aUTOCALYPSE!

Cleantech disruption winners and losers

Our global auto team’s latest report continues CLSA's deep dive into industry changes as electric vehicles and self-driving cars usher in more disruption than today’s incumbents have ever faced

NEW ENTRANTS are driving CHANGE

New entrants with no legacy costs are focused on pure EV, while traditional automakers are forced into stop-gap solutions such as plug-in hybrid electric vehicles (PHEV).

In the long run, it makes no sense for the industry to research and manufacture both gas and electric engines. The all-electric car will ultimately win that cost battle provided battery costs continue to fall.

Tesla suggests it can get battery costs down to US$100/kWh in 2020. According to CLSA U guest author Tony Seba, US$100/kWh is the point at which the “disruption” moment will happen, forcing traditional automakers to fast track plans for EVs and cause a dislocation on margins, R&D and headcount.

For more on both the opportunities and challenges inherent in new battery-storage technologies, check out what expert Donald Sadoway has to say in our CLSA U Speaker Series, The power and the glory.

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ELECTRIC AVENUE

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plug-in hybrids are more the focus now

NEAR TERM

Traditional global automakers are responding to the EV challenge with “stop-gap” plug-in hybrids (PHEV) which are likely to see more dramatic growth near term, while the Japanese are more keen on fuel-cell technology. In turn, pure EV numbers could disappoint in the
next few years given limited capacity being devoted to EV.

In China, where companies are playing catch-up on battery technology, OEMs appear to be pursuing battery-electric vehicle (BEV) and PHEV, but the marketplace thus far has been voting more for PHEV.

medium term

The pendulum swings after 2020, once battery costs have fallen enough, charging infrastructure has improved and pure EVs start to win the hearts of consumers. 

We project the industry-average battery costs of large-cell format (sold to automobile OEMs) to halve from US$350/kWh in 15CL (blended basis) to US$174/kWh by 20CL.

long term

We don’t see global auto production numbers declining on the back of self-driving before at least 2025, and likely longer. Only when pure Level 4 is attained, whereby a car can drive free of any occupant, will the fleet population be at risk.

Still, the onslaught of true Level 4 self-driving cars and a “sharing” economy will eventually cause havoc with new car sales, in a 2030-type scenario. This eventual disruption causes us more fear for industry returns/profitability
than the EV onslaught.

Shared autonomous vehicles - the impact


Personal car ownership fades 

Rise of the sharing economy 


Overhaul of city planning and infrastructure 

Smaller car fleets = less parking storage = urban land available for other uses 


Greater safety

Fewer deaths = Lower insurance premiums


Slower global
warming?

Demand collapse

Collapse of old-tech
diehards




Big Data applications 

R&D breakthroughs to disrupt  the disruptors




Fewer moving parts will impact autopart makers 


Lower industry margins


Could the world's vehicle fleet drop to a tenth of its current size?

more clsa interactive sites

By Charles Yonts | Published on 16-Sep-2015
By Ed Maguire | Published on 03-Mar-2015
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