EVs and AVs are disrupting Tier 1 auto suppliers’ foresights

Feb. 3, 2020
Simon Whitton is the SVP of Sales and Marketing, Americas at KUKA Robotics. He speaks with Aftermarket Business World about how electric vehicles and autonomous vehicles are disrupting Tier 1 auto suppliers and foresights.

Simon Whitton is the SVP of Sales and Marketing, Americas at KUKA Robotics. He speaks with Aftermarket Business World about how electric vehicles and autonomous vehicles are disrupting Tier 1 auto suppliers' foresights.

Q: Tell us about how the market is shifting in light of electric vehicles (EVs) and autonomous vehicles (AVs).

A: Over the years, consumers have become steadily more interested in purchasing EVs and AVs, according to a recent study. More auto manufacturers are looking to capitalize on the rising popularity of EVs and AVs. They see the new revenue stream just waiting to be tapped into as consumers look for convenience while minimizing their impact on the environment. Now these manufacturers are focusing their attention on developing EVs and AVs instead of traditional cars.

While traditional vehicles will still account for the majority of car sales in the near future, EVs and AVs will start growing in their own shares of the market as their designs become more robust, and consumers become more comfortable with the vehicles, increasing widespread adoption.

Q: What are some considerations suppliers must keep in mind as EVs and AVs grow in popularity in the market?
A: The way EVs and AVs are designed drastically vary from how traditional vehicles are manufactured. For example, while many of the larger, structural features of these vehicles are the same (frames, doors, steering wheels)  electric vehicles require more robust batteries and electrical components than traditional vehicles. Batteries will start to become more numerous as engine components’ demand dips. Because of this, auto manufacturers will be looking for different components from suppliers to align with what these vehicles need. That said, if one of their suppliers isn’t prepared for the rise in EVs and AVs, they may be left behind.

Q: How can suppliers ensure they stay nimble in the marketplace?
A: In order to stay flexible within the marketplace with progressively shorter production cycles, Tier 1s will need to be creative in how they approach rebalancing their product portfolio. Their technologies will have to adapt to disruption in the market. For some, this means leveraging existing infrastructure to meet the diverse needs of traditional components, as well as those of EVs and AVs at the same time.

They should see this change in the industry as a new opportunity to invest in different areas like sensors, electronic controls, and software. At the very least, some of the tools and solutions that Tier 1 suppliers are already investing in, such as robotics, will be useful whether they’re working on components for traditional vehicles or EVs and AVs.

Q: What are some of the other biggest challenges ahead for Tier 1 suppliers?
A: The auto industry is changing. Only a short while ago, Tier 1 suppliers and other players in the auto market knew what lay ahead for their companies, and they knew how to plan. Now, with rapidly changing technology, demand and design, Tier 1s are facing a whole new set of forecasting challenges as they prepare for the years ahead.

Will hydrogen, for example, become an emerging fuel of the future or will another form of energy disrupt the market? It’s becoming increasingly difficult to predict what’s coming down the line and what cars will need in the future, which creates a huge challenge, as well as an opportunity, for Tier 1s as they plan for 2020 and beyond.

About the Author

Krista McNamara

Krista McNamara is the former Editorial Director for the Vehicle Repair Group at Endeavor Business Media. She oversaw five brands  — Motor Age, PTEN, Professional Distributor, ABRN and Aftermarket Business World. She worked in the automotive aftermarket industry for more than 15 years. 

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