Climate change, global warming, and other related agendas have catapulted research and development efforts over the past two decades. One of the main initiatives in green design technology is overhauling the automotive industry. A National Geographic article written in 2017 predicted that by 2040 more than ninety percent of all first world passenger vehicles will be electric. We may well be on the road to making that statistic a reality.
Rising Costs
In addition to the continually rising prices at the pump, there are steep costs associated with traditional fuel engines. According to the research firm IHS Markit, developing a new gas engine can cost as much as $1 billion and involves hundreds of suppliers. Over the past several decades, automakers rolled out between 20 and 70 new engines globally. That number will fall below 10 this year, and then essentially go to zero.
General Motors was one of the EV frontrunners. Since the 1996 debut, GM has continuously strived to improve efficiency in their electric models. The return on this investment fluctuates as technology changes, and they continue to improve their efforts and increase demand for their sleek electric lines. Chrysler has toyed with electric models in the US market as well as abroad. The longtime automotive leader introduced virtually every body style, from the mini Fiat to the mighty Jeep, to an electric or hybrid model.
Scant Resources
Current and ongoing supply chain issues have magnified the impact of reliance on single source providers. Electric vehicles and alternate fuel varieties are helping the automotive industry stay competitive and sustainable. The fuel crisis, coupled with the environmental disturbances caused by petroleum consumption, has finally reached a place of drastic action. Norway announced that it intends to ban the sale of gasoline or diesel powered vehicles by 2025. Measures like this have sparked additional activity in research areas for electric sources and EV maintenance improvements.
Volksagen increased demand for their plug-in models and achieved a major jumpstart on cornering the market share. At Appraisal Economics, we help top tier automotive giants like VW, Chrysler, GM, Subaru and BMW understand their next best move. Well-researched valuations offer valuable insight into financial positions, cost and risk analysis, and much more. Armed with an accurate financial analysis, corporations are able to plan ahead and forecast spending and earning plans with confidence.
Although the business world may be unpredictable and riddled with uncertain trends, there are proven ways to stabilize the data and evaluate what really matters. Our financial and industry experts have the experience and keen sense of awareness necessary to capture relevant details and line items to complete the financial picture for any manufacturer, provider, or retailer. Our valuations provide critical information about the health of a particular company from the perspective of the general industry and the most likely course of future action.
Avoid the pitfalls of blind negotiations and an insecure balance sheet. We are here to help! If you are in the automotive space and need a valuation, get in touch with Appraisal Economics today.