The regulators are driving the multiplication phenomenon of electric vehicle (EV). The long-term goal for regulators is to achieve clean transportation by setting stringent standards. The guidelines are helping automakers to maneuver with alternative powertrain technology. Furthermore, EVs provide an added advantage to lower the environmental impact and achieve cost-efficiency in terms of economy. Tax credit incentives and low cost of ownership are the major drivers boosting the demand of EVs.
Automakers are witnessing significant advantages owing to rising adoption of EVs. On contrary, logistic industry is facing the challenge to thrive with EVs. The sector need to understand the new dynamics of supply chain to create a successful operational landscape.
The EV represents the transformation of automotive industry. So the suppliers and automakers need to reshape and collaborate to develop better systems and parts and position themselves appropriately.
The supplier will contribute more than the past this is because of the reason that they need to shift from supplying internal combustion engine based product to electric power train based products. In addition, both the manufacturing and design of batteries for the electric vehicle is a complex task and OEM lacks with respect to skills, thus they have opted for the supplier who can help them to bring the EV’s to the market. OEM’s are now trying to bring the technology in-house and outsourcing a few components to the suppliers who have the R&D facilities for achieving the scalability and also knows the technical how about the product segment.
The mechanical parts in combustion engine cars such as ignition coil, crankshafts, oil pans, spark plug, and others will not be used in future cars. Hence, the growth with respect to EVs will not offset the losses for combustion engine parts manufacturing. But in the long run, logistics will materialize all the losses.
The shipment of EV batteries is costly and cumbersome process due to their weight, safety procedures with respect to packaging and transportation of hazardous material such as lithium-ion core. Nearly located suppliers are more preferred by automakers. Majorly cell producers are located in Korea and China, hence, poses a big challenge for automakers and require to set up a manufacturing plant nearby.