By Xavier Mosquet , Hadi Zablit , Andreas Dinger , Gang Xu , Michelle Andersen , and Kazutoshi Tominaga

This report is part of BCG’s research on the future of automotive, a series of publications focusing on new technologies that are transforming the industry. Here, we examine the evolution of the powertrain. The Reimagined Car focused on the ways in which shared autonomous vehicles will change mobility in the US. A future publication will look at the impact of technological change on the profit pools of an automotive-based mobility industry.

More than 100 years after the first battery-powered production vehicle hit the road, the tipping point for electric vehicles is finally in sight. How will automakers and suppliers manage the transition from a century of mass-market dominance by the internal combustion engine (ICE) as, over the next dozen years, alternative powertrains capture more than half of the global automobile market? What powertrains will be required by 2030, for both owned and shared mobility?

BCG has been tracking powertrain development for the better part of a decade. We have examined how far and how fast mass-market adoption of alternatives to the ICE might move, especially given advances in the cost of batteries relative to the cost of other advanced combustion technologies. We have also looked at other factors, including regulatory pressures, energy prices (oil and alternative fuels), and, of course, consumers’ interest and willingness to pay. Along the way, we have asked such questions as:

  • What kinds of new propulsion technologies are likely to make sense, both technically and commercially? Where and when can we expect to see them entering the market? And what kinds of cars, finally, will consumers be willing to buy and drive? (See The Comeback of the Electric Car? How Real, How Soon, and What Must Happen Next, BCG Focus, January 2009.)
  • What impact will the development and cost of various types of batteries have on the emerging market for electric cars? How much progress can we hope to see in the next decade, and what critical barriers will need to be overcome along the way? (See Batteries for Electric Cars: Challenges, Opportunities, and the Outlook to 2020, BCG Focus, January 2010.)
  • Which technologies will prevail? How will consumers react to an expanding range of choices? How is the battle for market share—conventional versus electric vehicles—likely to shake out? What are the specific go-to-market challenges facing electric vehicles? (See Powering Autos to 2020: The Era of the Electric Car?, BCG report, July 2011.)

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