BCG Study Suggests 70% of US Consumers Are Considering EV Transitioning

A recent study by BCG showcases the dynamics of the electric vehicle (EV) market in the United States and sheds light on the prevailing challenges and opportunities for original equipment manufacturers (OEMs). Despite encountering limitations, the demand for EVs in the US remains substantial, with 70 per cent of consumers expressing interest in purchasing one. However, the growth of EV sales in 2023, though at 50 per cent, fell short of the projected 70 per cent, resulting in an inventory surplus and triggering a price war among OEMs.

Consumer concerns surrounding EV ownership include high costs, unpredictable residual values, charging infrastructure limitations, and reduced range in colder climates. Looking ahead, the study forecasts promising prospects, with 38 per cent of US consumers planning to make an EV their next vehicle purchase, and an additional 27 per cent considering it in the future. The Biden administration aims to achieve over 60 per cent market share for EVs by 2032.

Next-wave adopters of EVs demand lower prices, enhanced performance, a broader variety, and improved access to high-speed chargers compared to current EV owners. OEMs must meet stringent criteria, such as achieving 20-minute charging times, a 580 km (350-mile) driving range, and maintaining a 40 lakh rupee ($50,000) price point, to appeal to this consumer segment.

These next-wave adopters closely resemble current EV owners in demographics but prioritise running costs and established vehicle brands over EV-specific features. While few existing EV models meet these points, OEMs demonstrate the technical capabilities to achieve them with the next generation of EV platforms. Technological advancements, including high-density cell chemistries and more efficient components, offer promise for meeting consumer expectations. However, profitability remains a significant challenge, with most OEMs reportedly operating at a loss of 5 lakh rupees ($6,000) on each EV sold.

The study forecasts that up to 30 per cent of US buyers could be captured with the introduction of next-generation EV offerings, representing a potential demand of approximately 45 lakh units. Additionally, hybrids are expected to occupy a 15 per cent to 20 per cent share of new car sales when the next generation of EVs enters the market. 

Written by – Shashank Singh.