In a newly published paper, automotive strategy consultant Paul Eichenberg predicts that 75 percent of the world’s top 100 automotive suppliers will not survive the industry shift to electrification unless adaptation plans are made now.
The 25-year industry veteran expects the next decade to make or break current top suppliers, most of which he says are underestimating how quickly the shift to electrification is approaching. France and the U.K., for example, recently banned the use of fossil-fuel vehicles by 2040.
His report is called: “Electrification Disruption: How to not get Shocked, Jolted, and Fried by the Coming Shift in Automotive Power Sources.”
“The years between 2020 and 2030 will be the decade of electrification, and if suppliers don’t develop an e-mobility strategy and make investments now to operate in that decade, they risk becoming road kill on the global automotive highway,” says Eichenberg.
There are a number of reasons why several industry analysts are misidentifying the shift, says the former Magna Powertrain chief strategist, including “increasing regulations to reduce carbon dioxide emissions, ongoing battery technology and cost breakthroughs, and the diminishing opportunity to economically improve internal combustion engines.”
Eichenberg adds that not only are suppliers hurting themselves by refusing to adapt to a changing marketplace, they’re missing out on a huge chance to get ahead of the competition with industry-first technology.
“I’m afraid many auto supplier CEOs are so focused on operational optimization and this quarter’s earnings that they are not seeing the future, so they are missing the opportunity presented by this disruptive force that will sweep the auto industry,” he says.
Additionally, he goes on to say that electrification technology will affect all vehicles produced by 2030, therefore putting companies who only supply components for internal combustion-driven vehicles at the biggest risk.
Eichenberg’s full white paper can be downloaded here.