In brief

In brief

  • To remain competitive, automakers need to understand the implications of changing customer preferences toward sustainability.
  • To help automakers address this issue, we analyzed—and debunked—five myths that are often input factors for automakers’ decision-making processes.

Based on the insights that we were able to capture through our comprehensive survey, we refuse five myths that have been established in the world of automobiles. In each case, the reality is somewhat different and requires automakers to take immediate action. Our suggested measures should help them better understand the evolving customer preferences and take the necessary steps to align their businesses for continued success.

What is a “sustainability-minded driver”?

We use the term “sustainability-minded drivers” for car owners and drivers who rated themselves as either an 8, 9 or 10 with respect to sustainability on a scale in which 10 = “extremely environmentally concerned” and 1 = “not at all environmentally concerned.” This group accounts for 64% of the respondents, with the others referred to as “less-sustainability-minded drivers.”

Myth: Only a small group of drivers is concerned about the sustainability of the vehicles they buy and drive.

Reality: Most car buyers are concerned about the environmental impact of their vehicles— which could affect their purchasing decisions.

  • Sustainability is no longer a side issue for car buyers and drivers. In fact, nearly two-thirds of the 8,500 respondents in our study are very environmentally concerned.
  • These “sustainability-minded drivers” span all age groups, all types of population areas, and all income levels—with 25% having a monthly net household income less than US$2,500.

Myth: Vehicles with internal combustion engines will remain an important revenue source until governmental regulations become stricter.

Reality: The majority of drivers are considering switching to a sustainable vehicle for their next automotive purchase.

  • Nearly three-quarters (73%) of sustainability-minded drivers prefer an NEV for their next vehicle, with a hybrid electric vehicle being the most-preferred type.
  • More than half (53%) of less-sustainability-minded drivers also plan to purchase an NEV as their next vehicle.
  • The most important factor driving interest in NEVs is the protection of the environment (25%).

Myth: Drivers won’t pay extra for sustainable vehicles.

Reality: Customers want sustainable vehicles—and are willing to pay more for them.

  • Nine in 10 sustainability-minded drivers are willing to pay more for a sustainable vehicle―with six in 10 willing to pay at least 6% more.
  • Nearly four in 10 sustainability-minded drivers (38%) are also willing to pay up to 5% more for sustainable service and repairs, with another one-third (33%) willing to pay up to 15% more—and an additional 10% willing to pay as much as 25% more.
  • Sustainability-minded drivers are also willing to accept certain other trade-offs for a sustainable vehicle. For instance, approximately six in 10 would accept: a car with a less-attractive, more-functional design (63%); a car with reduced performance, such as lower horsepower and/or slower acceleration (62%); and a charging infrastructure that is not expanded much beyond today’s existing infrastructure (59%).

Myth: Drivers are more concerned about digital experiences and convenience than about environmental impacts.

Reality: Drivers don’t want to choose between digital experiences, convenience and sustainability—they expect all three.

  • Sustainability-minded drivers prefer digital experiences—including seamless and hassle-free processes—even more than their counterparts (they were approximately 25% more likely to have purchased a new vehicle online).
  • Yet sustainability-minded drivers are frustrated with some of their digital experiences, with more than one in five (22%) citing frustration accessing relevant price information and agreeing on a final sales price, and another 16% each citing frustration with the availability of pre-sales information on websites and the advice from sales associates online.
  • Three-quarters (74%) of sustainability-minded drivers would like automakers to provide proactive offers based on real-time vehicle monitoring to identify service and repairs needs.

Myth: Tesla is the de facto leader in sustainability.

Reality: The race for future customers is still open, as no single automaker is perceived as the sustainability champion.

  • No brand is perceived as the undisputed leader for the best vehicle sustainability concept. When asked to identify the brand with the best sustainability concept, nearly as many sustainability-minded drivers cited BMW or Audi (11% each) as Tesla (12%).
  • In fact, 13% of sustainability-minded drivers don’t even have a specific automaker in mind when it comes to sustainability—more than the number who cited any single brand. In many cases, respondents were more likely to pick automakers based in their home markets; those in the U.S., for example, selected Ford, and those in France selected Renault and Peugeot.
  • Even in service and repairs, nearly three in 10 sustainability-minded drivers (28%) don’t identify a specific brand as having the best sustainability concept; those who do most often cited BMW and Audi (12% and 10%).

What do manufacturers need to do now?

Automakers can’t let government regulations dictate the speed of their sustainability journeys. Instead, they must listen to and focus on what customers want—and act now:

  • They must move quickly to embed sustainability into―and communicate it broadly across―their brands.
  • They must transition their product portfolios toward NEVs and develop a holistic approach for new and used car sales as well as service and repairs.
  • They must rethink their pricing strategies to take advantage of the margin potentials in both their sales and service operations.
  • They must improve the digital experience for customers across all points of the sales and ownership journeys.
  • And they must establish or join a broader ecosystem with a diverse group of players to realize the full potential of sustainability.

The road for sustainability recognition and dominance is still wide open: The automakers that can move quickly will be well-positioned to meet consumers’ preferences for sustainable vehicles; those that hesitate will likely lose the race.


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