Consumer product experience critical to market success for Battery Electric vehicle technology in Mainland China, reveals new study by Synovate

18 April 2011

SHANGHAI — While consumer awareness towards Battery Electric vehicle technology is improving in Mainland China, new green energy vehicles continue to fight an uphill battle in consumer perception against the conventional internal combustion engine (ICE) technology, and accessibility is becoming a critical factor for market success. Top four global custom market research company Synovate today released a study investigating the perception of hybrid vehicles by Mainland Chinese passenger vehicle owners and purchase intenders.

The study, conducted by the company’s automotive specialist unit Synovate Motoresearch, shows that two out of three car owners surveyed in Mainland China (67%) claim to be well informed about Battery Electric technology, while another 27% know the new energy technology “a little.” Purchase intenders, on the other hand, have significantly less knowledge about Battery Electric, with only three out of ten future car buyers (31%) know this technology “very or quite well.”

Please see Figure 1 for consumers’ awareness of Battery Electric technology.


Figure 1: Consumer awareness of Battery Electric technology (in %)


Not surprisingly, Battery Electric (together with Plug-in Hybrid) technology owns the ‘green’ space in consumers’ minds against the conventional ICE technology in “significant emission reduction” and “good fuel efficiency” (62% and 49% for hybrid technology vs. 14% and 16% for conventional technology). These greener vehicles are also seen as more advanced and trendy (43% and 40% vs. 22% and 16%).

Battery Electric scores low on being “powerful” (16% vs. 44%), “reliable” (21% vs. 49%) and “affordable” (27% vs. 48%).

Please see Figure 2 for consumers’ perception on Battery Electric technology


Figure 2: Battery Electric technology image perception (in %)


Besides the overall weak image of Battery Electric technology, the major barriers that prevent Chinese car consumers from opting for this new energy proposition refer to concerns regarding the battery (53% indicating concerns for “difficult to recharge”), costs (42% “parts are too expensive”; 37% “cars are expensive”), and product experience (41% “no chance to test drive”).

Klaus Paur, Managing Director of Synovate Motoresearch for Greater China and Korea, said: “After having heard about Battery Electric vehicle technology for several years now, there is undeniably a great deal of interest in the market, but consumers still lack concrete product experience.

“To obtain a more favourable perception from prospective buyers, it is necessary to let them get behind the wheel and offer a personal electric driving experience. This is important to address doubts about usage and functional quality of new energy vehicles, which have accumulated over time mostly on a hearsay basis.”

Please see Figure 3 for consumers’ perception on barriers to use Battery Electric vehicle technology.


Figure 3: Barriers to use Battery Electric vehicle technology (in %)


Survey results also suggest that there is only room for charging a small price premium on Battery Electric vehicles.

Overall, car owners in China would accept a 4% price increase in direct comparison with their current car.

“The vehicle purchase price is one major reason against possible usage, but the cost concerns extend to maintenance costs and service parts as well. The challenge is on for Government to sufficiently subsidize the purchase of Battery Electric vehicles, and for car makers to transparently demonstrate low maintenance costs along the entire vehicle ownership,” Paur added.

Please see Figure 4, on acceptable pricing for Battery Electric vehicles.


Figure 4: Acceptable price for Battery Electric vehicles (Index vs. ICE = 100)


Research findings show that among car consumers in China, BYD displays the strongest top-of-mind association with Battery Electric vehicle technology (21%), but Toyota is on par when all associations — top-of-mind and other mentions — are counted (35% each).

Honda and Nissan (24% and 21% respectively) complete the list of strongly associated car makes with Battery Electric technology. Other than BYD, Chery obtains a sizeable number of consumer associations, comparable with the level of Volkswagen (18% and 17% respectively).

“The results of our survey show that, with the exception of BYD and maybe Chery, Chinese car manufacturers overall do not play a significant role in the eyes of consumers when it comes to Battery Electric technology,” concluded Paur. “Even BYD is at risk of losing the benefits of its marketing efforts if it cannot deliver on the promises made and roll out new energy vehicles soon, while foreign competitors, such as Nissan with its Leaf, are taking a more active role.”

Please see Figure 5, consumers’ associations of car markers with Battery Electric technology.


Figure 5: Associations of car makers with Battery Electric technology (in %)

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