New approach needed to drive electrical vehicles uptake

12 August 2019 Consultancy.uk

Electric vehicles are becoming more energy efficient and emit far fewer toxins than diesel and other internal combustion engine vehicles. However, while users experience a number of benefits, such as low recharge costs and lower maintenance costs, uptake continues to be relatively low, and developing a compelling product and processes to produce them at scale will be a challenge for the industry going forward.

New technologies, changes in consumer sentiment and new sales channels mean drastic disruption is on the horizon for the automotive sector. For example, with the potential for autonomous vehicle technology to remodel the nature of vehicle ownership in the coming era, 40% of British consumers say they would never buy a vehicle again once electric robocabs became viable.

The development of electric vehicles (EV) has so far been relatively slow, as the technology required for making them cost-effective at scale remains in development. However, a transition is now underway to shift the industry from internal combustion engines (ICE) to EVs. That transition is not fully defined, with multiple pathways of development open to companies.

Traditional vs. next generation DFMA

Further exploring the impacts the adoption and development of electric vehicles are likely to have, analysis from Oliver Wyman has revealed a wide array of issues, from demand to possible barriers for adoption and development. According to the study, first and foremost, a significant portion of new vehicles will be EV or hybrids by 2030. Globally, 30% of vehicles will be fully electric while in total 60% will feature some form of electrification, though the speed of uptake will vary per region.

The trend will be accompanied by a number of different cost and benefit calculations which could make EV ownership more compelling for consumers, accelerating their uptake beyond 2030. With an overall lower maintenance cost for consumers due to fewer moving parts, reliable components and batteries that can last for 100,000s of kilometres, the slower depreciation of an electric vehicle may become viewed as an essential investment among consumers in ten years’ time.

Difficult road

Building vehicles that meet the needs of consumers could require an overhaul of the wider production strategy, however. This includes new configuration of design for manufacturability and assembly (DFMA) – a method used by the industry to streamline the full production of vehicles. The firm notes that the shift to EVs can be part of a wider shift in DFMA model, away from traditional approaches to a more analytics-based approach.

Automotive workforce changes

However, the industry also faces a number of difficult choices around talent. Traditional business practices have focused on incremental improvement to design and engine function – usually slowly. An almost complete redesign of the power train and new possibilities around the interior, among others, means that new talent – largely focused on electronics, engineering and computer science – will need to be hired, which tends to already be in high demand.

Wider automation of production, meanwhile, will see total FTE fall sharply over the coming decade, creating opportunity but also significant business change. The report also notes that the new production method will increasingly see stronger integration between suppliers and strategic partners.

The authors concluded, “The trend toward involving more than one automaker in the platform development process will require much greater flexibility and agility. Ecosystem players need to adapt their product platforms and manufacturing processes to handle more variants and manufacturing process derivatives. Furthermore, while products and their variations remain strong competitive differentiators, companies also need to master agile manufacturing to drive crucial cost advantages and synergy derived savings.”


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