TECHNOLOGY, VALUE ADDED AND SUPPLY CHAINS OF ELECTRIC VEHICLES

by Michael Pieper (agiplan Gmbh) and Christian-Simon Ernst (fka mbH)

The Battery Electric Vehicle (BEV) is based on the simplest drive train configuration for electric driving. The mechanic drive train is reduced to an electric motor that drives the wheels directly or through a differential gear box. This gives a lot of new freedom for the design. The big drawback is the battery itself. It is big, heavy and expensive and can hold less energy than a fuel tank. The BEV available today, are very similar to conventional cars in terms of design, comfort and safety. The range is limited to less than 200 km with a battery capacity of 15 to 25 kWh. The pure costs for operation (consumption, maintenance) are significantly lower than those of conventional cars. But purchase costs are much higher.
We expect BEV to be competitive, concerning total cost of ownership (TCO), first for urban delivery services, commuter services and on site traffic. Those BEV run high daily mileages on defined routes with good access to recharging points.
Without massive governmental measures we can anticipate, that under present conditions, BEV will at first be operated in commercial fleets. Private customers will follow, when prices drop as mass production increases.


Analysis of the supply chain for BEV, compared to ICE (internal combustion engine)
Two major criteria were analysed for predictions on the design of the supply chain for BEV. These are value added in production and consumer value.
A BEV comes along with ~ 63 % higher value added, which is mainly generated at the supplier for the battery cell. About 75 % of the ICE drive train production value falls away. This is an important and not surprising message for the suppliers.
Important for the OEM is the combination of value added in production and customer value. This is in general the base for a make-or-buy analysis. In simple words, the higher the value added and the customer value, the more important it is for the OEM to make the component. This reflects the core competences of the OEM.


Figure 1: Comparison of value added


For the BEV we expect most OEM to produce engine management, integration of batteries and electric systems, thermal and battery management. Suppliers will develop and produce transmission, battery cells, power electronics, high voltage wiring and comfort/safety/infotainment components.

Figure 2: Make-or-buy analysis


 The supply chains for BEV are currently not suitable for an efficient mass production. Many one-on-one relations require an extensive management to ensure supply and production. The small number of vehicles, especially if we consider converted BEV, is produced with a high amount of manual processes. It can be characterized as batch production.



Figure 3: A change in production of EV is necessary for mass production


Along with the rising demand, the production capacities and supply chains have to be adapted to mass production design. Since battery production capacities are not yet sufficient for the future demand, new plants are necessary as well. A local sourcing share for the electric components is necessary and essential since the main value added of future vehicles is created in this field.
 
Perspectives
The automotive industry is a global industry. This is also true for e-mobility which is driven from the industry on international level.
We expect great differences in the markets for EV, due to different governmental regulations, economic and ecologic framework and customer acceptance.
A benchmark concerning markets and production of EV in Europe, the US and Asia anticipates good chances for European productions, due to competences in vehicle production, engineering and qualified personnel, but also clearly shows the strong position of Asia and ambitions of the US.