Auto makers will invest $515 bn in EV-related tech and manufacturing

Hyundai EV

Auto OEMs are forecast to invest an estimated $515 billion in EV-related technologies and manufacturing plant upgrades over the next 5 to 10 years, according to global technology intelligence firm ABI Research.

ABI Research said automakers have not recognized other impacts that the EV transition will have on the supply chain and, consequently, the impact on the ability to achieve their new vehicular model rollout plans.

Global automakers such as GM, Ford, VW and Mercedes, among others, will need to maintain the simultaneous development of new / updated Internal Combustion Engine (ICE) models and the introduction of differentiated EV models (models that are not powertrain variants of existing ICE models).

Incumbent automakers need to contend with an influx of new OEM entrants beyond Tesla, including Lucid Motors, Rivian, and Fisker.

These market pressures will require an elevated level of model programs that will address operational capacity constraints, which have been largely overlooked,” Ryan Martin, Industrial and Manufacturing Research Director at ABI Research, said.

A modern automobile is assembled from tens of thousands of parts, most of which are sourced from a global supplier network and many of which are custom components designed for a specific OEM vehicle model or platform program.

Supplier’s resources to manage new model launches are finite and are already stretched thin. “Unless automakers and suppliers take the initiatives needed to expand overall program launch capacity, their electrification goals are under threat,” Ryan Martin said.