Study finds automaker-consumer disconnect on EVs

IBM survey finds there is solid consumer interest in all-electric cars, but automakers still have to invest in bringing costs down and educating consumers for EVs to take hold widely.

There's significant interest in all-electric vehicles among car buyers, but automakers have a few obstacles to navigate in order to satisfy consumers, according to an IBM study.

IBM's Institute of Business Value, an internal IBM think tank, on Tuesday is expected to release results of a survey it did with both consumers and auto executives, which found that the industry's bet on electrification has some market pull from consumers.

Nineteen percent of 1,716 U.S. drivers said they were likely or very likely to consider an all-electric vehicle for their next car. The average driving range per day is between 30 miles and 40 miles, which held true even in rural areas, said Kal Gyimesi, IBV automotive lead and co-author of the study. Thirty percent of people said that a 100-mile range, which is what many automakers are targeting, is sufficient.

But even if there is demand, automakers should realize that consumer awareness of EVs is still relatively low and that EVs will challenge the conventional way of doing business, said Gyimesi.

"The business model is going to determine success just as much (as products). If you think about an auto company's traditional sales, manufacturing, and development model, they really need to reach outside of that and start making partnerships," he said.

For example, even though most consumers will primarily charge at home and possibly work, many in the survey expressed interest in EV charging ports at malls and other retail outlets. The cost of adding a faster, 220-volt car charging port to homes, which can cost $1,000 or $2,000, is also a potential barrier to consumer adoption.

Consumers are sensitive to purchase price and the price of gasoline, but the survey also found many were willing to pay more for a more environmentally friendly car. Forty percent said they would be willing to pay up to 20 percent more for an electric-only car.

Auto and utility industry executives, meanwhile, appear to think that rebates and tax credits are a strong motivation for buying an EV.

Although there's a great deal of buzz around the Nissan Leaf and other plug-in cars coming to market, most analysts expect battery-electric cars to represent a small fraction of total auto sales in the next 10 years. Large batteries make EVs relatively expensive, although the cost per mile is cheaper. They also face ongoing competition from more fuel-efficient, gas-only vehicles or hybrids .

 

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