Electric vehicles will find more buyers in China and Europe than in the U.S. over the coming decade, mainly because fuel efficiency of conventional gas engines is improving faster and at a lower cost than automakers expected, according to a new study by Boston Consulting Group, as reported Detroit Free Press. "Electric cars will undoubtedly play an increasingly large role in many countries' plans as energy independence and environmental concerns intensify," said Xavier Mosquet, global leader of Boston Consulting Group's automotive practice. "But they will gain only modest ground up to 2020." BCG's Mosquet, who advised President Barack Obama's auto task force during the 2009 bankruptcies of Chrysler and General Motors, said conventional gas engines are achieving more miles per gallon and emitting less carbon dioxide, through turbocharging, direct injection technology, lighter weight materials and smaller displacements. Those improvements are providing comparable benefits to electric vehicles at a lower cost. Even so, there is a significant demand for alternative powertrains.
About 13% of consumers in China say they are willing to pay a premium of US$4,500-6,000 for a green vehicle. That compares with 9% of Europeans and just 6% of Americans. BCG expects that electric vehicles (hybrids, plug-ins and battery-only cars) will represent 7% of China's new light vehicle sales in 2020, versus 8% in Europe and 2% of North American new car sales. Those results reflect China's heavy governmental support for gas-electric and plug-in hybrid technology and higher gasoline and diesel prices in Europe.
While there will be a small core of environmentally proactive buyers willing to pay an extra $6,000 or more above the price of a comparable all-gas vehicle, most consumers who are open to hybrids, plug-ins or all-electric vehicles want to recoup any upfront price premium through savings on fuel consumption over the first three years of ownership, Mosquet said.