How electric vehicles are transforming supply chain dynamics

Auto Supply Chain Prophets

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In this episode of the Automotive Supply Chain Prophets podcast, hosts Terry Onica and Jan Griffiths converse with Michael Robinet, Executive Director at S&P Global Mobility. They discussed recent disruptions in the automotive supply chain and the impending challenges transitioning from Internal Combustion Engine (ICE) to Battery Electric Vehicles (BEV).

Michael breaks down the industry complexities, talking about the challenges like making electric cars affordable, the unclear timeline for widespread use, and the evolution of autonomous vehicles. The episode shifted its focus to the potential impact on lower tiers of the supply chain, discussing concerns about the readiness and strategies of suppliers. The conversation also explores the global landscape of BEV adoption, focusing on major markets, each progressing at its own pace due to varying factors.

Additionally, attention is drawn to the changing dynamics in the automotive market, where traditional OEMs face competition from new entrants, especially from China, leading to shifts in global market volumes. The episode underscores the significance of careful planning, scenario analysis, and attention to supply chain details. It highlights the need for operational efficiency and diversifying customer bases as essential survival strategies for suppliers in the changing automotive industry.

Themes discussed in this episode:

• Automotive supply chain disruptions
• Impact of the disruptions on both OEMs and suppliers
• Global landscape of BEV adoption
• Transition from ICE to BEV
• Impact of the massive transition to lower tiers
• Competitive dynamics and new entrants
• Strategic planning and operational efficiency

Featured on this episode:

Name: Michael Robinet

Title: Executive Director, S&P Global Mobility

About: Michael is the Executive Director at S&P Global Mobility Consulting. With over three decades of experience, Michael is a leader and innovator in automotive research. In his role, he collaborates with decision-makers in supplier strategy, global production forecasting, and analyzing sourcing and production strategies for entities across the global auto ecosystem.

Connect: LinkedIn

Mentioned in this episode:

• NAFTA
• Plante Moran study

Episode Highlights:

[02:29] Automotive industry’s shift to electric mobility: Michael discusses the ongoing transition from Internal Combustion Engine (ICE) to Battery Electric Vehicles (BEV) and the global challenges and opportunities it brings. Michael provides insights into the industry's journey, addressing disruptions, regional variations, and the crucial role of affordability in shaping the future of electric mobility.

[08:57] Supply chain transformation: An exploration of the automotive industry's future where emerging players like BYD and VinFast are reshaping the market. They discussed the evolving concept of volume production and the potential transformation of traditional OEMs.

[18:38] Unpredictable road of BEV launches: A discussion about the unpredictable path of BEV launches, describing them as "lumpy," emphasizing the importance of scenario planning and meticulous attention to detail in preparing for BEV launches.

[25:44] Michael’s advice: Michael provides valuable advice to the automotive supply base, emphasizing the importance of diversifying the customer base and enhancing operational efficiency for success during this period of transformation.

Top Quotes:

[03:56] Michael: “So, making capital decisions is much more important to the enterprise than ever was before. So, all these factors kind of worked in and then you add in this ever-present ICE to BEV transition and whatever that slope looks like. It's a critical time from a strategic perspective for not only the vehicle manufacturers but tier ones."

[05:06] Michael: “We could wish that people want to buy better electric vehicles, but if they're not priced appropriately or don't have the right total cost equation for the customer, well, that's a problem.

[12:58] Michael: “And even with the faster development times of BEVs, it's still a long process to work through safety and reliability and building an assembly plant, building a supply base, building all that sourcing. As you guys well know, it doesn't happen overnight. It is such a process.”

[24:20] Michael: “The supplier doesn't have the same leverage that they did in the ICE world versus the BEV world. That is another message that gets lost a lot. And everybody said, well, that's somebody else's problem, because that's 10 years from now, and I'll be retired by then. But it is going to be a problem. There's no doubt.”

[26:10] Michael: “Do whatever you can to diversify your customer base and operational efficiency, whatever you make, make it as well as you can. So, it's better than the next person.”