As the global EV industry rapidly grows and enters the mass market, automakers should switch their focus from speed to cost, according to AlixPartners 2022 Global Automotive Outlook released on Wednesday.
The report states that sales of battery-electric vehicles will halve the global vehicle market by 2035, while the world continues to be electrified, compared to 8.3% in 2021.
Now that EV sales are headed for an inflection point in 2024, the industry is maturing beyond the first mover advantage that prioritizes speed by putting batteries in cars originally designed for gas engines.
“You basically can’t compete on a cost basis with that approach,” said Mark Wakefield, Detroit-based global co-leader of AlixPartners’ automotive and industrial practice. “To hit that mass market, it absolutely has to be ground-up EV design.”
Automakers plan to invest $526 billion to develop EVs by 2026. That’s a significant jump from the more than $330 billion over the five-year period announced last year.
Part of the adoption boom projected in the report will be fueled by choice: AlixPartners projects that consumers will have 212 battery-electric models to choose from in 2024, compared to 80 nameplates in 2021.
Notable models that have driven the industry forward include the Hyundai Ioniq 5, which bagged the 2022 World Car of the Year awards, as well as the Toyota BJ4X and the upcoming BMW i5. Automotive and industrial practice.
However, chip supply will be a bottleneck until 2024. Supply constraints are forcing the industry to follow Enzo Ferrari’s philosophy of delivering one car less than the market demand.
“All the manufacturers have been forced into that bucket,” Wakefield said. “There’s no use trying to be flawed and produce more.”
Instead, success in an electrified future depends on partnerships and joint ventures, Keds said. The report found that Hyundai has formed the most partnerships, followed by Volkswagen and Toyota, the world’s two largest automakers.
Keds said, “Companies like Hyundai, which were value cars in the past and are now catching up and taking[attery]EV technology, to produce more premium cars, changes the whole landscape. ,