Electric vehicles will transform the automotive industry

Impact to be realised over the next five years

Electric vehicles are one of four themes, along with the connected car, autonomous driving technology and transport-as-a-service, that is disrupting the legacy automotive industry, according to GlobalData, a leading data and analytics company.

The company’s latest report Electric vehicles – Thematic Research states that there are currently 3 million electric vehicles globally, but this could rise to 300 million by 2040.

Cyrus Mewawalla, Head of Thematic Research at GlobalData, comments: “Over the next five years, we expect stress, strain, margin evaporation, and shake out across much of the legacy automotive industry and its Tier-1 parts suppliers as a slow growth industry incurs the expense of conversion to electric vehicles and autonomous driving technology.”

GlobalData predicts that the proportion of electric vehicles as new registrations will rise from barely 1% of global passenger vehicles in 2017 to more than 15% by 2030. However, large scale commercial production of these vehicles by the big car makers is unlikely to take off until 2025.

Between now and then, most of the legacy auto industry is in for a period of rising capital expenditure, increased M&A activity, tougher regulations, shrinking margins and unprecedented technological disruption. Many car makers will not survive this turmoil.

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“We are at the very beginning of the cycle, but over the next decade the automotive value chain will be transformed by the electric vehicle theme,” Mewawalla concludes.

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