Electric vehicles will transform the automotive industry over the next five years, says GlobalData.
The electric vehicle is one of four themes, along with the connected car, autonomous driving technology and transport-as-a-service, that is disrupting the legacy automotive industry, said the 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, said,“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 vehicle 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 electric 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.
Mewawalla concluded, “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.”