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EV Manufacturers Must Meet Market Demand, Price Points: Belzowski

Bruce Belzowski - Automotive Futures Group
Managing Director


Rodrigo Andrade By Rodrigo Andrade | Journalist & Industry Analyst - Thu, 11/10/2022 - 10:46

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Q: How do Automotive Futures Group’s solutions add value to automotive companies, especially following the shift in how people work?

A: We were already one step ahead of the industry in terms of digitization, so COVID-19 did not change our work much. However, we adapted some critical components of our company. For example, our conferences were always in person but now we can do all digital processes in-house thanks to digital tools like Zoom. These tools greatly reduced our costs and improved our service as hybrid conferences bring the best of the physical and digital worlds. We provide research results through e-mail and all reports can be accessed on our website platform. 

Q: How do you select your research topics and how do members, clients and companies help you to steer those research lines?

A: At first, we tried to reach out to automotive companies but obtained limited results, so we decided to cover the topics that we identified would be of interest to the industry. We have the flexibility to choose our priorities within the industry. We handle diverse projects, covering a large part of the sector. Our specializations include advanced powertrains, the future of mobility and the role of globalization in the automotive industry and its structure. 

Q: How can countries like Mexico adapt to the EV trend, considering that the prices of these vehicles tend to be higher?

A: Electrification will likely be a long-term process for the US and even more so for Mexico and the rest of Latin America. In our Propulsion Strategies for the 21st Century Research Program, we surveyed industry leaders on their expectations for the penetration of all propulsion technologies within the industry. By 2030, EVs are expected to be about 25 percent of all new passenger cars and about 18 percent of light trucks sold in the US. 

Mexico has great opportunities in the production of resources needed for EVs and in the processing of those raw materials. This can help Mexico become a powerhouse in the electrification of the industry. 

Q: Nearshoring is playing a critical role for automakers. What is Mexico's position and what is the country’s potential in this area?

A: The three members of the USMCA must cooperate to fully take advantage of the treaty, especially in regard to the automotive industry. The tax incentives just introduced by the US government for the acquisition of EVs are likely to help to foster collaboration between these countries. At the moment, few EVs are manufactured in the US, so Mexico plays a critical role in their production.

The road to electrification will be long. The companies that have already adopted this trend will likely enjoy a small advantage but the competition can still catch up to them.

Q: Electromobility requires the massification of EVs. How is the industry shifting to make this a reality? 

A: It will be key for EVs to reach the same price range as typical ICE vehicles, so companies still have a great deal of work to do to reduce costs. Companies also need to start mass producing EVs. Having amazing vehicles at reasonable prices is useless if companies only produce 10,000 units a year. Companies must meet the demand that is currently covered by ICE vehicles. Chevrolet faced this problem with the Chevy Bolt. Since the automaker was uncertain whether the technology would be popular, it produced few of them, relative to the production of their gas models.

Q: How will digitization and new powertrain technologies transform the automotive industry in the short and medium term?

A: China is a great example of what can be achieved in a short period of time. The country is pushing for the introduction of EVs and in recent months, about 30 percent of its total new vehicle sales have been EVs. This is important because China also has the largest automotive market in the world. Other countries, such as Japan, are investing in hybrid models as a transition technology until EVs can supply the mobility demand. 

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