EVs Production Slowdown: How Manufacturers Can Deal With Supply Chain Challenges

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The ongoing crises in the world have had a negative impact on the automotive business for many years now. A huge number of car manufacturers are striving to produce as many electric cars as possible that do not pollute the environment. However, according to many of the world’s top car manufacturing executives, things may not be as rosy in the near future as we would like them to be.

Car enthusiasts around the world are looking forward to the innovative new electric vehicles that many automakers have already announced. However, there is a risk that many of them will not go on sale so soon. The biggest hurdle for automakers remains the disruption to supply chains that began with the advent of the global pandemic.

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Growing demand for electric cars and concerns of automakers executives

The demand for eco-cars is only growing every year. However, automakers cannot meet the needs of car enthusiasts due to catastrophic disruptions in supply chains, severe shortages of materials, and more.

One of the most pressing problems is the lack of lithium, which is the basis for creating batteries for eco-friendly cars.

gray vehicle being fixed inside factory using robot machines

Tesla, Volkswagen, Renault, and Stellantis executives have already voiced their concerns that the immediate future of electric vehicle manufacturing does not look very optimistic right now.

The German automaker Volkswagen planned to produce 700,000 of these cars. However, more recently it became known that the company sold all the electric vehicles produced in the United States of America, as well as in Europe. This year, the production of electric vehicles is suspended. There are only hopes that it will resume in 2023.

The prices of raw materials, as well as their shortage, led Elon Musk to the idea of buying a mining company. The queues for the supply of valuable raw materials are huge. Many companies simply cannot wait their turn, which has a critical impact on the production of electric cars. Thus, the head of Tesla wants to minimize his company’s losses.

The cost of electric vehicles increases significantly. The Renault executive is concerned about the fact that their electric vehicles will cost the same as combustion engine vehicles.

man in blue crew neck t-shirt holding white printer paper

How to find a solution

For the most part, the main components for the production of batteries are mined in countries such as the People’s Republic of China, the Republic of South Africa, and the Democratic Republic of the Congo, as well as in Indonesia. After collecting all the materials, the production of batteries takes place in Asian countries. Since the main production is concentrated in almost one place, automakers have a hard time when any problems arise.

Thus, large companies should reconsider their existing strategies for the extraction of materials and the production of automotive components. For these reasons, the following strategies should be implemented:

  • Search for multiple suppliers located in different parts of the world to minimize the number of failures. If one supplier is unavailable for some reason, then supply disruptions can be avoided by contacting another supplier;
  • Availability of suppliers located near the place where the production of cars is located, which reduces possible logistical problems, as well as the impact of natural disasters;
  • Replacement of used materials with more sustainable ones. Many automakers have already started using iron and manganese instead of cobalt;
  • Use of materials from recycled batteries. This practice is used not only by automakers but also by other companies, among which Apple can be noted. The company is engaged in the recycling of old devices for the extraction of materials, which allows for minimizing costs, as well as reducing the impact on the environment;
  • Using cloud-based software solutions to manage material and product information. Automakers will be able to receive information from suppliers in real time so that in case of any difficulties to change plans or quickly find a way out of deplorable situations.

Conclusion

The number of obstacles in the production of electric vehicles is increasing every year. Shortages of raw materials, as well as rising prices for materials, lead to a change in the plans of large automakers. It is necessary to increase flexibility, that is, to introduce new innovative solutions, as well as implement new strategies to minimize the costs of supply chain problems.