China, U.S. Offer Biggest Potential for Electric Vehicle Sales, but Wider Demand Predicted to Rise, Accenture Research Finds
December 01 2016 - 4:03AM
Business Wire
Improving car sales suggests strong potential for growth in
electric vehicle (EV) sales in China and the U.S. However, a
combination of technological, economic and political factors,
including the influence of more planned mass-market EV
introductions over the next four years, could provide car-makers
with nine additional growth markets to invest in, according to new
research from Accenture.
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Accenture analyzed 14 domestic markets, Brazil, Canada, China,
France, Germany, India, Japan, the Netherlands, Norway, Russia,
South Korea, Sweden, United Kingdom, and the United States, to
pinpoint the crucial distinctions that shape EV market
attractiveness.
China and the U.S. ranked as Best-in-Class countries because
they show both high EV market size and EV market growth. Accenture
believes automakers should target China and the U.S. for investment
in stronger distribution networks for EVs, while adapting product
portfolios to cater to specific customer preferences in each
country. Factors in their high ranking include the future volume of
buyers who will be able to afford EVs and the development of an
extensive charging infrastructure.
All of the markets were analyzed for local factors including
governmental regulations and subsidies, as well as
non-market-specific factors, such as vehicle range and charge time,
then placed into a matrix.
“In the markets that show growth potential for EVs automakers
need to be ready to tap the expected growth in demand to ensure
that they reach critical mass when the growth in demand is kicking
off,” said Christina Raab, managing director in Accenture’s
Automotive practice. “Plans for an assortment of more affordable
EVs with greater range aimed at the mass-market segment are moving
EVs toward higher volume car-buying. Given this development,
accessing EV-market attractiveness for each market individually
will be essential for automakers as they plan for the growing
differences between domestic markets.”
Canada, France, Germany, Japan, the Netherlands, Norway, South
Korea, Sweden and the United Kingdom are all ranked as High
Potentials for their high growth prospects between now and 2020,
but a low EV market size currently. They are typified by government
plans to invest significantly to make EVs more attractive.
As these markets may see significant growth over the next four
years, Accenture believes automakers should invest in them to
ensure that they are best placed to tap the expected market growth.
While the market share of EVs as a percentage of the global
automotive market in 2015 was only 0.3 percent, or 270,000 EV cars,
an increase to just three percent would equate to 2.7 million EVs.
This excludes figures for plug-in hybrid electric vehicles. It
means that, for example in the current market environment of
France, manufacturers should quickly make use of existing
governmental measures to support EV purchases. OEMs should consider
targeting all of those countries where governmental support and
subsidies exist as a priority, before these measures are
removed.
The three markets of Brazil, India and Russia are classed as
Hesitators by Accenture due to the small market size and an
expected low growth rate. These markets are characterized by a lack
of public charging infrastructure and low fuel prices, which have
been constantly low in the respective markets, independent of
current low oil prices. This combination makes EVs economically
unattractive. For these markets, Accenture believes OEMs should not
yet make significant investments, but they should be regularly
reevaluated. This is because they will require high investment for
a range of new capabilities such as dedicated sales staff training
and aftersales enablement once they begin to see demand take
off.
“Our research shows that automakers must carefully channel
overall EV investments toward the right country markets, using
total unit market size as an indicator of market attractiveness,”
said Raab. “What is clear is that government policy can rapidly
change the rules of the game, more than any other factor. For
example, China has set targets for EV and plug-in hybrids to make
up seven percent of total car sales in 2020 and 40 percent in 2030,
reaching an estimated 15.2 million units. In parallel, China is
hoping to see breakthroughs in battery and motor technology, while
planning to build a nationwide charging network.
“Car-makers must keep a close eye on how government agendas can
potentially open the way for an increase in EV demand -- especially
at a time when the industry seems to be reaching a tipping point
toward mass-market EVs,” she added.
Methodology
Each country was assessed on a range of political factors
(one-time government monetary subsidies at purchase, post-purchase
monetary government subsidiaries, non-monetary government
regulations, charging infrastructure); economic factors (purchase
price, fuel price, and number of potential buyers) and
technological factors (range and charge time).
About Accenture
Accenture (NYSE:ACN) is a leading global professional services
company, providing a broad range of services and solutions in
strategy, consulting, digital, technology and operations. Combining
unmatched experience and specialized skills across more than 40
industries and all business functions – underpinned by the world’s
largest delivery network – Accenture works at the intersection of
business and technology to help clients improve their performance
and create sustainable value for their stakeholders. With
approximately 384,000 people serving clients in more than 120
countries, Accenture drives innovation to improve the way the world
works and lives. Visit us at www.accenture.com.
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AccentureAnthony Hatter, +44 7810 756
138anthony.hatter@accenture.com
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