It's an understatement to say that EV manufacturers in the UK and Europe are in a tough situation. From my time at Jaguar – both here and in the US – I’ve learnt a trick or two about managing OEMs in tough times. Understanding the challenges and responding with clarity will prove pivotal to navigating through choppy waters.
Persistent issues
To support the UK automotive industry in its transition to zero emission vehicle (ZEV) status, the government officially reinstated the 2030 ban on new petrol and diesel cars and vans that was originally postponed by the previous Conservative government. However, self-charging hybrids and plug-in hybrid sales will continue until 2035.
During this period, carmakers must also ensure that their fleet CO₂ emissions do not exceed their 2021 baseline targets. In short, this policy aims to maintain momentum towards full electrification, while allowing time for the industry to adapt.
From a management perspective, pivoting commercial strategies to take advantage of slackening legislation will be an important task for OEMs.
In the wake of US tariffs, the UK government has brought in more flexibility in the way that EV targets are counted. Vehicle manufacturers are now able to exchange any van credits for two car credits. The option to use credits created from reduced fleet emissions (based on 2021 levels), has also been extended to 2029. Finally, manufacturer fines per unit over the required EV target have also been reduced, by a notable £3,000.
These changes have been broadly welcomed by the industry. However, there is still a gnawing desire from automotive leaders in the UK to see a far more compelling set of driver incentives to reignite EV sales.
Another challenge facing the industry is the perceived high upfront cost of electric vehicles. Research from consultancy EY confirms that 37 per cent of petrol or diesel car drivers cited the initial outlay of an EV as the biggest barrier to adoption. This, along with range anxiety and fears about the accessibility of charging infrastructure are the ‘big three’ issues facing the industry.
While there’s not a lot manufacturers can do about network availability, there are certainly improvements that can be made in the areas of showroom pricing and battery range/rapid charging. There are no magic bullets here – it’s all about incremental gains – however cost reduction strategies and enhanced battery chemistry can both play a key role.
Last man standing?
From my experience of managing manufacturers through various crises, I think success is all about developing clear strategies that are quickly implemented. The following areas should be considered to ensure maximum competitiveness.
1. Cost of production
It would be naïve to suggest that the focus on cost reduction and quality (notably through disciplines such as kaizen or TQC) are not already part of most manufacturers’ DNA, but finding the areas ripe for incremental improvement is one strategy worth exploring.
Reviewing the supply chain is one such area. We have recently worked with several manufacturers, helping them to dramatically improve the quality and, in some cases, capacity of their tier 1 and 2 suppliers. By undertaking audits focusing on quality and volumes, we have dramatically improved parts provision, even harnessing AI technology to achieve zero defects. On-time, volume parts supply is the ultimate goal here.
Battery weight and performance are other challenges that require constant attention. Operating concurrently with production, this ongoing R&D function is perhaps best fulfilled by outsourcing to a dedicated partner. The rise of ‘chemist consultancies’ is a relatively new animal in the automotive world, that can provide car makers with vital advantage in the area of battery power delivery and recharging, while reducing weight. Our established links with academic and research organisation such as the Manufacturing Technology Centre, Advanced Propulsion Centre and the Warwick Manufacturing Group put us in a strong position to bring improvements to battery production and management.
On the logistics front, there is also a lot of work to be done on an efficient and safe battery storage and replacement infrastructure in the UK.
2. Identifying and deploying talent
In uncertain times, the use of flexible talent can be a life saver – reducing overheads, while providing the option of flexing headcount when needed. Typically, during the ramp up phase of a new model launch the requirement for certain skills can increase significantly, while in periods of lower demand fewer designers, engineers or technicians would be needed.
To help manufacturers cope with these dramatic swings in skills demand, we are growing our G&P Talent division – which provides skilled people to manufacturers and OEMs on a short-term basis.
This ethos also carries through to dealer groups, who use our services to plug gaps in garages and repair centres. This improves customer satisfaction scores and brings new efficiencies to the aftermarket supply chain. Clearly, this strategy of developing strong links with partners that can provide ‘in demand’ skills is key for many OEMs.
In the final analysis, the industry is facing a unique set of challenges, the like of which most managers have never seen. We need to act pragmatically, enact quality and cost reduction strategies and keep communicating to allies and partners across the supply chain.
Geoff Cousins, chairman of quality management specialist G&P
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