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22 May 2012 | Adam Leach
Pressure to cut fuel emissions and government incentives are driving hybrid and electric vehicle manufacturers to look at changing the way they work with suppliers and bring elements of manufacturing back in-house.
According to Strategic Analysis of Electric Motor Technologies for Electric and Hybrid Vehicles in Europe, published yesterday by Frost & Sullivan, the market for hybrid electric vehicles (HEVs) and electric vehicles (EVs) will grow at a rate of 50 per cent a year. It said that emissions targets (European manufacturers are required to reduce carbon emissions from this year) and government support for low-emission technology will drive greater adoption from manufacturers, resulting in a $1.6 billion (£1.01 billion) market in 2017.
As involvement in HEV and EV engines increases across the sector, a significant number of manufacturers will take a more hands-on approach to designing and assembling engines, said the report, resulting in supplier relations becoming more about buying commodities. It found that 30-40 per cent of vehicle manufacturers that currently outsource motors are planning on bringing it in house.
Anjan Hemanth Kumar, team leader at Frost & Sullivan, said: “While some [manufacturers] are working with more than one supplier on the development of electric motors, others are choosing to develop them in-house. Reliability, strong R&D, a smooth supply chain and tight quality control, coupled with state-of-the-art manufacturing procedures and facilities, are some of the key sourcing criteria for [manufacturers].”
The report said that in the short term, car manufacturers would most likely continue to work with specialist contractors. It predicted that the process would evolve to working closely with Tier-1 suppliers in the medium term. Long term, it predicts that the design and intelligence aspects of manufacturing will be conducted in-house, with suppliers responsible for sourcing components.