Consultant AlixPartners said on Wednesday that sales of electric vehicles could reach 33 percent globally by 2028 and 54 percent by 2035, as demand picks up in most major markets.
Electric vehicles accounted for less than 8 percent of global sales last year, and just under 10 percent in the first quarter of 2022.
To support that demand, automakers and suppliers now expect to invest at least $526 billion (about ₹41 trillion) on EVs and batteries from 2022 to 2026, the firm said in its annual Global Automotive Outlook briefing. . This is more than double the five-year EV investment forecast of $234 billion (about ₹18 lakh crore) from 2020 – 2024.
According to Mark Wakefield, co-leader of the firm’s automotive practice, those high investments “have now made EV development inevitable.”
Wakefield said the industry still faces economic and supply chain challenges while transitioning from internal combustion engine (ICE) vehicles to EVs.
The transition would require “huge changes in the operating model – not just plants and people, but the whole way of working,” he said.
He said some companies would benefit from the separation of their ICE and EV businesses.
The raw material cost for EVs is also more than double that of ICEs: $8,255 (approximately Rs 6,43,578) per vehicle versus $3,662 (approximately Rs 2,86,538) per vehicle, as of May 2022.
The ICE-to-EV transition will cost automakers and suppliers a cumulative $70 billion (about ₹5.5 trillion) by 2030, according to Elmer Keds, co-leader of automotive practice, including bankruptcy and restructuring.
AlixPartners continues to face supply constraints in 2024, and expects total global vehicle sales to fall to 79 million units this year, before climbing to 95 million in 2024.
In the United States, total vehicle sales are expected to increase to 16 million in 2023 and 17.5 million in 2024, before beginning to decline in 2025 – 2026.
© Thomson Reuters 2022