EVs are coming, but ICE will remain
Napa, Calif.—The OEM need for — and consumer acceptance of — battery-electric vehicles is coming, but the internal combustion engine is not going away anytime soon, according to IHS.
“Internal combustion engines (ICE) will remain a good opportunity for repairers in the foreseeable future, despite what is being said about battery-electric vehicles (BEV),” reported Mark Seng, Global Aftermarket Practice Leader for IHS, who added that his market analysis of BEV and autonomous vehicles are more “bearish” than others. “They’re coming, don’t get me wrong. It’s not a matter of ‘if,’ it’s just a question of ‘when.’”
IHS forecasters analyze OEM plant production, and they have determined the ICE will remain the bulk of service in the near future, stating that there’s been a global vehicle platform consolidation, resulting in fewer platforms. In 2000, the global platform count was at 182, they predict that by 2025 it will be 137.
“But the number of vehicle per platform is exploding, from 284,000 to nearly 700,000 vehicles per platform,” said Seng, who gave his presentation at the recent CAWA Educational Forum in Napa, Calif.
He noted that the industry is migrating toward three general platforms: conventional, multi-energy, and skateboard style, which is designed for pure BEV applications.
“We’re seeing most OEM investment and demand coming from the multi-energy platform. If it was moving quickly to the skateboard style, then the investments would be accumulating there, but we’re not seeing that. Most of the attention is on multi-energy.”
Most of today’s vehicles are ICE, representing 94 percent of the market, and by 2030, it will still account for 51 percent, he said. “When we factor in hybrids — which incorporates an ICE — 92 percent of global manufacturing will still use an ICE in 2030, though that can change overnight with government regulations and incentives.”
Electric vehicle (EV) U.S. shares have almost tripled in three years, with Tesla’s Model 3 accounting for 39 percent of all EV 2018 sales. Adding in all other Tesla models, the company accounted for 53 percent of EV sales, though Seng said those numbers won’t be repeated and largely attributed them to pent-up demand.
As BEV numbers grow, Seng said they remain relatively low when compared to ICE vehicles. When considering all ICE-alternative propulsions — diesel, flexible, electric, hybrid, CNG — they number 9.6 percent of U.S. vehicles in operation (VIO). Hybrids and electrics account for 2 percent of total VIO.
“More than 11 percent of all U.S. electric vehicles are in Los Angeles County, which is just one among 3,150 counties in the country,” said Seng, adding that the top 10 counties in EV population represent 45 percent of the nation’s EV market. “A lot of EV sales are driven heavily by incentives, not as much as by consumer preference.”
Those incentives will be drying up, as he outlined the following:
• GM and Tesla are running out of federal $7,500 credits within the next few months.
• Ford and Nissan are 12-18 months from the same position.
Overall, California VIO grew 13 percent over the past 10 years, while hybrids and EVs grew four times. “So, yes, BEVs are coming on — we’re seeing more and hearing more about them — but their total fleet is slow in coming,” Seng said. “A repair shop in the top 10 counties, however, are right where they want to be.”
Autonomous technology in today’s bays
Autonomous vehicles are on the horizon, but more importantly for repair shops, all their enabling technology is coming into bays today.
“As the technology evolves, the aftermarket must also ascertain what parts and tech training it needs to service and repair those systems and sensors,” as well as EVs.
Seng recalled that in the early 1980s, cars went from carburetors to fuel injection and it was widely accepted that the independent aftermarket was finished — vehicles would require dealership service and repair. Independents couldn’t handle them.
“But the aftermarket did a good job of educating the consumer that it did have the parts and technology with trained technicians required to fix those cars — we just have to do it again today, as we did back then.
“Be prepared for EVs and autonomous cars, because those that are will be successful moving forward.”