Study: Strongest And Most-Challenged Global Plug-in Car Markets

China and the U.S. are showing the highest potential for growth in plug-in electrified sales, while three countries fall into the “Hesitators” category of a new Accenture study.

Although plug-in electrified vehicle (PEV) sales should be strongest in China and the U.S., the study finds that technological, economic and political factors, including the influence of more planned mass-market PEV introductions over the next four years, will mean that automakers can tap into nine additional growth markets to invest in.

Accenture analyzed 14 markets: Brazil, Canada, China, France, Germany, India, Japan, the Netherlands, Norway, Russia, South Korea, Sweden, United Kingdom, and the U.S., to pinpoint the crucial distinctions that shape EV market attractiveness. As this Accenture table shows, all but Brazil, India, and Russia show signs of PEV market growth potential.

EV Market Attractiveness Result Matrix

The consulting firm advised automakers to first target China and the U.S. for investments for stronger distribution networks for PEVs, while at the same time adapting their product portfolios to cater to specific customer preferences in each country. Factors that should be considered include the future volume of buyers who will be able to afford PEVs in those countries, and the development of extensive charging infrastructures.

Canada, France, Germany, Japan, the Netherlands, Norway, South Korea, Sweden and the United Kingdom are all ranked as High Potentials for their high growth prospects between now and 2020, but currently they each have a small PEV market size. These markets typically have government plans in place to invest significantly to make PEVs more attractive to car buyers.

Brazil, India and Russia are classified as Hesitators by Accenture due to the small market size and an expected low growth rate. Market forces influencing PEV sales in these countries include lack of public charging infrastructure and low fuel prices.

For these three Hesitator markets, Accenture believes automakers should not yet make significant investments, but they should be regularly reevaluated. They should expect to see significant investments in the country and a broad range of new capabilities that could include dedicated sales staff training and aftersales enablement once they begin to see demand take off.

All of the markets were analyzed for local factors including political factors (one-time government monetary subsidies at purchase, post-purchase monetary government subsidiaries, non-monetary government regulations, charging infrastructure); economic factors (purchase price, fuel price, and number of potential buyers) and technological factors (range and charge time).

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Accenture advises automakers to see existing government incentives as a strong market force in these countries. Automakers should consider targeting all of those countries where governmental support and subsidies exist as a priority, before these measures are removed.

“What is clear is that government policy can rapidly change the rules of the game, more than any other factor,” said Christina Raab, managing director in Accenture’s Automotive practice. “For example, China has set targets for EV and plug-in hybrids to make up seven percent of total car sales in 2020 and 40 percent in 2030, reaching an estimated 15.2 million units. In parallel, China is hoping to see breakthroughs in battery and motor technology, while planning to build a nationwide charging network.

“Car-makers must keep a close eye on how government agendas can potentially open the way for an increase in EV demand – especially at a time when the industry seems to be reaching a tipping point toward mass-market EVs,” she added.

Accenture