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EVs demand more flexible supplier-OEM relationship

Dirk Kesselgruber explores the shifting relationship between OEMs and the supply chain in an electrified world

The ever-accelerating shift toward a fully electric future presents both challenges and opportunities for players across the automotive industry, but as products change, so too must the relationship between OEM and supplier. A collaborative partnership, driven by a more flexible approach that values the ability to integrate, will hold the key to mutual success.

While electrification has been gaining momentum, OEMs have looked to their supply chain for system development—and to some extent, integration—but as the market grows, many are now looking to increase their involvement in the development and production of their own eDrive systems. While some are looking to in-source the full system, others are sourcing components to assemble themselves. For suppliers, flexibility and collaboration will be key.

Striking the right balance between bought-in expert technological innovation and in-house investment around future trends will determine the winners

The opportunity to further develop electric vehicle (EV) system technology is vast; improving battery capacity and efficiency while reducing charging times and cost are all instrumental in driving more consumer demand. The required speed to bring about these large-scale advancements is the greatest challenge the industry is facing and striking the right balance between bought-in expert technological innovation and in-house investment around future trends will determine the winners.

After all, electrification is just one of the trends disrupting the auto industry, with engineers simultaneously tackling connectivity, autonomous driving and the demands of new mobility trends, all underpinned by the growing dominance of software. OEMs are also navigating the change in focus from first generation EVs that were centred around speed and power, to the second generation where we see driving dynamics, agility and drivability at the core.

Electric vehicle (EV) charging station
Considerable innovation is underway to improve the EV experience

As the relationship between OEMs and the supply chain continues to evolve, an open, collaborative and most importantly flexible approach will empower OEMs to tool up and dial down as trends demand. While traditional OEMs get a handle on which components they wish to take ownership of and those they will source from other manufacturers, this could prove to be the necessary mechanism to remaining competitive in the marketplace.

The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.

Dirk Kesselgruber is Chief Technology Officer at GKN Automotive

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