Weaker demand to test automakers amid industry change
Wednesday, September 6, 2023
Significance
Automakers are cutting costs to invest in the electric, connected and autonomous technologies on which they are staking their future. Risks are high: new firms are challenging incumbents, innovation and supply issues need to be resolved in electric vehicle (EV) production and charging infrastructure, and the transition from traditional vehicles threatens large segments of automotive supply chains.
Impacts
- Price cuts, higher rates and competition are eroding automakers' profitability and valuations, even for previously high-flying EV firms.
- Cost-cutting will force automakers to prioritise their spending on new technologies and speed up their transitions.
- Powertrain technologies will evolve rapidly as automakers maximise manufacturing efficiency and vehicles' energy efficiency.
- Improvements in powertrain tech will lower costs for consumers, improve vehicle performance and lead to new vehicle propulsion options.
- Vehicles will become more connected and include more autonomous features as automakers respond to consumer preferences.