"Powertrain 2020 – The Future Drives Electric": Global sales of electric vehicles will rise to ten million in 2020, Roland Berger Strategy Consultants
Release Date: 2009-09-15
* Market share of around 20% in Western Europe by 2020; 8-10 million PHEVs (Plug-In Hybrid Electric Vehicles) and EVs (Electric Vehicles) sold globally by 2020* Powertrain electrification will reshape the current mobility value chain, forcing consolidation and new partnerships
* US government leads the way with almost EUR 20 billion support package (China: EUR 1 billion), EU governments must increase efforts in order to not fall behind
* Four major battlefields: High-power and high-energy batteries; equipment for battery cell manufacturing; electric motors/e-machines; energy, infrastructure and additional services
There can be no doubt that the current economic crisis will have a lasting impact on the automotive industry. As sales decline in major markets worldwide, the time is right to incorporate new technology into products, namely powertrain electrification. The financial support being provided by governments to manufacturers around the world is at least in part linked to specific investments in the development of new propulsion technologies. The authors of the Roland Berger study "Powertrain 2020 – The Future drives Electric" see the market for EVs developing much faster, mainly due to governments' carrot and stick approach. In this scenario, PHEVs (Plug-In Hybrid Electric Vehicles) and EVs (Electric Vehicles) achieve a market share of around 20% in Western Europe by 2020, making this region the frontrunner in the field of electric mobility. The coming changes in powertrain technology will thoroughly shake up the automotive industry. They will create many opportunities, but also pose serious risks for both established and new players. Meeting battery requirements is the key hurdle for success. Batteries represent the most attractive component market and will have a market size of between EUR 10.6 billion and EUR 29.8 billion in 2020. The currently highly fragmented market for batteries is likely to consolidate.
"Now is the time for companies in the automotive industry to realign their product portfolio and production footprint. They must rethink their slowly-slowly approach and accelerate technology advancement," says Dr. Wolfgang Bernhart, Partner at Roland Berger Strategy Consultants. The market for powertrain components will see an increase in the share of EVs. Batteries as a component will have a market size between EUR 10.6 billion and EUR 29.8 billion in 2020. "The future drives electric," Bernhart says, "not only due to government and industrial regulations, but also due to new revenues and opportunities. Now is the right time to hop on the powertrain."
European governments need to step up efforts
Increasing discussions about global warming and oil dependence are leading to a massive push to reduce fuel consumption and emissions, requiring significant efforts from all sectors, in particular the automotive industry. Although the potential to reduce emissions from gasoline and diesel engines will reach up to 40% and 30% respectively by 2020, there is still a gap of more than 10 g/km CO2 to the European target of 95 g/km. Therefore, more serious efforts in powertrain electrification are required. The main question is not if, but when zero emission vehicles will penetrate the market. The US government is leading the way with a support package worth almost EUR 20 billion, and China is providing EUR 1 billion. While the Japanese players are already strong, "European governments need to increase their efforts in order to not fall behind," says Bernhart.
Consolidation and partnerships to change the value chain
"Although technical issues for battery and key electrical components have been resolved, major challenges remain regarding cost, infrastructure and regulations," says Roland Berger Principal Michael Urbschat. "Powertrain electrification will reshape the current mobility value chain, forcing consolidation and new partnerships as well as opening up new revenue and profit pools for existing and new players." Challenges will arise on four fronts: High-power and high-energy batteries; equipment for battery cell manufacturing; electric motors/e-machines; and energy, infrastructure and additional services.
Fewer than ten companies to dominate cell manufacturing in 2020
While Western companies have a strong position for active battery materials, players from Japan and Korea are dominating cell manufacturing. And Chinese players are closing the gap fast – leveraging extensive government support and unique access to critical raw materials. Because of the massive R&D and CAPEX needs, fast consolidation is likely, with probably fewer than ten companies dominating cell manufacturing by 2020. Concerning the equipment for battery cell manufacturing, Japanese and US manufacturers currently dominate the market. The market for electric motors and e-machines will reach EUR 4 billion to 9 billion by 2020. Incumbent manufacturers are today's leaders in terms of technology. However, they face a major threat from Chinese newcomers who have better access to the rare earths needed for electric motors that rely on permanent magnets. Suppliers from triad markets therefore need to increase their efforts to develop alternative technical solutions and must not lose that business. Regarding energy, infrastructure and additional services – with electricity alone being a EUR 2 billion to 10 billion market by 2020 – utlities are being challenged by new players such as Better Place. These newcomers take advantage of global reach and invest heavily in additional services and new technologies to increase customer value. OEMs need a clear strategy to participate here as well, so as not to be marginalized by a long-term shift from selling cars to providing mobility services.
Companies need to define their strategic roadmap
Roland Berger Strategy Consultants recommends five steps: Companies must evaluate the strategic importance of the topic, assess their resources, define a general strategic roadmap, define their position in the new electric mobility value chain and adapt their current business to it. Bernhart: "Ultimately, the move toward electric mobility comes down to two things: viewing and doing. Viewing the future potential in the area, and 'doing' by starting clearly defined projects to build up know-how and gain hands-on experience."
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| Type: | NORMAL |
| Company: | Roland Berger Strategy Consultants |
| Country: | Germany |
| Url: | http://www.rolandberger.com/company/press/releases/Global_sales_of_electric_vehicles.html |