DETROIT – It’s a new age of collaboration for the auto industry.
Automakers need high-level technology as they develop vehicles akin to computers on wheels, a growing number of them propelled by electrical battery packs.
Such technical advancements require outsourcing that’s different than traditional automaker-supplier relations.
The adage is that it takes a village to raise a child. But it seemingly takes a global effort to meet modern automotive goals and government emission mandates.
So say industry players at a recent Reuters auto conference here.
“It’s all hands on deck,” says Mary Wroten, Ford’s director of global sustainability and ESG (environmental, social and governance).
She likens the emerging battery-electric vehicle age as “like shifting from horse to cars.”
But by collaborating “we can solve problems,” Wroten adds.
That calls for a new level of teamwork among automakers themselves and their suppliers, some of them start-ups that proudly call themselves disrupters. The trick is for auto companies, whose culture is more buttoned-down, to work with that group.
“Technology disruption is right at the heart of this business,” says conference participant Nakul Duggal, senior vice president and general manager at Qualcomm Technologies. The company provides the industry with advanced driver assistance systems and connectivity platforms.
“It’s hard for every automaker to do it on their own,” he says.
Today’s automotive collaboration is “a complex team sport,” Duggal says. “You’re looking out 10 years on one hand while on the other you are making decisions every day.”
As a principal analyst for Wards Intelligence, Steve Bell tracks the changing dynamics among automakers and suppliers.
“A new ecosystem is evolving” as the industry moves from internal-combustion vehicles to ones powered by batteries, he says. “There are many new and different players.” For advanced battery technology, “partnerships will be the key to keeping the pace,” he says.
And the tempo is quickening.
“Product developers say, ‘I can’t wait three years for automaker approval; I could be dead by then,’” Bell says, describing the urgency of some new players.
Partnerships and alliances are changing from the conventional customer-client relationships among automakers and suppliers.
“There’s more give-and-take on both sides,” Bell says. “It has to be managed.”
That includes automakers honing their skills to deal with a new supply chain, particularly regarding EV batteries.
“The battery supply chain presents challenges,” says Reinhard Fischer, Volkswagen Group of America’s senior vice president and head of strategy. “It’s a logistical puzzle.”
Icy international relations can kick in to make it even more complicated.
For example, Bell points to Ford delaying construction on a planned $3.5 billion EV battery plant in Michigan, in part because some Republican politicians have criticized the automaker’s plan to use Chinese battery technology.
The U.S. government recently issued guidance detailing new battery sourcing restrictions that take effect Jan. 1 and aim at weaning the U.S. EV supply chain away from China.
Because of an early start of about a decade, China is ahead of the U.S. in battery technology.
“Geopolitical relations can play a critical role,” Bell says, referring to their effect on the auto industry, which has never been without challenges.
As Duggal says, “If you can learn to survive in the auto business, everything else is pretty straightforward.”
