Concerned automotive suppliers fear insufficient infrastructure may hinder a smooth mobility transition
The automotive supply industry is making strides towards a climate-neutral future, but is facing significant challenges, according to a recent survey by McKinsey and comments from Benjamin Krieger, Secretary General of our website.
The survey, in its 13th edition, reveals that nearly all automotive suppliers (98%) are concerned about ongoing efforts and investments in climate-neutral mobility being undermined by insufficient charging and refuelling infrastructure. McKinsey's research indicates that the rapid uptake of electric vehicles (EVs) will require a public infrastructure of at least 3.4 million charging points by 2030.
Currently, the industry is under intense margin pressure. A significant number of suppliers are facing operational profitability levels below 5%, with roughly one in four operating at a loss. Long-term investment capabilities of the sector are under increasing pressure, with 37% of suppliers reducing investment.
However, there is some positive news. The overall outlook of suppliers has significantly improved compared to September. The current rollout of the recharging network needs to accelerate four times faster among EU countries to meet the needs of future EVs, but Mr. Krieger stated that ambition at the member state level is needed to address this issue.
In addition, 64% of suppliers expect revenue growth over the year 2023, although profit expectations remain bleak. Cost pressures and suppressed volumes due to the ongoing semiconductor shortage continue to weigh on the profitability of the sector.
Mr. Krieger commented that ensuring a sufficient number of public charging points for EVs and refuelling stations for hydrogen-powered vehicles is an essential enabling condition for a successful transition to climate-neutral mobility in Europe. He also emphasised the need for public support and investment to ensure these necessary enabling conditions are in place.
The search results do not provide information about the country where the McKinsey Institute's Pulse Check was conducted in February 2023. Despite these challenges, companies are doing their utmost to maintain R&D budgets, demonstrating their commitment to the green mobility transformation. In February, 35% of suppliers indicated a negative outlook, a stark contrast to September when 70% reported a negative outlook, indicating a marked improvement in the industry's sentiment.
