Electric vehicle sales could reach 33 percent by 2028 and 54 percent by 2035, as demand accelerates in most major markets, AlixPartners said.
EVs accounted for less than 8 percent of global sales last year, and just under 10 percent in the first quarter of 2022.
Automakers and suppliers expect to invest at least $526 billion on EVs and batteries from 2022-2026, AlixPartners said at its annual Global Automotive Outlook briefing. That is more than double the five-year EV investment forecast of $234 billion from 2020-2024.
The industry faces economic and supply chain challenges during the transition from internal combustion engine (ICE) vehicles to EVs, Mark Wakefield, co-leader of the firm’s automotive practice, said.
Some companies will benefit from separating their ICE and EV businesses, he added.
Raw materials for EVs also cost more than twice those for ICEs: $8,255 per vehicle vs $3,662 per vehicle, as of May 2022.
The ICE-to-EV transition will cost automakers and suppliers a cumulative $70 billion by 2030, said Elmar Kades, co-leader of the automotive practice, including bankruptcies and restructuring.
AlixPartners sees supply constraints continuing into 2024, and expects total global vehicle sales to dip to 79 million units this year, before climbing to 95 million in 2024.
In the United States, total vehicle sales are expected to rise to 16 million in 2023 and peak at 17.5 million in 2024 before starting to decline in 2025-2026.