Consumer interest in electric vehicles expected to pick up speed in China, KPMG survey finds

Consumer interest in electric vehicles expected to...

State subsidies, environmental protection and brand awareness are key drivers for electric vehicle purchases in China

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Electric vehicles (EVs) are rapidly gaining traction in China as a viable alternative to traditional internal combustion engine (ICE) cars, finds a recent KPMG survey.

The report, titled Consumer Insights on New Energy Vehicles in China, in association with AutoForesight, finds that 57 percent of new energy vehicle (NEV) owners and 76 percent of potential owners view EVs as more economical and environmentally friendly than ICE cars.  

State subsidies and free licence plates are also key factors for purchasing an EV, especially in densely populated cities that enforce licence plate quotas. Meanwhile, potential owners view lower maintenance costs and environmental protection benefits as the main reasons to purchase an EV. 

The key driver for both owners and potential owners to opt for an NEV is brand awareness, with a mix of international and domestic brands gaining recognition from respondents. Other key drivers are product quality and professional service for owners, and industry leadership and the maturity of NEV technology for potential customers.

The survey also finds that current NEV owners and potential buyers have quite a positive attitude towards the sharing economy regarding EVs. When it comes to choosing self-driving EVs from car-sharing services, 65 percent of all respondents agree they would use this service, while acknowledging that they would still want to own their car.

“With EVs gaining traction in the China market and getting more acceptance in society as a real alternative to traditional ICE vehicles, Chinese consumers are raising the bar regarding their expectations of EVs to fulfil their mobility needs,” says Huu-Hoi Tran, partner and China Head of Automotive, KPMG China. 

“Chinese consumers realise that technology needs to improve in order to ensure safety. However, they have very clear expectations about how they see the role of EVs for themselves, as well as for society. In a nutshell, EVs should meet their mobility needs – commuting and reasonable charging speeds, for example – and be environmentally friendly.” 

NEV consumers have clear expectations regarding driving range, charging speed and convenience, but they have an even clearer expectation about NEV prices. Most of these consumers want NEV prices to be the same or less than 125 percent the price of a similar gasoline car, says Yale Zhang, Founder of AutoForesight. 

“However, NEVs nowadays usually have a retail price that is double or even triple the price of similar traditional cars. For car makers, there are just four years left to lower their costs before all subsidies are phased out by the end of 2020. Otherwise, consumers in the cities without car licence plate control policies might be reluctant to buy NEVs.”

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About the Report

KPMG China and AutoForesight conducted a survey of 220 owners and potential owners of new energy vehicles in China to gain a better understanding of current and future consumer preferences for Chinese automobiles. One hundred respondents are owners of new energy vehicles, while 120 are potential owners. Eighty percent of the survey respondents are between 30 and 35 years old. 

About KPMG China

KPMG China operates in 16 cities across China, with around 10,000 partners and staff in Beijing, Beijing Zhongguancun, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Xiamen, Hong Kong SAR and Macau SAR. With a single management structure across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located. 

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 152 countries and regions, and have 189,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG China was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong office can trace its origins to 1945. This early commitment to the China market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in the Chinese member firm’s appointment by some of China’s most prestigious companies. 

Consumer Insights on New Energy Vehicles in China

This report, in association with AutoForesight, highlights the key current and future consumer preferences for new energy vehicles in China

 
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