BERLIN -- Automotive suppliers are in the middle of a transformation to electric mobility, but still generate 85 percent of sales from combustion technology, according to a joint study by German auto industry group VDA and Deloitte.
The study, conducted early in 2021, found the vast majority of suppliers surveyed are backing electromobility as the technology of the future, with more than 80 percent assuming this drive technology will become established as the technology standard.
In addition, a large proportion of respondents (more than 80 percent) say they have already started to switch to electromobility. Only 10 percent of the companies see no reason to transform, as they say they are not affected due to their product portfolio.
However, 88 percent do not expect the internal combustion engine to be completely replaced by electromobility until 2030 or later. Some of the suppliers surveyed assume that fuel cells or synthetic fuels could also still make it to (additional) standard.
The automotive suppliers surveyed said they invest over 30 percent of their research and development expenditure in electrification technology, and 85 percent are using the profits from traditional combustion technology to build up expertise in electromobility in parallel.
"As the investment behavior of automotive suppliers shows, they expect sales of electric cars to continue to grow significantly," Harald Proff, partner and automotive industry leader at Deloitte Germany and Global, said in a statement.
"It also shows that companies are strategically focusing on a sense of proportion. A large proportion are pursuing a harvest strategy, i.e. a controlled, slow withdrawal from the market for combustion technologies while simultaneously building up the electromobility business area.
Proff noted by contrast, more radical strategies such as a rapid market exit at an early stage are being pursued by only a minority of respondents.
Asked about the biggest barriers to rapid transformation, the 83 companies surveyed cited a lack of political support and planning certainty as the top roadblock.
In addition, increasing sustainability requirements, a slow expansion of renewable energies and a shortage of skilled workers were also mentioned.
Finally, the automotive suppliers were able to indicate which economic policy measures they consider to be particularly helpful. What they would like to see from policymakers above all are lower taxes and energy costs, ultimately a reduction in bureaucracy, faster expansion of the charging infrastructure and greater flexibility in the labor market.
"Companies are forging ahead with the transformation," VDA president Hildegard Mueller said in a statement.
"For a successful and sustainable transformation, the other political and economic framework conditions are now also crucial, in terms of the charging infrastructure, the expansion of renewable energies, the reduction of bureaucracy, the training of skilled workers and the creation of comprehensible and manageable sustainability requirements."
