Despite continued heavy investment by automakers in electric propulsion technologies, global automotive executives have low expectations that electric vehicles (EVs) will take a large chunk of annual global auto sales within the next decade, according to a new survey conducted by KPMG LLP.
The firm polled 200 C-level executives in the global automotive industry and found that nearly two-thirds (65%) of executives do not expect EVs to exceed 15% of global annual auto sales before 2025. Executives in the U.S. and western Europe expect even less adoption, projecting EVs will only account for between 6% and 10% of global annual auto sales.
Regardless of low expectations, however, automotive executives surveyed indicated that a wide range of electric technologies will be an increased focus of investment over the next two years:
83% say automakers will increase investment in e-motor production;
81% say investment in battery (pack/cell) technology will rise;
76% expect increased investment in power electronics for e-cars; and
65% predict increased investment in fuel cell (hydrogen) technology.
Additionally, executives expect that hybrid fuel systems, battery electric power and fuel cell electric power will be the alternative propulsion technologies 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,’ says Gary Silberg, National Automotive Industry leader for KPMG.
‘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,” he adds. “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.”
However, despite all the investment and energy being focused on electric platforms, nearly two-thirds (61%) of executives said the optimization (so-called “downsizing”) of internal combustion engines still offers greater efficiency and carbon-dioxide reduction potential than any EV technology based on the current energy mix.
When asked to name the electrified propulsion technology that will attract the most consumer demand until 2025, auto executives were as mixed as their projected investments. In fact, the variation in response rates between fuel cell EVs (20%), battery electrified vehicles (16%), full hybrids (22%), plug-in hybrids (21%), and battery electrified vehicles with range extenders (18%) was slight.
According to KPMG's Silberg, ‘The industry faces a tough decision about whether to place more trust and resources in fuel cell or battery vehicle concepts, and these results show that it's way too early to call right now. Clearly, hybrids – whether plug-in or full – are more mature and have more market presence, but this battle for the dominant technology platform will continue for years to come.’
