Detroit, Michigan – Electric cars won’t exceed 15 per cent of annual global sales before 2025, despite the heavy investment by automakers in them, according to a new survey of auto company executives by advisory firm KPMG.
In the poll of 200 global executives, KPMG found that 65 per cent do not expect more than 15 per cent of sales by 2025 for e-vehicles, which include all electrified vehicles from full hybrids to fuel cell vehicles. Executives in the U.S. and Western Europe expected e-vehicles to only account for 6 to 10 per cent of global annual auto sales by that date.
“Electric vehicles are still in their infancy, and while we’ve seen some recent model introductions, consumer demand has so far been modest,” said Gary Silberg, national automotive industry leader for KPMG. “While we can expect no more than modest demand in the foreseeable future, we can also expect OEMs to intensify investment, fully appreciating what is at stake in a very competitive industry.”
Despite the relatively modest sales projections over the next 15 years, auto execs indicated that a wide range of technologies will be an increased focus for investment. Over the next two years, 83 per cent said that automakers will increase their investment in e-motor production; 81 per cent said investment in battery technology will rise; 76 per cent expect increased investment in power electronics for the cars; and 65 per cent predict increased investment in hydrogen fuel cell technology. Hybrid, battery electric and fuel cell systems are expected to attract the most auto industry investment over the next five years.
“What’s interesting is that automakers are placing bets across the board, and large bets at that, because no one knows which technology will ultimately win the day with consumers,” Silberg said. “In last year’s KPMG survey, execs told us it would be more than five years before the industry is able to offer an electric vehicle that is as affordable as traditional fuel vehicles for mainstream buyers. It will be interesting to see how consumer adoption progresses as automakers discover ways to offer these electrified cars at better price points, and the infrastructure for these vehicles becomes more robust and accommodating.”
Despite the focus on electric platforms, 61 per cent of executives said that the optimization, or so-called “downsizing,” of internal combustion engines still offers greater efficiency and CO2 reduction potential than any electric vehicle technology, based on the current energy mix.
No clear-cut winner was identified among e-vehicles for consumer demand until 2025, with 20 per cent identifying fuel cell electric vehicles, 16 per cent battery vehicles, 22 per cent full hybrids, 21 per cent plug-in hybrids, and 18 per cent for range-extended electric vehicles.