A new survey by audit powerhouse KPMG suggests auto executives don't see electrified car sales passing 15 percent of global sales until at least 2025. Yet despite the slowly developing market, these same execs foresee substantial increased investment in electric and hybrid car production along with research and development. Given very limited consumer acceptance of hybrid cars since their U.S. introduction back in late 1999 (gas-electric new car sales are still around two percent), cautious sales estimates seem like par for the course.

Among the many highlights of the survey that polled 200 executives is word that 83 percent expect an increase in electric motor production, 81 percent think automakers will increase investment in battery technology, 76 percent see more power electronics investment, and 65 percent see increased investment in fuel cells. The survey results didn't show any conclusive winner as to which sort of alternative fuel technology might win out, with 20 percent choosing fuel cell vehicles, 16 percent picking battery-powered electrics, 22 percent choosing hybrids, 21 percent weighing in on plug-in hybrids, and 18 percent opting for battery-powered electrics with range extenders.

Perhaps the most interesting nugget we see is that 61 percent of the executives surveyed agreed that "the optimization (so-called downsizing) of internal combustion engines (ICE) still offers greater efficiency and CO2 reduction potential than any electric vehicle technology based on the current energy mix."

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Global Auto Execs Don't See Spark in Electric Vehicle Sales for More Than Decade: KPMG Survey

However, auto makers expected to pump investment into electric technologies; No clear electrified propulsion winner, execs mixed on consumer demand for e-vehicles by 2025


DETROIT, Jan. 5, 2012 /PRNewswire/ -- Despite continued heavy investment by auto makers in electric propulsion technologies, global automotive executives don't expect e-car sales to exceed 15 percent of annual global auto sales before 2025, according to the 13th annual global automotive survey conducted by KPMG LLP, the U.S. audit, tax, and advisory firm.

In polling 200 C-level executives in the global automotive industry for the 2012 automotive survey, KPMG found that nearly two-thirds (65 percent) of executives don't expect electrified vehicles (meaning all e-vehicles, from full hybrids to FCEVs) to exceed 15 percent of global annual auto sales before 2025. Executives in the U.S. and Western Europe expect even less adoption, projecting e-vehicles will only account for 6-10 percent of global annual auto sales.

"Electric vehicles are still in their infancy, and while we've seen some recent model introductions, consumer demand has so far been modest," said Gary Silberg, National Automotive Industry leader for KPMG LLP. "While we can expect no more than modest demand in the foreseeable future, we can also expect OEMs to intensify investment, fully appreciating what is at stake in a very competitive industry."

Automakers Inject Investments into Range of Electric Technologies

Despite the relatively modest sales projections for electric vehicles over the next 15 years, automotive executives in the KPMG survey indicate that a wide range of electric technologies will be an increased focus of their investment matrix. In fact, over the next two years:
  • 83 percent say automakers will increase investment in e-motor production,
  • 81 percent say investment in battery (pack/cell) technology will rise,
  • 76 percent expect increased investment in power electronics for e-cars, and,
  • 65 percent predict increased investment in fuel cell (hydrogen) technology.
Additionally, executives expect that hybrid fuel systems, battery electric power and fuel cell electric power will be the alternative propulsion technologies to attract the most auto industry investment over the next five years.

Placing Bets 'Across the Board'

"What's interesting is that automakers are placing bets across the board, and large bets at that, because no one knows which technology will ultimately win the day with consumers," added Silberg.

"In last year's KPMG survey, execs told us it would be more than five years before the industry is able to offer an electric vehicle that is as affordable as traditional fuel vehicles for mainstream buyers. It will be interesting to see how consumer adoption progresses as automakers discover ways to offer these electrified cars at better price points and the infrastructure for these vehicles becomes more robust and accommodating," he said.

However, despite all the investment and energy being focused on electric platforms, nearly two-thirds (61 percent) of executives say the optimization (so-called downsizing) of internal combustion engines (ICE) still offers greater efficiency and CO2 reduction potential than any electric vehicle technology based on the current energy mix.

No Clear Electrified Propulsion Winner Yet

When asked to name the electrified propulsion technology that will attract the most consumer demand until 2025, auto executives were as mixed as their projected investments. In fact, the variation in response rates between fuel cell electric vehicles (20 percent), battery electrified vehicles (16 percent), full hybrids (22 percent), plug-in hybrids (21 percent), and battery electrified vehicles with range extender (18 percent) was ever so slight.

According to KPMG's Silberg, "The industry faces a tough decision about whether to place more trust and resources in fuel cell or battery vehicle concepts, and these results show that it's way too early to call right now. Clearly hybrids, whether plug-in or full, are more mature and have more market presence, but this battle for the dominant technology platform will continue for years to come."

For the KPMG Global Automotive Executive Survey 2012, KPMG interviewed 200 C-class global automotive executives, including 25 from North America, representing vehicle manufacturers and suppliers, from October through November 2011. KPMG has released an annual survey of automotive executives expressing their views on the state of the industry since 1999.

About KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International.") KPMG International's member firms have 145,000 people, including more than 8,000 partners, in 152 countries.


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    • 1 Second Ago
  • 68 Comments
      thedriveatfive
      • 3 Years Ago
      If they were cost effective a wider range of people would buy them. Thats all there is too this.
        CaptTesla
        • 3 Years Ago
        @thedriveatfive
        exactly Teslas plan. You can't come out with a 30k pure electric car the first thing and have 300+ mile range. You make a little higher price one and they she'll out the money to keep you going with r&d to eventually make the 30k electric air that will go 300+. Look at plasma tv's. Did they start out with a $500 set? Don't think so. The first ones were $10,000. Ad eventually as the tech improved the price dropped so,that all could afford one.
        Michael
        • 3 Years Ago
        @thedriveatfive
        Uh, they (EVs) don't sit on a lot nearly as long as their counterparts. They are selling fine, now if production capacity were raised...
          thedriveatfive
          • 3 Years Ago
          @Michael
          Or maybe the market has correctly predicted the demand and if they made more they would just sit...
      kevsflanagan
      • 3 Years Ago
      Once someone be it a automaker of a battery manufacturer figures out a way to have a Electric Car fully recharged within a 5 minute time span they won't truly take off. Part of me does expect to see these types of numbers though since not all Execs are sold on the idea of Alt Fuel/Electric cars.
      CaptTesla
      • 3 Years Ago
      Can't figure out how to reply to a specific comment on my iPad so here goes. Regarding 45 minute charge. Ok. We are on a road trip. Normal ally most people would not drive more than 8 hours a day. So approximately 500 miles, give or take a few. ICE car would need one stop. With a 8hour drive I'm guessing you are going to also stop for something to eat. Yes you could do fast food but lets be reasonable. Even if to do that and eat in that is 20-30 minutes. By typical meal is 45 - 1 hour. And you also stop for gas for 5 more minutes. And then you drive the additional 200 miles or so. Now in the Tesla ( because no other electric car can do it). Same trip. You make your stop at 300 miles. Pull into the restaurant and connect your car to the quick charge unit and go eat your meal. 45 minutes later your car is topped off. And you can drive another 300 miles the same as the ICE car. Yes the infrastructure needs to be there for the quick charge but it is happening as we speak. Especially on the west coast. The east coast is another case. There are actually many more charging stations around than you realize. Also regarding forgetting to charge your car. Every day you pull into your garage you plug it in. Very easy and a total of 5 seconds. So you have a "full tank" every single day. How often do you have that in an ICE car? The range anxiety is very funny to,hear people discuss. For 95% of our lives it is not an issue. It just takes planning on long road trips but as I described above it is very easily managed. Between LA and san francisco there are actually more charging station spots than gasolines by a factor of 3.
        LUSTSTANG S-197
        • 3 Years Ago
        @CaptTesla
        What if you happen to be on that road trip during a holiday weekend? With those 45 minute wait times comes the increased likelihood of the charge station being full, or every one of them in the area. And then where do you eat? Or is every station expected to have a restaurant in it as well? No matter how you slice and dice it, that time it takes to recharge is still an issue at this point in time.
      Greg
      • 3 Years Ago
      No one here will own a fuel cell car within 15 yrs. For their cost, you will always be able to do better with batteries. (You could buy a couple Teslas for the price of one Honda Clarity.) Sure, the price of fuel cells will drop, but so will batteries. Also, since hydrogen for the fuel cell has to be produced (e.g., from hydrolysis of water), it is far less practical than just using electricity. Essentially, you can drive 3x as far using batteries than hydrogen given the same starting energy source.
      • 3 Years Ago
      [blocked]
        • 3 Years Ago
        [blocked]
        jhott997
        • 3 Years Ago
        what? Where do you get your information? In reality, the opposite is true.
        Richard
        • 3 Years Ago
        I know people like Gabbo... They use condescension when they're short on logic. Nobody can know how quickly technology will change, but recent history shows that the pace is increasing dramatically. I'm with Nick. One big battery breakthrough and those execs will be falling over each other to electrify their lineups.
        Redline
        • 3 Years Ago
        Bwahahahaha!
      Alex
      • 3 Years Ago
      Electric vehicles are not a viable solution until the grids powering them are run on renewables.
        axiomatik
        • 3 Years Ago
        @Alex
        Wind power is already cost-competitive with traditional generation methods.
        Dave
        • 3 Years Ago
        @Alex
        Then they become less viable, because "renewable" electricity is more expensive than fossil fuel derived electricity.
          axiomatik
          • 3 Years Ago
          @Dave
          Solar does not need "cheap land (which is far away from where the power is needed)" and is not "generated completely independently from demand". Imagine every house in the Sun Belt with a small, 1 kw solar panel on the roof. It would cut down the amount of electricity each house would have to draw from the grid. Peak power usage occurs in the middle of the day, just when solar generates the most. And peak demand occurs in the summer, powering all those a/c units, power that could be offset with solar.
          Danaon
          • 3 Years Ago
          @Dave
          That's completely untrue, Alex. Maybe the generation cost of solar will near parity with fossil fuels, but the true cost will not. The problems with solar power aren't really with the technology, it's with the basic logistics. Solar is by nature, intermittent. The real challenge of energy is producing as much energy as you need RIGHT NOW (you can't store it on a large scale) and WHERE it's needed. Solar relies on cheap land (which is far away from where the power is needed) and is generated completely independently from demand. Because of this, wind and solar will never amount to a large portion of our total power output. The real solution is natural gas for on demand (peak) generation, and thorium nuclear reactors for steady state generation. In locations where it's not geologically sound to build nuclear plants, they will have to use either NG or other fossil fuels. Hydroelectric and geothermal are both great, but you still suffer the same problem as wind and solar: location. In some places geothermal/hydroelectric are great options, in others they are completely unworkable. Unfortunately, rabid environmentalists make any new hydroelectric capacity nearly impossible to build.
          • 3 Years Ago
          @Dave
          [blocked]
          Michael
          • 3 Years Ago
          @Dave
          Dave, Not anymore. Both Solar and Wind have reached LCOE parity with coal and oil power plants.
        CaptTesla
        • 3 Years Ago
        @Alex
        Why so? An electric car will pollute less than an ICE car even with coal powered plants etc... Maybe we need renewable sources to power the refineries making e gasoline for our ICE vehicles? I don't hear anyone protesting that.
        Michael
        • 3 Years Ago
        @Alex
        Alex, That's utterly false. A fossil fueled power plant is more efficient than a ICE in any vehicle and even if your EV is powered up by a coal plant, it's still better than putting gasoline in your auto.
      RodRAEG
      • 3 Years Ago
      Not a problem if electrics don't make any big progress anytime soon, in my opinion. They just convert air pollution to ground pollution.
        CaptTesla
        • 3 Years Ago
        @RodRAEG
        Actually at least I the state of California the number one user of electricity is the refi eries making the gasoline for ICE cars. So the myth that electric cars just trade one pollution for another is false and misleading. If you do use as much gasoline, the refineries do. Ot have to use as much electricity and pollute the air. It has been proven that even with coal plants the electric air will still produce much less pollution being charged up than a traditional ICE car which pollutes from the refinery process, to delivery, to being burned in a car.
          axiomatik
          • 3 Years Ago
          @CaptTesla
          @RodRAEG I suppose oil doesn't require drilling and processing and piping and transportation all across the globe? The mining and processing for a battery happens once in an electric car's lifetime. The drilling and processing for oil occurs continuously throughout a gas car's lifetime.
          RodRAEG
          • 3 Years Ago
          @CaptTesla
          But they do trade one pollution for another, because you see, they have these things called batteries, which also require mining, processing, and (when they crap out) replacement. Like I said: Trading air pollution for ground pollution.
          • 3 Years Ago
          @CaptTesla
          [blocked]
      CaptTesla
      • 3 Years Ago
      New survey shows 100% of auto execs are 10-15 years behind in thinking and planning in the auto business. They have been too busy deciding which 1950's or60's car they will bring back into production with a 5 % increase In mpg.
        LUSTSTANG S-197
        • 3 Years Ago
        @CaptTesla
        It sounds to me like you haven't read anything on the auto industry in about 10 to 15 years. If you had, you would not make such an ignorant statement. Seeing as you know what a Tesla is, I am assuming it's just a knee-jerk reaction on your part.
          jhott997
          • 3 Years Ago
          @LUSTSTANG S-197
          Actually, his comments about the "yestertech" thinking inside the auto business are very accurate. It is a very conservative and risk averse business. There is no real vision of what the future will be and acting and planning to make that vision a reality. The fact of the matter is that the auto biz is ONLY interested in the next quarter or the next "game changing" vehicle launch of the same car is slightly different clothing.
          LUSTSTANG S-197
          • 3 Years Ago
          @LUSTSTANG S-197
          No, they are not stuck in the past, as you put it, they are stuck in the present, building what they think people want now, and in the very near future. By the way, the cars you mentioned in your rant are like their fore bearers in name and styling cues only. Beyond that, they are noting alike. The new Dart is to be a compact to compete with the likes of Chevy Cruze, Honda Civic, and Ford Focus, so I don't know why you lumped that in there with your whole rant about American cars being stuck in the past rant. As for Tesla? Good for them!! Unfortunately for the rest of us, only the likes of Matt Damon and George Clooney can afford them.
      • 3 Years Ago
      [blocked]
      Andre Neves
      • 3 Years Ago
      Until people start see benefits from electric vehicles when it comes to overall cost savings , efficiency & range , you might as well stick a fork in it.
        Michael
        • 3 Years Ago
        @Andre Neves
        I think you mean until MORE people see benefits...
      speedjohn
      • 3 Years Ago
      Tell autoblog to remove the Glen Beck ad. He's a douche and doesn't belong as ad space on this site
        Gabbo
        • 3 Years Ago
        @speedjohn
        I'm sure you prefer liberal intellects such as Rosie O'Donnell, Maxine Waters and Matt Damon. Try to stay on topic, i.e., cars.
      Gabbo
      • 3 Years Ago
      America needs to put together a "moon shot" program at developing ultra-clean coal technology. We have more coal than Saudi Arabia has oil, and coal doesn't spill or leak into aquifiers and waterways. Liberals are such children .....
        • 3 Years Ago
        @Gabbo
        [blocked]
          Greg
          • 3 Years Ago
          Yeah, finding a way to use coal differently--cleanly--is an idiotic idea. (/sarcasm)
        Jeff Elliott
        • 3 Years Ago
        @Gabbo
        Look up Coal Ash Slurry Disasters. Also there are a lot of health consequences(cancers) from being near a coal mining area as the pollution gets into the water tables. Then there is the actual air pollution and climate change resulting in many more human made disasters. ( though your "clean" coal burning solution would limit the last part if possible )
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