World's Auto Execs Don't Buy Their Electric Cars Hype

Bertel Schmitt
by Bertel Schmitt

world s auto execs don t buy their electric cars hype

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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  • Greg Locock Greg Locock on Jan 09, 2011

    "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.

  • Joeaverage Joeaverage on Jan 11, 2011

    “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).

  • ToolGuy 38:25 to 45:40 -- Let's all wait around for the stupid ugly helicopter. 😉The wheels and tires are cool, as in a) carbon fiber is a structural element not decoration and b) they have some sidewall.Also like the automatic fuel adjustment (gasoline vs. ethanol).(Anyone know why it's more powerful on E85? Huh? Huh?)
  • Ja-GTI So, seems like you have to own a house before you can own a BEV.
  • Kwik_Shift Good thing for fossil fuels to keep the EVs going.
  • Carlson Fan Meh, never cared for this car because I was never a big fan of the Gen 1 Camaro. The Gen 1 Firebird looked better inside and out and you could get it with the 400.The Gen 2 for my eyes was peak Camaro as far as styling w/those sexy split bumpers! They should have modeled the 6th Gen after that.
  • ToolGuy From the listing: "Oil changes every April & October (full-synth), during which I also swap out A/S (not the stock summer MPS3s) and Blizzak winter tires on steelies, rotating front/back."• While ToolGuy applauds the use of full synthetic motor oil,• ToolGuy absolutely abhors the waste inherent in changing out a perfectly good motor oil every 6 months.The Mobil 1 Extended Performance High Mileage I run in our family fleet has a change interval of 20,000 miles. (Do I go 20,000 miles before changing it? No.) But this 2014 Focus has presumably had something like 16 oil changes in 36K miles, which works out to a 2,250 mile average change interval. Complete waste of time, money and perfectly good natural gas which could have gone to a higher and better use.Mobil 1 also says their oil miraculously expires at 1 year, and ToolGuy has questions. Is that one year in the bottle? One year in the vehicle? (Have I gone longer than a year in some of our vehicles? Yes, I have. Did I also add Lucas Oil 10131 Pure Synthetic Oil Stabilizer during that time, in case you are concerned about the additive package losing efficacy? Yes, I might have -- as far as you know.)TL;DR: I aim for annual oil changes and sometimes miss that 'deadline' by a few months; 12,000 miles between oil changes bothers me not at all, if you are using a quality synthetic which you should be anyway.