Oh McKinsey…
The PR flacks at consulting powerhouse McKinsey have been busy this week. The firm’s mobility practice released a big research study on EVs with an irresistible news hook: 46% percent of U.S. EV drivers told McKinsey pollsters they are very likely to switch back to an ICE powertrain in their next vehicle.
This contrarian finding from the Wizards of McKinsey rang plenty of loud bells both in the automotive industry media and among those troublemakers in the ideologically anti-EV press. The Daily Caller gleefully squawked out the news under the breathless headline “Huge Percentage of EV Owners Want to Go Back to Normal Cars, Study Reports”. The “normal cars” crack is a nice cheap shot that would make even Rupert blush.
Show what is the truth of all this? I have, shockingly, an opinion. First the McKinsey research comes from a big global study, and the go back to ICE number ranges from county to country; from the lowest 13% in Japan to the highest 49% in Australia. (There was a high correlation between countries where McKinsey polled and where there is local McKinsey office standing by to pitch you consulting services. OK, these are also the places with the highest EV market penetration, so I kid the McKinsey people, I kid.) China’s go back to ICE number was 28% and the European numbers were all below that.
Other data doesn’t agree. Registration data — when people who own an EV change cars — over the past few years runs close to 1/3 rotating back to ICE. J.D. Power, another well-respected research firm in the Automotive Industry says their data doesn’t show anything like the McKinsey numbers. Our own polling, which didn’t dive much into asking about your next car’s likely powertrain, did show very high happiness among EV drivers. So it’s murky. I’ll let dueling gangs of consulting firm fugglemen and women duke it out over this at the next HBS, Stanford, Yale and Wharton business school reunion mixers and instead focus on what I think is a far more telling, and relevant, finding from inside the McKinsey study. I think that is the real signal inside the “EV drivers hate EVs” spun up noise.
McKinsey asked EV drivers why they said they were likely to switch. Here are the reason cited:
- Charging Infrastructure Not Good Enough – 35%
- Cost of ownership too high – 34%
- Driving pattern on long trip impacted too much – 32%
- Cannot charge at home – 24%
- Worry about charging too stressful – 21%
- Changing mobility requirements – 16%
- Do not like the driving experience – 13%
Now don’t ask me why the total percentages in this million dollar McKinsey study add up to 175%…. Probably aligned to the normal company mark-up. (OK, enough McKinsey jokes. I’m sure they are combining answers to reflect top two mentions. We did the same with our data. It’s just that my brother works for EY and our talented Executive Director Joe Sacks is a soon to be Bain guy. So I cannot resist. Joe would be writing a more reasonable and factually minded version of this, but he is busy getting married this weekend! Go Joe!)
The real finding in this data is quite clear: It’s Charging Stupid. It’s a big pain point for many EV drivers. Note that only 13% of these EV drivers say the driving experience is the reason they are — at this moment — likely to switch their next care to an ICE powertrain. The U.S. has the most DCFC hassles and our EV drivers feel the pain. The EU counties have, mostly, better charging so it’s no surprise that their switch to ICE numbers are much lower. (For example, EV loving fast charging paradise Norway’s switch to ICE score is only 18%.)
So I buy the charging pain finding. And our own data shows us that charging, along with price (also ranked high in the McKinsey list) are the biggest “reasons not to buy an EV factor.” (We also did data on culture/politics, which I don’t think McKinsey looked at. It’s a bit tough to tell; the McKinsey publicly released data is big on finding and very thin on methodological details.)
In view of all this I take the McKinsey finding of “46% of U.S. Drivers likely to switch” with a huge boulder of salt. I know I love my EV. But during the rare occasions where my Apple CarPlay won’t synch with my BMW infotainment software and I have to do a. hard reset, I’ll vow no more EVs either. For about a minute. So is the McKinsey topline number really predictive? I’d bet big against it. But their analysis of pain points? Dead on correct.
So have no doubt, we must fix public charging, both on highways and level 2 charging at offices and especially, at multi-family dwellings. That, is the real thorn in the EV bear paw and what the McKinsey data is really telling us.