Electromobility: an Opportunity for the Sector’s Actors and the Business Units that Will Succeed in their Transformation
For more than two years, firms have been facing a string of crises, related to health, supply disruptions of critical components or, more recently, energy, leaders don’t expect things to return to normal. In fact, crisis management has become the new normal, as firms continue to face lasting volatility and uncertainty, impacting many dimensions of the company, both internally and externally.
However, this change also brings new opportunities. In the field of mobility, even if several transformations are intersecting and accelerating, such as digitalization, social and environmental responsibility, new uses of mobility… a single and real technological revolution is operating in the background: electrification. In fact, today’s redesigning of urbanization in our cities and our approach to transportation means, to our daily needs have more to do with a change in the energy paradigm than anything else.
Looking more closely at the impacts and changes generated in the mobility industry, in particular the automotive industry, we see that electrification is disrupting the entire value chain and challenging the established models of the company’s operational functions, from R&D to sales,from procurement to production.
« The mobility sector is disrupted with the electrification of its product, its practices and the appearance of new functionalities that challenge established models. Beyond the constraint at first glance, we are facing the greatest value creation opportunities of the past fifty years for companies that will succeed in their strategic but also operational changes. At the societal level, the need for clean mobility imposes electrification which, facing the energy crisis of the coming years, imposes sobriety! Constraint is a vector of innovation and unlimited progress. »Sebastien Grilli, Partner
Asia is Positioning Itself to Capture More Added Value
Once a factory for the rest of the world, China (and more broadly Asia) has become a major center for the development of new technologies, particularly with BAT (Baidu, Alibaba, Tencent), but also in the energy and storage fields with lithium ion batteries.
With these developments, the upstream part of the automotive industry value chain is now witnessing the emergence of new Asian entrants. Chinese giant Build Your Dreams (BYD), a specialist in PCs and smartphones, is establishing itself in the production of electric vehicles with batteries manufactured in-house and beginning to march towards the West by recently unveiling its strategy for the introduction of 3 electric models on the European market.
More broadly, the emergence of increased competition at different levels of the value chain will be further facilitated and accelerated by the arrival of these Asian players offering the design, industrialization and production of marketing concepts or new mobility objects.
In Taiwan, Foxconn, the iPhone manufacturer, is openly aiming for a 5% market share in the subcontracting of electric vehicles for other brands. Slowly but surely, actors from the Information and Communication Technologies (ICT) sectors are emerging in the automotive industry, reimagining the motorized vehicle like a smartphone on wheels…
R&D, Heart of the Automotive Reactor, Must be More Strategic, Open and “Long-Term Thinking” than Ever
While investments in R&D by the European automotive industry approach 55 billion euros, the race for innovation in the field of electromobility continues to be more significant and abundant. Major automotive groups’ R&D and their subcontractors, which are increasingly strategic for companies, are facing the need to select the right technological solutions for the future from an abundance of choices. Moreover, their development requires new skills that are often very difficult to find. The success of the various aspects of the energy transition depends, above all, on the training and development of individuals.
Concrete and rapid anticipation of new needs and tomorrow’s business is the main key to success for the ecological transition. When in-house development is not possible or too expensive, R&D must continue to open up more and work with a new network of partners, often located in ecosystems in which it has, historically, almost never been active. These ecosystems are also as many opportunities for R&D to reconnect with users or pioneering users, who are increasingly at the heart of upstream design processes.
Moreover, for many years, the automotive industry has pushed the concept of platforms and modularization further: making the car a lego game to speed up and reduce the cost of its design.
Electrification pushes this concept to new borders, to the point of risking what has happened to the computer industry: the massification of the sector leading to the disappearance of many actors, the installation of powerful mega-assemblers, in an industry where only the strongest brands that have been able to develop the “performance of the user experience” would survive. Because well beyond the performance of the product, it is this experiential performance that will make the difference: the use of a vehicle that can be updated continuously, with components that can be retrofitted once obsolete, that adapts itself to the uses of its user…
« The automotive sector and, more broadly, the mobility sector, is undergoing profound change. This is a critical moment to innovate by focusing on sustainable solutions that meet the freedom needs of users. But the constrained economic context forces us to make the right trade-offs between operating the core business and the ability to explore new horizons. It is therefore necessary to know how to skilfully experiment with new ways and, if they prove to be good to deploy them on a large scale. »Gregory Blokkeel, Director