Tag Archives: AlixPartners

EV Evidence: Not Good

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By Gary S. Vasilash

Think of it as validation of what everyone seems to know about the electric vehicle market in the U.S.:

The AlixPartners 2024 International Electric Vehicle Consumer-Sentiment Survey found that compared to a similar survey it ran in 2021 U.S. interest in EVs is flat.

Yes, despite the additional years of Tesla, Tesla, Tesla. Despite products like the Chevy Bolt and the Ford Lightning, which have increased familiarity with EVs, AlixPartners found that the number of respondents who said they are “very” or “moderately” interested in acquiring an EV is 35%. The same number as back in 2021.

Growth? What growth?

(While the 35% number seems robust, know that the share of market in the U.S. for EVs is 7.6%. . .and may hit 10% this year.)

What are people in the U.S. turning to?

Arun Kumar, global co-leader of the Advanced Mobility Practice at AlixPartners: “In the U.S. and Europe, BEV-intentioned buyers are turning their interest to PHEVs, seeing them as a completely legitimate substitute for meeting near-term needs and addressing charging and range concerns.

“This shift in preference presents a monumental challenge for traditional automakers, suppliers and dealers as they deploy resources to compete in the BEV transition.”

Or said differently: the OEMs and suppliers have been shoveling money into the BEV transition and are now discovering that returns seem exceedingly elusive.

AlixPartners Describe Auto Reality

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The consulting firm couldn’t be much more clear

By Gary S. Vasilash

“Of course, everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things,” said Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners.

Certainly, that was the case. The chip crisis continues to make the forecourts of new vehicle dealership look like basketball courts: empty.

The comment about the COVID-19 lockdowns in Malaysia is a bit surprising.

Who knew that Malaysia had a role to play in the production of a crossover in Michigan?

Keep that in mind when people talk about (1) supply chains and (2) how there is truly a global network in goods. Those chains are long and those networks are complex.

AlixPartners’ Wakefiled continued:

“Also, chips are just one of a multitude of extraordinary disruptions the industry is facing—including everything from resin and steel shortages to labor shortages. There’s no room for error for automakers and suppliers right now; they need to calculate every alternative and make sure they’re undertaking only the best options.”

That’s resin as in the stuff used to make all of those plastic components that are part and parcel of vehicles. Steel shortages that are driving up the price of this ferrous material (shortages are contributing to rising sticker prices; no surprise there). And labor shortages just aren’t affecting that local restaurant down the street. Seems like workers everywhere have disappeared like that scene in the Marvel movie when the bad guy snapped his fingers.

As for the best options: Seems like OEMs are producing the high-ticket vehicles so as to maximize their venue potential.

A question, however, is whether this isn’t going to have some problems down the proverbial road assuming that the supply chain and network problems are resolved and there are people sitting there with exceedingly expensive vehicles in their driveways and exceedingly long payment schedules for said vehicles.