Report: Switch to EVs, Self-Driving Cars Will Cost Industry Billions
July 19, 2018—A new study projects that more than $255 billion will be spent on electric vehicle R&D and capital expenditures globally by 2022. Furthermore, according to a report by Consulting.us, $61 billion has also been allocated to autonomous technology.
Intense segment competition, sluggish overall vehicle sales, and low consumer price flexibility appear likely to make the AV and EV market unprofitable in the near term, however.
That begs the question: will the transition to future tech be good for U.S. auto manufacturers? A study by consultancy AlixPartners suggests that the shift in technological emphasis will likely lead to a significant capital drain soon for the auto industry.
The AlixPartners Global Automotive Outlook found that by 2022, $255 billion will be spent on EV research and development and capital expenditures globally. What’s more, some 207 EV models are expected to reach the market by 2022, many of which will be unprofitable due to issues like high systems costs and low production volumes.
Finally, the AlixPartners research also discovered that consumers aren’t overly eager to pay for autonomous vehicle technology yet; the reports survey notes a willingness to pay just $2,300 for autonomy, while the feature currently costs around $22,900 extra.