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