DETROIT, (Reuters) – Auto industry executives believe that electric cars will account for just under half the new car sales in America and China by 2030. This is according to a KPMG survey.
According to KPMG, combustion vehicles (including hybrids) will continue to hold a large share of major car markets over the next few years, as per the latest survey of 1,000 executives in the auto industry.
Automakers’ ability to phase out their combustion engines as well as the emissions of carbon dioxide is crucial for the future success of the global automotive industry. A group of automakers and countries signed a statement earlier this month calling for phase-out of combustion vehicles globally by 2040 https://www.reuters.com/business/cop/six-major-carmakers-agree-phase-out-fossil-fuel-vehicles-by-2040-uk-says-2021-11-10, and by 2035 in richer nations.
Volkswagen AG (OTC) is the two biggest automakers in terms of sales. Toyota Motor Corp., three of the largest car-buying nations in the world – China, America, Germany – have not signed on.
KPMG’s survey of executives in the auto industry found that 52% believed that electric vehicles would account for half of all sales by 2030 in the United States. This includes China, Japan, and the United States. There will also be lower figures for Western Europe, Brazil, and India. However, these aggregate projections are only a snapshot of the views held by industry executives.
Some auto industry leaders in China expect EV sales to fall below 20% by 2030. Others believe that China could become the largest electric market by 2025.
The government has provided subsidies to support electric car sales in the United States. KPMG’s survey found 77% believed that electric vehicles could be adopted in mass quantities within ten years if the battery cost drops to parity with petrol-powered ones. However, 91% said that they supported government subsidies.
A wide-ranging survey revealed that 75% expect their businesses to sell “noncore” assets within the next five years. This is because they are trying to reevaluate which business lines will remain viable in light of new battery-electric vehicles.
“There is going to be a lot of M&A,” said Gary Silberg, global leader of KPMG’s automotive practice.
The industry is capable of profitable growth despite recent supply-chain disruptions and pandemic flu outbreaks.
According to the survey, while the United States and China had the highest percentage of bullish executives, France was the least optimistic.
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