In a study presented at today’s California Air Resources Board (CARB) workshop on California’s electric vehicle (EV) mandate, U.C. Berkeley Professor Dr. Kenneth Train found that average consumers would demand that a battery-powered EV be approximately $28,000 less expensive than a comparable internal-combustion vehicle before they would agree to own and drive it.
“Since the average retail transaction price of an internal-combustion Toyota RAV4 is about $21,000, this would mean that in order to meet California’s EV mandate, Toyota would have to give the average consumer a free RAV4-EV plus a check for approximately $7,000*,” said Dr. Train. “This would be necessary to offset the shortcomings, such as limited range, that are characteristic of EVs.”
Conducted by Dr. Train and National Economic Research Associates, an internationally recognized economic consulting firm, the study also concluded that the mass market is not ready to accept EVs as general use vehicles.
Customers place a large negative valuation on EVs for reasons other than their price, performance, and operating costs. The negative valuation is still significantly strong even when consumers are informed about the potential positive effect of EVs on California air quality.
“This would make it difficult for Toyota to find 6,400 customers a year willing to drive battery-powered RAV4-EVs, the number required to fulfill our annual sales obligation under the mandate which is scheduled to begin in 2003,” said Jim OLSON, senior vice president, external and regulatory affairs for Toyota Motor North America.
“We believe EVs may meet a niche-market need, such as shared-use community vehicles,” continued Olson, “and we are exploring that niche. But, as this study shows, there is not sufficient consumer demand to justify the mandate, and the minimal real-world demand for EVs will assure that they have negligible effect on the quality of California’s air.”
The study, which examined the potential market for electric vehicles and polled an unusually large sample of more than 1,000 California vehicle owners, was commissioned by Toyota and General Motors.
assuming 100-mile EV range and the same operating cost and performance as an internal-combustion RAV4.