DAVID FURLONGER: Demand for electric vehicles speeds up
Electric cars are now more desirable to consumers than traditional ones, a new report suggests
10 June 2022 - 06:00
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Global demand for electric vehicles (EVs) has reached a “tipping point”, with more than half of intending car buyers saying their next vehicle will be electric, according to a report by business consultancy EY.
The 2022 edition of EY’s mobility consumer index shows that 52% of market research respondents intending to buy a car want an EV. It’s the first time the figure has exceeded 50%. Two years ago, it was 30%, then 41% in 2021.
The figures include both all-electric and hybrid cars. The latter use dual electric and liquid-fuel motors. The preference for all-electric cars has risen from 7% to 20% since 2020.
These numbers do not include or reflect SA. Here, despite apparent consumer interest in EVs, they remain a rarity on the roads because of high prices, lack of charging infrastructure and doubts about Eskom’s ability to provide the power required to keep nonhybrid EVs on the road.
That rarity is currently inflated because the country’s only mass-market EV, the Corolla Cross hybrid, is unavailable while Toyota SA finishes mopping up its Durban vehicle assembly plant that was flooded in April, causing all vehicle production to be suspended.
Nevertheless, the EY findings will increase the frustration of local lobbyists, who are desperate for the government to devise a policy that will encourage the local manufacture and sale of EVs. Nearly all vehicles made in SA have internal combustion engines (ICE). More than 60% of industry production is exported, most to countries that will ban sales of new ICE vehicles from 2030.
The government published a green paper setting out its strategy intentions in May last year. A detailed white paper policy document was expected in October but has been delayed while the government determines how to pay for buyer incentives.
Unlike many countries, which offer generous tax and other rebates to stimulate demand, SA’s duty structure actually penalises EVs.
Consumer concerns like high purchase costs and range anxiety appear to be receding, says EY
The EY report says EVs will be “the stars of the show” in an expected global car-buying boom driven by post-Covid travel patterns. Before the pandemic, analysts were forecasting that demand for personal vehicles would decline in coming years, as consumers opted for ride-hailing, car-sharing and other forms of transport that would allow them to pay for vehicle use rather than ownership.
Now, with lingering Covid fears making many people fearful of shared space — what EY calls the “hygiene factor” — people want their own transport. The study says: “Having encouraged their populations to stay at home and stay safe, governments and transport authorities may have inadvertently created a new and potentially limiting narrative around transport safety in consumers’ minds. On a sliding scale where the private car is regarded as the safest and most hygienic mode, public transport is represented as the least and shared mobility, such as taxis and ride-sharing options, occupy the middle ground.”
The EY study shows that, globally, work journeys by public transport are down 15% from pre-Covid levels. In Australia the drop is 35%, in Canada 30% and Italy 29%. Of the 18 countries surveyed, only one, India, reported an increase in public transport usage, and that was by 1%. Among research respondents, 60% say a private car is best for their safety and wellbeing.
The buying boom hasn’t arrived yet. Quite the reverse: new-car sales around the world are struggling because of economic malaise and vehicle stock shortages caused by a breakdown in supplies of key components such as semiconductor microchips. The situation has been made worse by the war in Ukraine.
Growth will come. The study suggests that 45% (2020: 33%) of research respondents plan to buy a car in the coming 24 months — nearly two-thirds of them in the next 12 months. Of the 45%, 33% plan to buy new cars and 12% used.
The study says China, India and Mexico show the greatest demand for cars, with 75%, 75% and 66%, respectively, of their respondents likely to buy. Sweden, Singapore and Japan — 33%, 27% and 20% — seem least interested.
Amid this general growth, EVs are expected to be the big winners. Why? The original market was dominated by environmentalists with the wellbeing of the planet in mind. Now they are being joined in large numbers by people “with more prosaic financial concerns”.
While they still cite environmental issues, these mainstream buyers are almost equally driven by fears that if they buy an ICE vehicle, they will be hit by congestion and pollution charges. While not mentioned in the EY report, they will certainly also be influenced by the current enormous cost of filling up with petrol and diesel.
Consumer concerns like high purchase costs (even after incentives) and range anxiety — the fear that electric motors’ limited, single-charge travel range will cause them to run out of power mid-journey — appear to be receding, says EY.
One reason may be that the growing incidence of working from home means that, in many cases, commuting has become a weekly activity rather than a daily one. Vehicles need charging less often, so there is less chance of power loss.
However, EY says consumers in many countries are still worried about the lack of charging infrastructure, as well as the speed of charging.
If the EY study is an accurate barometer of consumer intentions, it shows that consumer acceptance of EVs is growing faster than the motor industry has predicted. In Europe alone, EY reckons there could be 130-million EVs on the roads by 2035.
Randall Miller, the company’s global leader in advanced manufacturing and mobility, says: “It is now up to the [motor] industry to meet this demand. If manufacturers are not aware of this trend already, they’re behind the curve and they need to catch up fast.”
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
DAVID FURLONGER: Demand for electric vehicles speeds up
Electric cars are now more desirable to consumers than traditional ones, a new report suggests
Global demand for electric vehicles (EVs) has reached a “tipping point”, with more than half of intending car buyers saying their next vehicle will be electric, according to a report by business consultancy EY.
The 2022 edition of EY’s mobility consumer index shows that 52% of market research respondents intending to buy a car want an EV. It’s the first time the figure has exceeded 50%. Two years ago, it was 30%, then 41% in 2021.
The figures include both all-electric and hybrid cars. The latter use dual electric and liquid-fuel motors. The preference for all-electric cars has risen from 7% to 20% since 2020.
These numbers do not include or reflect SA. Here, despite apparent consumer interest in EVs, they remain a rarity on the roads because of high prices, lack of charging infrastructure and doubts about Eskom’s ability to provide the power required to keep nonhybrid EVs on the road.
That rarity is currently inflated because the country’s only mass-market EV, the Corolla Cross hybrid, is unavailable while Toyota SA finishes mopping up its Durban vehicle assembly plant that was flooded in April, causing all vehicle production to be suspended.
Nevertheless, the EY findings will increase the frustration of local lobbyists, who are desperate for the government to devise a policy that will encourage the local manufacture and sale of EVs. Nearly all vehicles made in SA have internal combustion engines (ICE). More than 60% of industry production is exported, most to countries that will ban sales of new ICE vehicles from 2030.
The government published a green paper setting out its strategy intentions in May last year. A detailed white paper policy document was expected in October but has been delayed while the government determines how to pay for buyer incentives.
Unlike many countries, which offer generous tax and other rebates to stimulate demand, SA’s duty structure actually penalises EVs.
The EY report says EVs will be “the stars of the show” in an expected global car-buying boom driven by post-Covid travel patterns. Before the pandemic, analysts were forecasting that demand for personal vehicles would decline in coming years, as consumers opted for ride-hailing, car-sharing and other forms of transport that would allow them to pay for vehicle use rather than ownership.
Now, with lingering Covid fears making many people fearful of shared space — what EY calls the “hygiene factor” — people want their own transport. The study says: “Having encouraged their populations to stay at home and stay safe, governments and transport authorities may have inadvertently created a new and potentially limiting narrative around transport safety in consumers’ minds. On a sliding scale where the private car is regarded as the safest and most hygienic mode, public transport is represented as the least and shared mobility, such as taxis and ride-sharing options, occupy the middle ground.”
The EY study shows that, globally, work journeys by public transport are down 15% from pre-Covid levels. In Australia the drop is 35%, in Canada 30% and Italy 29%. Of the 18 countries surveyed, only one, India, reported an increase in public transport usage, and that was by 1%. Among research respondents, 60% say a private car is best for their safety and wellbeing.
The buying boom hasn’t arrived yet. Quite the reverse: new-car sales around the world are struggling because of economic malaise and vehicle stock shortages caused by a breakdown in supplies of key components such as semiconductor microchips. The situation has been made worse by the war in Ukraine.
Growth will come. The study suggests that 45% (2020: 33%) of research respondents plan to buy a car in the coming 24 months — nearly two-thirds of them in the next 12 months. Of the 45%, 33% plan to buy new cars and 12% used.
The study says China, India and Mexico show the greatest demand for cars, with 75%, 75% and 66%, respectively, of their respondents likely to buy. Sweden, Singapore and Japan — 33%, 27% and 20% — seem least interested.
Amid this general growth, EVs are expected to be the big winners. Why? The original market was dominated by environmentalists with the wellbeing of the planet in mind. Now they are being joined in large numbers by people “with more prosaic financial concerns”.
While they still cite environmental issues, these mainstream buyers are almost equally driven by fears that if they buy an ICE vehicle, they will be hit by congestion and pollution charges. While not mentioned in the EY report, they will certainly also be influenced by the current enormous cost of filling up with petrol and diesel.
Consumer concerns like high purchase costs (even after incentives) and range anxiety — the fear that electric motors’ limited, single-charge travel range will cause them to run out of power mid-journey — appear to be receding, says EY.
One reason may be that the growing incidence of working from home means that, in many cases, commuting has become a weekly activity rather than a daily one. Vehicles need charging less often, so there is less chance of power loss.
However, EY says consumers in many countries are still worried about the lack of charging infrastructure, as well as the speed of charging.
If the EY study is an accurate barometer of consumer intentions, it shows that consumer acceptance of EVs is growing faster than the motor industry has predicted. In Europe alone, EY reckons there could be 130-million EVs on the roads by 2035.
Randall Miller, the company’s global leader in advanced manufacturing and mobility, says: “It is now up to the [motor] industry to meet this demand. If manufacturers are not aware of this trend already, they’re behind the curve and they need to catch up fast.”
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