Some doubts are starting to arise about the effectiveness of the electric transition. According to the 24th edition of the Kpmg survey, the global network of independent companies specializing in management consultancy active in 147 countries, executives of car manufacturers and suppliers operating globally are less certain of the success of the transition towards electric vehicles, while investments related to hybrid models are growing strongly. The report is based on the analysis of interviews with over a thousand executives on all continents, from which it emerges that the “total” confidence of Western European executives towards the transition to fully electric models has fallen – compared to the previous survey – from 31% to 24%. That of managers in the United States from 48% to 43% and that of Japanese from 32% to 10%. In China, however, this figure rose from 28% to 36%.
KPMG said doubts are growing that the sector can achieve more profitable growth over the next five years as concerns over costs and access to critical materials intensify. Just a year ago, managers were excited about the prospects of transforming the industry with new types of cars, KPMG notes. Now they remain optimistic, but are more sober about how difficult it will be to manage the transition and preserve or increase profits. On the other hand, hybrid technologies jumped from fourth to second place overall in technological investments.
Reasons for concern …
Despite price reductions in 2023, more than two-thirds of manufacturers surveyed expect increases of 5%-10% in 2024. However, given recent price drops and the high number of new models – says the report – these increases could be more difficult to obtain than expected. At the automotive supply industry level, the survey finds that confidence in electric vehicles has fallen from 56% to 23%. According to the report, the reasons for concern are clear: companies have made huge bets on electric propulsion and at the same time are increasingly worried about short-term headwinds that could delay results.
“Two years ago when we asked what percentage of electric car sales would be in 2030 – underlined Gary Silberg global head of automotive at Kpmg International – we have answers on a very wide range, from a minimum of 20% to a maximum of 80%. This year the range of estimates has narrowed significantly, indicating that executives have developed a more mature and realistic view of how quickly the penetration of electric models will occur. Electric vehicle sales are growing rapidly, but within total markets that are stabilizing. According to our survey, China is expected to have the highest EV penetration in 2030, accounting for 36% of new car sales. Respondents expect penetration in the United States, Japan and Western Europe to reach 30-33%.”
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