How EVs Are Shaking The Car Parts Supplier Industry

Companies that make parts for internal combustion engines are facing a harsh future. Revenues for ICE cars, and fuel and exhaust systems are all expected to decline 44% through 2027. Meanwhile, for electric drivetrains and batteries or fuel cells, revenues are expected to rise 245%, according to a 2023 Deloitte Automotive Supplier Study. While the parts themselves are changing, the pie is also shrinking. An internal combustion powertrain has about 2,000 parts. EV powertrains have about 20, sometimes less. Automakers are also finding ways to more efficiently manufacture parts through methods like giga casting, pioneered by Tesla. There are thousands of parts in cars that come from companies all over the world, a whole branching supply chain of firms each dependent on the success of the others. Many of those companies are small, family owned firms, but even the large, publicly traded suppliers such as Bosch, Denso, Magna and ZF could be in trouble. The question is, will EVs kill the thousands of auto suppliers or can they find ways to pivot, consolidate or somehow stay in business?

Chapters:
00:00 — Introduction
01:52 — The shift to EVs
05:55 — Lower demand
10:19 — Volatile times
11:42 — Industry pivots

Produced by: Robert Ferris
Editor: Darren Geeter
Senior Managing Producer: Tala Hadavi
Graphics: Jason Reginato, Andrea Schmitz
Camera and Production Support: Andrew Evers

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How EVs Are Shaking The Car Parts Supplier Industry

[kiaranr]

I'm not even a big fan of electric cars. But the fact that they have FAR fewer parts is perhaps their biggest advantage. We should be engineering for simplicity and robustness. Values that the auto industry chucked out the window decades ago.

[KTPurdy]

The end of the video does a really good job demonstrating how difficult it is to get into new markets.

[Nunya]

We should never stop innovation for the sake of a few companies' survival. These companies need to innovate and adapt alongside the industry if they want to survive, as has always been the case throughout humanity.

[samuxan]

The difference between a threat and an opportunity is how fast the company can adapt to change. Small companies have the advantage here if they lose the fear of changing and embrace this technology.

[ronch]

I'm reminded of the quartz crisis that turned the Swiss watch industry upsidedown. Many car makers and suppliers will bite the dust, no doubt.

[souravjaiswal-jrbj]

What happened to whalers, horse buggy, film roll camera and feature phone manufacturers?

[sgardi]

I purchased a chevy volt years ago and traded it when the warranty ran out. A replacement battery is 25K as they stopped making them. Thats insane!

[MicahBratt]

I love the idea of a simple magnet which cleans up the roads. Simple and effective!

[syproful]

And really, Storch has nor to fear. Active magnet systems are a niche combining electrical and mechanical fabrication. I wish them luck, they will do good.

[dlewis]

A business does not necessarily have to be passed down to the next generation. Most people work for about 30 or 40 years. So the owner can retire, sell the business or wind it down, and give support to their kids to train for the jobs of the present.

[keaganscott]

Very interesting.... I'm a commercial automotive fabricator and I'm actually excited to see where EV takes the industry.... at my company I make all the xxx replacement parts for trucks. But if the industry starts to shift you need to shift with it and invest in the necessary equipment to meet the product's and demand. Like I understand that EV is the future but we will always have diesel trucks.... just because the drive train is electric, doesn't mean the bumper brackets change...

[teardowndan]

An EV power train has 1000+ parts too: the battery pack has 100-250 cells, each cell needs a BMS wire, then you have all of the cooling, structural, safety and other stuff on top. The fixed reduction gearbox and differential between the electric motor and half-shafts is easily 20+ parts in itself. The motor inverter is hundreds of parts too between the power FETs, their drivers, support components, mounting hardware, etc. You are only trading mechanical complexity for electrical complexity. Total non-trivial parts (not breaking down bearings to individual balls or PCBs down to SMD resistors and capacitors) count are likely similar.

[YoushaAhmad]

I like how this company is exploring new opportunities. A business that doesn't adapt or innovate is a business that is in decline.
Also, like the ideas of the magnet sweepers, good for the environment for the waterways and good for car tyres. I would like to see both being used where I live.

[darelljohnson]

I certainly don’t advocate for insensitivity towards one’s making a living, but a part of this conversation is how this industry negatively impacts the vehicle consumer who pays the equivalent of the cost of the vehicle in repairs due to the complex engine design and the economy of faulty parts that need to be constantly replaced. I don’t think an industry, for the sake of commerce, should exist at the expense of a the consumer. There are definitely problems created so that they can be temporarily resolved at the motorists expense. So I’m just saying there’s more than just a loss of jobs at play. Some people spend half the incomes the length of their lives on shelter and transportation alone.

[RS-uhrz]

In Storch, you picked a very interesting small business to concentrate on, with an insightful and well-spoken executive -

[far]

There is still tons of opportunities. The final drives still can be tweaked, you can add 2 or 3 speed transmissions to improve the top end speed, limited slip transfers to improve handling, etc. If you are a hot rodder you won't get as greasy or have hundreds of parts lying around your work shop.

[nickyg]

My aunt just bought and EV and it's amazing. No gas, no oil change, none of the standard maintenance in a gas car. Battery is good for 100, 000 miles. My next car I hope is an EV

[dxd]

Here in Brazil one huge sell point for any car is if the parts are fabricated locally, no one here in Brazil wants to buy a car from a company that dont have a local manufacturing and parts supply due to the dolar being more expansive with time, import a specific part can be VERY expansive.
In other hand because the cost of production in Brazil being much lower, specially with workforce and electricity, the parts fabricated here are much more affordable with the same quality levels as US and Europe.

[theotheleo]

That rolling magnet won't pick up nonferrous debris that are both hazardous to tires and drivers. So the road crew would have to have another road sweeping truck follow the magnet truck, which makes the magnet roller superfluous.

[marknc]

Look back near the turn of the Nineteenth Century. Horses, wagons, and carriages were the norm. In those days, when someone would have car trouble, a common response was, "Get a horse."