1、Place your billion-dollar bets wiselyPowertrain strategies for the post-ICE automotive industryFor more than a century,the automotive industry has been defined by one constant and arguably dominant force:the reign of the internal combustion engine(ICE).Now,a tsunami of investmentsome$200 billionhas

2、hit the industry from automotive start-ups,established automakers and suppliers,even tech companies that are betting on a new powertrain king:the battery electric vehicle(BEV).As we publish this paper,the Biden administration has proposed a raft of new supports for the U.S.EV business,including fres

3、h buyer incentives.Add in the momentum created by the enormous success of Tesla,global concerns around climate change,and new regulatory regimes that could literally outlaw ICE powertrains,and you have a new auto industry,dominated by BEV powertrains.A BEV future is clearly the current conventional

4、wisdom.But is it right?Or,as is often the case,is conventional wisdom,well,simply too conventionalor just overly simplistic?This is not a theoretical question,given the billions at stake.We believe that the coming years will be far more complicated and unpredictable than the conventional wisdom sugg

5、ests.For starters,billions of people live in developing economies where incomes and electric grids prevent consumers from switching to BEVs.Even in wealthy countries like the U.S.,the charging infrastructure is not fully in place for BEVs.Nor is the grid sufficiently robust for a nation of BEV charg

6、ersor safe from the scary threat of cyber intrusion,(or even severe weather).Then there is physics,which heavily favors ICE.A full gas tank has the same energy as 1,000 sticks of dynamite.Gasoline has about 100 times the energy density of a lithium-ion battery.Notwithstanding the tremendous advances

7、 in battery technology,the physical advantages of oil and its abundant supply mean the ICE engine will be around for a long while,even if its importance is diminished.So yes,conventional wisdom is too conventional.In this paper we describe an emerging automotive landscape that is far more complex an

8、d uncertainbut also exciting.Rather than a single,monolithic model for success,built around a single fuel/powertrain combination,Letter from Gary Silberg2 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated w

9、ith KPMG International Limited,a private English company limited by guarantee.All rights reserved.the future industry will be fragmenteda mosaic.Think of a world with bespoke,sexy,and cool new vehicles powered by batteries or hydrogen.Hybrids and vehicles running on natural gas.Maybe even solar.And,

10、yes,new cars with advanced ICE technology.Throw in progress in computing and AI to make autonomy real,and you have a new transportation ecosystem made up of many kinds of vehicles using the technologies that work best for the job.In this new world,where should you place your bets?A lot depends,of co

11、urse,on your current situation.If youre a startup you can go all-in on new technology.But what if your biggest single source of profits is trucks and SUVslike most U.S.automakers?What do you have to believe about your customers,the evolution of technology,growth of charging infrastructure,and future

12、 regulation to convince you to bet billions on EV technology and plant capacity now?What will be the cost in lost profits if you move too quickly and cant build product for your most profitable business?What is the cost if you move too slowly and you arent in position to cash in when EVs reach the t

13、ipping point?What if youre a supplier?How much will you bet on the new players and new types of vehicles?There are no simple answers.And the stakes could not be higher.No single company has the financial wherewithal to cover all the bets.Companies will need to think hard about where they can carve o

14、ut a winning positionwhere they can make their billion-dollar betsand where to use alliances and partnerships.Our goal here is to offer ideas and approaches for weighing these mind-boggling options.We have created the mosaic framework to help you answer the big strategic questions:where to play,how

15、to play,andcriticallywhen to play in this new automotive ecosystem.In short,the mosaic can help you make the billion-dollar betswisely.Gary SilbergPartner,Global Automotive Sector Leader,KPMG US3 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization

16、 of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Key takeawaysThe century-long reign of the ICE powertrain is endingbut no one knows how quickly;analyst estimates of 2030 BEV penetration range from as little as

17、 24 percent to nearly 40 percent.The industry will look more like a mosaic.Contrary to the conventional wisdom and$200 billion-plus of investments,the future wont just be BEVs.There will be multiple fuel/powertrain combinationsincluding ICE hybrids,and hydrogen-electric to meet the needs of the mark

18、et.Too many players,too few consumers?Today,many BEV players are aiming at a narrow($50,000 and up)slice of the U.S.market,representing only 2.4 million units or 17 percent.By 2030,even if BEV penetration reaches 30 percent(including more lower-price models)the available market may only be 5.1 milli

19、on out of a 17 million-unit market.Massive ICE manufacturing overcapacity.If the 30 percent BEV penetration forecast is even close,by 2030 there could be nearly 40 million units per year of excess ICE manufacturing capacity globallythe equivalent of 200 assembly plants.That does not include the mult

20、iplier effect on suppliers and their plants.Unanswered infrastructure questions.Not only is there uncertainty about building out infrastructure(for EVs and hydrogen vehicles),but also about the needed electrical supply.Nearly 4 billion people live in countries with inadequate electrical infrastructu

21、re for EVs.Even in wealthy economies,the electric grid is vulnerable and not ready for widespread EV use.Sweeping structural change.In almost any scenario,the industry can expect massive structural change.New competitors will take share.Value chains will be shattered,and supply chains will be reconf

22、igured;companies will need to adjust their portfolios of businesses.The stakes could not be higher.The betsand the uncertainty and complexityare enormous.New dominant positions will be built,and old empires may fall.A decade from now,there could be a new pecking order in automotiveand one or more of

23、 todays top players may have been acquired or disappeared.The mosaic can show how to place your bets wisely.To win,companies will need to choose new strategic postures and adopt a dynamic decision-making framework to plan and place their bets.They need the mosaic.$4 2021 KPMG LLP,a Delaware limited

24、liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.5 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG glo

25、bal organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.From a monolith to a mosaic For a century,a single fuel-powertrain combinationthe petroleum-powered internal-combustion engine(ICE)has dominated

26、the global automotive industry.How automotive companies are structured,how they are financed,how they go to marketeverything was optimized for producing and selling ICE-based vehicles.Yet,ICE was not always destined to dominate.In the early days of the industry,ICE was only one powertrain option.And

27、 long before the internal-combustion engine appeared,inventors were tinkering with battery-powered vehicles.Indeed,in the early 1900s,electric vehicles outsold the noisy,dirty and smelly gas-powered cars.1 Henry Ford and Thomas Edison were exploring electrics,and Ferdinand Porsche invented the first

28、 hybrid.Brands were built on steam powertrains,and Stanley“steamers”were sold until the mid-1920s.It took 20 years,but by the 1920s gas-powered ICE vehicles drove the competitors off the roadbecause of advantages that remain today.Petroleum(gasoline and diesel fuel)has extraordinary energy density,s

29、o a small tank could keep a car going for hours.Thanks to the adoption of kerosene for lighting in the 1800s,there was already a nationwide network for distributing petroleum products.Mass production and engineering refinements quickly drove down the cost of ICE engines and improved reliability and

30、performance,while makers of battery-powered drivetrains ran up against the limitations that engineers continue to wrestle with today.Finally,as the network of well-paved roads expanded,motorists wanted to go faster and farther than they could in a battery-electric.Now,the conventional wisdom says th

31、at the battery-electric powertrain will triumphbecoming the dominant force in the automotive business that ICE has been.Yet,we still dont know when BEVs might reach a tipping point and become popular with a wide swath of consumers,and capable of generating the salesand profitsto justify billion-doll

32、ar bets.By 2025?By 2035?Never?Predictions are all over the map.For the next 10 to 20 years,multiple fuel/powertrain combinations(including gasoline/ICE)will coexist,and innovation will continue on multiple fronts.So,instead of a monolith built around one dominant fuel/powertrain combination,the indu

33、stry will look more like a mosaic.The mosaic is both a metaphor for shattering the old ICE model and a framework for understanding the highly complex and uncertain future.It can help you evaluate possible scenario driverseconomics,technology evolution,regulation,etc.to place billion-dollar bets wise

34、ly and to revise strategies as factors change over time.1 Jake Richardson,“38%Of American Cars Were Electric In 1900,”CleanTechnica,February 25,2018.1Consumer acceptanceEcosystem requirementsEconomicsRegulatory mandatesTechnology evolutionExhibit 1:The mosaic is a framework to view scenarios on mult

35、iple dimensions Scenario drivers:6 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.A crack in the ICE:fra

36、cturing the industry modelEfforts to create alternatives to ICE powertrains never entirely disappeared,and after the oil crisis of the 1970s they got a boost as nations sought energy independence.In the U.S.,Congress passed the Electric and Hybrid Vehicle Research,Development,and Demonstration Act,w

37、hich led to a flurry of investment in fuel cells,electric motors and batteries,and other electric-powertrain technologies.In 1990,General Motor Corp.introduced its EV1,the first commercial U.S.electric model in decades.The EV-1 was a short-lived experimenttoo costly to build and attracting too few c

38、ustomers.2 But advances in lithium-ion battery packs and modern electronics have paved the way for commercial success.The breakthrough that really put BEVs on the map came from a startup called Tesla.Instead of building a$30,000 bare-bones econobox with an electric motora proposition attractive only

39、 to the most ardent green consumersTesla made high cost a virtue.Its$70,000-plus cars were high-performance computers on wheels that quickly became an object of desire for well-heeled techie trendsetters.Tesla also upended traditional sales and marketing models to offer a unique customer experiencea

40、nd by 2020 had become the most valuable automotive company on the planet.3 2 Source:“A Brief History and Evolution of Electric Cars,”Interesting Engineering website,July 1,2020.3 Source:“Tesla closes day as fifth most valuable U.S.company,passing Facebook,”CNBC.com,January 8,2021.Current marketcapit

41、al of Tesla:$627 billionCurrent marketcapital of top 14 OEMs:$1.1 trillionTesla$627BToyota$222BVolkswagen$170BDaimler$95BFord$50BGM$85BBMW$66BHyun-dai$44BHonda$53BBYD$76BNissan$22BRenault$13BNIO$65BStellantis$57BGreatWall$37BExhibit 2.Tesla is worth more than established automakersTop 15 Auto OEM ma

42、rket capitalization($billions)Note:Market capitalization shown as of March 19,2020.Source:CapIQ7 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company l

43、imited by guarantee.All rights reserved.A tsunami of investmentWe count more than$200 billion in EV investments by the top 10 global automakers(Exhibit 3).To put that in perspective,its more than the U.S.spent over the 13 years on the Apollo space program to land a man on the moon(adjusted for infla

44、tion).Its enough to develop more than 200 new car platformsaimed at a market that today accounts for less than 5 percent of global auto sales.And$200 billion doesnt even count the estimated$60 billion that has gone into startups or the tens of billions being invested by smaller automakers and parts

45、suppliers.Nor does it include needed investments in complementary industries,such as money to enhance the electric grid or for gas stations to add hydrogen pumps or charging stations.With Tesla pointing the way,auto companies across the world have doubled down on electric vehicles.Almost every major

46、 car manufacturer is now offering at least one BEV model,if not several.In addition to high-end high-performance cars,they are selling or developing plug-in pickups(a new Hummer powered by a 1,000-horsepower electric engine delivering 11,500 lb.-ft of torque is slated for 2022)and a range of mid-pri

47、ced electric crossovers such as the new Mustang and Volkswagens ID.4.4 A raft of new competitors,such as Rivian,Lucid,Fisker,and Nio are designing electric sedans,SUVs,for the U.S.market as well.GM has gone all-in,declaring that it will only produce EVs after 2035.And Jaguar has upped the ante,sayin

48、g it will be all-electric by 2025.5 Exhibit 3.Top 10 auto makers(plus Tesla)have announced$200 billion in EV investments and hundreds of modelsFor many automakers,these bets are too big to fail.But clearly,not all these bets will pay off.Some bets may wind up losing because the hoped-for technology

49、breakthrough didnt happen.Others will have aimed at a vehicle type or customer segment that wont transition easily to EVs.Some bets will fail because of poor timing.Announced investments in EVs and FCVs,2020present($B)Global EV new model launches/refreshes by yearSource:OEM announced investments are

50、 not directly comparable across OEMs.For example,some announcements reflect only R&D while others include capital expense for new EV production plants.4 Source:“Every Electric Vehicle Thats Expected in the Next Five Years,”Car and Driver,January 12,20215 Source:“Jaguar cars to go all-electric by 202

51、5 as JLR plans full range of e-models by 2030,”CNBC.com,February 15,2021.Note:(a)20162020 historical data;20212023 expected based on announcements;(b)Includes BEV models only Source:LMCFCA$11Daimler$26Hyundai$14Ford$22VW$55GM$27BMW$32Tesla$12Toyota$592920232005842172

52、0160$200 billion in EV investments$8 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.2030 Units41.134.331

53、.126.21.6Xdifferencebetweenhigh andlowestimate28.93%6%19%23%27%31%9%12%16%20%25%29%33%37%4%16%18%21%24%0%5%10%15%20%25%30%35%40%20022202320242025202620272028202920303%2%5%14%7%9%13%9%16%28%2%UBSBloombergMorgan StanleyFrostLMCRBC Capital MarketsJP MorganRisky businessEven now,there remains

54、 wide disagreement on when a mass EV market will materialize.Depending on the analyst,EVs could capture up to 37 percent of the global market by 2030or as little as 24 percent(Exhibit 4).Even if the high estimate proves accurate,there still may be far too many players vying for too few customers.At

55、year-end 2020,LMC Automotive counted 284 EV models for sale and predicted the number could approach 500 by 2023.6 These models will be produced by an estimated dozens of companies,ranging from the newest startups to the worlds oldest auto brands.Exhibit 4:There is no consensus on EV adoptionSources:

56、JPMorgan;UBS;RBC Capital Markets;Morgan Stanley,LMC;Bloomberg Note:2030 units are based on analyst BEV share estimates and LMC 2030 volumes for consistencyExhibit 5.As EV sales rise,the available ICE market will shrinkAverage estimateHigh estimate20M40M60M80M120M100M0M93%2022 202420202026 202882%203

57、086%90%76%7%Units10%18%14%24%3%97%9%3%6%94%91%77%17%83%23%29%71%97%20M40M60M80M120M100M0M2022 202420202026 2028 2030Units20%88%6%2%94%12%80%29%71%37%63%98%20M40M60M80M120M100M0M2022 202420202026 2028 2030UnitsICE,hybrid,and otherBEVNote:Overall industry volume taken from LMC 2021 Q1 LVSF for consist

58、ency in comparison,mix has been taken from analyst forecastsLow estimateGlobal BEV sales forecastanalysts viewpoints6 Source:LMC9 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Li

59、mited,a private English company limited by guarantee.All rights reserved.The risks are particularly complex for established automakers,which will have to manage the decline of ICE sales as they pursue EVs.No matter how quickly or slowly the EV share grows,the share of ICE vehicles sold will drop by

60、2030(Exhibit 5).In the U.S.,for example,there could be anywhere from 3.4 million to 5.6 million fewer ICE vehicles sold in 2030 than in 2020(assuming a 17.3-million-unit market).The implication is that automakers will be fighting harder to hold share in the conventional vehicle market,even as they v

61、ie for a slice of the EV market.The struggle could be especially difficult for established players adopting all-in EV strategies.As Exhibit 6 shows,these companies would need to do extraordinarily well in EVs to maintain their current market shares.In the high-case scenario,an incumbent would need t

62、o grab three times its current market share in the new EV business to stay even.In other words,a player with 5 percent of the market today would need to capture 15 percent of the EV market in 2030.If the low estimate holds and EVs only grab about 20 percent of the 2030 market,the 5 percent player wo

63、uld need to capture more than 25 percent of the EV segment to maintain unit-volume share(Exhibit 6).Exhibit 6:Under an all-in EV strategy,incumbents will need to capture a huge amount of EV sales to maintain overall market shareHypothetical US BEV 2030 TAM(total addressable market)Required market sh

64、are increase to maintain competitive positionNotes:(a)Overall industry volume taken from LMC 2021 Q1 LVSF (b)Analyst average includes LMC,UBS,and RBCAnother consideration for incumbents:the implications of a declining ICE business for their asset bases and capital structures.We estimate that at 30 p

65、ercent EV penetration,there could be global manufacturing capacity to build nearly 40 million more ICE vehicles than the market will demand(globally)in 2030.That would be the equivalent of 200 un-needed assembly plants(Exhibit 7).U.S.market viewLow end ofanalyst rangeAnalystsaverageHigh end ofanalys

66、t range13.9M(80%)13.1M(76%)11.7M(68%)3.4M(20%)4.1M(24%)5.6M(32%)17.3M17.3M17.3MBEVICE,hybrid,and other0%10%20%30%40%50%60%70%80%90%100%20%0%5%10%15%Required market share of BEVAnalystaverageHighanalyst5.1x Current Share3.1x Current Share4.2x Current ShareCurrent marketLowanalyst10 2021 KPMG LLP,a De

67、laware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.ICE/Other Production Capacity(million units)4010020Excess ICE/Ot

68、her Production Capacity2030 Required ICE/Other Capacity 100.1M(80M units at 80%capacity)FAWGACIranian OEMsIndustrial CNHTataMazdaBAICGAZAgrale SAOther Indian OEMsChanganPeroduaMahindraGeelyBMWDaimlerBYDOther Chinese OEMsSuzukiFordGMBrillianceStellantisHyundaiVWDongfengSAICRenault-NissanDRB-HicomToyo

69、taSubaruHondaIsuzuCheryGreat WallJianghuaiOther2020 capacity 138MExhibit 7:There could be nearly 40 million units per year of excess ICE capacity in 2030Source:LMCNotes:Capacity was based on LMC capacity per manufacturer.Manufacturer capacity allocated to OEM sales groups based on 2020 sales.Numbers

70、 were adjusted to remove estimated BEV,EREV,and FCEV capacityBetting on non-BEV powertrains,tooEven as dozens of players target the BEV segment,billions of dollars are being bet on alternative scenarios.For example,General Motors,Toyota,Honda,and Hyundai continue to invest in hydrogen fuel-cell EVs(

71、FCEVs).FCEVs dont have the range limitations of BEVs but face similar obstaclesthe high cost of fuel cells and the need for new fueling infrastructure.Auto companies are also expanding their hybrid options.The hybrid price premium vs.ICE models is narrowing,and hybrids are available in almost every

72、passenger-vehicle configuration,from subcompacts to SUVs and pickups,providing an attractive option for consumers who are not prepared to make the leap to BEVs.Whats more,ICE isnt going away anytime soon.Vehicles with ICE powertrains are far cheaper to buy and are likely to remain somaking them the

73、practical choice in developing economies.Moreover,ICE vehicles are more versatileICE powertrains are used in everything from motorcycles to tractors and semis.They work in all terrains,at all altitudes and in all kinds of weather.But when the temperature drops so does battery life.Meanwhile,ICE tech

74、nology continues to advance.With new engine designs and electronics,gas-powered cars can be cleaner and less fuel hungry.For the 2020 model year,average estimated real-world CO2 emissions were projected to fall 12 grams per mile(g/mi)to 344 g/mi,and fuel economy was projected to increase 0.8 miles p

75、er gallon(mpg)to 25.7 mpg.7 And there are“clean”ICE variations,such as natural-gas-powered city buses.8 The bottom line:Both established players and start-ups need to look at all the possibilities on every dimensioncustomer needs,economics,infrastructure evolution,regulation,timewhen should place th

76、eir billion-dollar bets?And how do they sustain current business as they invest in the new?7 Source:2020 Automotive Trends Report,U.S.Environmental Protection Agency,epa.gov,January 20218 Source:Natural gas powers more than 175,000 vehicles in the United States and roughly 23 million vehicles worldw

77、ide;Alternative Fuel Data Center.U.S.Department of Energy,afdc.energy.gov.Illustrative analysis of required ICE production capacity11 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG Internationa

78、l Limited,a private English company limited by guarantee.All rights reserved.Consumer acceptanceEconomicsEcosystem requirementsRegulatory mandatesTechnology evolution Driver experience Mile range/range anxiety Value perception Social preferences Total cost of ownership(acquisition cost,depreciation/

79、residual,fuel,maintenance,insurance,etc.)Private sector investments in upstream/downstream capabilities Government-driven investments&coordination Restrictions Subsidies/Tax incentives Solid state batteries Advances in fuel cell design and materials Increases in computing powerThe mosaic framework g

80、ives us a way to look at the various constraints(and opportunities)as automotive companies place their bets.It helps decision makers ask the critical questions about what they would need to believe about variables such as battery cost curves,charging infrastructure buildout,grid maturity,and custome

81、r preferences to make strategic decisions.Play it smart:Use the mosaic to assess the possibilitiesDrivers and considerationsExhibit 8.A mosaic view of auto industry scenarios2Example multi-factor evaluationtrucking sector(illustrative example)Hybrid ICE EVCitySuburbanRuralLight vehiclesVans&busesLon

82、g-haulLTL/RegionalLast mile trucking/service fleetsLocal delivery servicesPassenger VehiclesMaaS FleetsCommercial VehiclesGasolineDieselNGBEVFCUser segment12 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliate

83、d with KPMG International Limited,a private English company limited by guarantee.All rights reserved.1.Consumer preferences and vehicle missionsUnderstanding the automotive buyer is more important than ever.Where do they drive?How often?How far and for what purpose?Would they rather use mobility ser

84、vices than buy a car?At this point,BEVs do not fit all customer needs.Today BEVs beat out ICE mainly on performance and environmental concernsthey trail in cost,convenience,range and perceived value.What will it take to convince drivers of pickups and SUVsthe most popular consumer vehicles in Americ

85、ato switch to an electric model?Why isnt it equally plausible that the next move for many buyers will be to buy hybrids?For about$10,000 less than one of the all-electric pickups on the drawing boards,a consumer today can get a hybrid that will go more than 800 miles on a tank of gas and do zero to

86、60 in about 5 seconds.9 Even though upcoming BEV models are specd to deliver more than 400 miles on a charge,consumers still cite range anxiety as a reason not to buy EVs.The average gasoline-ICE vehicle(a small SUV),can go for about 410 miles before needing a fill-up,while current EVs can only go a

87、bout 250 milesand a lot less if its cold out.10 While 80 percent of U.S.motorists travel 50 miles or less per day on average,they still want to know that they can drive long distances and not worry about if there will be a place to refuel/recharge.On the other hand,battery-electric powertrains look

88、like winners in emerging automotive applications,such as autonomous vehicles for urban mobility services and local-delivery vans(with drivers or autonomous).In these uses,the high purchase cost is amortized over more hours of daily operation and range is not a worry.Whats more,these vehicles dont ne

89、ed the performance and styling that are the basis for consumer vehicles.The drawback:this market doesnt yet exist,although its getting closer.Amazon,for example,has tested delivery vans that it developed with Rivian Automotive on routes in Los Angeles.11 9 Source:Comparison based on 2021 Ford F150 X

90、LT with Powerboost Hybrid V6 configured(MSRP of$57,760)vs.Rivian R1T($67,500).10 Source:Institute of Transportation Studies,University of California,Davis website;EVA.11 Source:“Amazon is testing Rivian electric delivery vans in Los Angeles,”CNBC.com,February 3,2021.12 Source:For more detail,see EV

91、Plan B,KPMG 2020.BEVs will likely become the dominant light vehicle for urban mobility-as-a-service(MaaS)fleets.MaaS fleet operators would not have range anxiety(all trips would be local)and high utilization rates would lead to low cost of ownership,despite higher purchase costs.MaaS providers could

92、 rely on their own charging facilities,so finding a charging point would not be an issue.Autonomous BEVs for MaaS could also get a boost from regulators who might mandate the use of BEVs for livery services.We have estimated that 90 percent of autonomous MaaS vehicles could be EVs in 2030.12BEVs cou

93、ld dominate in urban MaaSLicense,registration,taxesMaintenanceInsuranceFuelDepreciationICE(Honda Civic EX Hatchback)BEV(Nissan Leaf)0.070.010.080.040.110.310.090.090.090.090.010.38BEV has significant cost advantages in high mileage MaaS operationsICE vs.BEV cost per mile for MaaS operationsNotes:Key

94、 assumptions:Useful life6 years;miles per year50,000;maintenance costsper AAA;gasoline price$2.87(AAA assumption);ICE fuel economy32 MPG combined;EV efficiency0.3 kWh per mile;electricity price0.132 per kWh;License,registration,taxes,insuranceper AAASource:KPMG Analysis13 2021 KPMG LLP,a Delaware li

95、mited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.BEVs are still too pricey for most consumers to consider.Even though daily driving c

96、osts can be lower than for an ICE vehicle,the sticker price limits the potential market.The problem remains the cost of battery packsdespite an 85 percent drop in the cost of lithium-ion batteries over the past 10 years.Even so,battery packs for a midsize BEV still cost upwards of$10,000.While Tesla

97、 and luxury/performance brands such as Jaguar,Mercedes and Porsche are finding a market for pricey EVs,with MSRPs exceeding$100,000,it is a limited market.Only about 2.4 million of the 14.5 million light vehicles sold in the U.S.in 2020 fetched$50,000 or more at retail(Exhibit 9).13 That is only abo

98、ut 17 percent of the U.S.market.Exhibit 9.Only 17%of U.S.passenger vehicles sell for$50,000 or more$70K+$65K70K$60K65K$55K60K$50K55K$45K50K$40K45K$35K40K$30K35K$25K30K$20K25K$15K20K$10K15K2.4munitsTesla Model X,SHummer EV 2X PickupRivian R1TCadillac LyriqTesla Model YVW ID4Ford Mustang Mach-EPorsche

99、 TaycanChevy BoltNissan LeafTesla Model 312munits53881,3671,5981,9472,6751,926650331,852In other words,cost is still a barrier.And,assuming that approximate cost parity with ICE vehicles is required for mass market appeal,BEVs still have a way to go.As Exhibit 10 demonstrates,as long as g

100、as is cheap(and/or battery prices remain high),BEVs are at a price disadvantage.At todays oil pricesabout$60 per barrela battery pack would need to cost$100 per kilowatt hour(kWh)to be competitive.In 2020,the average EV battery cost$126 per kWh.14 The median estimate among analysts pegs the average

101、battery price at around$100 in 2024.2.Economics and technology evolution13 E.14 Source:Battery Pack Prices Cited Below$100/kWh for the First Time in 2020,While Market Average Sits at$137/kWh,Bloomberg NEF,December 16,2020.Notes:(a)Trim prices pulled:Tesla Model X,S,Y,3Long Range;Porsche Ocean4S;Rivi

102、an R1TAverage;Cadillac LyriqN/A;Ford Mustang Mach-EPremium;VW ID41st Edition;Nissan LeafS Plus;Chevy BoltLT/Premier Average(b)Includes all vehicles with more than 1000 units sold in 2020,representing 99.8%of US Light Vehicles sold.(c)Prices based on“Edmunds Suggests You Pay”price for the middle pric

103、ed trim of each vehicle.U.S.2020 light vehicle sales by price level(thousands of units)14 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited

104、by guarantee.All rights reserved.Exhibit 10.When will battery prices fall enough to make EVs competitive with ICE vehicles?Breakeven for an ICE vehicle vs.an EV with 250 miles of rangeBattery pack cost curve:Analysts projections00600500400300200300400500EVs are cheaper than ICE

105、sICEs are cheaper than EVsCost of batteries($/KWh)Price of oil($/bbl)Current WTI crude oil:$55Break-even cost of batteries:$64BNEFs 2024 projectedprice of batteries:$94Projected break-even price of oil:$85BNEFs estimate ofaverage battery price:$176Break-even price of oil:$0200250201920202

106、0224202520262027202820292030Median estimate:$141 per kWh Median estimate:$97 per kWh Median estimate:$71 per kWhU.S.DOEBNEFNomura ResearchFrostDeutsche BankJP MorganCredit SuisseUBSHSBCTeslaVolkswagenJefferiesSamsungPanasaonicCATLIHS MarkitMedianPoly.(Median)Note:Includes Li-ion battery p

107、ack cost or price estimatesSources:Bloomberg NEF;US Department of Energy;Deutsche Bank;Nomura research;JP Morgan;Credit Suisse;UBS;HSBC;Global Lithium-ion Battery Production and Capacity Expansion,Frost;Tesla,Cleantechnica;VW press conference;“The Global Energy Challenge”,Michael GreenstoneBut solvi

108、ng the technical problems to reduce battery cost is only part of the equation.The priceand availabilityof raw materials for EV batteries is another critical variable.There are already growing shortages of critical materials such as nickel and lithium.15 And,European Commission President Ursula von d

109、er Leyen recently warned that the scarcity of raw materials could stymie the ECs efforts to decarbonize by switching to EVs;she also estimated that 98 percent of raw materials needed for a clean economy are controlled by China.16 Cost is also a barrier for hydrogen fuel cell vehicles.Hondas Clarity

110、fuel cell vehicle,for example,currently leases for almost twice the cost of the companys battery-powered model.17 15 Source:Guy Burdick,“Battery makers face looming shortages of high-quality lithium”,UtilityD,June 25,2020.16 Source:Finbarr Bermingham,“Chinas rare earth dominance casts shadow over Eu

111、ropes ambitious climate targets,”South China Morning Post,Feb.26,202117 Source:Avery Thompson,“Where Are All the Hydrogen Cars We Were Promised?”,Popular Mechanics,August 27,2020.Sources:BNEF estimate,Greenstone,M.(2020).The Global Energy Challenge:State of the Global Economy.Energy Policy Institute

112、 at the University of Chicago.;Greenstone et.al.,“Will We Ever Stop Using Fossil Fuels?”15 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited

113、 by guarantee.All rights reserved.Exhibit 11.The grid challengeU.S.summer electricity demand during AugustThe timing of widespread adoption of EVswhether they plug into the electric grid to charge batteries or use fuel cells that convert hydrogen to electricityalso depends on when the supporting inf

114、rastructure for recharging or refueling is in place.There are 31,753 public EV charging facilities in the U.S.but,only 4,325 of these have DC fast chargers(with 17,409 outlets).This compares with 168,000 gas stations,which typically have eight or more fuel pumps.It is estimated that it would cost mo

115、re than$2 billion just to equip homes and workplaces with enough chargers to meet anticipated 2025 needs in 100 top metro areas-and many times that to replicate the current U.S.gasoline distribution network.18 Like battery-powered EVs,hydrogen fuel-cell-powered vehicles also would have to have their

116、 own infrastructurethat is,a hydrogen production,storage,and distribution network,in addition to a network of refueling stations(currently less than 100 hydrogen stations exist in the U.S.).Based on current EV demand,the market is unlikely to create charging infrastructure by itself.It will take pub

117、lic-sector action,as well as strategic investments from automakers to build out their own charging systems(a move already made by Tesla).If enacted,President Bidens infrastructure bill could provide funding for 500,000 charging stations in the U.S.19 There are other infrastructure issues to overcome

118、 before BEVs can become attractive to most motorists.For example,home charging is not so simple in large apartment blocks in major citiesthe markets where EVs are most likely to catch on(at least initially).Even if apartment owners have an on-site parking space,these are usually not wired.Notes:Summ

119、er demand from August 2016Source:KPMG analysis3.Ecosystem requirements(infrastructure)18 Source:Jacqueline Toth,“Report:$2.2 Billion Needed to Meet U.S.Electric Car Charging Demand Through 2025,”Morning Consult,August 13,2019.19 Bengt Halvorson,“Electric car rebates,charging stations:Whats in$2 tril

120、lion Biden infrastructure plan?”Green Car Reports,March 31,2021.Electricity Demand(GW)4004505005506006507001:0023:0021:0019:0017:0015:0013:0011:009:007:005:003:00Central TimeCapacityExample summer demandCapacity available for EV chargingCapacity usedNighttime capacitycan support upto 80M carsVery li

121、ttle capacityto charge from 28PMwithout additional gridinvestment16 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All right

122、s reserved.Then there is the problem of the electric grid(Exhibit 11).The U.S.grid was not designed for a nation of motorists who arrive home after work every night and plug in their BEVsor to provide the surge of power used by commercial quick-charge stations.The problem can be partially addressed

123、with demand-management systems that would let utilities coordinate charging timesdynamically scheduling individual customers for EV charging hours to avoid excessive loads.According to KPMG analysis,the U.S.has generating capacity to charge 80 million EVs if utility-managed charging is used.However,

124、there are still bottlenecks in transmission and distribution that would require additional investments.Electricity infrastructure is a greater barrier to EV adoption in developing economies,which have some of the worlds fastest-growing automotive markets.Rising incomes(and lower EV costs)will help c

125、lose the affordability gap.But today,3.9 billion consumers live in developing economies with inadequate electric grids(Exhibit 12).20 When that will change,no one can tell.Exhibit 12.In developing economies,there are nearly 6.6 billion people who lack infrastructure and financial means to switch to

126、BEVsCountries classified by GDP per capita and grid reliabilityIncome$25,000 and high grid reliability 1.0B 44.1M 45.2MLower income and/or lower grid reliability 6.6B 45.6M 66.8MCategory 2019 population 2019 auto sales 2032 estimated auto sales20 Source:World Bank,World Economic ForumNote:Nearly eve

127、ry country with GDP per capita over$25,000 was classified as having a reliable electrical grid.Of the 6.6B people in low income countries,2.2B were classified as having reliable electric grids.3.9B were classified as having unreliable grids and 0.5B were not classified17 2021 KPMG LLP,a Delaware lim

128、ited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.4.The X factor:What will regulators do?The choice of non-ICE technology and business

129、strategy is also driven by regulationanother variable that adds a high degree of uncertainty.The internal combustion engine is in the crosshairs of regulators because motor vehicles are a leading source of carbon emissions.In 2018,greenhouse gas emissions from transportation accounted for about 28.2

130、 percent of total U.S.greenhouse gas emissions,making it the largest contributor of U.S.greenhouse gases.21 With increasing evidence of climate-change impactand rising political pressureregulators have gone from limiting carbon emissions across vehicle fleets and encouraging BEV adoption to outright

131、 ICE bans.Seventeen countries have announced mandates to stop sales of ICE vehicles,starting as early as 2025.22 Other pro-BEV policy measures include industry mandates to automakers to make BEV models available,financial incentives to buyers,subsidized charging infrastructure,and campaigns to incre

132、ase consumer awareness.On March 31,2021,the Biden administration unveiled a$2 trillion-plus infrastructure bill that includes a range of supports for EV sales.These include new federal tax credits for EV purchases and funding for charging stations.23 How much,if any,of the Biden EV plan will be enac

133、ted is difficult to predict.We do know from experience that policies can change direction without warning.In the past 12 years,the U.S.has gone back and forth on support for EVs and other environmental measures between the Obama,Trump,and Biden administrationsand could flip back again with the next

134、election.21 Source:Sources of Greenhouse Gas Emissions.U.S.Environmental Protection Agency.22 Source:Actions by countries to phase out internal combustion engines,theclimatecenter.org.23 Source:Niraj Chokshi,“Bidens Push for Electric Cars:$174 Billion,10 Years and a Bit of Luck,”The New York Times,A

135、pril 1,2021.Norway has the highest EV penetration in the world.In 2020,more than 50 percent of Norways light vehicle sales were battery-electric vehicles.The country has invested heavily in building the infrastructure to support this transition to EVs,spending more than 3 billion through 2018 and co

136、mmitting 2 billion more for the 20182029 period.This represents a total government investment of roughly$1,800 per household or potentially$3,200 per BEV sold through 2029,based on expected volumes.While these costs are feasible for high-income countries,they would be prohibitively expensive for dev

137、eloping economies.Population(2020)5.4 million 331 million 1.3 billionAnnual auto sales 0.1 million 15.5 million 2.3 millionGDP per capita(USD)$75,400$65,300$2,100 0.514 0.838 0.041Motorization rate(vehicles per capita)$5.4 billion$339 billion$1.4 trillionEstimated cost for BEV infrastructure($B)Norw

138、ay U.S.IndiaNorway builds for EVs20025203020352040204520500%100%80%60%40%20%Share of electric vehiclesof new salesNorwayNetherlandsUKFrance CanadaGermanyCaliforniaJapanSouth KoreaIndiaChinaHistorical and targeted electric shares of new passenger vehicles sales by marketsSource:Update on t

139、he global transition to electric vehicles through 2019,The International Council on Clean Transportation.18 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private Englis

140、h company limited by guarantee.All rights reserved.Strategy for an uncertain future3The automotive business is morphing.For all its complexityglobal supply chains feeding thousands of parts to networks of assembly plants to build hundreds of different modelsthe automotive business has been a mature

141、industry.Everybody was making cars using ICE technology and they all used similar operating models.Now,the industry is becoming a mosaic of multiple possibilitiesand risks.The strategic choices have multiplied:companies have to reconsider what models to build,how to design them,where to build themor

142、 whether to farm out manufacturing entirely.These decisions are being made under great uncertainty and require a dynamic and flexible process:What do you have to believe to make a billion-dollar bet on a particular EV technology or market segment?What needs to happen to make this scenario come true?

143、How does this vary by country and market segment?What happens if conditions change?Exhibit 13.What do you have to believe?U.S.ChinaEuropeTimeCurrentFive YearsTen YearsFifteen YearsMosaic scenario drivers(what you would have to believe):ConsumeracceptanceEcosystemrequirementsTechnologyevolutionEconom

144、icsRegulatorymandates19 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Companies must not only place big

145、 bets on fuel/powertrain combinations,they must also think about how they will function in the new automotive business.There will be new operating and business model choices.There will be new profit pools and the industry structureand the structure of individual playerswill change to fit the new bus

146、iness.Assets that were built up around ICE may be less relevant.There may be more opportunities to partner and outsource.To craft strategy in this environment,companies need new approaches.They need ways to move ahead even in the face of irreducible uncertainties.And,they need the flexibility to ada

147、pt to surprises along the way.Preparing for structural changeThe end of a single focus on ICE and the emergence of the mosaic is setting off structural change across the automotive industry.Old value chains are being shattered and new operating models are appearing.Supply chains are being reconfigur

148、ed and companies are re-examining their portfolios of businesses and assets.Automakers have new choices about production,from vertical integration to contract manufacturing.They have new choices of distribution modelsfrom selling direct to maintaining dealer networks.The most obvious change is the i

149、nflux of new competitors.For the first time in decades,barriers to entry have fallen.Agile,well-funded startups such as Rivian,Lucid,Fisker,Nio,Xpeng,and Lordstown and many more are staking their claims.The new competition also includes tech giants such as Alphabet,Amazon and Apple.The transition to

150、 EVs is also creating new production models.Fisker has outsourced production of current designs to Magna International and recently Key questions for automakers,suppliers,and other players1234567What is a realistic range of scenarios for industry end-states,as a function of consumer acceptance,econo

151、mics,technology,infrastructure,and regulation,under which we would make different investment decisions?What are the resulting mosaic(s)for each scenario?For each scenario:What is my competitive positioning now and in the future?What is my strategic posture do I want to adopt?What capital investments

152、 do I need to make?Looking across the scenarios,what decisions,investments,and actions are common?(no-regrets)What are the high commitment decisions that require additional diligence?How can I better understand these decisions?War gaming Agent based modelling/game theoryWhere should I go-it-alone or

153、 partner,or should I acquire?20 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.announced a deal to partn

154、er with Foxconn,the contract manufacturing giant that makes iPhones.24 The company says Foxconn will produce 250,000 units per year starting in 2023.Foxconn,which previously signed deals with Chinas Byton and Zhejiang Geely Holding Group,and with the Fiat Chrysler unit of Stellantis,says it is consi

155、dering Wisconsin and Mexico for EV plant sites.25 At the other extreme,Tesla has declared its intention to be as vertically integrated as possible.It fabricates everything from batteries to seats and builds its own production equipment(Exhibit 14).The company is even investing in a network of quick-

156、charging stations.Its a costly bet,but founder Elon Musk maintains this will allow the company to keep ahead of competitors in an increasingly competitive business.26EVs are also bringing structural change to auto retailing.The vast majority of new entrants are selling direct.And,EVs could further e

157、ndanger the economics of legacy dealer networks.EVs have few moving parts compared with ICE vehicles(20 parts in a powertrain vs.thousands in an ICE engine),requiring much less maintenance.That threatens one of dealers last reliable sources of dealer profitsservice and parts(Exhibit 15).27Exhibit 14

158、:Three value-chain approachesFabricationAssemblySales/distributionDesignMarketingAftersalesFabricationAssemblySales/distributionDesignMarketingAftersalesChargingTraditional OEMRefining/processingMining/extractionFabricationAssemblySales/distributionChargingDesignMarketingAftersalesTesla Asset light

159、startup Performed by OEMLimited OEM involvement24 Source:Akanksha Rana,Ben Klayman,Apple supplier Foxconn teams up with Fisker to make electric vehicles,Reuters,February 24,2021.25 Source:Yimou Lee,“Foxconn eyes EVs for troubled Wisconsin plant,may go to Mexico,”Reuters,March 16,2021.26 Source:“Elon

160、 Musk Explains Teslas Vertical Integration Vs Catalog Engineering,”InsideEVs,October 22,2020.27 Source:The future of automotive retailing,KPMG 2020.21 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with

161、KPMG International Limited,a private English company limited by guarantee.All rights reserved.Exhibit 15.Lower EV maintenance requirements could cut aftermarket revenueEVs have lower maintenance cost vs ICEs.Comparison of total annual maintenance of Chevy Bolt and VW Golf($maintenance cost per year)

162、And up to 60%less aftermarket revenue as EV penetrates marketReduction in aftermarket revenue for various levels of BEV penetrationChevy BoltTotal annualmaintenance:$255VW GolfTotal annualmaintenance:$610Parts replacement(incl.service)Inspection(preventative)Liquids(incl.service)Source:UBS estimates

163、Source:UBS AutoEV Market Share Aftermarket Revenue Decline1,00090080070060050040030020010000%-10%-20%-30%-40%-50%-60%10%20%30%40%50%60%70%80%90%100%When to bet:timing is everythingAs always,timing will be critical for successful strategy.The shift to electric power trains and the unwinding of existi

164、ng ICE capacity will be non-linearadoption will accelerate quickly once the proverbial tipping point for EVs is reached.But it is still difficult to determine when that tipping point might occur.Start-ups can race into the future nowindeed,thats what theyre all about.But incumbents need to sustain t

165、heir core businesses.This will require a delicate balancing act.Companies need to determine when to commit to new technologies and how to safely unwind ICE capacity.Based on their customers and geographic footprints,some incumbents might see significant first-mover advantages.Others could conclude t

166、hat it makes more sense to be a fast follower.22 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Emerging

167、 strategic postures In this environment,companies can choose from a range of strategic postures:Reserving multiple options.Toyota may be the best example of this posture.The company is investing in multiple strategies across the mosaic,reflecting Toyotas position as the most global player,serving ma

168、rkets such as India and Indonesia as well as Japan,the U.S.and Europe.It has been a market leader in hybrids and is developing plug-in EVs as well as fuel-cell models.In the home market,Toyota President Akio Toyoda has been sharply critical of a possible government mandate to end ICE production,whic

169、h he said would cause the Japanese auto industry to collapse.He also estimates that“the infrastructure needed to support a fleet consisting entirely of EVs would cost Japan between 14 trillion and 37 trillion,the equivalent of$135 billion to$358 billion.”28 Market shaper.GM signaled its strategy on

170、January 2021,when CEO Mary Barra declared that GM will end production of ICE vehicles in 2035.29 In effect,this announcement says that GM plans to lead the shift to electric versions of the cars,trucks and SUVs that Americans buy today and shape the future market.Partnering to share the cost and ris

171、k.Then there are unprecedented strategic partnerships.In 2019,Ford and Volkswagen joined forces in a global alliance to collaborate on an EV platform that will be used by both companies.They are pooling the risks of platform development and expect to produce 15 million Volkswagen MEB EV platforms a

172、year in 2028.And,arguably the Stellantis merger of Peugeot and Fiat Chrysler is intended in part to share the costs of the transition to EVs.More consolidation is likely.Scaled-down to focus.In February,Daimler-Benz announced what Chairman Ola Kllenius called“a profound reshaping”of the company to p

173、osition itself as the leader in electric luxury cars.The company plans to separate its truck business,which will focus on fuel-cell electric and self-driving trucks.Mercedes will focus on hybrids and EV passenger cars.Supplier strategies.Tier 1 parts suppliers also have to consider new strategic pos

174、tures.Can they compete in the new world of batteries,electronics,and electric motors?Or will they go for more scale in the traditional parts businessadopt a“last man standing”strategy and buy up competitors?BorgWarner,for example,recently completed the acquisition of Delphi Technologies to strengthe

175、n its position in electric powertrains and electronics,and has announced plans to acquire German battery maker AKASOL.Other parts suppliersJohnson Controls,for examplehave concluded its a good time to exit the business.The choice of strategic posture will depend both on judgments about how and where

176、 to play in the new business and the companys“path dependence”the history,distinctive capabilities market position and assets that each organization has.Companies need to be realistic about which choices are within their grasp.Well offer EVs across all of our brands and at price points and span the

177、global EV market from the Wuling Hong Guang Mini to the Cadillac CELESTIQ.GM CEO Mary Barra,Feb.10,2021 earnings call The infrastructure needed to support a fleet consisting entirely of EVs would cost Japan between 14 trillion and 37 trillion,the equivalent of$135 billion to$358 billion.Toyota Presi

178、dent Akio Toyoda,the Wall Street Journal,Dec.17,2020.28 Source:Toyotas Chief Says Electric Vehicles Are Overhyped,”Peter Landers,The Wall Street Journal,Dec.17,2020.29 Source:General Motors Co(GM)CEO Mary Barra on Q4 2020 Results-Earnings Call Transcript,Seeking Alpha,February 10,2021.23 2021 KPMG L

179、LP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.How to make strategic decisions amid uncertaintyTraditionally,automo

180、tive strategy has dealt with known knowns(business as usual)and knowable unknownslike how sales of various vehicles will behave under different economic conditions.But to place bets on the future industry(the mosaic),auto company strategists must work increasingly in the realm of the unknowable.Righ

181、t now,the biggest bets appear to be on a scenario in which battery technology continues to evolve on a predictable curve:manufacturing costs come down,range goes up,BEV sales accelerate.This scenario also seems to assume supportive government policy for EV adoption.But there can be other plausible s

182、cenarios in which the opposite is truewhere technology stalls,costs keep consumers away,and government incentives disappear or are ineffective.In this end state,mass EV adoption would occur much later.So,clearly,an automaker would make different decisions under one scenario versus another.To make la

183、rge,difficult-to-reverse decisions,companies will need to use a structured approach like the mosaic to identify a handful of plausible scenarios.If you believe costs will not come down rapidly what is the scenario for BEV market evolution?What do you have to believe about charging infrastructure?Bas

184、ed on your beliefs about EV adoption,what are your assumptions about the ICE business?Once you have sketched out several alternative scenarios,then you can use simulations and other analytical tools to assign probabilities and determine the most likely scenarios.A new automotive game is commencing,a

185、nd companies need to place their bets.For many companies,betting wrong now could have life-and-death consequences.In this paper,we have highlighted the idea of the mosaic as a way to analyze how various factors could determine the outcome as the reign of ICE technology begins to wane.We believe the

186、mosaic is a useful tool for breaking down complex problems into manageable parts.It helps you find answers to the critical questions about consumer behavior,economics,technology,regulation,infrastructure needs,etc.These answers can help inform critical decisions about where to invest,how much to inv

187、est,when to go it alone,when to partner,and when to make your move.Our goal has been to encourage automotive executives and their strategy teams to create their own vision of the future industry,based on sober,data-driven analysisof both the automotive market and of the value of the assets and capab

188、ilities that their organizations bring to the new automotive game.These are the most consequential decisions this generation of automotive leaders will make.Place your bets wisely.Conclusion24 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of

189、 independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.How KPMG can helpKPMG is a recognized leader in delineating critical trends in the automotive sectormobility,autonomy,electrification,etc.Our strategy practice has

190、helped top companies in the industry plan and execute strategies to make the most of these trends.Our data-driven approach allows us to quantify the impacts of trends such as mobility for automakers,dealers and other players so they can identify and prioritize emerging opportunities.We then assist c

191、lients in defining technology investment and development roadmaps to pursue these opportunities.In addition,we support clients with operating-model and business transformations to prepare their organizations for building new types of products and doing business in new ways.To implement new operating

192、 models,we develop forward-looking metrics.Automotive/mobility strategy clients:Major OEMs Tier-1 suppliers Aftermarket players Mobility providers EV/AV startups Institutional InvestorsExamples of recent strategy projects:Market sizing and entry option development for EV and MaaS Scenario developmen

193、t for regulatory changes based on AV/EV adoption Development of a new usage-based forecast model for privately owned and MaaS vehicles Analysis of industry value-chain shifts and future participation options Development of vehicle subscription operating models based on ROI simulation Retail innovati

194、on and customer experience transformation25 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.AuthorsEric i

195、s the Global Automotive Sector Executive for KPMG International and a Director in the KPMG US Strategy practice with more than 9 years of experience in the automotive and diversified industrial sectors.He specializes in data-driven growth strategy,strategic planning,and business due diligence.Prior

196、to joining KPMG,Eric worked for a middle market private equity firm and has worked as a mechanical engineer in the energy industry.Eric ShapiroGary is the global head of automotive for the KPMG Automotive practice.Gary has more than 25 years of business experience,including over 16 years in the auto

197、motive industry.He has advised numerous domestic and multinational companies in strategy,mergers,acquisitions,divestitures and joint ventures.For the past nine years he has focused on the intersection of technology and the automotive industry,developing groundbreaking research on autonomous vehicles

198、,mobility services connected cars and automotive retailing.Thank youWe would like to thank Michael Greenstone,Director of the Energy Policy Institute at Chicago(EPIC)as well as KPMG colleagues who contributed this work:Nehal Doshi,Geoff Lewis,Ken Fodor and Tara Nelson.Yoshi is a Managing Director in

199、 the KPMG Strategy practice,with more than 20 years of experience in growth and innovation strategy,new market entry,M&A strategy and commercial due diligence.Yoshi assists leading U.S.and global companies in a variety of industrial manufacturing subsectors including automotive OEMs,Tier-1 suppliers

200、,automotive retailers and aftermarket companies,as well as mobility services providers.Yoshi SuganumaTodd is a Principal in the KPMG Strategy practice.He has more than 25 years of experience in strategy and corporate.He currently primarily serves the automotive industry,providing consultation servic

201、es to passenger and commercial vehicle original equipment manufacturers(OEMs),Tier 1 suppliers,and emerging industry players.Gary Silberg Todd DubnerJohn is a Principal in the Strategy practice.He has more than 25 years of automotive industry experience in North America,Europe and China.He specializ

202、es in developing growth strategies for automakers and other industrial manufacturing clients.John Jullens26 2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private Englis

203、h company limited by guarantee.All rights reserved.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.Although we endeavor to provide accurate and timely information,there can be no guarantee that such infor

204、mation is accurate as of the date it is received or that it will continue to be accurate in the future.No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.The KPMG name and logo are trademarks used under license by

205、the independent member firms of the KPMG global organization.2021 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reser

206、ved.DASD-2021-4088Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related thought leadership:The future of automotive retailingThe new ICE ageFor more information,contact us:Automotives new realityGary Silberg Partner,Strategy 312-665-1916 Yoshi Suganuma Managing Director,Strategy 212-872-7821 John Jullens Principal,Strategy 313-520-7006 Todd Dubner Principal,Corporate Strategy 212-954-7359 Eric Shapiro Director,Strategy 201-218-7890