Will electric car sales revolutionize Supply Chain Logistics? Here’s what you should know.
Will Electric Car Sales Revolutionize Supply Chain Logistics? Here’s What You Should Know
The popularity of electric vehicles (EVs) in the UK maintains its steady rise. Records gathered as of October 2019 revealed that one in every 10 brand new cars sold in the country was an EV or a hybrid vehicle. It showed that the EV market fared better compared to the fuel- and gasoline-powered vehicles. According to the 2019 Investor’s Business Daily EV Outlook Study, hybrid electric vehicles pushed the rise in green car sales. It accounted for 5.5 percent of the total car sales in the country. On the other hand, fully electric cars made up 2.3 percent of market sales.
Because of this, the automotive industry must reevaluate its global supply chain management. EVs used to simplify the supply chain process in the past. Due to the thriving market, experts believe that there are inevitable changes in the global supply chain logistics. Here are several things that consumers need to know about the impact of EVs on global supply chains.
EV Market On The Verge of Major Growth
At the moment, EV sales only take up a small portion of the overall automobile market. In the UK, consumers registered 37,850 new EVs in 2019. It is just a fraction of the overall new car registrations composed of 2,311,140 gasoline or diesel-powered vehicles like pickup trucks, SUVs and sedans. However, there is a significant increase in EV sales in the country compared to the number of registered cars in 2018 that only reached 15,510. However, experts believe that the EV market will reach the million mark in the new decade.
Two Main Processes To Create EVs
The EV supply chain differs from those used in making an internal combustion engine (ICE) vehicle. The difference lies in the design concept that the EV carmaker plans to adopt. They also have two options in making EVs. The first one was the conversion route that uses an existing ICE vehicle but switches its engine to EV, or the purpose-built route that makes EV from scratch. Because of this, there are two different supply chains for the corresponding EV production process.
Batteries Are The Main Component Of EVs
Electric cars need a high-powered battery to function. These batteries normally cover a large part of the vehicle floor. It is also one of the most expensive components of the car. Because of this, batteries have a major impact on both the supply chains and logistics in EV manufacturing. American EV manufacturer Tesla can produce its own battery packs and battery cells in its facilities. Meanwhile, other EV manufacturers source their lithium-ion batteries from different parts of the world, especially Asia.
Because of these factors, consumers can expect a significant change in the global supply chain process in the automobile industry due to the rise in the EV market. If the expert projections turn out to be true, millions of electric cars will soon cruise along the major streets all over the world. When that happens, the industries linked to EV manufacturing would further flourish in the future.
