Drivers of the mobility turnaround

New drives require new manufacturing processes

Electromobility will have the greatest impact on sales of new vehicles in the coming years.

The electric drive and the associated new energy storage systems require completely new manufacturing processes: Whereas a conventional combustion engine comprises around 2,500 parts, an electric motor consists of only around 200 parts, as it can dispense with transmissions, particulate filters, catalytic converters and many other components. Purely electrically powered vehicles therefore not only reduce the complexity of the powertrain, but also significantly reduce the vertical integration of vehicle manufacturers and suppliers. 

As a result, much of the know-how and production expertise built up over decades is being lost.

The challenge is to master the balance between traditional core business and the development of new competencies. Companies that position themselves as technology leaders in this area of tension in good time have a good chance of securing long-term success.

Production and infrastructure are changing

Increasing automation is coming to fruition in two areas: first, automated manufacturing in the factory, and second, in driving itself - autonomous or assisted driving.

In the context of Industry 4.0, the automation of production can bring about significant increases in the efficiency of operational processes. But it also faces challenges. This is because automated factories are designed for large-scale production of individual technologies. However, demand for electric cars will only gradually increase in the near future. In the short to medium term, more flexible and scalable production structures for electric vehicles and their components will have to be established to meet new production requirements and changing unit volumes.

In the case of the product itself, i.e. the vehicle, automation will also determine success: According to forecasts by leading economic researchers, the proportion of new registrations with automation functions will increase significantly in the next few years. Fully autonomous driving will also open up new opportunities, but will not become relevant until 2040 and will account for a smaller share of new registrations. The market volume for autonomous driving functions and driving assistance systems is significantly higher.

In this scenario, OEMs and suppliers must find the right market positioning with new technologies and business models to avoid the risk of becoming pure hardware providers. The integration of new hardware and software components is a considerable hurdle for many companies, apart from the lack of a legal framework. Overcoming them requires highly qualified and interdisciplinary development teams.

Smarte products and services demand flexibility

While hardware offers few differentiators in the automobile of the future, data-based services and the integration of software may determine the success of suppliers.

The increasing collection of vehicle data not only allows providers to offer predictive services relating to the maintenance of the car itself ("predictive maintenance"). Personalization functions and the communication of vehicles with the infrastructure, tracking solutions and infotainment features are also increasingly becoming the focus of users. OEMs are therefore forced to pay more attention to entertainment technology and mobile devices. In addition, new business areas are emerging in the area of digital platforms for "mobility-as-a-service".

These developments confront suppliers with completely new tasks, as they do not generally possess these technological competencies today. The successful companies will be those that succeed in building up and deploying their corresponding capabilities in cooperation with companies from other sectors.