McKinsey’s Russell Hensley confronts the ‘permacrisis’ roiling the auto industry
Jan 28, 2024
auto_awesome
Russell Hensley, McKinsey's Center for Future Mobility, shares insights on software, autonomy, and electrification transitions in the auto industry. Topics include battery issues in cold weather for EVs, GM and Honda's collaboration on hydrogen fuel cells, challenges and changes in the auto industry, and navigating transitions in the industry.
Electric vehicles can experience decreased range and longer charging times in cold weather due to battery issues.
General Motors and Honda have partnered to mass produce hydrogen fuel cell systems, marking a significant step in building a hydrogen economy.
Deep dives
EVs Lose Range in Freezing Conditions
In cold weather, electric vehicles (EVs) experience decreased range and longer charging times, leading to frustrated EV drivers. EVs can lose up to 30% of their range on average in freezing conditions due to battery issues. The problem is more related to battery technology than charger availability. Cold temperatures and the use of heaters significantly impact battery performance and range. This issue highlights the need for EV drivers to plan for reduced range during freezing temperatures. The impact of this issue on EV sales remains to be seen, as some prospective buyers may be deterred by concerns about charging in cold weather.
GM and Honda's Hydrogen Fuel Cell Joint Venture
General Motors (GM) and Honda have partnered to produce hydrogen fuel cell systems in a joint venture. This production line in Brownstown Township, near Detroit, is the first instance of mass production for hydrogen fuel cell systems. While GM and Honda collaborate on production setup and share the same underpinning technology, they compete as separate entities in various applications, such as construction and heavy-duty trucking. The joint venture signifies a significant step in building a hydrogen economy. Honda plans to include these fuel cell systems in its fuel cell CRV model manufactured in Ohio. This venture highlights the growing interest and investments in hydrogen as an alternative fuel.
Facing Uncertainty and Opportunities in Future Mobility
The future mobility landscape presents challenges and opportunities for automakers. They must navigate a period of uncertainty characterized by technological advancements, geoeconomics, energy transitions, changing consumer needs, and shifting industry dynamics. Traditional automakers face the challenge of adapting to innovations while protecting their established brands and scaling new technologies. Startups, on the other hand, grapple with scaling their innovative ideas and business models to compete with incumbents. External investments, regulatory shifts, and evolving customer preferences further impact the industry. Despite the complexities, executives who understand these dynamics can leverage the opportunities presented by this disruptive period.
Navigating the Disruptive Era of Future Mobility
The automotive industry is transitioning into a disruptive era characterized by new technologies and business models. The transition includes the shift from hardware-focused vehicles to software-defined vehicles, as software features play an increasingly significant role in differentiation and post-sale monetization. This transformation also involves an energy transition with the adoption of electric vehicles (EVs) and the increasing role of software and connectivity in vehicles. Traditional automakers and newcomers alike face challenges and opportunities in navigating this period of change. Success lies in understanding the five pivotal dimensions: global trade and decoupling, technology acceleration, demographic changes, energy transitions, and capital availability. By anticipating and adapting to these drivers, companies can capitalize on the immense potential for innovation and growth in the mobility industry.
The partner and co-leader of the consulting firm’s Center for Future Mobility advises automakers on navigating software, autonomy and electrification transitions amid profound changes in technology, workforce and the global world order.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
