Auto execs lower expectations for Battery Electric Vehicle adoption
Automotive industry experts predict what market share BEVs will reach by 2030
Automotive industry experts predict what market share BEVs will reach by 2030
Challenging climate sees auto execs lower expectations for Battery Electric Vehicle adoption
- European automotive executives predict that battery-powered vehicles (excluding hybrids) will represent around a third (29 per cent) of new vehicle sales in Europe by 2030.
- Twelve months ago, European auto execs told KPMG that they predict battery electric vehicles (BEVs) would represent half (51 per cent) of all new car sales by 2030.
- Two-thirds (58 per cent) of European auto execs say they are still confident that EVs will reach cost parity with internal combustion engine vehicles by 2030.
Despite battery electric vehicle transition gaining pace in the UK and Europe in 2022, industry experts have lowered their current expectations for what market share they believe BEVs will reach by the end of the decade, according to new research from KPMG.
Taking part in KPMG’s annual Global Automotive Executive Survey, 266 European-based automotive executives – including 31 senior figures in the UK – predict that battery-powered vehicles (excluding hybrids) will represent around a third (29 per cent) of new vehicle sales in Europe by 2030.
Twelve months ago, European auto execs told KPMG that they predict battery electric vehicles (BEVs) would represent half (51 per cent) of all new car sales by 2030.
Commenting on this change in forecast, Richard Peberdy, UK Head of Automotive for KPMG, said:
“The UK market is making good progress on electric vehicle transition, with battery electric vehicles gaining a 16 per cent share of the UK market in 2022. But continued progression is not straight forward, as the roll out of charger networks to keep pace with sales is proving difficult, while wider mass market adoption of battery electric vehicles is made harder by their current purchase price, plus concern around heightened energy prices as part of a wider cost of living squeeze.
“On the supply side, car makers are investing in further electric vehicle and battery technology development, but still face supply chain problems caused by chip shortages, the war in Ukraine and the general imbalance in supply chain efficiency post-covid. Questions also remain unanswered about substantially scaling-up battery manufacturing in the UK.
“This combination of factors is likely behind the fall in expectation regarding what market share BEVs can achieve by the end of the decade – and the fall should focus minds even further on how to tackle some of these challenges.”
Looking more broadly at what the global automotive sector will look like by 2030, industry experts also predict that the majority of new cars will be purchased online, and drivers will readily pay subscriptions for in-car software:
- Four-fifths (78 per cent) of automotive executives say that most vehicle purchases (excluding test drive) will be purchased online by the end of the decade.
- Global auto execs expect 34 per cent of new cars will be sold directly to consumers by car manufacturers and the same proportion by dealers – with 32 per cent sold by digital retail platforms.
- Digitisation will extend well beyond the point of sale to the entire functional and experiential life of the car, executives believe. Two-thirds (62 per cent) are either extremely or very confident that consumers will be willing to pay monthly subscription fees for such things as software services and advanced driver assistance systems (ADAS).
This revenue model is widely familiar to consumers who buy personal computers and then pay subscriptions for their software or those who buy monthly streaming entertainment services. If this prediction proves correct, such ongoing revenue streams represent an attractive opportunity and who profits from this (automakers, dealers, software and content providers) is not yet clear.
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Chris Knight, UK Automotive Partner for KPMG, said:
“Key players in the automotive industry, both globally and in the UK, are clear about the scale of shift to online for car buying in the coming years. The rising connectivity of cars is also anticipated to create strong demand for software subscriptions. Both of these changes will lead to a significant increase in customer data and a growing market for it – which will likely prove attractive to insurers and technology companies also.”
Given the amount of data that will be generated by each car and what it can tell about the driver, the report tells that car makers may want to participate in the market for car insurance. Executives think automakers will join forces with insurers, rather than competing against them. Only 7 per cent predict that auto companies will compete directly with insurers. Nearly half (46 per cent) expect them to partner with insurance companies and 44 per cent expect automakers to sell car and driver data to the insurers.
In other findings:
- Globally, executives remain very concerned about supplies of commodities and components, especially semiconductors, as well as items such as electrical steel and lightweight materials crucial for fuel efficiency and battery range. Car makers are responding to the vulnerability by focusing on near-shoring and on-shoring, in an effort to reduce reliance on only one or two countries.
- Nine in 10 executives say start-ups will have a significant effect on the auto industry.
- More than one in five executives say they are extremely likely to sell non-strategic parts of their businesses.
For full findings from the Global Automotive Executive Survey click here.
About the survey:
KPMG conducted a survey of 915 executives across the automotive and adjacent industries in October 2022. Two hundred and seven CEOs/Presidents/Chairman responded to the survey, along with 209 other C-level executives, 293 heads of business units and departments, and 205 business unit managers. Fifteen per cent work for car manufacturers and 15 per cent for Tier-1 suppliers. Sixteen per cent are employed by information and communication technology companies.
Three hundred and fifty-one work at companies with annual revenue of more than $1 billion. The two countries with the largest number of responses are the U.S. (28 per cent) and China (17 per cent). Europe has 29 per cent of respondents, with 26 per cent located in India, Japan, South Korea, Australia, Thailand, Indonesia, Canada, Latin America, South Africa and Saudi Arabia.
For further comment or interview:
Steven Reilly-Hii, Media Relations Manager (Industrial Manufacturing, Automotive, and Future Mobility), KPMG UK,
E: steven.reilly-hii@kpmg.co.uk ,
T: 0203 078 4055 / 07510 376635
About KPMG UK:
KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022.
KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients