Internal combustion engine suppliers will need to relearn how to swim — or risk sinking — as an industry transition to electric vehicles begins, according to a report from S&P Global Mobility.
The markets for transmissions and engine systems are expected to shrink more than 50 per cent by 2035, according to consulting firm McKinsey & Co. And S&P said that just two internal combustion engine combinations will be launched for North American production in 2025, down from 13 in 2015. Robinet acknowledged that the transition is in its early stages and that suppliers have likely not begun to experience volume reductions. On the road today remain 1.3 billion internal combustion engine cars, S&P estimates.
Four potential strategies for moving forward were identified in the report: divest from combustion parts and shift to EV production; commit to combustion engine supplies and simultaneously prepare for closure; move to assert dominance as a particular parts supplier; or position to be acquired.