Insights from the consumer research sample
Consumers are displaying a significant interest in electric mobility, as indicated by approximately 30% of those surveyed expressing their intention to purchase an electric vehicle (EV) within the next two years. Among the respondents, the 6% who already own EVs are predominantly high-income, middle-aged men residing in urban centers with access to private parking spaces.
On the other hand, the 61% of respondents who are prospective EV buyers, known as “EV Prospects,” have a roughly 20% lower income compared to EV Owners. Within this group, three personas, namely Tech Enthusiasts, Dreamers, and Pragmatic individuals, exhibit the highest intentions of purchasing an EV, collectively representing around 70% of the anticipated demand in the next two years. This suggests a shift in the EV market towards a broader customer base.
A significant portion of the respondents, accounting for 31%, falls under the “Sceptics” category. These individuals are primarily women with lower disposable incomes, approximately six years older than the EV Prospects.
Online vehicle sales, which currently make up 20% of EV sales, are particularly prominent for premium vehicles. Furthermore, 65% of consumers are contemplating purchasing their next vehicle online, primarily driven by the factors of convenience and transparent pricing.
Interest in used EVs is noteworthy, with 60% of current EV owners expressing a desire to buy a used EV due to cost savings and immediate availability. However, concerns regarding the state of health (SoH) of the batteries remain a significant obstacle.
Turning to the eReadiness Index, in Europe, Norway, Switzerland, and Germany emerge as the most e-ready countries, driven by their well-developed charging infrastructure and strong consumer demand. Italy and Spain, despite offering government incentives, lag behind in this regard.
In the APAC region, Hong Kong, China, and Singapore stand out as the most e-ready countries, boasting high consumer demand and, particularly in Hong Kong and China, a robust charging infrastructure.
In contrast, Australia ranks as the least eReady country across the entire panel, indicating that there is substantial room for growth and improvement in terms of electric mobility readiness in the country.
eReadiness Index
The eReadiness Index is constructed from 14 Key Performance Indicators (KPIs) that are categorized into four primary dimensions, each assessed for every country within the study.
These eReadiness Index Dimensions and their respective KPIs encompass various aspects:
Government Incentives Dimension
Evaluation of specific government incentives with a focus on:
– Grants (comprising purchase subsidies, both national and local grants, and scrapping bonuses).
– Value-added tax (VAT) exemption.
– Reduction in registration taxes.
– Exemption from annual ownership taxes.
Infrastructure Dimension
Analysis of infrastructure is based on these KPIs:
– The number of installed public charging points per thousand vehicles (including both electric vehicles and non-electric fleets).
– The presence of installed public fast charging points (>150 kW) per kilometer of highway.
– The share of energy generation from renewable sources.
– The comparison of driving costs between gasoline-powered and electric vehicles.
Supply Dimension
Assessment of the supply aspect involves:
– The proportion of electric vehicles in relation to total vehicle registrations.
– The rate of depreciation experienced by the top-selling electric vehicles in a given country.
– The number of companies exclusively engaged in manufacturing electric vehicles.
Demand Dimension:
The analysis of consumer demand within this dimension focuses on:
– The willingness of consumers to purchase an electric vehicle within the next two years.
– The percentage of drivers who typically cover short distances, averaging less than 30 kilometers per day.
– The average household income, reflecting the financial capacity of potential electric vehicle buyers.
These four dimensions, each comprising a set of specific KPIs, collectively form the eReadiness Index, offering a comprehensive assessment of a country’s readiness and suitability for electric vehicle adoption.
Outputs from the eReadiness Index
Hong Kong and Norway are the most eReady countries across all dimensions while Australia seem the least mature one for e-mobility.
In Europe, Norway is the most eReady country across all dimensions while Italy, Spain and Poland seem the least mature for e-mobility.
Hong Kong, China, and Singapore promptly emerge as the top eReady nations among all the countries under consideration.
Recommendations for e-mobility players
Utility Companies
Recommended Actions: Develop financially flexible offerings that reduce initial expenses, provide supplementary services, and safeguard residual value to encourage more hesitant prospects to switch to EVs.
Rationale: Upfront costs and low residual value are significant barriers for 40% and 33% of potential EV buyers. Many current EV owners, particularly in the Asia-Pacific (APAC) and North America (NA) regions, opt for additional services, such as insurance and maintenance plans, to ensure peace of mind.
Retailers
Recommended Actions: Form strategic partnerships with third-party providers, complete with clear service level agreements (SLAs) and incentives, to offer comprehensive support and coordination for home chargepoint installations. Provide a range of related products and services, such as green energy contracts, energy storage solutions, photovoltaic panels, and on-the-go charging options to EV customers at the point of sale.
Rationale: Many consumers face challenges related to limited knowledge of charging infrastructure (42%) and delays in the home charging installation process (25%). A significant percentage (10-40%) of consumers purchase additional EV-related products and services shortly after acquiring their EVs.
Public & Charging Point Operators (CPO Authorities)
Recommended Actions: Collaborate with third-party providers to offer holistic support and coordination for home chargepoint installations and provide a suite of related products and services to EV customers, including green energy contracts, energy storage solutions, photovoltaic panels, and on-the-go charging options, at the point of sale.
Rationale: This approach helps address the issues consumers face due to limited knowledge about charging infrastructure and the delays encountered during home charging installations. It can improve the overall EV ownership experience.
Original Equipment Manufacturers (OEMs)
Recommended Actions: Review and enhance the used-vehicle business proposition by introducing pre-owned programs that leverage telematic data and include certification of battery health. This not only safeguards residual values but also streamlines the management of second-hand EV trade, making it more effective and profitable.
Rationale: Approximately 60% of current EV owners are open to considering pre-owned EVs, mainly due to their lower upfront costs. However, concerns related to battery health certification, warranty, and fears of diminished battery capacity are key barriers for 45-60% of potential customers.
These recommendations aim to address critical barriers and challenges in the EV market, such as high upfront costs, limited charging infrastructure knowledge, and concerns about battery health, thereby fostering the wider adoption of electric vehicles.
This is our view of the report made and published by Strategy&.