Auto Service World
News   May 14, 2010   by Auto Service World

Adoption of electric cars will be slow: Deloitte

A Deloitte Consulting study has found that the high cost and limited performance of electric cars will keep the number of vehicles at only two per cent to five per cent of the U.S. market a decade from now.

Reuters, in reporting on the study by the consulting and research firm, said Deloitte’s forecast is in marked contrast to the more upbeat outlook by other automakers and electric car advocates.

For example, Nissan Motor Co. recently forecast that 10 per cent of new-car sales will be electric vehicles by 2020. Deloitte expects the cost of producing batteries for electric cars to fall by 40 per cent over the next four years.

The consulting firm said it expected that advanced batteries powering electric cars would cost near US $600 per kilowatt hour in 2014. That would be down from near US$1,000 per kilowatt hour today.

The study showed Nissan and General Motors Co. – both will introduce electric vehicles this year — face a potential problem with consumer perception of their brands when it comes to electric cars.

“The auto purchase decision in the United States is very much a brand purchase. People tend to affiliate with automotive brands,” said Robert Hill of Deloitte, during a webcast to detail the study’s findings.

A Deloitte survey found that 17 per cent of consumers would prefer to buy an electric car from Toyota Motor Corp., 15 per cent from Honda Motor Co. and 12 per cent from Ford Motor Co. GM’s Chevrolet brand was fourth at eight per cent, and Nissan was ninth at four per cent.

Hill said the adoption of electric cars could closely parallel the relatively slow acceptance of 20th-century consumer breakthroughs like the washing machine than the fast embrace of more recent innovations like the cell phone.

It took the washing machine from 1930 until 1975 to go from 10 per cent use in U.S. homes to 70 per cent. By contrast, the jump for mobile phones to 70 per cent from 10 per cent in the U.S. market took a mere decade.

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