Manufacturers poised for growth as EVs drive $660b opportunity
Battery-powered electric vehicles are expected to reach 50% of global sales by 2041.
The automotive industry is currently experiencing a major shift that presents a significant revenue opportunity of $660b, a new EY analysis said. This shift is driven by the move from internal combustion engine (ICE) vehicles to electric vehicles (EVs).
This transition will result in a change in focus within the industry, shifting from manufacturing and sales to the entire vehicle lifecycle. Manufacturers now face a critical juncture, needing to adapt their processes and strategies to align with the growing demand for EVs.
This shift will provide new opportunities for stakeholders in the industry, such as automakers, battery manufacturers, suppliers, energy companies, and investors. By embracing innovation, optimising data strategies, and investing in talent development, manufacturers can position themselves to thrive in this evolving landscape.
EY analysis has identified three key areas, referred to as "megapools," that offer the highest potential for revenue growth. These include supercharging the future through batteries, charging infrastructure, and energy storage; redefining vehicle architecture through software-defined vehicles; and closing the loop through battery and vehicle circularity. By focusing on these areas, players in the automotive industry can tap into new revenue streams, drive cost efficiencies, and contribute to a more sustainable future.
Martin Cardell, EY Global Mobility Solutions Leader, highlighted the need for industry leaders to adapt to this paradigm shift. He emphasised the importance of reevaluating business models, embracing innovation, optimising data strategies, and investing in talent development.
"Leaders across the industry need to carefully examine their business models and focus on where they can grow and where they need to reduce activities that are set to become outdated," he said. To succeed in these new areas, he added that companies should embrace innovation, optimise their data strategies and focus efforts on sraining and nurturing skilled talent.
"They must choose between becoming either a leader or a fast follower. It’s time to put themselves in the driver’s seat and gear up for the great value shift," Cardell stressed.
The transition towards electric vehicles is already underway and gaining momentum. It is crucial for stakeholders in the automotive ecosystem to not only optimise their current operations but also innovate for the future. Developing a reliable and diversified battery supply chain, enhancing vehicle performance and safety, and investing in charging infrastructure are key priorities for companies looking to succeed in the EV market. With significant investments being made in battery production and charging infrastructure across regions such as Europe, automakers are taking steps to improve the energy density, lifecycle, and stability of EV batteries.
Value shift underway
To win in the value shift race, companies must focus on building a culture of innovation, redefining strategy and customer experience, unlocking the potential of data, and nurturing future workforce skills. As the industry evolves, the demand for talent with expertise in areas such as software and chemical engineering will increase. Companies must invest in upskilling and reskilling their workforce to remain competitive and support growth in the sector. Innovation in areas such as battery technology, robotics, artificial intelligence, and data will be vital for success in the evolving automotive landscape.
The global automotive industry is undergoing a transformation that presents a significant revenue opportunity for stakeholders. By focusing on key areas such as electric vehicles, software-defined vehicles, and circularity in manufacturing, companies can tap into new revenue streams and drive growth. Embracing innovation, optimising data strategies, and investing in talent development will be essential for companies looking to succeed in the new era of the automotive industry.
