CALIFORNIA STUDY SAYS MASS MARKET NOT READY FOR ELECTRIC VEHICLES

Average consumers would demand that a battery-powered electric vehicle cost about $28,000 less than a comparable internal-combustion vehicle before they would agree to own and drive the EV.

That's according to a study by Professor Kenneth Train of the University of California - Berkley. He presented it to the California Air Resources Board (CARB) workshop on California's electric vehicle (EV) mandate.

"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," says Dr. Train.

Why's that?

To offset the shortcomings, such as limited range, that are characteristic of Ev's," he says.

The study by Dr. Train and National Economic Research Associates, an economic consulting firm, says 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," says Jim Olson, Toyota Motor North America's senior vice president for external and regulatory affairs.

He adds, "We believe EVs may meet a niche-market need, such as shared-use community vehicles, 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 examined the potential market for electric vehicles. It polled more than 1,000 California vehicle owners. Toyota and General Motors commissioned it.