Notable quotes, takeaways from CAR MBS: Part I

Jeff Schuster, LMC Automotive; Stephanie Brinley, IHS Markit; and Colin Langan, Wells Fargo, forecast automotive production, sales, and electric vehicle adoption rates with moderator Kristin Dziczek, senior vice president, research, CAR, at the CAR MBS in early August.

Editor's Note: This is the first part of the three-part series "Notable quotes, takeaways from CAR MBS," in which those in the know exposed cutting-edge developments surrounding the EV evolution discussed during the CAR MBS in early August. Part II focuses on the supplier transition to EV production and supplier/automaker relationships during the pandemic discussed during the CAR MBS. Part III focuses on insights into batteries, lightweighting materials for EVs

Automotive, EV Outlook

Jeff Schuster, president, global forecasting, LMC Automotive:

We were [forecasting] around 17 million for this year. Then, obviously, we ran out of vehicles. The U.S. light-vehicle forecast for 2021 is now about 15.8 million units, a 750,000 cut since the beginning of August.

In the China Roadmap 2.0, new-energy vehicles are to account for 50% of the volume by 2030. By 2035, ICE vehicles are expected to be done in China.

The changes in the U.S. plan; we heard some of that today [in President Biden’s announcement] about the U.S.’s voluntary target of 50% EVs by 2030—BEVs [battery electric vehicles], plug-ins, and fuel cell vehicles.

So all of that is baked into our global forecast now … 35 million units of BEVs as well as plug-in vehicles out by 2030. You’re looking at 650 vehicles [models] by the 2030 range, globally. The U.S. is certainly playing catch-up. After reviewing the new U.S. target and expected California mandate, we are now expecting 30% of vehicles sold in the U.S. to be BEV; if you bring in the plug-ins and fuel cells, you’re right around 35%. In China it’s 35%, and 42% in Europe.

I think you’ve got to get that [EV charging] time down to something reasonable like filling up your vehicle. If you can get it down to 10, 15 minutes and you can count on it [being able to charge up], then I think you get the mass consumer over to the space. I think you also have to educate the consumer about the benefits [to achieve the 50% EVs sold goal by 2030].

Labor, materials … I think we’re in a situation where we’re short of everything right now. If it weren’t chips, there would be a disruption in another commodity or part.

Stephanie Brinley, analyst, IHS Markit:

Global sales … obviously, still the same two things are impacting production: the chip shortage and other shortages, and the race between vaccines and variants. In our production and sales forecast, we really aren’t coming back to the production level of 2018 until 2024 on a global level.

Essentially 35 million units [global sales] will be EVs by 2030.

In 2018, 11% of EV sales were SUVs. In 2028, 67% of EV sales are forecast to be SUVs.

On EVs: It’s when, not if.

We shut everything down for two months [in 2020 because of the COVID-19 pandemic] and then turned everything back on. That’s not an easy thing to do. You shut the world down.

Colin Langan, automotive and mobility analyst, Wells Fargo:

My forecast is a bit more cautious. Globally, I have 22% forecast to BEVs by 2030 and 16% of vehicles sold in U.S. and North America. It will still be the end of the decade before we get upfront price parity [EVs with internal combustion engine vehicles].

First, government is really critical. There needs to be some bridge funding to get people into electric vehicles. And that’s why we’re seeing [U.S.] automakers pushing [for government support] because they’re seeing that support around the world. Second, we need funding for the charging network. That is in the proposed infrastructure bill. Third, people announce mega battery factories, but we don’t have the raw material processing capability for the lithium and the graphite that is needed.

Auto demand will likely exceed [chip] supply until mid-2022.

What really got us in this [semiconductor shortage] situation? In Q2 of last year, like most recessions, auto companies cut their orders pretty significantly. Unlike prior recessions, we saw a surge in demand from PCs and telecommunication equipment. It wasn’t until the end of last year when [auto] production surged back in a record way that everyone realized, ”We’re out of chips.” … Then the Texas storms, and two plants were put offline, and … the Renesas fire delayed things as well. The good news is that relief is on its way, but this is going to be a crawl-out here.