The Electric Vehicle revolution will be only as strong as the weakest link

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Launched this week, the UK’s new transport decarbonisation plan is designed to cut pollution in the transport sector, with the aim to reach zero carbon emissions by 2050. One measure included in the scheme is the new “ZEV mandate”, which requires of British carmakers that a minimum proportion of the cars they produce be electric.

In an industry known for its stubbornness, changing market demands and tougher emissions standards means carmakers will soon have to revolutionize their entire business models just to stay on the road. 

The global electric vehicle (EV) revolution will touch every part of society. We have seen a new supercycle of the copper commodities market, expected to double in size to meet supply demands for gigabatteries, and changing geopolitical ties as supply chains shift and expand to reach new markets. 

Jobs are returning to former industrial heartlands, such as Northern England and Eastern Europe, where car manufacturers are reopening closed plants due to increased demand for access to sustainable electric grids. Analysts are calling it the ‘EV domino effect’ — entire tech ecosystems can flourish out of a single manufacturer’s decision to set up shop. 

The ripple effect can already be felt in the UK. Six companies are in talks with Downing Street about building gigafactories for production of EV batteries. Their investment could help secure the future of Britain’s automobile industry. Such sustainable investment is direly needed to counteract the recent ban of new diesel truck sales in the UK – which will include heavy good vehicles (HGV) – set to come into force from 2040. 

Critics argue that such ambitious timelines push the limits of what is technologically possible. While it is true that uncertainty remains as to the technologies best suited for clean HGVs, there are nevertheless steps that can be taken towards the end goal now, such as investing in clean energy infrastructure. 

There are also opportunities to enact much bigger changes as a result of new sectors entering the EV supply chain. 

The traditional approach to building cars requires co-operation between suppliers in integrating automotive parts from an early stage of development. This only works when the vehicle is mainly composed of hardware supported by the engine, its most important component. But the inclusion of complex smart computers and new chassis-design demands new industrial capabilities.  

For instance, Foxconn, the giant multinational electronics contract manufacturer, is using its agile production process – used to construct the iPhones in our hands – to build EV batteries faster and quicker out of its new Taiwan plants, casting away the cumbersome ‘just in time’ model used by most carmakers. 

Such competition leaves traditional carmakers with a stark choice: either invest in electrical engineering and software research and development or cease manufacturing. 

The electronics companies targeting the automotive supply chain, meanwhile, must rapidly acquire mechanical capabilities and adapt to entirely new frameworks in the realm of safety and security: you can crash a computer, but you can’t easily reboot a car whose algorithm has driven it into a wall.

The full value chain involved in developing a single Electric Vehicle is complex and involves dozens of stakeholders. The litmus test for success in the newly emerging market will consist of the ability to excel across all three spheres of complex planning involved – in the form of policy, tech, and manufacturing. 

Experts believe the EV transition will stretch long into the future, requiring a strong financial commitment and persistence from entrants such as Foxconn. Shipping cars is costly, and production is less moveable than smartphones or semiconductors. Many more plants will be needed around the world. There are also great challenges to overcome in the exporting space – which is quickly becoming a losing game because of the large tariffs placed on car imports in nearly every economic bloc.  

Governments will therefore be required to do more than just impose regulatory policy — they must incentivise private industry to enter the emerging EV market. They should fund Research & Development to encourage the cheaper and more efficient design of power units. They must accelerate the practical rollout of critical electric charging points and hydrogen refuelling stations on key freight routes. And they have the responsibility to attract foreign investment to ensure their country’s place in the vertical supply chains of the future. 

Without private-public partnership, the EV revolution might quickly run out of gas.  

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