As the global electric vehicle industry gains momentum and enters the mass market, automakers must shift their focus from speed to cost, according to AlixPartners Global Automotive Outlook 2022 released Wednesday.
The report says the world continues to be electrified, with battery electric vehicle sales accounting for half of the global vehicle market by 2035, up from 8.3% in 2021.
Now, as EV sales approach a tipping point in 2024, the industry is moving beyond the first-mover advantage that prioritized speed by putting batteries in vehicles originally designed for gas engines.
“With this approach, you just can’t compete on value,” said Mark Wakefield, global co-head of AlixPartners’ Detroit-based automotive and industrial practice. “To enter this mass market, it must necessarily have a top-notch electric vehicle design.”
Automakers plan to invest $526 billion to develop electric vehicles by 2026. This is a significant jump from the $330 billion over the rolling five-year period they announced last year.
Part of the adoption boom predicted in the report will be driven by choice: AlixPartners predicts that consumers will have 212 battery-electric models to choose from in 2024, up from 80 nameplates in 2021.
Notable models that have propelled the industry forward include the Hyundai Ioniq 5, which won 2022 World Car of the Year Award, as good as Toyota Bz4X and the upcoming BMW i5, said Elmar Kades, one of the heads of the firm’s automotive and industrial practice in Munich.
However, until 2024, the supply of chips will be limited. Lack of supply forces the industry to follow Philosophy of Enzo Ferrari deliver one car less than what the market demands.
“All the manufacturers ended up in that bucket,” Wakefield said. “There is no use in retreating and trying to produce more.”
Instead, success in an electrified future depends on partnerships and joint ventures, Kades said. Hyundai has established the most partnerships, the report says, followed by the world’s two largest automakers, Volkswagen and Toyota.
Kades said: “Companies like Hyundai that valued cars in the past are now catching up and taking B[attery]EV technology to produce more premium cars is changing the entire landscape.”
Credit: techcrunch.com /