Betting on the future of automobiles

For a century, a single fuel-powertrain combination— the petroleum-powered internal-combustion engine (ICE)—has dominated the global automotive industry. How automotive companies are structured, how they are financed, how they go to market—everything was optimized for producing and selling ICE-based vehicles.

Now, the conventional wisdom says that the battery-electric powertrain will triumph—becoming the dominant force in the automotive business that ICE has been. And automotive companies are making massive bets on this scenario. Yet, we still don’t know when battery-electric vehicles (BEVs) might reach a tipping point and become popular with a wide swath of consumers, generating the sales—and profits—to justify the billion-dollar investment auto makers are making in BEV development. ICE is going to lose dominance, but the future industry may look more like a mosaic—with multiple fuel/powertrain combinations and far more complexity than the conventional wisdom assumes.