KPMG surveyed nearly 1,000 auto industry executives and 2,400 vehicle owners to learn what they think about the future of the automobile. Their findings may surprise some and disturb others. Perhaps the most unexpected finding is that 62% agree battery electric vehicles will fail due to infrastructure challenges. Fully 78% agree that fuel cell electric vehicles will be the real breakthrough for electric mobility.
That’s certainly a shocker for those of us here in the Gas2 community, where most believe electric cars are poised to become competitive with conventional cars within the next 5 years or so. We have long felt that industry executives — like Ford’s Mark Fields — simply don’t “get it,” when it comes to electric cars. A comment posted by a reader at Green Car Congress sums up the prevailing attitude of electric car advocates nicely.
“I read this study not as an indication of the trends, but insight into the mentality, and blind spots, of auto executives.The view that hydrogen refueling infrastructure will prevail over electric charging infrastructure seems especially detached from all available facts, and ignorant of the successful players.” Amen to that.
Here are some of the other significant findings of the KPMG 2017 survey:
- 53% say that diesel is dead for use in light duty vehicles.
- 76% say the internal combustion engine will continue to play a major role in passenger cars for the foreseeable future.
- 27% believe BMW is the current leader in autonomous driving technology versus 9% for Tesla.
- 59% agree half of consumers will not want to own their own vehicle by 2025.
- 76% believe on connected car will generate as much or more revenue for the manufacturer as 10 conventional cars.
That last point is critical. “The game has changed for automakers, as cars have evolved into rolling computers and consumers have been quick to embrace autonomy, connectivity and mobility-on-demand. A car is no longer defined by its utility, it is defined by the experience it provides to the driver and passenger — and that opens a tremendous pipeline for new revenue streams and business services that KPMG projects could top $1 trillion in the next decade or so.” That’s according to Gary Silberg, head of automotive research for KPMG.
Think of it as the Amazon experience applied to automobiles. Data collection is more valuable than profits from actual sales. 80% of executives agree that data will be the fuel for future business models. 83% believe they will make money as a result of collecting such data. That means every manufacturer needs its own ecosystem/operating system (OS) in order to keep from having that revenue stream diluted by sharing it with third parties. That may be why Apple and other tech companies are finding it hard to find companies that want to use their dedicated electronic systems. The companies want to keep all that lovely money all to themselves.
Here’s another interesting tidbit. 83% of executives think it is likely there will be a major business model disruption in the automotive industry in the near future. Does that mean more direct to customer sales, which Tesla is advocating? Possibly. The survey did not ask the obvious follow up question.
The entire survey results make interesting reading. One thing that we as consumers can learn from them is that auto industry executives seem to be blissfully unaware that most EV charging takes place at home overnight. Yes, there are challenges for people who live in condos and apartment buildings, but to suggest they are so insurmountable that hydrogen powered cars will be more in demand seems foolish if not downright silly.
If we thought car companies were out of touch with reality before, now we know the truth. They are. Thanks, KPMG.