Electric vehicles sales to account for 33% of global demand by 2028: Study
Sales of battery powered vehicles could make for 33% of global vehicle demand by 2028 and 54% by 2035 as demand for such vehicles is accelerating in most big markets, consultant AlixPartners told Reuters. Last year, electric vehicles accounted for less than 8% of global sales and 10% in just the first quarter of 2022.
To cater to this demand, automakers and suppliers are now looking to invest at least $526 billion on EVs and batteries from 2022-2026, the consultation firm said at its annual Global Automotive Outlook briefing. This sum is more than double of the five-year EV investment forecast of $234 billion from 2020-2024. With the increased investments, EV growth inevitable, said Mark Wakefield, co-leader of the firm's automotive practice.
However, he noted that the company faces economic and supply chain challenges during its transition from internal combustion engine (ICE) vehicles to electric vehicles. This transition is not just about changing operating models but also about changing plants and people, and the whole way of working," he said. Companies can benefit from separating their ICE and electric vehicle businesses.
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The study by the consultation firm also noted that raw materials for building EVs also cost more than twice those for ICEs, that is, $8,255 per vehicle vs $3,662 per vehicle, as of May 2022. AlixPartners also noted that constraints will continue into 2024, and it is possible that total global vehicle sales dip to 79 million units this year, before they soar to 95 million in 2024.
The total vehicle sales in the US are expected to rise to 16 million in 2023 and peak at 17.5 million in 2024, before starting to decline in 2025-2026.
Further, this transition from ICE-to-EV will cost automakers and suppliers a cumulative $70 billion by 2030, as per Elmar Kades, co-leader of the automotive practice, including bankruptcies and restructuring.