Electric Capex and smart-cars : new opportunities for growth

July 20, 2021
5 min

Lately a huge step towards decarbonization has been made on the European Continent: the European Parliament and European Commission agreed that actors of the car industry must achieve carbon neutrality by 2035, and won’t be selling fuel-powered cars. 

Also, a big trend in the automotive industry along with electric cars is the rise of connectivity : car-sharing apps and smart-cars are a new focus for manufacturers, that have to become software companies.

But in terms of CAPEX, what does it imply for car manufacturers? 

Towards a revolution in the car industry


Today, according to the ACEA (Automobile Manufacturers European Association), fuel-cars still represent the majority of cars produced in the third quarter of 2022. It means that factories aren’t shaped to produce non fuel-cars. For the first time since 2021, passenger cars sales are growing and over 159 000 electric cars were sold across the EU in August, with the market share of EV representing more than 12%. Today, the sales of all-electric cars are going up, and manufacturers need to face a lot of challenges, which explains why the waiting time is up to 4 weeks and more. 

The all-electric trend will most likely initiate a revolution in the car industry: car manufacturers will need to drastically change their business model to adapt to a world without gas. Today, shifting from to a 100% electric car factory is hard, and generates a lot of costs: manufacturers need to invest in research and development as well as to bound new partnerships in order to meet the high demand for electric vehicles. A striking example of this, is the German Group owning Porsche, Bugatti, Lamborghini, and SEAT is investing over $30 billion over the following years in order to launch over 70 new electric car model by 2028.

In 2023, a few other trends will affect the automotive industry, such as: the shift towards more software oriented companies, like Tesla. Automobile manufacturers will have to be better at software working on self-driving cars. The car is likely to become a computer on wheels, which will foster IT-projects and the recruitment of software engineers. 

Managing Electric Capex

Revolution means opportunities. Opportunities will bring growth under the condition that those projects are managed the right way. Actors of the car industry will need to check the compliance of every investment with the main objective of having EVs only. Concretely, this means adopting a portfolio approach of CAPEX projects in order to be sure to reach the ambitious target set up by the European Union. To achieve growth and to fake the most of this small revolution in the industry, it is important to leverage technology when managing CAPEX. 

When we created Vertical, our focus has always been to provide the right software to enable efficient horizontal and vertical collaboration, as well as data collection and reporting. To manage your Electric  Capex in the most efficient way, there’s no other tool that can make you master in your data analytics. 

With Vertical’s portfolio approach, CFOs gain visibility on projects and their KPIs. It becomes possible to find more cash to invest in projects related with the electrification of the industry, in order to master this transformation.

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