Auto Service World
News   June 29, 2022   by Adam Malik

Study raises red flags over green ambitions

Will supply chain challenges hold back automakers from EV plans? A new report warns that they will need to plan carefully

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More than half a trillion dollars is expected to be put into electric vehicle plans by the end of this decade. But new research is raising red flags over plans to go more green technologies.

Global technology intelligence firm ABI Research pegs the investments of automakers in EV-related technologies and manufacturing plant upgrades to be US$515 billion over the next five to 10 years.

In its white paper, The Electrification Wave and its Impact on the Automotive Supply Chain, the group warns that automakers have not adequately recognized other impacts that the EV transition will have on the supply chain. As a result, this could have an impact on their ability to successfully rollout their plans for new technology vehicles.

As a result, automakers will need to ensure they’re keeping up with development on internal combustion engine vehicles as they introduce EV models, said Ryan Martin, industrial and manufacturing research director at ABI Research.

“Incumbent automakers also need to contend with an influx of new OEM entrants beyond Tesla, including Lucid Motors, Rivian, and Fisker,” he added. “These market pressures will require an elevated level of new model ‘programs’ that will address operational capacity constraints, which have been largely overlooked.”

Since vehicles are made with thousands of parts, sourced from a global supplier network and designed for a specific OEM model or platform program, the current disruption could upend plans.

“From ABI Research’s ongoing research, automotive program management has not received the same managerial attention or level of investment as the supply chain that it supports,” said Jake Saunders, vice president at ABI Research.

And suppliers are stretched thin as it is. “Unless automakers and suppliers take the initiatives needed to expand overall program launch capacity, their electrification goals are under threat,” Martin said.

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