by Steve Griffith, Industry Director, NEMA
In
December, a NEMA Automotive Component Workshop convened Member companies
that provide products and systems that make up the internal components
of passenger vehicles, vans, commercial and industrial trucks, and
buses.
It covered internal combustion engines (ICEs), hybrids, and
electric vehicles (EVs). The purpose of the workshop was to assess the
opportunity landscape for this section of the transportation market by
utilizing Member company expertise and collaborating across the product
supply chain.
The automotive industry’s transformation to a future
that is increasingly connected, electrified, and ultimately autonomous
is already having a profound effect on the automotive component
industry. Here are some notable trends:
- Technological advances in sensor technology and electronic systems such
as advanced driver assistance systems used in a wide range of vehicle
safety and control applications, including anti-lock braking systems,
airbags, and engine emissions control.
- Steadily declining battery prices serving
to boost the sale of If battery prices continue to fall, they will
reach a point that makes EV prices comparable to traditional ICEs in the
absence of incentives when you consider a vehicle’s total cost of
ownership.
- Tax incentives and regulatory activities. Governments
around the world, such as China, the U.K., India, and France, have put
forth initiatives to phase out ICEs. In the U.S., tax rebates and
incentives were launched to promote the adoption of
- Intense competition in the automotive component industry. More
established high- tech companies, including semiconductor makers, are
actively pursuing opportunities in automotive components. Automotive
original equipment manufacturers are also more willing to collaborate
and work with these types of companies to facilitate the development of
automotive
Historically, automotive manufacturers have been
reluctant to set broad industry Standards on components and instead set
internal procurement policies and evaluation protocols. However, with
the increasing adoption of EVs, that dynamic could be changing.
A McKinsey report
from October 2017 suggests that because of the lower complexity of
powertrains in EVs, the path to commodity will happen quickly. Said
another way, if Standards can be set, these automotive manufacturers
would quickly move to outsource building these subassemblies to reduce
costs. This would result in opening the market for manufacturers that
specialize in making similar products (i.e., NEMA Member companies).
During
the workshop, Members brainstormed policy, technical, and other issues
related to the automotive component market. Some of the key findings
from that discussion were:
- The component qualification
process is lengthy, taking an average 1½+ With technology changing so
rapidly once a component is qualified and its design locked in place, it
could become obsolete. Also, even minor changes to it could require a
requalification. For components not dedicated to life safety, a
standardization process could reduce qualification time.
- There
are several Standards gaps in areas such as on-board components (power
electronics, inverters, and inductors), EV drive, and advanced
driver-assistance
- Product regulations (conflict minerals, the
Restriction of Hazardous Substances Directive, and Prop 65) are
amplified due to the small enclosed environment within the
- There is a need for policies to promote EVs, and connected and autonomous vehicles, perhaps more at the state and/or regional
- A broader dialogue needs to occur with automotive manufacturers, either directly or through their
The
NEMA Automotive Component Council is being established to increase
manufacturer collaboration in the expanding automotive component market.
For more information on the Council and to find out how to participate,
contact Steve Griffith, NEMA Transportation Systems Division Industry
Director, at Steve.Griffith@nema.org. ei