Saying What's Popular: Suppliers Claim Automakers Are Overselling the Future of 'Mobility'

Suppliers have begun putting automotive companies on blast for overly ambitious mobility claims. While self-driving cars are definitely en route, manufacturers have ramped up their arrival time and omitted the necessary pit stops to win favor with investors or the general public. Meanwhile, parts suppliers have been frank on the matter — explaining they know when autonomous cars are really coming because they’ll be the ones providing the tidbits that make them work.

Don Walker, CEO of Magna International, one of the world’s largest OEM parts suppliers, suggests automakers may even be misleading their customers. “A full autonomous vehicle is a long way off for lots of reasons, because of legislation, class-action lawsuits, all the complexities and the costs associated with it,” the executive said.

Speaking Wednesday at the 2017 Center for Automotive Research Management Briefing Seminars, Walker also took umbrage with the popular claim that electric vehicles could comprise around 25 percent of the new market by 2025. Instead, he claims EVs will only account for 3 to 6 percent of the global market within that timeframe — a figure predominantly dependent on how swiftly the highly regulated Chinese market grows.

EVs, he predicts, will account for just 3 to 6 percent of the global new vehicle market by 2025. According to Automotive News, Walker stipulated a number closer to 6 percent is only possible if the Chinese EV market grows exceptionally fast.

Considering the global market share of light-duty plug-in vehicles represented a minuscule 0.86 percent of new car sales in 2016, he may have a point. Granted, that’s up from up from 0.62 percent in 2015 and 0.38 percent in 2014 — which is impressive progress. But it isn’t the kind of exponential growth required to hit the 25 percent many automakers have suggested, with many believing U.S. EV sales will stagnate the second government incentives dry up.

Manufacturers have countered this by claiming battery technology and charging networks will progress at a rate that will make EV ownership more convenient and affordable than traditional gas-burners by the prophetic year of 2025. Of course, some automakers claim it will come much sooner than that.

“I am going to get criticized by a lot of people who say I don’t know what is going on,” Walker said. “Quite frankly, auto companies can’t tell publicly what they really believe,” he said. “They know what’s going to happen, but they have to say what is going to be popular to be perceived as a progressive company. We’ve got a lot of feedback from many of the car companies, and they actually believe this to be right.”

Likewise, Walker says manufacturers’ autonomous claims are also bogus. Despite many companies rebranding themselves as futuristic mobility providers, ready to usher in the self-driving revolution, it’ll be some time before Level 5 autonomy makes an appearance.

Walker maintains models with zero autonomous features will still account for 17 percent of new vehicle sales in eight years, while cars with level 1, 2, or 3 autonomy will account for 79 percent of the 2025 market. However, none of these vehicles will provide universal self-driving capabilities, requiring constant human involvement.

Walker estimates Level 4 vehicles will only account for 4 percent of all new vehicles on the road, reserved primarily for wealthy individuals and commercial fleets that could use the technology to save money. “Level 5 cars are not even a sliver on that slide,” he said.

Magna International is not alone. The computing company Nvidia has explicitly stated that Level 5 will be next to impossible before 2025, while other suppliers focusing explicitly on autonomous hardware have claimed similar timelines.

However, Walker admits Magna is bolstering production of its own autonomous-related tech sales from $450 million today to $1 billion by 2020 — reminding the crowd that it’s all still coming, even if it’s not at the pace promised by automakers.

[Image: Volvo Cars]