Automotive Suppliers Think the EV Revolution Is Over Hyped
Delphi CEO predicts 95 percent of cars will have internal combustion engines in 2025.
Executives like Tesla CEO Elon Musk talk a big game about the future of electric cars, but the companies who actually supply auto parts say otherwise. Bloomberg reports that five of the top 25 biggest automotive suppliers have, in the past month, downplayed hype about EV sales expectations.
“There’s a lot of buzz and a lot of talk about how the world’s going to change to electrified vehicles overnight, and I’m here to tell you it’s not going to happen overnight, and it’s not going to happen for decades,” David Dauch, CEO of American Axle & Manufacturing Holdings Inc., said rather bluntly at a JPMorgan conference in New York. “I’m a strong believer in the internal combustion engine. I think it’s going to continue to be here for some time.”
Car companies are eager to be ahead of the curve in the EV revolution that may or may not happen. Volvo has pledged to put electric motors in every new car by 2019 and Tesla claims more than fifty percent of U.S. of auto production will be electric in 10 years. However, they can only ignore the public’s sluggish adoption of electric cars for so long.
Skeptical automotive suppliers are saying that automakers make drastic predictions about the EV revolution coming overnight simply to appear progressive to the public. While a prediction like the one made by Magna International that three to six percent of new cars worldwide will be electric by 2025 is conservative and actually based on market adoption, you just can’t say that publicly according to Magna CEO Don Walker. “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,” said Walker at a seminar in Michigan earlier this month.
Delphi Automotive CEO Kevin Clark predicted that 95 percent of new cars in 2025 will still have internal combustion engines and only 5 percent will be all electric at a JP Morgan conference this week. However, Delphi and Magna both predict a surge in hybrid vehicles putting gas-electric hybrids at about 30 percent market share. Plug in hybrids like the Chevy Volt could be a nice bridge between gas and electric, but the price and variety of such vehicles still need to improve for mass market adoption to happen. When you take range anxiety out of the equation, green vehicles become much more desirable.
With new innovations coming to the old fashioned internal combustion engine, we might not need electric cars for a long time.