Enabling the Electric-Vehicle Transition on a Global Scale

The seismic shift toward electric vehicles has created waves of change not only for the vehicles themselves, but also for the entire automotive value chain, including energy sources, raw material production, manufacturing and more.

As OEMs pave the way for an electrified future, many public and private players throughout the value chain are scrambling to figure out where they fit into this new paradigm and how they can effectively support this transformation. At the William Davidson Institute (WDI) at the University of Michigan, we have partnered with the state of Chihuahua in Mexico to conduct timely research into the EV landscape. As a state with deep automotive industry expertise and an important manufacturing player in Mexico, Chihuahua is working to strengthen its competitiveness and position in the value chain as the industry transitions to producing EVs.

The results of our research, however, can be used by a wide range of public and private entities, stakeholders and organizations to adapt to and enable the EV shift.

Implications and Opportunities

For its entire 120-year history, the automotive industry has been constructed around the internal-combustion engine (ICE). Replacing an ICE with a battery carries with it far-reaching implications for automakers and suppliers in the very near future.

Interconnected trends including improving battery technology, incorporating sustainable business practices, selecting lighter materials for manufacturing and developing reliable software, all bring challenges that need to be solved.

Broader trends, such as digitization and consumer attitudes, are also affecting the way EVs are sold, and environmental concerns are central to ongoing debates about how they will be handled at the end of their life.

These challenges create ample opportunity for businesses to develop innovative products, services, and solutions – and secure their place in the value chain.

 Key Players and Roles

To gain a global picture of the transition, our research examined six markets based on their focus on e-mobility policies and their existing automotive manufacturing capacity: the states of Michigan and California, and the countries of Brazil, China, India and South Africa.

The research and analysis revealed key opportunities, players and enabling strategies that are important to anyone in the e-mobility ecosystem in any market.

Every business ecosystem is composed of different actors from multiple industries that are needed to create and sustain mutual value. In our research, we identified the following key players and their roles in enabling a successful transition:

To build a successful ecosystem, the interactions between these players must be based on trust, seek to ensure alignment of priorities and goals to properly allocate resources, and keep in mind the needs of end users, such as local communities.

Enabling Strategies

Certain conditions need to be in place to support the shift to EV production. As WDI examined the various areas impacting this transition, we identified three enablers that accelerate a successful shift:

Diana Paez U-M WDI

For more, read WDI’s full report “Mapping the e-Mobility Transition: Opportunities and Enablers” (https://wdi.umich.edu/programs-projects/chihuahua-e-mobility/) 

Diana Páez (pictured, above left) is senior director of Energy & Mobility at the William Davidson Institute. Her role involves helping energy and mobility businesses and stakeholders in low- and middle-income countries take advantage of business opportunities and adapt to changes brought about by the energy transition.