Automotive Engineering - September 2022 - 7

SUPPLIER EYE
Propulsion Shift = Declining Supplier Value-Add
Today vs. Tomorrow
Supplier
~75% VA
Supplier
~45% VA
Supplier
~65% VA
OEM
OEM
OEM
Today - ICE
+10 Years - ICE
Today - BEV
OEM Supplier
ICE Value-Add
* Supplier value add assumed at ~65% of total for ICE vehicles
* Lower economies of scale and sector consolidation will drive inflation for ICE-only
systems in the future
BEV Value-Add
* OEMs benefit from technology and scale improvements
* OEMs control propulsion battery, software and e-drive value
Rather than commanding up to 70% of the value-add in an ICE vehicle, electrification is causing suppliers' share to fall well below 50% for
future vehicle programs.
ICE experience, sharing risk where required with
their OEM partners will enable these suppliers to
also shift into the electrified world.
Additionally, the BEV insourcing shift allows
OEMs to retain more of their employment levels
and ameliorate the unions to a degree. But for
suppliers, there is a real possibility of lower employment,
declining revenue share within the
next ecosystem, and increased sourcing risk.
OEMs are being careful to avoid vertical integration
of key systems which are well outside their
sphere of efficient execution. These will continue
to be seating, electronics, structures, thermal,
AUTOMOTIVE ENGINEERING
Supplier
influence,
control,
and in some
cases survival,
are in the
crosshairs.
chassis systems, interiors, material supply and
other systems.
Supplier influence, control - and in some cases,
survival - are in the crosshairs during this
transformation. Additionally, where a supplier
resides within the OEM-supplier tiering structure
may shift - forcing many to rethink their market
approach and structure. In the end, the ICE-toEV
shift is more than just swapping in a battery
and e-drive for an engine/transmission.
Suppliers on all tiers must redefine their business
strategy within the new dynamic. The
OEMs already have a game plan.
September 2022 7
Econ of scale
& technology
improvement
+10 Years - BEV
Supplier
~45% VA
OEM
S&P GLOBAL MOBILITY
Manufacturing Cost
Supplier ICE inflation
& regulatory costs

Automotive Engineering - September 2022

Table of Contents for the Digital Edition of Automotive Engineering - September 2022

Automotive Engineering - September 2022 - Intro
Automotive Engineering - September 2022 - Sponsor1
Automotive Engineering - September 2022 - CVRA
Automotive Engineering - September 2022 - CVRB
Automotive Engineering - September 2022 - CVR1
Automotive Engineering - September 2022 - CVR2
Automotive Engineering - September 2022 - 1
Automotive Engineering - September 2022 - 2
Automotive Engineering - September 2022 - 3
Automotive Engineering - September 2022 - 4
Automotive Engineering - September 2022 - 5
Automotive Engineering - September 2022 - 6
Automotive Engineering - September 2022 - 7
Automotive Engineering - September 2022 - 8
Automotive Engineering - September 2022 - 9
Automotive Engineering - September 2022 - 10
Automotive Engineering - September 2022 - 11
Automotive Engineering - September 2022 - 12
Automotive Engineering - September 2022 - 13
Automotive Engineering - September 2022 - 14
Automotive Engineering - September 2022 - 15
Automotive Engineering - September 2022 - 16
Automotive Engineering - September 2022 - 17
Automotive Engineering - September 2022 - 18
Automotive Engineering - September 2022 - 19
Automotive Engineering - September 2022 - 20
Automotive Engineering - September 2022 - 21
Automotive Engineering - September 2022 - 22
Automotive Engineering - September 2022 - 23
Automotive Engineering - September 2022 - 24
Automotive Engineering - September 2022 - 25
Automotive Engineering - September 2022 - 26
Automotive Engineering - September 2022 - 27
Automotive Engineering - September 2022 - 28
Automotive Engineering - September 2022 - 29
Automotive Engineering - September 2022 - 30
Automotive Engineering - September 2022 - 31
Automotive Engineering - September 2022 - 32
Automotive Engineering - September 2022 - 33
Automotive Engineering - September 2022 - 34
Automotive Engineering - September 2022 - CVR3
Automotive Engineering - September 2022 - CVR4
https://www.nxtbook.com/smg/sae/24AE12
https://www.nxtbook.com/smg/sae/24AE10B
https://www.nxtbook.com/smg/sae/24AE10
https://www.nxtbook.com/smg/sae/24AE09B
https://www.nxtbook.com/smg/sae/24AE09
https://www.nxtbook.com/smg/sae/24AE08
https://www.nxtbook.com/smg/sae/24AE06
https://www.nxtbook.com/smg/sae/24AE05
https://www.nxtbook.com/smg/sae/24AE04
https://www.nxtbook.com/smg/sae/24AE03
https://www.nxtbook.com/smg/sae/24AE02
https://www.nxtbook.com/smg/sae/23AE12
https://www.nxtbook.com/smg/sae/23AAVE11
https://www.nxtbook.com/smg/sae/23AE10
https://www.nxtbook.com/smg/sae/23AE09
https://www.nxtbook.com/smg/sae/23AE08
https://www.nxtbook.com/smg/sae/23AAVE07
https://www.nxtbook.com/smg/sae/23AE06
https://www.nxtbook.com/smg/sae/23AE05
https://www.nxtbook.com/smg/sae/23AAVE04
https://www.nxtbook.com/smg/sae/23AE04
https://www.nxtbook.com/smg/sae/23AE03
https://www.nxtbook.com/smg/sae/23AE02
https://www.nxtbook.com/smg/sae/23AAVE01
https://www.nxtbook.com/smg/sae/22AE12
https://www.nxtbook.com/smg/sae/22AVE11
https://www.nxtbook.com/smg/sae/22AE10
https://www.nxtbook.com/smg/sae/22AE09
https://www.nxtbook.com/smg/sae/22AE08
https://www.nxtbook.com/smg/sae/22AVE07
https://www.nxtbook.com/smg/sae/22AE06
https://www.nxtbook.com/smg/sae/22AE05
https://www.nxtbook.com/smg/sae/22AVE04
https://www.nxtbook.com/smg/sae/22AE04
https://www.nxtbook.com/smg/sae/22AE03
https://www.nxtbook.com/smg/sae/22AE02
https://www.nxtbook.com/smg/sae/22AVE01
https://www.nxtbook.com/smg/sae/21AE12
https://www.nxtbook.com/smg/sae/21AVE11
https://www.nxtbook.com/smg/sae/21AE10
https://www.nxtbook.com/smg/sae/21AVE09
https://www.nxtbook.com/smg/sae/21AE09
https://www.nxtbook.com/smg/sae/21AE08
https://www.nxtbook.com/smg/sae/21AVE07
https://www.nxtbook.com/smg/sae/21AE06
https://www.nxtbook.com/smg/sae/21AE05
https://www.nxtbook.com/smg/sae/21AVE05
https://www.nxtbook.com/smg/sae/21AE04
https://www.nxtbook.com/smg/sae/21AE03
https://www.nxtbook.com/smg/sae/21AVE03
https://www.nxtbook.com/smg/sae/21AE02
https://www.nxtbookmedia.com