Foot Off the Accelerator: Auto Execs Lose Confidence in EVs

By: James Flippin · December 21, 2022 · Reading Time: 3 minutes

Shifting Gears

Macroeconomic conditions are challenging at present for a number of different sectors. Prices are rising at a historical pace, the supply chain continues to face disruptions, and recessionary concerns are rising on Wall Street.

According to a survey released by consulting firm KPMG, auto executives are becoming less optimistic about their businesses, particularly in regard to electric vehicles or EVs. Over 900 executives participated in the query. A year ago, the expectation was that EVs would account for 65% of all new vehicle sales globally by 2030. Now, that’s down to 35%.

Wrench in the Works

Although the word recession isn’t included in the published results of KPMG’s survey, the company notes both higher interest rates and inflation were listed as top concerns. The other leading issue automakers face is the ability to get raw materials, especially semiconductor chips, when it comes to EVs. A separate KPMG survey found automotive is considered the most important sector for chipmakers, marking the first time in 18 years that it ranked that high.

Looking long term, automakers are more confident. Over 80% expect higher profits over the next five years, which is up from last year’s 53% mark.

Seeds of Growth

The survey asked executives to weigh in on which companies will be at the front of the EV or battery-powered car market by the end of the decade. Tesla (TSLA) received 223 votes, followed by Audi (VWAPY) with 206, and BMW (BMWYY) with 196. An intriguing name emerged in the fourth spot: Apple (AAPL).

The tech giant has never publicly confirmed plans to develop a vehicle, but industry observers contend the company’s brand and experience with mass production gives it a potential edge. Also, Chinese tech firm Foxconn, which makes iPhones on a contract basis for Apple, is currently building an electric pickup in Ohio. It’s a reminder the EV market is still brand new, with plenty yet to be determined.

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