Auto execs still aren't convinced about electric cars

Auto execs are concerned about market dynamics and supply chain snafus standing in the way of EV adoption, a survey found in December.
Justin Sullivan / Staff / Getty

Auto execs are nervous about transitioning to EVs, consulting firm KPMG found in a new survey.
That’s amid supply chain crises and inflation problems.
Auto executive confidence in high EV sales in the US by 2030 dropped from last year.

Auto executives aren’t as confident in electric car adoption as they once were — but they’re largely blaming their concerns on all sorts of market dynamics and supply chain snafus, rather than consumers.

In a survey of more than 900 auto industry execs published in December, KPMG found that respondents think only 37% of new vehicle sales in the US will be electric by 2030.  

That’s a dramatic drop from this same time in 2021, when surveyed executives expected 62% of car sales in the US would be EVs by 2030.

The Biden administration has said that it’s targeting EVs to make up half of all vehicles sold in the US by that year. In June, the trade group representing virtually every major automaker urged the White House to “ease up” on emissions rules to ensure China doesn’t gain “a stronger foothold” in the US market. 

Since KPMG’s last survey’s optimistic results, the industry has grappled with a variety of roadblocks. Requirements set forth in this summer’s climate bill make it harder to qualify for EV incentives. Battery prices have risen and electric vehicle prices continue to climb, hitting an average cost of $65,041 in November, according to Kelley Blue Book. 

For comparison, a new gas-powered car cost about $48,681 that same month. 

KPMG said the results of its 23rd annual executive survey indicate that EV expectations are becoming more realistic, which could be driven by production issues and affordability challenges. 

One industry-wide point of optimism centers on pricing. Some 82% of execs surveyed believe that in the next decade, EVs can be adopted widely without subsidies, indicating costs could go down.

The survey results come two days after Toyota’s CEO came under fire for comments that indicate he’s not all that sold on EVs just yet. “That silent majority is wondering whether EVs are really OK to have as a single option,” Akia Toyoda said according to The Wall Street Journal. “But they think it’s the trend so they can’t speak out loudly.”

The KPMG survey also reported that 76% of respondents said inflation and high-interest rates will impact their business in 2023. The industry is seeing some of that manifest through end-of-year consumer’s car-buying trends.

The industry has already committed $526 billion into electrification through 2026, according to firm AlixPartners. KPMG found the industry is generally feeling good about that spending and more, with 83% of auto executives confident the business will see profitable growth in the next five years — that’s substantially up from 53% last year.