Castrol Accelerating The Evolutionadmin
The road to mainstream Electric Vehicle adoption.
There is little debate that Electric Vehicles (EVs) will revolutionise mobility across the globe and play a pivotal role in the de-carbonisation of the Global economy. While EV sales have been rising steadily, and 12.7 per cent of Australian consumers are considering purchasing a hybrid car within the next 4 years1, mainstream adoption still remains a long way off with just 1 in 50 new cars sold worldwide being an EV2.
Global lubricants pioneer Castrol has been at the forefront of automotive innovations for over a century, and with burgeoning demand anticipated for EVs, Castrol recently conducted a comprehensive Global research study to better understand the key factors that will underpin their adoption.
The study combined opinion research and economic modelling to examine how consumers, fleet managers and the automotive industry view the future of fully electric vehicles (EVs) across eight of the world’s most significant EV markets based on size, growth potential and maturity: China, France, Germany, India, Japan, Norway, the United Kingdom and the United States.
The study engaged 9,000 consumers, 750 fleet managers and 30 automotive industry specialists worldwide, and by examining five ‘critical challenges’ to growth in the EV market Castrol identified ‘tipping points’ that, if overcome, would drive mainstream adoption, namely – price, charge time, range, infrastructure and vehicle choice.
The Road To Fully Electric
While momentum around EVs is undeniable, Castrol’s study highlighted that many consumers and fleet managers are still waiting to see how the market develops before making the switch.
While only 2 per cent of new cars sold today across the study markets are currently EVs, the majority of consumer respondents said they themselves would consider buying an EV in 2024, just four years away.
This consideration though will not necessarily translate to uptake with 61 per cent of consumers adopting a ‘wait and see’ approach, believing that research and development into battery technology will be fundamental to driving the development of the fully electric car market. Similarly, although 58 per cent of fleet managers are personally motivated to make a positive difference to the environment by making their fleet fully electric, over half (54 per cent) are waiting for their competitors to make the switch before they do.
The Five Critical Challenges To Mainstream Ev Adoption
Critical Challenge 1: Price Unsurprisingly, the purchase price of an EV emerged as the most important critical challenge for consumers. While the influence and sensitivity to price may vary with individual markets, within the study markets the tipping point price tag when mainstream adoption is anticipated to be achieved is sub-$36,000USD (the equivalent to the average price of a car in the United States). Nearly two thirds of the consumers surveyed (63 per cent) viewed the current array of EVs on the market as beyond their price range.
“Our Study Estimates The Ev Market Could Grow To $367 Billion Per Year If Consumer Expectations For Price, Charge Time And Range Are Met.”
Critical Challenge 2: Charge time The length of time it takes to charge a battery was the second most important critical challenge for consumers. According to Castrol’s study, the mean charge time tipping point for mainstream adoption is 31 minutes, equivalent to the length of the average lunch break. Although this is far longer than the average internal combustion engine (ICE) refuel, it is only 10 minutes longer than our respondents’ average break at a rest stop (21 minutes).
Critical Challenge 3: Range Vehicle range was the third most important critical challenge for consumers in Castrol’s study – and arguably a consideration that will have an even greater relevance for Australian drivers give the relative geographic isolation of its major urban hubs. For mainstream adoption to be achieved, EVs need to reach a range of 469km – equivalent to traveling just over half the distance from Sydney to Melbourne. ICE equivalents can achieve between 500 and 1,000km.
Critical Challenge 4: Charging infrastructure Consumers in Castrol’s study ranked charging infrastructure as their fourth most important critical challenge. Seventy percent of consumers believed the majority of cars will become fully electric when charging infrastructure becomes as easily available as service stations. Most important is having the ability to charge at home or nearby (70 per cent), followed by having a charge point at work or nearby (67 per cent). As one might expect from environmentally conscious EV switchers, nearly two thirds of consumers (62 per cent) expect charging points to guarantee the electricity they provide is from renewable energy sources.
Critical Challenge 5: Vehicle choice While vehicle choice was the least important critical challenge for consumers, it proved to be the second most important buying factor for fleet managers in Castrol’s Study. To achieve mainstream adoption, creating more familiar models will be key: over half of consumers (54 per cent) and fleet managers (53 per cent) said they would consider making the switch if there was an EV-equivalent to their favourite ICE car.
Making The Switch
Despite the optimism around EVs, there’s clearly significant work to be done before mass adoption of EVs and meeting these five critical challenges will be central to achieving that outcome.
While all challenges have degrees of importance, the reality is that improvements in one critical challenge (i.e. Price) could help allay concerns customers may have in other areas (i.e. Range).
Indeed, with Australia’s most popular OEM Toyota now landing a sub-$27,000 price point on Toyota Corolla hybrid models, EVs have never been more financially accessible for Australian consumers.
“The Majority Of Consumer Respondents Said They Themselves Would Consider Buying An Ev In 2024, Just Four Years Away.”
Meeting The Tipping Points: The Size Of The Prize
As with all things, economics will be the key in determining just how focused the automotive and associated industries are in pursuing EV technology and uptake but based on Castrol’s research, the size of the financial prize is enormous.
“Our research shows that while consumers are positive about EVs, perceptions about performance and cost is holding back mainstream adoption. However, if the automotive industry can overcome these challenges the potential size of the prize is huge,” suggests A. S. Ramchander, Castrol’s VP of Global Marketing. “Our study estimates the EV market could grow to $367 billion per year if consumer expectations for price, charge time and range are met.”
For this reason, there’s little reason to doubt the future may be closer than many think for mass EV adoption in Australia and beyond.
For more information and insights on Electric Vehicles adoption, and to access the full “Accelerating the EVolution” report, visit www.castrol.com.au/ev