The 24th Annual Global Automotive Executive Survey by KPMG sheds light on the evolving landscape of the automotive industry, revealing both challenges and exciting prospects. As executives grapple with uncertainties, the journey towards Electric Vehicle (EV) transition takes center stage, marked by shifting perspectives on growth, pricing, and market development.
Executives express less confidence in achieving profitable growth over the next five years, attributing it to global economic concerns and rising costs. A significant shift in extreme confidence is observed, with Japanese executives dropping from 32% to 10%, Western Europe from 31% to 24%, and the US from 48% to 43%. However, China bucks the trend with extreme confidence rising from 28% to 36%.
Amidst expectations of a 5 to 10 per cent price increase in 2024, concerns arise regarding the feasibility of these increments. Despite over two-thirds of Original Equipment Manufacturers (OEMs) anticipating such increases, recent price declines and a surge in new models may pose challenges to achieving these projections.
The EV transition outlook has matured, showing a more realistic estimation of EV market share by 2030. While mean estimates for penetration have increased, Tesla continues to be the frontrunner, aided by the Tesla Gigafactory near Berlin. The survey indicates heightened awareness among European executives, favoring Tesla over established brands like BMW and Audi.
Executives exhibit less optimism about EVs reaching cost parity with conventional cars by 2030, with a decrease from 70% to 66% globally. However, Chinese OEM executives stand out with 87% expecting parity by 2030, compared to 71% in the previous year.
A seamless and hassle-free customer experience emerges as a key selling point, ranking second only to performance. While the emphasis on smooth customer experience extends to operating software, challenges arise in software reliability, impacting OEM executives’ confidence in generating subscription revenue.
Global supply chain concerns persist, shifting towards a “just in case” approach, particularly after disruptions in recent years. Notably, China exhibits lower worries about supply continuity, having a more significant influence on key commodities for EV production.
Automakers express less preparedness for advanced technologies such as AI, digital twins, and advanced robotics compared to the previous year. The rapid advance in generative AI, expected to bring automation, prompts the need for increased worker training. Hybrid technologies have gained prominence, reflecting a shift in powertrain technology investments.
As the automotive industry undergoes profound transformations, executives are urged to hedge their bets, face global challenges in EV transitions, embed AI comprehensively, and seek collaborations to navigate the complex landscape.
The survey, conducted by KPMG, encompasses insights from 1,041 executives worldwide, offering a comprehensive view of the industry’s current state and future trajectory.
