Auto Executives’ EV Market Forecast: Confidence Remains

In just one year, the outlook has changed significantly. When asked about the prospects for worldwide EV sales in 2021, auto executives expressed great optimism, predicting that EVs may account for up to 70% of the market by 2030. Since then, the highest estimates have decreased to about 40%, yet confidence remains. Additionally, the forecasting range has narrowed.

Published

January 2023

Industry

Electric Vehicles

India, Brazil, and Japan experienced the most significant decrease in estimated EV penetration. India’s infrastructure issues are likely to cause substantially lower demand for EVs compared to two- and three-wheeled vehicles, which are not included in the poll. Brazil may focus more on alternate fuels like ethanol than electrification. Japan’s top automakers are likely to continue to prioritize hybrid vehicles and other potential energy sources such as hydrogen.

These EV sales projections are supported by a few important forecasts based on manufacturers’ rising faith in the viability of EV vehicle production from an economic standpoint. The enormous sums of money invested in new facilities and R&D are partly responsible for this. Economies of scale should cause costs to decrease as EV output increases. 70% of those surveyed believe that without subsidies, EV costs will be equal to those of ICE vehicles by 2030.

In the next 10 years, EV adoption is expected to reach a significant level without government subsidies, according to more than 80% of the CEOs polled. In 2021, 7% of respondents did not think governments should give direct consumer subsidies for electric vehicles. This rate tripled in 2022, reaching 21%. Such subsidies can frequently affect markets and impede international commerce. According to 78% of respondents, subsidies should gradually end for cars costing between $30,000 and $70,000 or more.

As more public funds become available for charging stations, perceptions of the infrastructure problem are changing. An increasing percentage of CEOs believe that owners will park at public charging stations, at their places of employment, or on the street, despite the majority of executives still believing that most consumers will charge at home.

The capabilities of the charging technology are now more evident. Compared to 2021, more CEOs predicted that consumers would have to wait longer for an 80% recharge in 2022. Additionally, 26% of customers said they would be ready to wait 45 minutes, an 8% increase from 2021. Conversely, the percentage that thinks customers will only tolerate a 20-minute wait decreased from 27% to 17%.

Auto executives continue to predict Tesla will continue to rule the market for battery-powered cars in 2030, just as it did in 2021, but by a considerably smaller margin. One notable development is that Apple, which has yet to create or even announce a single automobile, is currently in fourth place, up from ninth place in 2021. China’s BYD appears to be another top candidate. The market is still very open, so auto executives will be keeping a keen eye out for potential competitors.

Source: KPMG | 23rd Annual Global Automotive Executive Survey

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