Car industry executives expect electric vehicles (EVs) will make up just over half of new vehicle sales in China by 2030, and could do so without receiving government subsidies, according to a new survey by accounting and consulting firm KPMG.
But combustion vehicles, including hybrids, are expected to retain a significant share of most major vehicle markets for years to come, according to KPMG’s latest annual survey of 1,000 automotive industry executives.
But behind those aggregate forecasts, industry executives have widely varying views.
For China, some auto industry executives expect EV sales by 2030 to be less than 20% of the market, while others believe the world’s largest market could be 80% electric by then.
The speed at which automakers can phase out combustion engines and the carbon dioxide they emit is a pivotal issue for the global auto industry.
Phase Out Of Petrol Engines
A group of automakers and countries signed a statement earlier this month calling for phase-out of combustion vehicles globally by 2040 and by 2035 in richer nations.
But the world’s two largest automakers by sales, Volkswagen and Toyota Motor, and three of the world’s biggest vehicle-buying nations – China, the US and Germany – did not sign on.
The KPMG survey of auto industry executives found that they believe that electric vehicles will account for 52% of sales by 2030 in the US, China and Japan, with lower percentages for western Europe, Brazil and India.
“Car manufacturers have rarely faced such an array of technological and business-model changes since the dawn of the automotive industry 130 years ago,” Gary Silberg, global head of automotive at KPMG, said.
“Flying taxis, cars by subscription, ubiquitous and fast EV charging stations, big-tech car entrants — these are some of the developments we can expect in the next 10 years.”
Subsidies Vital So Far
EV sales around the world have been fuelled so far by government subsidies. KPMG said 77% of the respondents said EVs can achieve mass adoption within 10 years without government aid. However, 91% said they support government subsidies.
Executives are worried about a range of issues affecting the supply chain, including the price and availability of semiconductors, steel, rare earth elements and other scarce materials.
More than 50% of respondents were “extremely” or “very worried” about the supply of these materials. Furthermore, 55% of executives are very or extremely concerned about labour shortages.
“Whilst supply chain and other cost challenges continue to be a concern, the global automotive industry remains optimistic, in large part due to the innovation being delivered both now and in the coming years,” Richard Peberdy, head of automotive at KPMG UK, said.
“Industry executives are buoyant about EV prospects but are clear that charging infrastructure must keep pace. Carmakers are also eyeing more direct to consumer selling online.”
- Reuters with additional editing George Russell
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