Currently reading: Supply chains ‘absolutely critical’ for industry’s electric future
Car makers are warned to build their parts base, or risk being left behind as EV competition rises

Supply chains are now the most critical part of the automotive sector as we move into an all-electric world, a motoring expert has claimed in Autocar’s latest webinar on the future of manufacturing.

Peter Wells, director of the Centre for Automotive Industry Research at the Cardiff Business School, said car makers – especially start-ups – will need to make sure parts for future EVs can be reliably sourced, or else face failure.

He added: “Supply chains are absolutely critical. Success of a company now comes from the supply chain. 

“As we move into these new technologies, [supply] problems will come to the fore for many manufacturers.”

Currently, many car makers have more solid supply chain foundations for their ICE cars, but with new and complex parts needed for electric vehicles - coupled with the recent global shortages of semiconductors and other high-tech materials – competition is fiercer than ever.

Speaking during Autocar Business Live, Wells was backed up by Ineos Automotive operations director Erik Torseke, who said the car maker might not have survived if not for its strong supply links.

He said that the Jim Ratcliffe-owned start-up built its base from core parts outwards – such as with its BMW-supplied engine and other tier one companies like Bosch – which meant smaller suppliers were less worried Ineos would be a risk to them. The relationship with the big companies was critical in persuading the smaller ones to commit.

The firm, which began selling its Land Rover Defender-inspired Ineos Grenadier in May, said it would be entering the EV market with a smaller, fully electric SUV, and this supply base will allow it to do so.

“When you have these pillars in place, it’s much easier to source other suppliers,” added Torseke.

“We now have a very, very strong supply chain network established, and we are very confident we can supply our cars [to the same level] as we said we could.”

Wells said: “Suppliers tend to be very tentative. When you look at how some [car makers] have done it, Tesla is one that had an advantage as their deep pockets saw them through a long period of non-profit and delays of parts due to its supply base issues.

“This is why smaller companies have failed in the past.”

But some firms are already looking at ways to get around these issues. Wells said firms – mainly OEMs – were now looking to either open their own parts factories or buy up existing suppliers.

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