With continued growth of Electrified Vehicle (EV) registrations this year and post-Brexit speculations, the message is loud and resounding – the automotive market is facing a new dawn. At Automechanika Birmingham this year, there were more seminars and speeches about EVs than ever before. As technology continues to advance relentlessly, the question is no longer when change will happen; it is how.
IT’S NOT ALL GREEN WITH EV
A recent press release from the ACEA has revealed that the European Commission underestimates the impact of a forced push for electric cars on EU employment. According to the FTI report, Europe’s automotive suppliers are expected to produce roughly 38% less parts and components for electric cars, compared to a loss of around 17% for automobile manufacturers. The study points out that many of these suppliers in the EU are SMEs, who are likely to struggle more with making the transition in a short timeframe than car manufacturers.
RARE EARTH POWER
While it is estimated that batteries will make up 35-50% of the cost of an electric car in the future, it is uncertain if they will be produced in the EU or not. The sector will become extremely dependent on rare-earth materials that are sourced outside of Europe.
With the automotive industry today accounting for more than 20% of total manufacturing employment in EU regions like the UK, a forced push to electric cars will likely affect jobs.
ACEA Secretary General has expressed that it is imperative for the entire automotive supply chain to transform at a manageable pace in order to protect employment and long-term viability of the sector. He further added, “The report makes it evident that overly-stringent CO2 targets, as well as unrealistic sales quotas for electric vehicles, could lead to serious structural problems across the EU.”
TWO SIDES TO A COIN
Whilst the tone of the press release is quite foreboding, it does not elaborate on the amount of infrastructure enhancements needed to support the influx of EVs into the market, with the targets set by lawmakers. Changing the way we power vehicles will not be an overnight process, nor will it be as simple as swapping fuel combustion engines for electric motors.
Challenges include the need for huge investments to ensure that there are enough public charging points. Many of these public charging points need to support rapid charging which require stations to connect high-voltage distribution networks. Furthermore, electricity networks to households need to be reinforced to support the charging needs. This means that the overall electricity grid capacities need to support EV demands.
Whilst changes may seem rapid, it is likely that they will continue gradually so that real-life needs can reconcile with the vision of lawmakers.
TRICKLE EFFECTS INTO THE AFTERMARKET
During Automechanika Birmingham this year, Wendy Williamson, Chief Executive of the IAAF, covered type-approval, legislation, lifestyle changes and future connectivity among other topics.
Type-approval has maintained its prime position in the IAAF’s agenda for the past three years as they fought hard to ensure that a number of key amendments were included in the final legislation by the European Parliament.
While the EU legislation will be adopted in the UK as of March next year, the type-approval legislation does not take effect until September 2020. This throws up a question of where the legislation now sits for the UK.
With the growing interest in autonomous vehicles, the biggest challenge for the aftermarket is accessing the vehicles’ information for repairs. Whilst the IAAF continues to fiercely lobby for access to technical information and the motorists’ right to choose how their car gets repaired, players in the aftermarket can also do their part in sustaining the sector.
WHAT NOW? GAPS NEED TO BE FILLED.
This burgeoning future is multi-faceted and it takes effort from all levels of the supply chain to sustain the sector. This new dawn may make certain aspects obsolete in time, but it also creates unprecedented opportunities. The road to futureproofing the industry begins with investment in people and equipment, as well as self-education to avoid being left behind with all technological advancements.
Parts manufacturers are investing significantly in the R&D of developing EV compatible parts. With that, motor factors are encouraged to maintain strong relationships with suppliers and customers. By keeping their ear to the ground, motor factors can benefit significantly by gaining a reputation of being quick in reacting to customer demands and part availability.
On the topic of reputation, motor factors should continue to be very discerning of product quality and type-approvals. By maintaining the reputation for reliability, it encourages motorists to continue seeking independent garages for repairs.
FPS representatives are always prepared to share insight with motor factors on the latest opportunities and options available in the aftermarket.