By on January 7, 2011

The majority of car makers the world over think that for the next five years, electric cars will remain too expensive to stand a chance in the mass market. Their saving grace must be government subsidies. Without government money, EVs are priced out of the market.

Nevertheless, most automakers think that research and investment in this category is important, almost 90 percent are planning to invest in hybrid systems, battery electric power or hydrogen fuel-cell technologies over the next five years.

These are, in a nutshell, the sobering results of the KPMG 2011 Global Automotive Executive Survey, which asked over 200 global automakers, suppliers and dealers where they think their business will be going over the coming five to 10 years.

Here are the main insights:

  • Fuel-efficiency remains the biggest consideration when purchasing a car.
  • The growth (but not the volume) will be in hybrid and electric vehicles over the next five years.
  • A two-tier global market evolves: Mature countries struggle to cope with changing mobility behavior. Up-and-coming regions push to deliver a variety of cars to populations eager for greater mobility.
  • Population growth and urbanization is driving a significant change across the entire automotive landscape.
  • While the world waits for affordable electric vehicles, ‘mobility service solutions’ (short-term rental of a car, or various modes of transport) are what some respondents believe may be game-changing. Only nine percent of respondents believe that mobility solutions will represent a significant part of their strategy. However, some automakers like Daimler, Peugeot, BMW and others are already investing in this area. Says KPMG: “Those who own the mobility grid could well be the same as those who own the market.”
  • Development of alternative fuels and powertrain technologies is risky and costly. 68 percent of major players are opting to enter into strategic alliances or joint ventures with suppliers rather than seek capital and go it alone.
  • Overcapacity continues to be a chief concern in both mature and emerging markets. Almost two-thirds of respondents believe the US is the most overbuilt, with Japan and Germany following. China and India are expected to reach overcapacity within five years.

Two hundred automotive executives participated in the survey. Over half were business unit heads or higher.

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12 Comments on “World’s Auto Execs Don’t Buy Their Electric Cars Hype...”

  • avatar
    M 1

    There is also the very real issue of range — the same reason mass transit works well in many other places, but not the US, which is still a rather major market, to put it lightly.

  • avatar

    Why am I not surprised that auto execs say that EVs (or any new product segment, for that matter) will only be viable with large govt subsidies?

  • avatar

    TTAC: early adopters of “the trough of disappointment.”

  • avatar

    Love the graph.  Very fitting for EVs.

  • avatar

    Works for me — I’ll either buy my electric car new, or at a discount when one of those “tough of disappointment” folks sells!  :-)
    The oil companies will loose my 90% of business sooner or later, it’s just a matter of time.

    • 0 avatar

      And will you feel better giving your money to the local power company?

    • 0 avatar

      Yes. Better than sending my $$$ outside of the US for oil. Also I can generate power on my rooftop. I no means of generating gasoline at my house. I could go biodiesel but I don’t have an easy source of fry-oil.

      For the record I’m not keen on coal or mtn top removal which they do alot of around here – thus my motivation to invest in my own solar panels.

  • avatar

    It is going to be very interesting over the next decade to see exactly what will happen with the ratio of regular cars to hybrids and EVs. As the cost of gasoline is likely to experience some hefty peaks and troughs within the next, even couple of years, cost of operating compared to buying a new EV or building one will jump closer to the front of people’s minds.

    The trough of disappointed will more than likely coincide a few times with the falling price of gas as demand drops. “consumers” are not that great about thinking long term.

  • avatar

    Wow, I bet the graph was the same for buggy manufacturers, or gas-light, or calculator, or typewriter or steam engine manufacturers, or …. you get the idea.

  • avatar
    Ford is getting in the game big time,  undercutting GM on price, range and execution.

  • avatar
    Greg Locock

    “Fuel-efficiency remains the biggest consideration when purchasing a car”

    How odd. I wonder why people worry about that more than total cost of ownership per mile? After all, I can think of several relatively cheap cars that cost more in tires than gas.

  • avatar

    “Fuel-efficiency remains the biggest consideration when purchasing a car”
    No it isn’t. We might talk about fuel efficiency but if it REALLY was people would never buy SUVs or minivans for commuter duty. Go visit Europe and see what people drive when they are SERIOUS about saving money on fuel.
    The USA has several high mileage options – the Prius, the Insight, and the Detroit hybrids. Then there are the nearly 50 mpg VW turbo diesels.
    If gas mileage was tops on people’s lists then they would be buying these more than any other vehicles on the market. People would be looking at the smallest engine options vs the “poweh” options like the V-6 and V-8 engines. They would be clambering for manual transmissions to squeeze the extra 1 mpg out of their engines.
    I think there alot of people who THINk they need 300 mile ranges just like there are alot of people who think they need 200 HP to bring home the groceries. If that is what they like so be it. I’m confident that most of us here can reset our trip odometers today and find that our daily commutes are under 100 miles per day. I could just about drive to work on flashlight batteries (14 miles round trip).
    Get these cars to market now in numbers and people will buy them if they are sold at reasonable costs ($25K). The problem is that the automakers know that EVs are inevitable with the march of technology and the EV represents a huge game changer to the revenue machine that the automakers have so carefully designed and tweaked to max profits over the years. Why would any company willingly shoot their cash cow? I can’t blame them.
    The fact is that we are going to NEED some of these EVs in the traffic mix to minimize tailpipe emissions in crowded cities. These car companies are going to stall the technology as long as possible. They are going to get all the green marketing and green kudos they can from the technology without releasing any electric cars. Now that Nissan is releasing the Leaf, if the product is successful, then all the other manufacturers will be compelled to release similar products to a few years’ time or look like they are out of date. I figure there will be some sort of critical mass at some future point (a decade after EVs reach the mainstream?) where there are more EVs are sold than gasoline or diesel vehicles and we’ll watch the automobile suppliers that build engine parts disappear. We’ll also begin to see the service departments of dealers begin to change in significant ways. Gone will be oil changes and filter changes. Brakes will outlast the car. My CR-V still has it’s original rear brake shoes at 211K miles. A vehicle with regen brakes will likely never need brake parts or perhaps it’ll need a single set of front pads at some point.
    Yeah car companies see the writing on the wall. The question was simply who would pull the trigger first. Toyota did with the RAV4-EV (selling it to consumers) but GM and Chevron managed to sue them back into line over the battery. This time it’s Nissan who wants to be first. It might be Ford that offers EV#2 with the Focus. That car certainly looks nice but what will the production version look like? Will probably lose the nice wheels, maybe the interesting nose and tail. Maybe they’ll get the green cred and then never build it. See GM and fuelcell technology (among others).

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