Consumer interest in electric vehicles diverges globally: China surges and U.S. stagnates

Purchase intention surges in China and stagnates in the U.S., as buyers pivot to plug-in hybrids; improved charging is singular key to long-term BEV growth, AlixPartners study finds

• Percentage of those “very” or “moderately” likely to purchase battery-electric vehicles increases to 97% in China, showing that NEV’s have moved mainstream
• PHEVs are viewed by electric-vehicle intenders in U.S. as real substitutes for BEVs
• High percentages of BEV intenders outside of China willing to consider Chinese brands
• In U.S., those citing BEV charging concerns grow, as cost and range concerns moderate amid improvements
• BEV loyalty has strengthened; but BEV intention among ICE owners has remained the same
• Long-term U.S. BEV growth outlook favorable, with those likely to purchase BEVs rising from 35% today to 48% by 2035

NEW YORK (April 22, 2024) – The global battery-electric vehicle (BEV) market has divided into two distinct camps, with “very” or “moderately” likely BEV-purchase intention nearing totality in China – the world’s largest automobile market – even as near-term growth in sentiment for pure BEVs stagnates in the U.S. and Europe, according to the AlixPartners 2024 International Electric Vehicle Consumer-Sentiment Survey released today.

The new study, fielded in late March through early April, suggests that while the long-term global outlook for BEVs remains favorable, the road to achieving meaningful BEV growth has taken some critical turns since AlixPartners’ previous similar survey was fielded in 2021. Conditions for international expansion of Chinese EV brands appear to be improving, and the suitability of plug-in hybrid-electric vehicles (PHEVs) as BEV substitutes is on the rise in the U.S. and other key markets as the BEV and PHEV buyer pools highly overlap.

Chinese BEV manufacturers, following years of battle-testing in their domestic market, are laying groundwork for international expansion, says the study. Among those surveyed, between 47% to 71% and of consumers in mature markets – including Germany, the U.S., and Japan – said they are aware of at least one Chinese brand, with BYD Company Ltd.’s BYD brand leading the way. Many, including 73% in the U.S., said they would consider a Chinese BEV if the vehicle is priced 20% lower than a similar BEV from non-China manufacturers – which is often the case in China right now.

“China clearly occupies the pole position in the global EV race,” said Mark Wakefield, global co-leader of AlixPartners’ Automotive & Industrial Practice. “China now operates like a mature BEV market, with consumers seeing BEVs as a natural choice. This is due to several factors, including a well-developed BEV-charging ecosystem and high-tech, attractive vehicles that are software-defined. The U.S. and European markets, meanwhile, still have BEVs mostly satisfying early adopters.”

AlixPartners’ survey, the third of its kind, included 9,000 respondents in eight markets that represent more than 80% of global BEV sales. The study gauged general interest in BEVs and PHEVs; price sensitivity; and awareness and consideration globally of Chinese automaker brands.

The responses show stagnating growth of interest in pure BEVs in the U.S. and Europe compared to 2021 results. The percentage of those surveyed in 2024 who are “very” or “moderately” likely to purchase a BEV remained flat compared with 2021 in the U.S., at 35%; in Europe that number increased just one percentage point, to 43%, over the period. That compares to growth of the share of “very” or “moderately” likely purchases in China to 97% of respondents in this new survey, up from 85% in 2021.

Battery range (43%) and charging infrastructure (43%) are tied atop the list of BEV concerns in the U.S. in this year’s survey, followed by the amount of time it takes to charge (38%) and ownership/leasing costs (33%). Doubts about home-charging feasibility experienced a notable increase, increasing to 27% from 19% in 2021. Respondents in China are less concerned about charging infrastructure.

These concerns have BEV-intenders in the U.S. turning their interest to PHEVs, which combine both a battery and an internal-combustion engine to power the vehicle, as a suitable alternative. Of respondents in the U.S. “very” or “moderately” likely to consider a BEV, 83% are more interested in a PHEV as their next vehicle.

“In the U.S. and Europe, BEV-intentioned buyers are turning their interest to PHEVs, seeing them as a completely legitimate substitute for meeting near-term needs and addressing charging and range concerns,” said Arun Kumar, global co-leader of the Advanced Mobility Practice at AlixPartners. “This shift in preference presents a monumental challenge for traditional automakers, suppliers and dealers as they deploy resources to compete in the BEV transition.”

“Compounding this is recent evidence that PHEVs are not run on electric-only power anywhere near what regulators had anticipated,” Kumar said. “This further complicates the task of keeping one foot planted firmly in the present while taking a giant step towards the future – there is little margin for error, particularly as Chinese brands move aggressively in domestic and international markets.”

The study found PHEVs address two of the most prominent challenges serious BEV intenders face: charging and range. The study indicates the appeal of PHEVs will fade in the longer term, with 85% of PHEV owners internationally saying they would strongly consider a BEV by 2035.

Among other findings:

• Chinese BEV brands would face awareness hurdles in the U.S. While price could be a major influencer in favor of Chinese BEVs, U.S. consumers would be hesitant due to buy due to various concerns. Concerns include reliability, service, and brand image, which are perceptions that have been overcome in China. Chinese EV brands are now seen as mature and products a completive and not simply low priced options.

• Loyalty to BEVs is high among existing BEV owners internationally with 83% of BEV owners “very” or “moderately” likely to buy another BEV, compared to 75% in 2021’s survey. Of internal-combustion vehicles owners surveyed, only 27% are likely to next purchase a BEV, down from 28% in the 2021 survey.

About AlixPartners

AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private-equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York, and has offices around the world. For more information, visit www.alixpartners.com.

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