Auto Executives Are Losing Confidence In EV Adoption

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A new survey found executives are concerned about inflation and ongoing supply chain problems.

Automaker executives across the world are increasingly growing concerned about the rate of electric vehicle adoption than they were only a year ago due to ongoing supply chain issues and rising inflation. Per CNBC, the annual global auto survey of 915 executives from KPMG, an international consulting and accounting firm, has found that 76% of them are troubled by the economy and high interest rates and how both will affect their business in 2023. US-based auto executives are even more concerned with 84% reporting back.

The bottom line is that auto execs are becoming less bullish about the number of pure battery electric vehicles in and outside of the US by 2030. For example, last year's survey of EV global sales estimates by 2030 ranged from 20% to 70%.

This year, those numbers were down from 10% to 40%. Here in the US, the median sales expectation for EVs was 35% of the new vehicle market. In 2021, it was 65%. Why is this a problem for the US government?

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Because the Biden administration is aiming for a 50% adoption rate by 2030.

"There's still a sense of optimism long term, and yet, most importantly, there's a sense of realism in the near term. You see this realism throughout the entire survey," Gary Silberg, KPMG's global head of automotive, told the new outlet. "You can be long-term optimistic, but near term, you've got to be very realistic," he added. "It's not rainbows and butterflies and euphoria anymore, it's game on."

Aside from economic and supply chain concerns, auto execs are nervous about stricter requirements for federal tax credits when purchasing new EVs as well as rising prices for raw materials for batteries. Dealerships are also continuing to mark up EV prices by thousands of dollars due to low inventory.

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Executives who took part in the survey still place Tesla as the global EV leader in 2030, especially with demand for the Model 3 and Model Y higher than ever. However, Tesla's lead (233 votes) is not much ahead of rivals, with Audi (206), BMW (196), and even Apple (133) not too far behind.

A year ago, Apple had only 91 votes. This is interesting because the company has yet to even launch an EV though it's expected in the coming years. But there is some good news. The survey found that 83% of participating executives are "confident" in higher profits over the next five years, an increase from 53% last year.

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Source Credits: CNBC KPMG

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