Electric vehicles could take over 33% of global sales by 2028-AlixPartners

By Paul Lienert

DETROIT (Reuters) – Sales of electric vehicles could reach 33 percent globally by 2028 and 54 percent by 2035 as demand accelerates in most major markets, consultant AlixPartners said on Wednesday.

Electric vehicles accounted for less than 8% of global sales last year and just under 10% in the first quarter of 2022.

To support this demand, automakers and suppliers now expect to invest at least $526 billion in electric vehicles and batteries from 2022 to 2026, the company said at its annual Global Automotive Outlook briefing. This is more than double the five-year EV investment of $234 billion over 2020-2024.

Those higher investments “have now made the growth of electric vehicles inevitable,” according to Mark Wakefield, co-leader of the firm’s automotive practice.

The industry continues to face economic and supply chain challenges during the transition from internal combustion engine (ICE) vehicles to electric vehicles, Wakefield added.

The transition will require “drastic changes in operating models – not just factories and people, but the whole way of working,” he said.

Some companies will benefit from separating their ICE and EV businesses, he added.

Also, raw materials for EVs cost more than twice as much as for ICEs: $8,255 per vehicle versus $3,662 per vehicle, as of May 2022.

The transition from ICE to EV will cost automakers and suppliers a cumulative $70 billion by 2030, according to Elmar Kades, co-leader of the automotive practice, including bankruptcy and restructuring.

AlixPartners sees supply constraints continuing into 2024 and expects total global vehicle sales to fall to 79 million units this year before rising to 95 million in 2024.

In the United States, total vehicle sales are expected to grow to 16 million in 2023 and reach 17.5 million in 2024 before beginning to decline in 2025-2026.

(Reporting by Paul Lienert in Detroit)