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Let’s start the discussion

As everything in the automotive industry, relationships are changing at an accelerating rate, especially in North America.  US OEM’s from the 60’s to the late 90’s designed and built electric and hybrid vehicles mostly in house.  In the last ten years, the US OEMs, having shed their component divisions, had to find new partnerships.   European OEM’s have always relied on highly competent suppliers for many aspects of the vehicle and thus they had generally tight partnerships.  Japanese and Korean OEMs also relied on partners where the OEM often had a financial stake in the supplier.  The rapidly developing Chinese industry relies on a combination of Chinese suppliers and localized suppliers from all over the world who established not only manufacturing plants in China but also R&D facilities.

 The advent of xEV’s (hybrids, plug-in hybrids, extended range hybrids and pure electric vehicles) has complicated the picture since most OEMs do not have sufficient expertise in the new components such as batteries, electrical machines and power electronics.  An altogether different kind of partnership is also emerging worldwide. Governments are taking an active role in R&D, as well as funding investments in manufacturing.  Even individual cities are offering inducements installing charging stations etc.  The final change is that with the glamour that accompanies xEV’s even private equity firms are investing in the business.

What does all this mean to the OEMs? They are responsible for the performance and durability of these new vehicles they have to juggle a whole host of new relationships.  How does this affect established suppliers?  Finally will there be brand new suppliers that have to learn how tough the requirements of the automotive industry are.

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