The Convergence of Automotive and Technology

From chaos comes opportunity

Business leaders are now searching for new ways to stabilise production in this time of radical change in the industry. Particularly as they try and traverse “the new normal” of unpredictable capacity, labour and fuel rates by placing greater emphasis on their logistics and supply chain requirements. As such, there has never been a better time to make logistics a key strategic advantage within the auto industry. But how can we be faster, smarter and more efficient amidst current unpredictability and uncertainty?

 

Innovation across automotive supply chains has become an absolute requirement to meet the changing industry landscape. At first glance, it may seem that the EV supply chain is merely adding batteries to the existing ICEV, but it can and should be so much more. The lithium-ion batteries used in today’s EVs share their roots and supply base with those from technology consumer electronics and cars and are fast becoming the hardware used to showcase the latest software for features like autonomous driving and the in-vehicle personal assistant.

The automotive industry can learn more from technology supply chains than just the requirements for handling lithium-ion batteries as Class 9 Dangerous Goods. In many cases, these “consumer electronics on wheels” have service needs for their software, as well as physical repairs in the traditional automotive sense. As the fast-moving, high-volume technology supply base crosses over into automotive, it brings with it the normalcy of immediate over-the-air software updates to fix bugs and the option to purchase new software upgrades. This familiarity resonates with consumers who increasingly want the latest and greatest as soon as it is available instead of making a 10+ year investment in a single-vehicle.

As well as the influences of the technology supply chain, the automotive industry will also leave an imprint on the technology supply chain. Ride sharing may become more common, but private vehicle sales will continue, particularly in rural areas. In both ownership models, the product lifecycle for a car is far longer than that of an electronic device. Add to that the ‘Right to Repair’ movement and the aftersales industry that will likely contribute to the growing electronics aftersales support industry.

Additionally, the volume of lithium-ion batteries in consumer electronics pales in comparison to the overall volume of lithium-ion cells in passenger vehicles. Thus far, there has not been enough economy of scale within consumer electronics alone to grow the battery recycling industry. Still, with the increasing number of used batteries from vehicles and the additional demand from both regulators and automakers for battery recycling, solutions are already emerging. And all of this comes before second-life opportunities for vehicle batteries, but the circular economy discussion is a story for a different day.

The lines between the automotive and technology industries get blurrier every day. We should embrace the baseline knowledge and experience that both bring to the table, growing in sync with one another as the supply chains converge. 

The outlook of the industry remains complex and uncertain. Currently, our approach is to build robust and sustainable supply chains of the future, empower our customers to understand what is happening in the market, where the industry is going and help them to make their own decisions.
 
In order to achieve this, DSV designs, implements and operates comprehensive global automotive supply chain solutions for individual parts, components, subassemblies and finished vehicles for OEMs and their suppliers. From the world’s largest automotive manufacturers to start-up electric mobility manufacturers (EMC2). The EMC2 team supports customers involved with products that use batteries, electrified mobility and future mobility concepts.