Strong customer interest in electric vehicles, but the automotive industry still urgently needs to innovate and take action

• Survey on the acceptance of electro-mobility among 500 automotive customers in Germany and France
• 37% of the German customers surveyed are considering buying an electric car; half of those surveyed would be willing to spend an additional EUR 4,000 for e-mobility
• But this still isn't enough to cover the additional costs of the battery
• This means mobility packages and services – such as mobility flat fees, raising residual value and providing additional purchase guarantees for a limited time – are necessary to help this technology achieve a breakthrough

Automotive customers in Germany and France are very interested in electric vehicles. 37% of the customers (France: 35%) are considering buying an electric car. Half of them would even be willing to pay up to EUR 4,000 more for this. However, 65% of customers feel that they are not yet well informed enough about the topic. Despite positive feedback, the automotive industry still has to take considerable action and innovate because the willingness of customers to pay more is not yet enough to cover the additional costs. These are the results of a study conducted by Roland Berger Strategy Consultants and market research company TNS Infratest. Therefore, to lay the groundwork for electro-mobility in Germany, comprehensive mobility packages and services, such as mobility flat-fee, incentives to raise residual values and additional purchase incentives for a limited period of time, are necessary.

"The good news: More than one-third of those surveyed in Germany could imagine owning an electric vehicle," says Roland Berger Partner Ralf Landmann. "However, there is still a lack of innovative business models that would help alternative powertrains actually achieve a breakthrough. To do so, this means that especially marketing, sales and the manufacturers' banks have to come up with new price, purchasing and leasing models for vehicles, batteries and mobility. "One could imagine intelligent models where customers can choose mobility packages and services tailored especially to the specific electric vehicle. Flat-fees or leasing offers can cover vehicle and battery financing and insurance. Technically, the vehicle battery can be used as a source of storage to compensate for power production and peaks. "Customers are very interested: Almost 80% of customers today are not considering the traditional direct purchase of vehicles and batteries, but already two-thirds of potential buyers are interested in a combination of directly buying a vehicle and leasing the battery from a separate mobility provider," says Landmann. "Those who want to be successful in this environment in 2011 must make a decision now – and it is not necessarily those companies that represent mobility today."

Attractive offers for customers are decisive

"The future in the automotive market is lighter, smaller and ecological," confirms Dr. Robert Schröder, Deputy Managing Director at TNS Infratest Automotive. "There's no doubt that, over the long term, e-cars will have considerable market share. However, this means providing customers with attractive offers – and these are still rather far away. To make electric vehicles affordable, also to the mass market over the medium term, new innovative business models are necessary. These may include leasing variations for the entire vehicle, the powertrain or just the battery." Among other things, what's in demand are mobility packages for e-vehicles. For example, 88% of customers in Germany want access to a quick charging station located within five kilometers. About half are ready to pay EUR 20 to 40 for this. 74% are also keen on special electric navigation, such as charging station maps and routes requiring the least amount of consumption (France: 57%).

Willingness to pay more is not yet sufficient

A big problem for the manufacturers is still the costs: "The catch at the moment: Even customers' willingness to pay more for electro-mobility will still not be sufficient in the next 10 years to offset the additional costs of the powertrain, especially the battery," says Roland Berger Partner Dr. Wolfgang Bernhart. According to his view, the additional costs today are between EUR 10,000 and 15,000 and will still amount to between EUR 8,000 and 10,000 in 2015. "The additional costs of an electric vehicle versus conventional powertrain will fall below EUR 4,500 (i.e. the amount potential owners of electric cars would be willing to pay) no sooner than 2020," says Bernhart.

Fast industrialization and special incentives are necessary

Beside fast technical industrialization of components, additional incentives that provide e-car users with clear benefits are important. "These don't only have to be financial incentives," says Bernhart. "These could also be, for example, exclusive access to traffic-restricted metropolitan areas or parking options only for electric vehicles."
Landmann adds: "In order for electric-mobility to be a success, carmakers, banks and mobility providers must find new ways to earn money with the e-mobility business model. The customer is waiting."