Are drivers waiting on a sustainable future that is already here? Are drivers waiting on a sustainable future that is already here?

Authors
Randall Miller

EY Global Advanced Manufacturing & Mobility Leader

Passionate about manufacturing, mobility and disruption. Champion for women and diversity & inclusiveness in the Advanced Manufacturing & Mobility industries.

David Borland

EY UK&I Automotive Leader

Passionate about the automotive industry and delivering innovative solutions for clients. Outside of work, focused on family and community. Enjoys sports.

Gaurav Batra

EY Global Advanced Manufacturing & Mobility Analyst Leader

Passionate about mobility disruption. Helping share the auto industry narrative in this disruptive landscape.

Contributors
Local contact

EY Global Mobility Solutions Leader

Focused on business transformation. Passionate about cars and exploring the world.

8 minute read 31 Aug 2021

The COVID-19 pandemic gave rise to more consumers being interested in living greener lives and purchasing electric vehicles. 

In brief
  • The latest EY Mobility Consumer Index shows a major increase in interest toward purchasing an EV for their next new car.
  • The challenge is turning this wave of consumer sentiment into action.
  • The newfound desire to choose a sustainable EV is countered by concerns around cost, range and charging infrastructure.

For all the disruption and pain associated with COVID-19, the pandemic has also presented the auto industry with a golden opportunity to supercharge electric vehicle (EV) sales. The consumer mindset is changing fast - over the last 18 months, millions of people around the globe have reconnected with environmental concerns and are now more willing than ever to put sustainability at the top of their mobility agenda. Findings from the latest EY Mobility Consumer Index show that no fewer than 41% of respondents who intend to buy a new car are actively considering an EV, and 66% of them intend to buy one in the next 12 months—some of the biggest shifts in buyer sentiment we’ve seen.

EVs

41%

of respondents who intend to buy a new car are actively considering an EV.

Local Perspective IconA local perspective

What stops Swedes from taking the EV leap?

Environmental concerns play an important role when making the decision to buy an EV, but worries regarding price and driving range still trouble many potential buyers. Interestingly, consumers in Sweden seem pickier than the global average when considering these factors.

Data shows that 91% of global high-income earners are willing to pay a premium for an EV, which is significantly higher than only 66% of Sweden’s high-income earners. Moreover, Swedes have higher demands regarding driving range, as 43% of the global average are satisfied with a driving range of up to 200 miles, compared to 36% of Swedes. To ensure a green revolution in the mobility sector, Swedish industry and government must put even greater effort into also addressing these practical EV ownership concerns.

Local contact

Martin Cardell
EY Global Mobility Solutions Leader

The challenge for industry and government alike is how to encourage this wave of consumer sentiment so that it translates into actions; the door to a clean, green EV future may be open, but the way through it is still at least partially obscured by obstacles around costs, range and charging — some more perceived than real.  Understanding these obstacles and the actions that Original Equipment Manufacturers (OEMs), industry partners and governments can take to address them will be key to unlocking a sustainability-led EV sales boom.

Family by car
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1

Chapter 1

The (electric) car’s the star

Consumers want to travel safely and sustainably, and the EV is set to be their preferred choice.

The rise of home working, virtual communication and online delivery services may have removed the need for many day-to-day journeys, but consumers still prefer mobility to stasis. They want to travel, but to do so more safely and sustainably, and the EV is set to be their mode of choice. The number of journeys taken is broadly expected to return to pre-COVID-19 levels, with the exception of work-related travel: 14% of work journeys are expected to be avoided in future. Concerns over the risk of infection remain a major influence on consumers’ choice of transport — private cars have become the preferred way of getting around safely and at low infection risk. More than half (56%) of current and future car owners agree that constant access to a personal car is very important to them. And 38% of those who don’t currently own a car say they are now looking to buy one, a rise of 7% from the previous survey conducted during phase one of the pandemic last year.

Making the leap

The newfound resolve to live a greener life and choose a sustainable EV is countered by ingrained practical concerns around cost, range and charging infrastructure. How much, in other words, will eco-principles cost consumers — financially and in terms of time, convenience and stress or anxiety — and how much are they willing to pay? The confusing and disjointed information provided around the EV experience does not help buyers seeking reassurance that the sustainable choice is the right one.  

These issues are far from new, but despite years of effort from both industry and government, the MCI shows that they remain the key obstacles to wider EV ownership. New, more customer-centric solutions are required.

couple with coffee by car
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Chapter 2

Cost–surface the savings to avoid social divide

Helping lower income consumers into EVs will drive sales, boost sustainability and prevent damaging social divisions.

Cost remains the number one bar to EV ownership — cited by 50% of all respondents — but there is evidence of a growing divide between wealthier and mainstream consumers. Although the desire to choose a sustainable EV exists across all income groups, the richer consumer is happy to pay a substantial premium to join the club, while those in lower-income groups are less willing to pay extra and more likely to choose the known quantity of an Internal Combustion Engine (ICE) vehicle. But while less cash up front and smaller monthly payments may make an ICE look cheaper, is it really? Lower running costs mean that on a total cost of ownership basis, EVs compare very favorably with ICE vehicles financially, while also being demonstrably more sustainable. 

OEMs need to consider how to reframe the consumer mindset to focus on total costs to highlight these “invisible” savings. Could behaviors be “nudged” so that lower-income consumers in particular realize that the sustainable EV choice is more affordable than they think? Nearly a third (30%) of those in higher-income groups would pay a premium of over 20% for an EV, compared with only 19% of those on lower earnings. Well over a third (39%) of low-income respondents are not prepared to pay any premium, a figure which falls to 21% for high-income groups.  Helping lower- income groups into EVs will not only drive mass sales and boost sustainability but also prevent the emergence of damaging social divisions over access to sustainable personal transport.

EV charging station
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Chapter 3

Charging conundrum

Port availability and EV range remain concerns. Co-locating charging hubs with public transport could up EVs’ sustainability credentials.

Despite considerable progress on infrastructure, the speed and availability of charging points still loom large in the minds of would-be EV buyers. Over 45% of both current EV owners and those planning to buy an EV want to see more fast chargers in parking locations. But focus on the perceived lack of public and fast-charging points obscures the evidence that the majority of charging will be done overnight at home. In reality the need for fast charging will be less than many consumers expect, as EVs that are already on the market have sufficient range for most daily use scenarios.

Addressing these concerns will also require action from OEMs, such as partnering with energy providers to provide inclusive power and charging packages at sale. Two in five (39%) of current and potential future EV owners agree or strongly agree that there are not yet enough charging points. Accordingly, packaging access to charging will remain an important tool for OEMs in allaying these concerns. Offering 100% renewable power deals for buyers will also be a key constituent of a truly sustainable EV ecosystem. This presents a valuable opportunity for OEMs to put themselves at the heart of a customer-centric ecosystem, that addresses not only charging infrastructure but also whole-life sustainability around battery life cycle, repurposing and reconditioning, for example.

Range anxiety — all in the mind?

No one wants to be stranded by an empty battery, but is the fear more perceived than real? Some 43% of respondents say they would be happy with a range of up to 200 miles from an EV, rising to 62% for up to 300 miles range. But while the current generation of EVs are already capable of delivering these numbers, consumer perceptions are lagging. Range remains the second-greatest disincentive among those buyers who still prefer ICE vehicles over EVs.   

To overcome those lagging perceptions, OEMs need to provide reassurance as well as information — trumpeting the latest improvements in range figures is not enough. New sales tools are required that use customers as advocates to bring the EV experience to life and demonstrate that 200 miles of range will cover the vast majority of day-to-day travel needs.

A new role for public transport

Sustainable mobility is integrated mobility – for the mobility of tomorrow to be truly sustainable, public transport will be required to play an important role, especially in urban areas. However, only 33% agree that public transport is a safe and convenient way to travel. Building in “last mile” urban options — such as EV charging hubs co-located with public transport networks — could help revive public transport networks post-COVID-19, and further add to the sustainability credentials of EVs in consumers’ minds. 

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Chapter 4

Rising to the challenge of truly sustainable mobility

Consider these five keys to achieving a sustainable EV future.

Consumer attitudes are undergoing a radical swing to sustainable personal mobility, but support from government and industry is required to reassure potential purchasers that their green aspirations are both practical and affordable. The keys to achieving a bright sustainable EV future include the following:

  • Rethink the dialogue with the consumer — show, don’t tell. Fears over range and access to charging remain, despite evidence that for many users they are more imagined than real. OEMs and dealers should develop new messages, relationships and tools to bring the EV experience to life for consumers and provide reassurance that the sustainable choice is the right choice. 
  • Offer smart incentives — how can governments and OEMs go beyond the blunt instrument of simple subsidies to help prove that EVs are affordable for both low-income and high-income groups? Smart new finance packages and ownership models are required to prevent the emergence of a damaging social divide and drive mass market sales.
  • Collaborate on infrastructure — rather than working in isolation, government, OEMs and charging providers should collaborate to develop coordinated national charging plans. Greater interoperability and transparency will help allay lingering fears over access to and availability of charging points. 
  • Integrate mobility to revive public transport — it’s not either/or; EV ownership and public transport use are not mutually exclusive. City authorities still have a major role to play in integrating public transport, but they will require support. By acting together, OEMs, city authorities and governments can demonstrate their commitment to sustainable mobility and help revive public transport post-COVID-19.  
  • Take an ecosystem view — well-to-wheel sustainability calls for a holistic focus on the EV life cycle, offering new opportunities for OEMs — particularly around repurposing and reconditioning of EV battery packs.

Summary

Harnessing the consumer sustainability shift calls for a radical rethinking of the way that EVs are sold, owned, operated and recycled. How can the EV experience be made easier to understand and more accessible across the whole life cycle? Consumers will vote with their wallets, but only if their practical concerns are satisfied and every part of the EV buying and ownership experience screams “deep green."

About this article

Authors
Randall Miller

EY Global Advanced Manufacturing & Mobility Leader

Passionate about manufacturing, mobility and disruption. Champion for women and diversity & inclusiveness in the Advanced Manufacturing & Mobility industries.

David Borland

EY UK&I Automotive Leader

Passionate about the automotive industry and delivering innovative solutions for clients. Outside of work, focused on family and community. Enjoys sports.

Gaurav Batra

EY Global Advanced Manufacturing & Mobility Analyst Leader

Passionate about mobility disruption. Helping share the auto industry narrative in this disruptive landscape.

Contributors
Local contact

EY Global Mobility Solutions Leader

Focused on business transformation. Passionate about cars and exploring the world.