OEM’s have ambitious plans to transition production completely to electric vehicles as early as 2030, but are not adequately factoring in technological and supply challenges in their plans. Global tech intelligence firm, ABI Research, has released a new whitepaper that casts doubt on automakers ability to reach their targets in the current supply and technology environment, while competing with new EV OEMs for materials.
“Current OEMs also need to compete with an influx of new OEM entrants beyond Tesla, including Lucid Motors, Rivian, and Fisker,” said Ryan Martin, Industrial and Manufacturing Research Director at ABI Research.
These market pressures will require an elevated level of new model “programs” that will address operational capacity constraints, which have been largely overlooked,” explains ABI Research’s whitepaper, called The Electrification Wave and its Impact on the Automotive Supply Chain.
The research suggests that though OEMs will invest an estimated US$515 billion in EV-related technologies and manufacturing plant upgrades over the next five to 10 years, “automakers have not adequately recognized other impacts that the EV transition will have on the supply chain. This will have an impact on the ability to achieve their new vehicular model rollout plans.”
Continuing development and production of ICE vehicles may be necessary throughout this transition. According to ABI’s press release, “automakers, from GM and Ford to VW and Mercedes, will need to maintain the simultaneous development of new/updated Internal Combustion Engine (ICE) models and the introduction of differentiated EV models (models that are not powertrain variants of existing ICE models).”
The report states that suppliers’ resources to manage new model launches are finite and are already stretched thin. “Unless automakers and suppliers take the initiatives needed to expand overall program launch capacity, their electrification goals are under threat,” Martin concludes.
