Deloitte Supplement - January 6, 2020 - D6

Industry 4.0 in automotive

infrastructure investments that will likely be required.

the same. Further, 27 percent of US respondents and

Some vehicle manufacturers have stated that they are

30 percent of German consumers would be willing to

not in the business of selling fuel, although some

wait between 30 minutes and one hour to charge their

pioneers have been forced into the charging space to

electric car.

make their overall business strategy viable. For their
part, traditional fossil fuel providers are happy to

What about fuel taxes
in an EV world?

maintain the status quo. Government agencies are
channeling some funds to specific projects to promote
innovation, but these amounts are nowhere near the

To date, one of EVs' most compelling benefits has

overall investment likely needed.

been essentially free or very low-cost fuel. But
When put to consumers, the question of who should

governments, of course, have an interest in

be responsible for EV charging infrastructure

maintaining the considerable revenue stream

becomes somewhat clearer. Thirty-eight percent of

currently generated by fossil fuel taxes. In fact, the

consumers in Japan believe that it is the EV

level of refueling taxes applied in Germany (46

manufacturer's obligation to build out the necessary

percent), Japan (47 percent), and India (49 percent),

charging network, and many in the United States (36

have translated into a substantial and stable source of

percent) and India (34 percent) hold the same view.

government revenue over several decades. Even in the

However, opinions in the Republic of Korea and

US, a loss of the 19 percent tax applied to each gallon

Germany are decidedly different. In the Republic of

of gas pumped would be a considerable gap to backfill.

Korea, only 24 percent of consumers said that the

Therefore, the more that global governments

OEM should be responsible for building charging

encourage EV ownership through incentives and

stations, and half thought it should be the

other stimulants, the more they should figure out how

government's responsibility. Moreover, German

to either tax electricity to earn revenue comparable to

consumers were roughly evenly split in placing the

that generated by fossil fuel taxes, or come up with

responsibility on OEMs, government, existing fuel

alternative revenue sources to fill the void. These

companies, and electric utilities. As we've seen in

alternatives could take the form of user fees or other,

some other industries, the question of establishing a

similar mechanisms, but many of these ideas are very

viable, holistic EV charging network may open the

unpopular with consumers.7

door to a public-private partnership (P3) that would
have the resources to scale an appropriate response to

At the end of the day, both automakers and

this issue.

governments should find new revenue streams to fill

6

potential gaps left by an evolving industry. Even
An interesting side note is that, when asked how long

though some of the technologies now being developed

it should take to fully charge an EV, only 17 percent of

may take years to become commercially available,

German consumers said less than 10 minutes. In fact,

considering the implications now may yield significant

less than 10 percent of US survey respondents said

benefits down the road.

6
Deloitte Supplement - January 6, 2020

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