Auto

EV shift creates major risk for automakers, study says

“The stakes could not be higher,” the study says. “New dominant positions will be built, and old empires may fall.” The changeover to EVs will result in “massive structural change” in the auto industry, and there is no easy formula for success.

Betting too big and too early on EVs could leave traditional automakers without the gas-powered vehicles they need to keep profits rolling in. But falling behind on the electric curve could spell the demise of laggards that cling to petrol power too long, the study says.

“Getting the timing wrong is very risky,” Gary Silberg, the study’s co-author and global head of KPMG’s automotive practice, said in an interview. “Getting it wrong by five years, you could go bankrupt.”

Indeed, Silberg and his co-authors predict one or two of the world’s top automakers will fail to navigate the transition and cease to exist within the next decade.

“It could even be more,” Silberg said. “You could have some big crashes.”

For now, too many automakers are targeting a small sliver of the market for vehicles priced at $50,000 and up. General Motors just unveiled an electric Hummer SUV with a sticker above $100,000 to complement the Hummer pickup that starts at $80,000. EV startup Rivian Automotive Inc. is rolling out a pickup and SUV this year priced at $75,000. Vehicles sold above $50,000 represent just 17 percent of the U.S. market.

“There are too many players going after too few consumers,” Silberg said. “And there’s going to have to be a shakeout.”

File source

Tags
Show More
Back to top button
Close