When strategic recovery requires more than cost cutting
How turnaround strategies can rebuild competitive position by resetting the portfolio, operating priorities and sources of future growth.
Read articleBy September 2026, the automotive transition is no longer defined by electrification alone. EV development increasingly intersects with centralized vehicle software, AI-enabled functions and new electrical architectures, while commercially deployed autonomous mobility is expanding in selected markets. These shifts increase dependence on semiconductors, batteries and specialized technology ecosystems even as affordability, tariffs and regional industrial policies influence vehicle economics. OEMs and suppliers must decide where to invest, partner or simplify while managing combustion-era assets and avoiding technology portfolios too broad to fund competitively.
Focus
Strategic Challenges
Strategic Impacts
Observed Patterns
Strategic Challenges
Strategic Impacts
Observed Patterns
Industry Challenge
Automakers are navigating a difficult transition in which electrification, software, tariffs, battery economics and regional industrial policy are changing at the same time. EV demand continues to grow globally, but adoption rates differ sharply across markets, while excess capacity and intense price competition pressure returns. Supply chains remain concentrated in batteries and critical components. The strategic challenge is to decide where to localize, which technologies to own, how to manage mixed powertrain portfolios and where capital can earn acceptable returns as regulation diverges.
Future Outlook
The industry is moving toward vehicles that are increasingly defined by software, connected services, electric architectures and higher levels of automation. Over time, value will shift from the mechanical product alone toward batteries, compute, data, digital services and ecosystems around charging and mobility. Winning will require more modular vehicle platforms and faster software cycles, but also disciplined choices about partnerships and vertical integration. Manufacturers that align product architecture, manufacturing footprint and digital business models will be better able to adapt.
Market Outlook
The global automotive market in 2026 is being reshaped by record EV penetration, policy changes and increasingly regionalized production. Electric-car sales exceeded 20 million in 2025 and are expected to keep growing this year, although momentum is uneven across China, Europe, North America and emerging markets. China remains the dominant EV and battery manufacturing hub, while tariffs and localization policies are encouraging new capacity elsewhere. Competitive pressure is intense, with pricing, battery cost, trade access and local scale becoming as important as headline volume growth.
POV
Our approach
Our approach� connects vehicle demand, powertrain economics, batteries, software architecture, semiconductors, manufacturing, suppliers, distribution and mobility models. We examine how value is moving across this system and where regional differences change the attractiveness of technologies or business models. Rather than assume one transition pathway, we test portfolio choices across electrification, software and autonomy against affordability, capital requirements and supply dependencies. This helps distinguish strategic capabilities that require ownership from those better accessed through partnerships, platforms or ecosystem relationships.
The data and estimates presented are indicative and intended for illustrative purposes. Actual outcomes may vary based on each company’s specific context, market conditions, operating model, implementation choices, and the quality and consistency of execution, including actions undertaken by the client.
Keypillars
Explore the key pillars that define this capability and shape how we create focused, measurable business impact.
Mobility economics
Examines vehicle economics, ownership models, demand shifts, fleet dynamics, and changing profit pools across the mobility ecosystem
Industry architecture
Connects OEMs, suppliers, software, infrastructure, energy, and service providers across increasingly integrated mobility systems
Technology transition
Tracks electrification, autonomy, connectivity, software-defined vehicles, and intelligent transport infrastructure across the sector
Strategic Framework
Assess OEMs, suppliers, mobility providers, infrastructure, technology platforms, channels, and customer demand
Monitor vehicle demand, technology curves, infrastructure, policy, competitors, and consumer mobility behavior
Prioritize portfolio, platform, partnership, technology, market, manufacturing, and mobility-model choices
Examine electrification, autonomy, software, connectivity, regulation, ownership models, and mobility behavior
Evaluate product portfolio, platforms, technology capabilities, supply dependencies, brand, and geographic exposure
Test adoption, powertrain, autonomy, regulation, pricing, infrastructure, and competitive scenarios
How we help
We help OEMs, suppliers and mobility businesses assess where future profit pools are moving and what that means for product portfolios, capabilities and capital. Work can address regional strategy, EV and software economics, supplier positioning, partnerships, operating-model change, manufacturing footprints, commercial models and new mobility propositions. We also help companies determine which technologies they need to control, where ecosystem participation is more rational and how legacy businesses should fund or adapt to the transition.
Explore our FAQs
Find answers to the most common questions about this service, including key features, processes, and practical considerations. Explore our FAQs for additional insights and guidance.
Related services
Discover related services and capabilities designed to help organizations connect strategic priorities, address complex challenges, and unlock value across the business.
Articles
How turnaround strategies can rebuild competitive position by resetting the portfolio, operating priorities and sources of future growth.
Read articleHow leaders can use strategic foresight to test market, footprint and investment choices against multiple plausible futures.
Read articleFocus
Clients are using AI internally while questioning fees for work that machines increasingly perform faster and more cheaply.
Public agencies are deploying AI broadly while evaluation, procurement discipline and accountability remain uneven across government systems.
Strategic challenges
The challenge is defending network effects when discovery and purchasing increasingly happen through interfaces the marketplace does not control.
The challenge is integrating intelligent systems across ageing assets, fragmented data and manufacturing networks with uneven maturity.