The industry is investing hundreds of billions on battery-electric vehicles (BEVs). Will those bets pay off?
For a century, a single fuel-powertrain combination— the petroleum-powered internal-combustion engine (ICE)—has dominated the global automotive industry. How automotive companies are structured, how they are financed, how they go to market—everything was optimized for producing and selling ICE-based vehicles.
Now, the conventional wisdom says that the battery-electric powertrain will triumph—becoming the dominant force in the automotive business that ICE has been. And automotive companies are making massive bets on this scenario. Yet, we still don’t know when battery-electric vehicles (BEVs) might reach a tipping point and become popular with a wide swath of consumers, generating the sales—and profits—to justify the billion-dollar investment auto makers are making in BEV development. ICE is going to lose dominance, but the future industry may look more like a mosaic—with multiple fuel/powertrain combinations and far more complexity than the conventional wisdom assumes.
In our paper, Place your billion-dollar bets wisely: Powertrain strategies for the post-ICE automotive industry, we describe why for the next 10 to 20 years, multiple fuel/powertrain combinations (including gasoline/internal combustion) will coexist, and innovation will continue on multiple fronts. So, instead of a monolith built around one dominant fuel/powertrain combination, the industry will look more like a mosaic of a variety of powertrains to meet the need of different market segments. This mosaic can help auto companies evaluate possible scenario drivers—economics, technology evolution, regulation, etc.—so they can place their billion-dollar bets wisely and to revise strategies as factors change over time.
Place your billion-dollar bets wisely: Powertrain strategies for the post-ICE automotive industryDownload PDF