The electric vehicle revolution has begun

  • The mobility industry has been responding to a global demand for higher sustainability for many years, and the electric vehicle (EV) is one answer.
  • The acceleration toward EV production is shaking up the automotive industry in ways no one could have predicted.
  • How manufacturers respond could mark an industry revolution not seen in decades.
The number of EVs on the road is expected to reach almost 10 million this year, as sales grow despite the COVID-19 health pandemic.1 And amid the crisis, EV sales could reach a record share of the overall vehicle market for 2020.2

Original equipment manufacturers (OEMs) face growing pressure to address a dramatically shifting automotive industry and customer landscape:

  • Sustainability needs are growing and maturing, especially among young people, and particularly where mobility is concerned.
  • New customers, who live in urban areas and are more likely to use multi-modal urban transportation, are inclined to use digital channels to stay updated on the latest technology developments.
  • The circular economy is pushing the automotive industry to make environmentally friendly vehicles along their whole lifecycle—from green production using renewable energies to responsible battery disposal and chemical recycling.
  • Fast evolving technologies are reshaping the passenger vehicle through Connectivity, Autonomous, Sharing and Electrification (CASE) trends.

Pushing the e-revolution along, EVs are becoming increasingly sophisticated. For example, Tesla Inc. pioneered the concept of selling wirelessly updatable vehicles, demonstrating that it is possible to transfer updates and new features to the vehicle much in the same way consumers download new software to their smartphones. Today, other traditional automotive manufacturers are following suit.

EVs are the future

By 2025, all new vehicles are expected to be connected, and by 2030, 30% will likely be electric.

Car-sharing goes electric

45% of car-sharing providers in Europe already operate a 100% electric fleet.3

Reducing carbon

Stringent CO2 emissions targets have driven European governments and automotive players to invest €60 billion in EVs and batteries.

Revenue at risk

By 2040, battery EV volume will put 10% to 15% of current OEM’s aftersales revenues at risk due to changing maintenance activities.

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A new essential ecosystem is emerging

The electric revolution creates a new, evolving ecosystem that includes utilities, charging infrastructure developers, new mobility service providers and battery manufacturers, to name a few important categories. OEMs will have to work with new players and orchestrate the ecosystem to develop a consistent offering of vehicles, services and charging experience.

For example, Daimler has created a "live replacement parts store" for the fleet of third-generation EVs. The battery storage plant is available to the energy market to supply primary balancing power. Its modular design enables the system to continuously and automatically stabilize the power grid with balancing power. This solution is an example of how batteries could be turned into an opportunity for OEMs while supporting and integrating with utilities and grid operators.

The sustainability revolution is already underway, and the initial uncertainty over whether EVs will become a key part of the mainstream global vehicle market is over. The only uncertainty to manage now is over what role manufacturers will play in this revolution. Traditional OEMs that want to lead will need to double-down now.

See Law of Threes

1 Electric car sales this year resist Covid-19’s blow to global car market

2 As the Covid-19 crisis hammers the auto industry, electric cars remain a bright spot

3 Trend Europe: Electrification in car-sharing fleets

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