E-Mobility Supplier Survey: Dependence on Combustion Engines Remains High

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Berylls Strategy Advisors GmbH

FAULHABER Drive Systems

Wuxi InfiMotion Technology Co., Ltd.

The transformation to e-mobility is progressing more slowly and more volatile than expected. A survey by Berylls by AlixPartners among European suppliers reveals: The industry is stuck in a dilemma.

Automotive suppliers in the DACH region find themselves in a paradoxical situation: although the transformation to e-mobility has slowed down, margins are under pressure, and OEM platforms are delayed, 90 percent of the surveyed companies rate their preparation as good. This discrepancy between perceived readiness and market reality is one of the key findings of the "E-Mobility Supplier Survey 2025" by the consulting firm Berylls.

Dependence on Combustion Engines Unchanged

A good 70 percent of the surveyed suppliers still generate more than a quarter of their revenue from components for internal combustion engines – exactly the same figure as the previous year. By 2030, the companies expect a decline to 55 percent. This forecast is identical to the expectation from the previous year's survey. The dependency on combustion engines thus does not effectively decrease, even though the transformation has been considered a central challenge in business development for years.

At the same time, the sentiment toward e-mobility has significantly worsened. Only just under half of respondents (48 percent) see e-mobility as an opportunity – down from 69 percent last year and 77 percent in 2023. Meanwhile, the proportion of those who view e-mobility as neutral or risky has risen to 52 percent.

Revenue Expectations Decrease, Margin Pressure Remains

Expectations for revenue growth through e-mobility have further declined. While 75 percent of suppliers expected a positive revenue effect over the next five to ten years in 2023, only 50 percent do so in 2025. At the same time, 17 percent of respondents anticipate revenue declines, compared to four percent in 2024.

The margin expectations present a mixed picture: 35 percent of suppliers anticipate improvements, while 23 percent expect additional pressure. The causes are structural: many BEV programs operate below the scale necessary for profitability. At the same time, suppliers often have to manage combustion engine and electric drive portfolios in parallel, which increases fixed costs and operational complexity.

The study highlights the case of suppliers focused on e-mobility: while the Top 100 Suppliers achieve average EBIT margins between 5.2 and 5.9 percent, purely e-mobility suppliers sometimes report negative margins of up to minus 7.2 percent.

Platform Delays as a Risk

European car manufacturers delay BEV platforms by an average of 150 days (Start of Production, SOP). In contrast, electric platform plans in China are kept tighter, with delays averaging only 20 days (SOP). This discrepancy exacerbates the competitive disadvantage of European suppliers: production lines remain underutilized for longer, and investments amortize more slowly.

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In addition, 92 percent of the surveyed companies expect a consolidation among e-mobility suppliers – more than half of them within the next two to three years.

Regulatory Uncertainty is Increasing

Regulation, long regarded as a reliable pace-setter for electrification, has lost stability. The recent adjustment by the EU Commission in December 2025, reducing the CO₂ reduction target for new cars by 2035 from 100 to 90 percent, provides additional flexibility for suppliers of combustion and hybrid components. However, for BEV-focused suppliers, this weakens the regulatory foundation for aggressive investments.

China Sets the Pace

While Europe struggles with weaker demand, platform delays, and margin issues, China is consistently driving the transformation forward. Chinese manufacturers and suppliers benefit from higher volumes, lower cost structures, and shorter development cycles. Battery costs in China are already below 80 US dollars per kilowatt-hour, whereas in Europe they are not expected to fall below the 100-dollar mark until 2026.

The growing presence of Chinese providers in international markets increases price pressure – especially for components exposed to global competition.

Strategic Action Areas

Berylls by AlixPartners recommends five measures to suppliers in the study:

1. Refine portfolio: Focus on technology with a credible scaling path. Reduce or discontinue products without realistic profitability perspectives.
2. Increase operational flexibility: Introduce modular production systems that can adapt to fluctuating volumes. Make dual strategies for combustion engines and electric drives more efficient.
3. Strengthen financial discipline: Stricter capital allocation, realistic business plans, cash focus with longer payback periods.
4. Scenario-based planning: Develop strategies for multiple future scenarios instead of relying on a linear e-car growth curve.
5. Rethink China strategy pragmatically: Determine where participation is essential, where partnerships bring advantages, and where risks become unmanageable.

Transformation Without Security

E-mobility remains the central transformation of the industry this decade – but it is progressing more slowly, unevenly, and under tougher economic conditions than expected three years ago, concludes the Berylls survey. Success will belong not to those who bet on a single scenario, but to those who are prepared with a sharp portfolio, high flexibility, and financial discipline when the next wave of growth arrives.

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The study is based on a survey of 49 European automotive suppliers from the segments of powertrain, electronics, interior, exterior, body, and software, including several top-100 suppliers.