THE ALIXPARTNERS AUTOMOTIVE MINUTE
Recently, AlixPartners conducted a survey of suppliers likely to be impacted the most by the upcoming rapid growth in battery-electric vehicles. While many are working on their BEV product plans, it revealed that only 37% have started to transition their supply bases—be it to invest in incremental BEV-related operations or to manage an orderly consolidation, sale, or wind-down of their ICE-related ones.
Suppliers should not be waiting to start this transition, as it’s best to address it while automotive demand remains above supply for all types of vehicles. And just sitting on the fence can be costly: AlixPartners calculates that, without proactive actions, the ICE-to-BEV transition of the powertrain supply chain will cost the auto industry $70 billion by 2030 in “move” costs alone—finding alternative suppliers, moving tools and production, re-validation, and business-continuity costs for wind-downs.
However, there are ways to avoid up to 60% of these costs if you’re proactive. That’s based on our work helping companies prepare to do just that. Conversely, those who continue to wait to act—one way or the other—will be the ones likely hit with the majority of the big upcoming transition costs.