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Interest in electric vehicles will rise when gas hits $5 a gallon: Study

Interest in electric vehicles will rise when gas hits $5 a gallon: Study

Posting in Energy

A new study by Deloitte finds that 78 percent of Americans would consider purchasing an electric vehicle when fuel prices reach $5 a gallon.

Increasing gas prices are forcing consumers to look for alternative ways to get around. Now a new study by Deloitte finds that 78 percent of Americans would consider purchasing an electric vehicle when fuel prices reach $5 a gallon.

The study, “Gaining traction: Will consumers ride the electric vehicle wave?,” surveyed 12,000 consumers globally, including more than 1,000 in the U.S., and concluded (a little obviously) that a high price of fuel would increase interest in electric vehicles.

"Offsetting the fuel factor is the finding that the better the fuel efficiency of internal combustion engine (ICE) vehicles, the less interested consumers become in EVs," said Craig Giffi, vice chairman, Deloitte LLP and U.S. automotive practice leader. "A total of 68 percent of consumers in the U.S. and 57 percent in China are less likely to consider an EV if they are able to find ICEs with a fuel efficiency of 50 miles per gallon."

According to the survey, the majority of consumers' in the world's four largest automotive markets either identify themselves as potential first movers, or at least willing to consider purchasing an electric vehicle (U.S. 54 percent, China 93 percent, Europe 69 percent, and Japan 48 percent).

However, for the mass adoption of electric vehicles, automakers would have to meet price and range expectations of consumers, the survey found. Consumer expectations for EV range, was two to three times (200 to 300 miles) the currently available range (100 miles), while expectations for charging time was two hours or less (60 percent in the United States, 55 percent in China, 67 percent in Europe, and 81 percent in Japan). Currently cars like the Nissan LEAF take about six to eight hours to charge. Considering the market offerings, the Chevy Volt or other plug-in hybrids (vehicles that switch to a gas tank once the electric charge runs out) seem to meet consumer needs far more than pure electric vehicles, at this point.

From a price perspective, more than 50 percent of U.S. consumers said they would not be willing to pay a premium for electric vehicles compared to a regular car, while only eight percent said they were willing to pay a price premium of more than $3,000 -- making the need for government incentives even more necessary.

On the flip side, more than half of American respondents say they were at least somewhat knowledgeable about EVs, with 11 percent extremely or very knowledgeable. This is a huge step up from most past surveys, proving that electric car manufacturers are at least doing a decent job promoting the vehicle.

"Global mass adoption of electric vehicles will be significantly influenced by a number of factors, including rising fuel prices, advancements in ICEs, and the availability of government incentives," adds Giffi. "While interest in electric vehicles is growing, current market offerings generally fall far short of consumers' expectations for driving range, charging time, and purchase price."

Government policies towards stricter carbon emission standards and fossil fuels will also eventually drive market trends.

The violence in Libya and the Middle East, combined with the earthquake in Japan, is not likely to bring the price of oil done anytime soon. In the end, it might be the push hybrids and electric cars have been waiting for.

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Ami Cholia

Contributing Editor

Contributing Editor Ami Cholia has written for AltTransport, Inhabitat, The Huffington Post and Sunday Mid Day in India. She holds degrees from the University of Texas at Austin and the Columbia University Graduate School of Journalism. She is based in New York. Follow her on Twitter. Disclosure