Okay. So this year the electric vehicle sector
saw massive shift towards widespread adoption,
including millions of dollars in investments from
legacy automakers, President Joe biden's E.
V push and both private and federal plans
to build nationwide E V charging infrastructure.
So the seeds are planted will say that but
Well 2020 to be the year that consumers make the switch. And will e. V.
companies meet that demand
joining us now is Arun Kumar managing
director of the Automatic Practice at Alixpartners,
a global consulting firm in Arun with all the developments in the E V space this year.
Do you think 2022 is the year of widespread e V adoption?
Hey, thanks Ken for having me on the show.
Yeah, I think 2022 is will turn out to be an inflection point as we call it.
Um, I think 2020-1.
We also saw great progress when it comes to consumers buying electrics
Battery electric vehicles compared to a traditional internal combustion
engines because the market grew more than 100%.
But I think that momentum is gonna continue into 2020 but there are
some concerns that we need to address before we can call it,
call it a day.
What kind of concerns?
Well, I think there's still concerns about range.
People are concerned about being able to charge the vehicles.
If you look at our Alixpartners global survey that we do within 2021 4
and 10 consumers sight range is a big concern for them for buying electric vehicles
Three and 10 consumer site um, you know,
ability to charge their vehicles where they are going as a major concern.
So these are concerns that needs to be addressed on top of that,
you still have cost us an issue that the
automakers still need to address because you know,
people want to be able to afford those vehicles within a certain payment
and that's important for them to be able to afford those vehicles.
So have you,
how have you seen consumer sentiment towards Evie's change and
why might consumer attitude be shifting despite those hurdles?
We're already seeing in 2021 from our global survey that, you know,
there's a two x increase uh,
in the consumer interest in buying the next vehicle as battery electrics.
So if you look at our survey back in 2019, that was 11% globally. Now, it's 25
similar things in the U. S.
A significant increase in interest to buy the
next vehicle as as the battery electric again,
keep going back to these concerns that consumers have
all that interest would be great if we don't
have the right vehicles with the right ranges and
if they don't see charging infrastructure where they live,
that's going to dampen that interest with consumers.
Now, President joe biden also announcing this year,
his administration's goal to have half the cars
on US roads be electric by 2030 legacy automakers
like ford and GM joined his pledge.
So what sort of impact do you think biden's move will have on
the E V market or is it just too soon to tell?
Well,
I think if you look at all automakers that they
have pledged that they want to be 50% by 2030,
but at the same time, you know, there's a lot of on the supply side,
automakers are pumping in a lot of investments.
Our assessment was about $330 billion dollars of investment that
automakers plan to invest in the next five years.
But at the same time, you know, when I, when I talk about these concerns, you know,
infrastructure is a big concern that, you know,
the administration is trying to address
in our estimate,
we think in the US alone by 2030 we need about $26 billion of
investments that needs to be made specifically in more level two and level three,
which is the fast charging uh to be put in place so that people
can confidently switch to an electric vehicle and not have to worry about,
they're going on a trip
or going somewhere to work that they can see these charges and charge them.
So, according to Reuters,
there's about 43,000 E V charging stations and around
100 and 2,120,000 charging ports around the US.
What number do you think? We need to get to, to make folks feel a little,
I guess easier about going into the E V space
and not worrying about a charging station being near them.
Yeah, that's a great question.
I think by 2030 our estimate is that about a million
charges needs to be put in place nationally in the US
to enable it's a mix of level two slow
charges that takes between 8 to 10 hours to charge
and the charges that are called fast charges that
take anywhere from 20 to 40 minutes to charge.
So we need about a million charging points throughout the country
along the highways and also in places like urban and suburban
areas to allow people to freely charge just like they would
go to a gas station and fill up their vehicles gas.
They should be able to get that going.
Yeah, there's about about 115,000 gas stations in the US.
And according to this article, there's
Every consumer lives about eight minutes away from the nearest gas station
where consumers lived about 28 minutes away from their nearest TV stations.
So that is a big hurdle.
I've been talking about infrastructure on the show forever
because everyone talks about supply but never infrastructure.
So I'm glad you brought that up now even startups,
Rivian and Lucid both went public this year.
Currently their combined valuation is around $250 billion.
But both companies have struggled to fill delivery quotas,
never mind turn a profit.
Do you think 2022 is the year we will
see these companies fulfill orders and become profitable?
Well, I think, um, I think you're going to see it will probably take much longer.
We call it the profit desert.
It'll be probably several years more close to five years.
I would say before we see a lot of these startup companies trying to make a profit.
I think the key difference is that, you know,
there's about 300 plus battery electric models that are going to
be put out by the startup companies and the global automakers,
which means that there's more more models available for people to choose from.
So it's gonna be a kind of a Wild West scenario that's going to play out for, for the,
for the benefit of consumers because they are able
to choose the right right vehicle for them.
So it's going to be much harder for
uh,
anybody to make a significant profit on battery electrics in the next five years.
We call it the profit dessert.
What kind of challenges real quickly?
What kind of challenges can consumers face if there's so many E. V.
S out on the road, but not so many charging stations?
Well, I think it's going to dampen the spirit of the consumers right?
Because you're not gonna see consumers if my neighbor actually
has a battery electric vehicle and easily struggling to charge.
One of the important things that we found in our survey was that friends and family is
the biggest influences the number one influencing factor
for consumers to consider a battery electric vehicle.
So if I see my friends are struggling to get a charging,
getting the vehicles charged and it's going to have a negative impact
on me in terms of me considering to buy a vehicle.
So it's extremely important to have these charge points.
Let's not take this light very likely because without charging infrastructures,
people are going to struggle with
by, you know, increasing the adoption of electric vehicles in the near future.
Finally, thank you so much for being with me on the show. Arun
Kumar, managing director of the automotive practice at Alixpartners, Sir,
Thank you again for your time and your wisdom.