Several factors will make 2023 a true test to the resolve of governments and the automotive industry in driving battery-electric vehicles (BEVs) forward, according to Gartner, Inc.<\/p>\n\n\n\n
\u201c2023 is the moment of truth to drive full electrification forward,\u201d said Pedro Pacheco, VP Analyst at Gartner.<\/strong> \u201cThe spike in electricity prices in Europe make BEV running costs less attractive, some countries, like the U.K., Switzerland and Australia, are starting to introduce EV taxation. In addition, China ended electric vehicle subsidies at the beginning of 2023 and global charging infrastructure still has many coverage gaps and the average quality of service is poor.\u201d<\/p>\n\n\n\n In addition, the sharp increase in raw material prices like lithium and nickel will inherently drive BEV costs higher, which will make it harder for original equipment manufacturers (OEMs) to close the price gap with internal combustion. As a result, BEV sales may grow at a considerably lower pace or stall in some markets, making investments related to BEVs take longer to achieve break even.<\/p>\n\n\n\n Gartner expects supply chain shortages in the automotive industry to continue through 2023. \u201cMore than two years after the pandemic began, carmakers still cannot forecast an end to shortages of\u00a0semiconductor chips\u00a0or the subsequent shortage of vehicles they can produce. They also face short supply of\u00a0key materials\u00a0for BEV batteries, causing the prices of commodities to surge,\u201d said\u00a0Mike Ramsey, VP Analyst at Gartner.<\/strong><\/p>\n\n\n\n \u201cThe digital transformation of automotive retail has not stalled, simply reduced speed,\u201d said Pacheco. \u201cAs the challenging economic environment is slowly moving the automotive market from supply-constraint to demand-constrained, automakers and retailers will refocus on the transition to online retail sales. They will also do so to reduce sales costs.\u201d<\/p>\n\n\n\n This downturn period provides an opportunity for automotive CIOs to help their companies grow their market share through technology. For instance, several established automakers are trying to transform into technology companies, but their corporate culture has been a major obstacle to their ambitions. \u201cThis must be their starting point to avoid widening the gap with digital native automakers and grow their revenue via the use of technology even further,\u201d said Pacheco.<\/p>\n\n\n\n Gartner predicts that by 2026, more than 50% of EVs sold globally will be Chinese-branded automobiles. \u201cThere are more than 15 Chinese companies selling EVs and many of these are smaller and much less expensive models than those sold by foreign rivals,\u201d said Ramsey. \u201cWhile foreign automakers like Tesla, VW and GM are selling a lot of EVs in China, the growth is much faster with Chinese companies.\u201d<\/p>\n\n\n\n As demand grows around the world for EVs, Chinese firms are well-situated to take advantage of the growth with good access to key minerals and battery manufacturing capacity in China. Gartner recommends that automotive CIOs focused on EVs, integrate supply chain planning and visibility software to ensure better business decisions about where key materials are sourced and ensure resiliency for key materials.<\/p>\n\n\n\nBeyond 2023<\/h3>\n\n\n\n