The McKinsey team claims the genuine arrival of electric cars could be either a matter of mere years or still decades away. Much depends on whether concerns "over energy security, fossil fuel emissions and long-term industrial competitiveness" will bring government action in the form of a "combination of subsidies, taxes and investments," they add.
Increasing numbers of electric vehicles will require huge infrastructure investment in recharging stations and capabilities to manufacture the vehicles, the team points out.
Since so many factors remain variable, "there is little point in trying to predict how many electrified vehicles of one kind or [an]other will be on the road," believe the researchers. "Electrified vehicles will go mainstream at a pace determined by government action to make gasoline more expensive," they argue, thus reducing costs associated with electric car production and use.
As for incumbent automakers, Hensley, Knupfer and Pinner state that electric vehicles pose "an enormous threat" but at the same time "open up opportunities". "Automakers will have to reinvent their businesses to survive," they declare.
The study says car firms will have to develop "a clear understanding of the way they will prioritise R&D" across different vehicle types, as well as of "how their relationships with the battery makers will evolve" and "the role technology standards will play in fitting batteries into vehicles".
Whether "dealers or players like Wal-Mart will sell cars and batteries" and how supply chains will differ from at present are among issues which should occupy company strategists. The future ownership of recharging infrastructure also needs to be addressed, according to McKinsey.
The future is brighter for battery producers, says the team, as "the sector's growth potential is vast" and government grants should help to attract additional private investment. Yet "battery manufacturers face many challenges".
As battery capacity increases, "the cells of batteries will become a commodity," according to the researchers, and "value will migrate from the level of cell chemistry to the level of battery-pack systems". They envisage battery makers either partnering more closely with automakers' suppliers or with the car manufacturers themselves to retain value.
Battery makers may also be able to move into new products or services. Utilities "might be interested in voltage and frequency regulation, power-management services, and bulk energy storage".
Since these applications have "very different energy and power density needs" and "different capital requirements and operating expenses," battery firms should "place their bets and manage their portfolios carefully".
As for utilities, if they do not install "smart systems that control the time when a vehicle can charge, they could struggle". However, the team points out that electrified vehicles will "create new revenues for utilities" and "might help [them] profit from carbon-abatement taxes and trading mechanisms".
The McKinsey party concludes that with the coming of electrified vehicles "companies that act boldly" will "probably enjoy significant gains". But "timing is critical," they warn.