The automotive industry is currently undergoing a significant transformation as electric vehicles (EVs) take precedence, charting a new course for the future. A recent report by Deloitte has projected a notable 44% decline in revenues for internal combustion engines (ICE), alongside a considerable 245% surge in revenues for electric drivetrains and batteries by 2027. This monumental shift is not only reshaping the economic terrain but also revolutionizing the approach to vehicle design and production.
The Evolution of Powertrains
The transition towards electric vehicles is streamlining the powertrain at the very heart of a vehicle. In contrast to the intricate ICE powertrain comprising approximately 2,000 components, a typical EV powertrain encompasses a mere 20 parts. This substantial reduction in complexity is compelling manufacturers to embrace pioneering production techniques, such as giga casting. Popularized by Tesla, giga casting entails casting large vehicle sections in a single process, obviating the necessity for assembling smaller parts.
Impact on the Automotive Supply Chain
The far-reaching effects of this transition are reverberating across the automotive supply chain. While larger corporations are adapting by segregating or discontinuing their ICE divisions in order to concentrate exclusively on EVs, smaller suppliers are encountering challenges. These businesses lack the resources for such a profound shift and are compelled to leverage their existing expertise and innovate in order to survive in this rapidly evolving market. This evolution is impacting entities of all magnitude, from substantial publicly traded corporations to small family-owned enterprises.
Exploring the Effects of EV Subsidies
In response to this shift, the European Commission is deploying investigators to China to conduct a comprehensive assessment of automakers such as BYD, Geely, and SAIC. The objective of this investigation is to comprehend the potential economic ramifications of EV subsidies offered by the Chinese government. The findings of this inquiry could result in the enforcement of duties or tariffs on imported electric vehicles, a measure that the Chinese government has denounced as protectionist. The implications of this development could have far-reaching consequences for global automotive supply chains and China-EU trade relations.
Beyond the geopolitical impact, the transition to EVs is also prompting apprehension regarding the possible shortage of nickel, a pivotal component in EV batteries. This strain on the supply chain underscores the imperative to address numerous challenges to ensure a more environmentally friendly and sustainable future for transportation. The narrative of the electric revolution in the automotive industry is still unfolding, and the path ahead, albeit challenging, holds the promise of an exhilarating journey.
Subscribe to BNN Breaking
Stay abreast of daily global breaking news from around the world. Register for our newsletter today!
+ There are no comments
Add yours