Lauren Fix, The Car Coach: Auto Executives Are Less Confident in EV Adoption

Will electric vehicles will be the next cash for clunkers? Are the wheels are coming off the bus? Hear me out on this one. You may have heard that electric cars are the only vehicle that will be on the road in the future. Well, now there are doubts from none other than auto executives.

Auto executives are less confident in EV adoption than they were a year ago, according to a KPMG survey. The survey found 76% are concerned that inflation and high interest rates will adversely affect their business this year. For the U.S., the median expectation for EV sales was 35% of the new vehicle market by 2030, markedly down from 65% a year earlier.

Of the more than 900 automotive executives who took part in the annual global auto survey by KPMG, the international consulting and accounting firm reports 84% are concerned that inflation and high interest rates will adversely affect their business.

The declining optimism in EV adoption comes amid stricter requirements for federal incentives for the vehicles; rising concerns about raw materials for batteries; and record vehicle prices. Such concerns are in addition to other supply chain issues and recessionary fears. The lack of confidence includes continued supply chain problems for automakers, ranging from EV raw materials to semiconductor chips and materials.

Toyota’s president stated a silent majority of auto industry people question whether EVs should be pursued exclusively as the future of cars. Last week, Toyota CEO Akio Toyoda offered hope to brand enthusiasts who would like the carmaker to put forward a more convincing electric vehicle strategy by unveiling the Hilux Revo BEV Concept in Thailand. He then went on to defend Toyota’s cautious approach to electric vehicles, reiterating that the company does not believe in a full switch to Battery Electric Vehicles just yet.

Toyota CEO Akio Toyoda: “I believe we need to be realistic about when society will be able to fully adopt Battery Electric Vehicles and when our infrastructure can support them at scale. Because just like the fully autonomous cars that we were all supposed to be driving by now, I think BEV’s are just going to take longer to become mainstream than the media would like us to believe. And frankly, BEV’s are not the only way to achieve the world’s carbon neutrality goals.”

According to The Wall Street Journal, the chief executive and grandson of Toyota Motor founder Sakichi Toyoda said he is among the industry’s “silent majority” in questioning whether EVs should be pursued exclusively.

“People involved in the auto industry are largely a silent majority. That silent majority is wondering whether EVs are really OK to have as a single option. But they think it’s the trend so they can’t speak out loudly,” Toyoda said.

Akio Toyoda’s comments reflect a growing concern about how quickly car companies can transition to electric vehicles. While rivals like General Motors, Volkswagen and Honda have set dates for when their lineups will be all-electric, Toyota has invested in a diverse lineup of vehicles that includes hydrogen-powered cars and hybrids.

“Because the right answer is still unclear, we shouldn’t limit ourselves to just one option,” Toyoda explained. He did add that Toyota was taking all types of vehicles seriously, including EVs. That said, Toyota has been slower than most rivals to roll out fully electric models in major markets.

While the Biden Administration wants 50% of auto sales to be electric by 2030, industry executives are on a slightly different page than they were a year ago. Unfortunately for the industry, it seems as though some automakers either don’t think they can take full advantage of the government incentives so quickly. Those incentives from the Inflation Reduction Act of 202r mean shifting production and supply lines which may not be worth it in the long run.

We shall see if the future includes hydrogen vehicles, synthetic gasoline, or a change in direction as the government and private companies try to find a future for transportation energy.

There is so much more to discuss on this, put your comments below and let’s start the conversation.

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Lauren Fix, The Car Coach is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and safety issues for both the auto industry and consumers. Her analysis is honest and straightforward.