There also may be less to automakers’ electric vehicle commitments than meets the eye. Automakers are under intense pressure from Wall Street to announce new electric models, but achieving those goals and having a market for the vehicles is a different matter. It’s also important to note that many of those ambitious targets count hybrid cars as electric, even though they produce emissions and share many parts with combustion engines. The pledge by Ford and Stellantis to achieve a 40 to 50 percent zero-emission share of new U.S. car sales by 2030, for example, includes plug-in hybrids and fuel cell cars.
Of the 285 million light vehicles on U.S. roads today, fewer than 2 percent are BEVs. It will be many decades before they outnumber traditional vehicles. Our analysis forecasts that only 26 percent of vehicles will be BEVs by 2040, with gasoline-powered cars making up 48 percent and hybrids accounting for the remainder.
Given this, traditional auto suppliers shouldn’t necessarily feel an intense fear of missing out on transitioning their business to electric. Even after the last gasoline-powered car rolls off the line, the need for aftermarket supplies will remain substantial and lucrative for decades.
Suppliers that rush to make the transition now can be faced with a chicken-and-egg problem — the lack of BEV models means that they don’t know what exactly to design for. Those looking to service the BEV aftermarket not only face a relatively tiny pool of vehicles right now, but they also have to wait three-plus years before those cars are out of warranty.
While there are some benefits to being an early mover, let’s not forget there are also opportunities for those who come later to achieve success by improving on what came before.