Is The U.S. Truly Ready For EVs?
DETROIT, March 29, 2023 /PRNewswire/ — With clear gaps between reality vs. projections in the U.S. electric vehicle market, Berylls Strategy Advisors, a global management consulting firm focused on the automobility industry, has completed a market analysis of the projected 30 million electric vehicle sales opportunity in the US. What must these players understand and enact to seize on the potential?
Key insights from the Berylls study include:
U.S. buyers are contradictory: The U.S. buyer cites good fuel economy, maximizing residual value and low total cost of ownership as the top-three purchase factors. Considering still substantial price differences between EV and ICE, automakers have to push towards making EVs more economic. Do they? The highest selling vehicle in the U.S. is the Ford F-150 pickup truck – ranked as having one of the lowest fuel-economy ratings globally. OEMs must bridge the gap between what U.S. buyers want and how EVs are perceived to perform against such criteria.
Hey OEMs! You in or out? Considering the substantial size of the U.S. EV opportunity and the U.S. customer product wants, OEMs can no longer treat the States as another platform to sell their Europe/China-centric vehicles – a dedicated product strategy is required.
While current U.S. EV sales shares can hardly compete with the EV sales share in Germany, the U.S. will battle Europe for the runner up position behind China with both regions forecasted to show EV sales above 6 million by 2030. EV growth in the U.S. will dramatically shrink internal combustion engine vehicles (ICE) quickly, likely by more than 30 percent by 2030. The majority of CEOs are concerned about capaibility gaps in their organization and partnerships – from e-drive capabilities to the EV readiness of their dealer network.
Can anyone still unseat Tesla? 15% profit margin at a 64% market share – judging by today’s metrics, Tesla is well positioned to claim vast parts of the US’ EV growth potential with scale economy advantages and breathing room for tactical price movements. However, OEMs are tripling the number of EV models by 2025 in a joint effort to unseat Tesla and to exploit the Californian’s weaknesses (e.g., aftersales and repairability of EVs).
Made in America: A local-for-local US EV market? The Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) offer nearly 30-times more than federal government investment to date. Access to funding will necessitate a re-assessment of supply chain setup and go-to-market strategies to comply with the investments’ production and customer-related criteria. Tesla’s Nevada, Ford’s Michigan and VW’s Ontario plans are only the beginning.
California Dreaming is not enough: Focusing on purely California – known as an EV pioneer and sales volume leader – will not be enough for players to fully participate in the U.S. EV game. Automakers need to identify those parts of the U.S. that follow the Californian model in optimizing the subsidy, infrastructure and policy triangle. OEMs need to dig deep in their regional assessment to reflect inner-state differences in population density, customer make-up and city-level incentives.
Click HERE to review the study in its entirety.
“The U.S. EV market offers a significant platform for EV growth and scale backed by an unmistakably clear commitment by the U.S. government,” says the Berylls US Team. “The U.S. offers a substantial EV alternative to the currently leading EV geographies but makes access to this potential dependent on a laundry list of production and customer-related criteria. The speed of players’ demystification of the IRA and the (re-)configuration of their EV value chain will be a key success factor in the U.S. EV race. Stay tuned.”
ABOUT BERYLLS GROUP
The Berylls Group’s services are fully dedicated to the automotive industry. Our global experts understand the industry’s key challenges and are developing ways to achieve sustainable success in the automobility eco system. Using innovative & digital strategies, our professionals are networking across our four specialized units to offer our clients end-to-end support, from strategy development to implementation. For more information, visit https://www.berylls.com/en/.
SOURCE Berylls Strategy Advisors
