McKinsey survey finds EV awareness increasing, suggests strategies for OEMs to electrify

Chevy Volt Charging Plug-in 1

As the EV scene heats up, we’re starting to see a steady stream of studies and surveys analyzing the growing market. Assessments of consumers’ EV awareness vary considerably, and predictions for the future are all over the map.

A recent report by investment analyst Goldman Sachs sees big changes ahead for the auto industry, but predicts that by 2025, pure EVs will account for only 5% of the market(!).

A survey of 2,500 Americans by Altman Vilandrie & Company found that 60 percent of respondents “don’t know much” about electric vehicles, but 10 percent said they planned to buy one.

A new report from management consulting firm McKinsey & Company is more optimistic. McKinsey surveyed 7,000 consumers in the US, Germany, Norway and China, and also interviewed executives from automakers and other industry insiders.

Around half of respondents in the US and Germany said they know how plug-in vehicles (PHEVs and EVs) work, and about 30% of vehicle consumers in the US and 45% in Germany said they would consider buying a plug-in vehicle today. However, less than 5% of potential buyers ultimately choose a plug-in over a legacy ICE model (3% in the US, 4% in Germany, and 22% in Norway), and government subsidies are a big incentive for doing so.

This implies that there is a good bit of pent-up consumer demand for EVs (as does the enormous level of interest in upcoming EVs from Tesla, Faraday Future and others). McKinsey also identifies several factors that should accelerate the transition to e-mobility: the self-reinforcing auto industry megatrends of autonomy, connectivity and sharing; faster-than-anticipated improvements in battery costs, vehicle range and charging infrastructure; increasing urbanization; and accelerating regulatory forces.

Not surprisingly, the report finds that automakers are slow to rise to the challenge: “They must strike the right balance between selling enough EVs to comply with tightening regulatory targets, while preventing [the cost of battery packs] from cannibalizing corporate profits.”

McKinsey’s report goes on to suggest some strategies OEMs can use to “electrify” their customer base. But it’s no secret that automakers (and other giant corporations) have a poor track record when it comes to adapting to new trends. If the predictions of growing consumer demand for EVs come true, the dinosaurs are going to have to start doing some cannibalizing soon, or Tesla and other fast-evolving mammals may be feasting on their remains.

 

Source: McKinsey & Company

  • Ramon A. Cardona

    If only reporters or authors like Mr. Morris would refrain from the seemingly standard “only” term writing as to EV’s. Why? Because FIVE percent is a huge number compared to zero. Besides being a negative, these are speculations. With the Chevy Bolt sales starting at an excellent pace and with the expected Tesla Model 3, both under $30,000 and with over 200 miles of range, introducing the joys of e-driving, who knows of the impact? The transition to e-driving also will get a huge boost when the VW money starts flowing to each state so high speed charging station will be installed. I see huge changes starting as soon as early 2018. By 2020? Sorry, I can see that far.

    • Eco Logical

      I read the “only” term as a jab on the Goldman Sachs report … negative on Goldman Sachs (and rightly so) but not negative on EV’s.

  • EVPerks.com

    There is a big push to install ev chargers in Workplaces and MUDs, which will increase the ev adoption rates beyond any of these reports. Put ev chargers in the above mention locations and watch the ev sales soar. OEMs and Dealers will have a hard time keeping up with demand and maybe they don’t want to as the article states…cannibalizing their ICE sales. Dealers should become EV Lifestyle centers……go by and charger your EV,work out at the on-site gym, sit in the coffee shop, grab a bite to eat, work at the co-working area…all powered by solar. Dealers will have to reinvent themselves to survive in an EV world.

    • John Trotter

      Nice thinking about dealer lifestyle centers.

      • EVPerks.com

        Maybe it can be patented 😉

  • Ramon A. Cardona

    After a second reading this came up. Ask 2,500 car owners how much they “know” as to the cars they operate. I predict 100% know little beyond using a key to start the engine, select D and stepping on the gas! Studies can reveal far less that designed. As to awareness of EV’s I agree as the press, in my opinion, shows little interest to cover electrified vehicles.