Automakers, suppliers need to work together through EV transition

TRAVERSE CITY, Mich. — Internal combustion engines are not dead. And the road to fully battery-electric vehicles will be bumpy.

That means automakers and suppliers must work together to adjust their electrification transitions and meet government regulations as well as consumer demand, panelists at the  2024 Car Management Briefing Seminars said Aug. 6.

Gasoline-powered engines are getting more efficient, while hybrid technology is further advancing engine innovation, the panelists said. Investments in electric vehicles and the battery supply chain are sparking new partnerships and ideas. And while mainstream consumers' hesitation around range, charging availability and price have slowed the EV adoption rate — prompting some automakers to pull back on or delay adding capacity — it's still growing.

General Motors is working toward a zero-emission light-duty vehicle lineup in North America by 2035. The automaker has introduced more EVs in more segments, including highly contented full-size pickups and an electric version of the Chevrolet Equinox compact crossover that will start around $35,000 with shipping.

Having EVs in more segments, at more price points and from more brands will give the industry a better view into consumer interest, said Dan Nicholson, GM's vice president of strategic technology initiatives.

"It's going up. The question is, how fast and how high?" Nicholson said. "That's the real thing. So giving consumers choice, staying next to the consumer and helping to kind of inform and educate the public as they go along and make the purchase decisions — that's really the way forward."

Public education is one way suppliers can help automakers persuade consumers to consider an EV, starting with getting people to drive one, said Collin Shaw, president of the Original Equipment Suppliers group at MEMA, which represents companies in the automotive supply chain.

Another way is working to solve the commercial risks that suppliers and automakers share during the transition, Shaw said, including how to profitably build EVs that satisfy both consumers and regulators.

"I see how hard it is for the OEMs, because ... they want to make sure their supply base is healthy. They don't want to get the volumes wrong," he said. Suppliers "want to supply and make sure they're meeting their customers' needs. And this is the No. 1 issue that as a group, we need to continue to work together to make sure that both sides of the equation are healthy and profitable as we go through this, and there's not that animosity and friction that can sometimes exist in these kind of relationships."

Securing the necessary battery materials and components has been a learning curve, said Dante Boutell, vice president of powertrain control at Toyota Motor North America. Some key components, such as copper wire and microchips, are not yet fully localized to North America, he added.

Toyota's strategy includes EVs, but also hybrids and plug-in hybrids, which the automaker says will do more to reduce carbon emissions than a full BEV approach.

"We need to balance the consumer, the affordability, the regulations, the supply chain, the carbon footprint," Boutell said. "There's quite a few pieces that go into the strategies that we need to create."

Automakers are global companies that have developed platforms to meet requirements around the world, said Lyndon Lie, Volkswagen Group of America's chief engineering officer for North America. The group, including Porsche and Scout, plans to offer 10 to 15 more EVs in the U.S. by 2030, he said.

Volkswagen is working to bring some of its development in-house, such as its battery unit PowerCo, while also seeking external partnerships, Lie said. "PowerCo can't provide everything," he said. "So we will de-risk it with multiple suppliers and multiple options."

Volkswagen-backed Scout Motors, an EV startup working to build an electric SUV and pickup, is focused on adding value, said Randy Frank, its vice president of body systems. That goes beyond just batteries and EV propulsion systems, he added, and includes body structures, vehicle weight and cost.

"Everything is new in electric vehicle architecture," Frank said. "We are trying to really double down on our customers and really find out what they want and give them those pieces in an affordable manner, in a way that we can also be profitable as a company."