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'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

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Jensen Huang made his $172 billion fortune on AI chips. His family's $75 million gift to Vanderbilt argues art decides what technology is for

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Daimler tracked 146 electric cars for more than 620,000 miles. Here’s what it found out.

By
Kirsten Korosec
Kirsten Korosec
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By
Kirsten Korosec
Kirsten Korosec
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July 31, 2015, 10:23 AM ET
Daimler Smart Fortwo electric drive (ED)
The Daimler-made Smart Fortwo electric drive car.Courtesy: Daimler
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The prospect for electric vehicles largely boils down to price, image, and ignorance, according to research by Daimler AG, the parent company of Mercedes-Benz.

Daimler (DDAIY) just wrapped up a two-year electric vehicle project that tracked 146 Smart Fortwo cars for more than 1 million kilometers, or a little more than 620,000 miles. The company’s mobility research team interviewed the private and business customers who drove the cars, analyzed the driving data, and came up with a few insights that could help automakers figure out how to sell more electric vehicles. The study was conducted in the Rhine-Ruhr and Berlin regions of Germany.

Two kinds of consumers emerge out of the research.

The typical supporter of electric mobility is educated and tech-savvy with an above average income, according to analysis of the target group in the study. Meanwhile, the researchers found the less the interviewee knew about electric vehicles, the more negative their opinion was of EVs.

 

In the end, the decision in favor of an electric car came down mainly to reasons of image, while environmental awareness was of minor importance, according to Daimler.

Interviewees also took a rather narrow view on pricing. On one hand, the purchase price was a key criterion for or against an electric car. And yet, the folks interviewed for the study were often unaware of the money they saved on fuel consumption.

The ideal target group in the study turned out to be commuters who drive 50 km (31 miles) a day—the distance that makes the purchase of an electric vehicle, or EV, financially attractive.

Interviewees also placed great importance on the range, performance, and space of the car as well as the charging time of the battery. The decision to buy an EV was also positively influenced by access to a public charging infrastructure.

Granted, this study was limited to drivers in Germany. However, it does offer a glimpse to a wider consumer group, particularly in Europe and North America.

The upshot? If automakers hope to sell a critical mass of electric cars, trucks and even bikes, education will have to a major component of the push along with investment in charging infrastructure.

Global electric vehicle stock has surged despite obstacles with consumers, rising from about 180,000 electric cars on the road in late 2012 to 665,000 by the end of 2014, according to the Global EV Outlook 2015 released by Clean Energy Ministerial’s Electric Vehicles Initiative (EVI).

The number of EVs sold each year has accelerated rapidly from 45,000 in 2011 to more than 300,000 in 2014, according to EVI. EVs are also increasing their market share. In 2014, EVs represented more than 1% of new car sales in four member countries: the Netherlands, Norway, Sweden, and the United States.

[fortune-brightcove videoid=4040972115001]

 

Daimler is one of those automakers keen to invest in and expand its EV offerings. The company’s Mercedes-Benz brand says it will introduce 10 plug-in hybrid models by 2017 and is planning further all-electric vehicles powered by either battery or fuel cell.

For Daimler, the next step is another study, deemed eMERGE2. In this study, up to 200 cars will be tracked in several regions of Germany. This time, the vehicle fleet will be made up of battery electric B 250 e and plug-in hybrids from Mercedes-Benz.

Daimler wants learn how customers use plug-in electric vehicles compared with owners of all-electric vehicles. Daimler will pool the findings with other empirical data—such as information from endurance trials—and use it in the development of electric drivetrains and systems.

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