Automotive Engineering - February 2022 - 4

SUPPLIER EYE
Time to turn 'BEV' into a verb
H
appy trails to 2021! While vehicle dealers
made record profits, most of the
industry is overjoyed to place this chipstarved,
labor-deprived, and cost-escalated
year in the rearview mirror. Despite the
constant supply line interruptions and the erratic
schedules impacting vehicle output the world
over, it was a critical year for the future of the
battery-electric vehicle.
Virtually every global vehicle OEM significantly
built upon or upwardly revised investment
plans for future propulsion battery and
BEV production and development. Billions in
capital are now devoted to the foundation for
the BEV's future.
Though my Grade 2 (that's Canadian for 2nd
grade) teacher would surely cringe, I'm officially
turning 'BEV' into a verb. To 'BEV' is the
activity of increasing Battery Electric Vehicle
production or building components/systems for
this emerging propulsion format. BEVing is
more than just increasing capacity to build
BEVs, batteries and e-drive systems. It entails
a wholesale shift in the value chain, the cadence/lifecycles,
skills and alliances required,
how the dealer network fits into this complex
equation, and downstream revenue opportunities
for all players within the ecosystem.
In light of this shift, virtually every supplier
now must determine its trajectory from a perspective
within the electrified propulsion supply
chain. Strategically, each supplier has or will
need to establish whether its technology, relationships
and processes are BEV-Negative, BEVAgnostic
or BEV-Positive. Now more than ever
before, ensuring that strategy is optimized for
the growth of BEV volume and the commensurate
shifts in value-add and lifecycles is key to
future competitiveness. OEMs are using this
Michael Robinet
Executive Director,
IHS Markit
SAE Foundation
Trustee
michael.robinet
@ihsmarkit.com
Virtually
every supplier
now must
determine
its trajectory
from a
perspective
within the
electrifiedpropulsion
supply
chain.
transformation to ensure they control those aspects
of the BEV which can truly differentiate,
and bolster value.
Let's delve into this further. The classic BEVNegative
sectors are fuel, exhaust and powertrain/
driveline. While there are other sectors
heavily impacted by this new propulsion format
these are either eliminated or altered substantially
as an organization BEVs.
Basic questions emerge: What is the trajectory
of the remaining ICE volumes? Will the lifecycles
lengthen, and the associated technologies stagnate?
Can the production processes or material
capabilities transfer to BEV associated systems?
In the end, all suppliers need to understand
their prospective role in the new ecosystem.
Specifically, those in BEV-Negative sectors need
to establish if 1) they are going to shift to a new,
more BEV-focused system; 2) sustain the current
path and limit capital/new resources to
'cash cow' their position for the next few cycles;
3) become a consolidator in their space by eliminating
capacity and reducing the number of
players, or 4) or simply sell off or close up shop
when the volumes and or financial returns become
unsustainable. These considerations will
determine their long-term fate.
While the true trajectory of BEV volume
through the balance of the decade will surely
be debated, we are well past a simple small
investment or skunk-works-level initiative when
BEVs are considered. Massive investments,
structural shifts in development capabilities,
new alliances and commitments underscore
that we are past the point of no return for
many participants.
The industry is going to BEV. The question is
at what pace and how all the players conform
to this new reality.
4 February 2022
AUTOMOTIVE ENGINEERING
Automotive Engineering - February 2022

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