The previous chapter in this series discussed the different stakeholders of the automotive ecosystem and the impact on stakeholders due to vehicle electrification. This chapter focuses on the vehicle system-level impact of vehicle electrification.
Automotive Vehicle Value Add Perspective
The automotive vehicle is the successful product of many partnerships with full value chain partners including raw material suppliers, component manufacturers, service providers, and obviously OEMs themselves who play the dominant role in integration and configuration building for the vehicle.
A report by Autocarpro says that component suppliers add more than half the value to an ICE vehicle by employing design, manufacturing, and in some cases innovation. Some systems like fuel injection system vehicle manufacturers are largely dependent upon the supplier partners. Raw material supplier adds value to the ICE vehicle in the range of 10-15% and the remaining value is added by OEM to complete the vehicle offered to the customers [Refer to Figure 1 (a)].
However, with vehicle electrification, the supplier value add is going to increase significantly. Battery and components/operating system suppliers will play a bigger role. OEMs and electrical system suppliers need to work together to get optimum performance of the vehicle. More than half of the value [cost] of the vehicle will be accumulated by energy storage devices as well as motors. Even though other components which are part of vehicle control and occupant comfort, as well as safety-related systems, will be required for the vehicle, I believe their value-add will reduce compared to the powertrain system. New raw materials, light-weighting, as well as electrical insulation/safety requirement perspective, raw material suppliers’ value-add, will increase [Refer to Figure 1(b)].
Deep Dive into Vehicle Systems and Impact due to EVs
The vehicle powertrain is a subsystem of the vehicle system that has a substantial role in vehicle propulsion. Other systems complement it to ensure occupant safety, comfort, and control of the vehicle. Hence, vehicle electrification and its impact on complete automotive vehicles need to be assessed for all the sub-systems. Though EV powertrain adoption impacts the ICE powertrain adversely, it also generates opportunities for other systems. In this section, let’s understand major vehicle systems and the impact on them due to vehicle electrification.
Negatively Impacted Sub-systems
The automotive powertrain is transforming into an electric powertrain and, naturally, the first impacted vehicle subsystem is the engine, transmission, and related systems. It is important to mention here that vehicle electrification and its impact are compared with the battery electric vehicle and not with other electrified vehicles such as hybrid vehicles. In the case of hybrid vehicles, engine and transmission do not have as much negative impact.
In Battery electric vehicles, engines and related systems are replaced directly with e-Motor and MCUs. Transmission in EVs is simpler and it is fixed stage transmission. The gear shift system is replaced with the electric or simple direction control system. The fuel system is replaced with a wiring harness carrying the electric charge from the battery to the e-Motor (s). Engine cooling system which contains radiators, fans, pump, and complex piping is not present or present in the simpler form of a battery cooling system.
As the propulsion system gets simpler and there is a reduced number of relatively rotating parts, it has lesser requirements for lubrication / anti-wear products. As the powertrain becomes simpler, the need for maintenance reduces significantly.
It is important to note here that vehicle electrification simplifies the mechanical system, however, it has complex electronics and control systems. Electric vehicles have more sensors, electronic hardware as well as software codes to manage these complex systems in order to achieve the optimum performance of the vehicle. From a vehicle service, maintenance, and human resource perspective, electrification has a negative impact on the automotive ecosystem in short term, and it demands reskilling or new skilling to human resources in the ecosystem.
No / Minimum Impacted Sub-systems
As mentioned in the previous section, besides the powertrain vehicle needs other systems to have reliable, safe, and comfortable operation.
Vehicles aggregates like Axles, Chassis – Brakes, Frame, suspension, Steering systems, Air Conditioners, Seats, Infotainment, Safety including lights, and Tires are likely to have minimal or no impact. However, these systems will need customization as well as a redesign to accommodate new powertrain requirements. Chassis frames will be significantly different in the case of EVs compared to conventional vehicles. In the case of EVs, batteries will have higher mass and the chassis frame need to carry that mass safely. The infotainment system will have more information besides basic information about the vehicle including battery state, temperature, etc. Tires will be customized for the electric vehicles which will have more efficient running.
All the eco-system built around these systems will have a minimal impact due to EVs. The ecosystem including car repair services, customization, car care products, etc. will continue with the same or minor upgraded products.
A few important points need to mention here, when it is mentioned that the above aggregates or subsystems will have the minimal impact, it means these subsystems will be present in the vehicle in one or another form. Requirements for the aggregates may be different and they may be present in the vehicle in a different form (geometry) for doing the intended function.
Electrical vehicles will have the axle to transfer the torque from motor to wheel in case of conventional vehicle layout. However, axles for EVs and axles for the ICE will have significant differences in terms of their weight, geometry, and components arrangements. In the case of the “in-wheel motor” arrangement, each wheel will have a separate motor to drive, and hence the role of the axle will be either integrated into the chassis or it will play the role of support and not torque transfer.
The minimum impact mentioned here is from the point of view overall ecosystem, however, the mentioned aggregates will experience significant customization to adapt to electric vehicles.
In addition to automotive aggregates and systems, other complementing important stakeholders of the automotive ecosystem are facilitating systems like insurance, vehicle financing, car customization or care system. ICE automotive ecosystem is well established for vehicle financing, insurance, and other facilitating products, however, even though EV ecosystem need is similar in nature, however, the experience and risk are unknown to these stakeholders. Insurance for EVs is a significant concern and considering uncertainties and associated risk, it is expensive as well as very few insurance companies provide insurance for EVs. Similarly, the availability of EV finance options is limited. Even though these are short-term impacts and in long term, they may complement as well as nullify the overall impact.
Any technology transformation is a challenge to part of the ecosystem as well as it generates opportunities within the ecosystem. EV transformation is also generating huge opportunities within the ecosystem.
Electric motor development, optimization from a performance as well as cost perspective, and customization based on vehicle requirements are opportunities for automotive system ecosystem players. Refer to Figure 3, which summarizes powertrain areas mainly related to the electrical power management system. Motor, electronic motor controller, battery management system, converters, battery – packs as well as battery cell chemistry, associated electronics including IC, and most importantly charging system are some of the newer opportunities which are evolving due to vehicle electrification.
ICE vehicles also were equipped with electronic and software systems, however, the extent of the same will magnify with vehicle electrification. In the new automotive world, services around these systems are required to be built. Vehicle repair and the nature of vehicle issues will significantly change and will call for reskilling or highly skilled resources in the system.
Similarly, the nature of aftermarket requirements will change with EVs. Wires, connectors, battery maintenance, and recycling will have more emphasis compared to conventional components. Battery charging will have significant retailing business opportunities which will cannibalize business from fuel stations.
In summary, EV transformation will have a negative impact on powertrain systems like engines and associated systems, as the transmission will be simpler compared to ICE vehicles. Few aggregates will have minimal impact or changes are related to the adoption of the electric powertrain. However, the EV transformation will generate huge opportunities in the areas of electronics, batteries, and battery charging. The new world of automotive ecosystem and partners will emerge considering the new technologies and complex systems interactions.
In the next chapter, let us reimagine the automobile ecosystem with vehicle electrification.
About the Author :
Dr. Maruti Khaire is currently working as Head – EV and Special Projects at SKF India Ltd. He possesses diverse experience in the field of R&D, technology roadmap, and new products development in addition to business areas. Dr Khaire also co-authored the recently published book “Advanced Applications of Hydrogen and Engineering Systems in the Automotive Industry”.
Previous Chapters :
- Transition to Electric Vehicles | Impact on the automotive ecosystem – Chapter 1
- Automotive Industry Stakeholders and Impact due to EV Transformation – Chapter 2
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