You are probably thinking recent, aspirational announcements by Britain, Germany, India, and China to eventually phase out the sale of gas-powered cars is the kind of shock to the system that will rouse the global auto industry into action. The industry is of course already on high alert to the threat from EV, shared transport, and autonomous mobility. So, phase out targets that don’t arrive until 2030, 2035, or even 2040 provide more than enough time for the industry to adjust. Instead, automakers face a more immediate problem, already bearing down in 2017: sales growth of ICE vehicles (internal combustion engine) may have already peaked.
If ICE vehicles never return to sales growth, then automakers must now confront the task of managing gas-powered vehicles as a legacy business, while finding their role in the new, broader area of mobility. How is it possible that ICE vehicles are already a legacy business? Because ICE sales growth in the US, for example, is expected to fall for 2-3 years starting this year. More crucially, by the year 2020 electric vehicle models will be falling into the price affordability window. If gas-powered cars are already losing market share to EV starting this year (EV sales are growing from a tiny base, ICE sales are falling from a large one) then how will ICE sales growth mount a recovery in 2-3 years time?
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