The Center for Automotive Research (CAR) Management Briefing Seminars returned in person in August 2021 after a two-year hiatus. This two-day event brought together thought leaders and decision-makers in the automotive and mobility industries to discuss important industry topics.
The conference is always a good barometer of where the industry is heading, and is helpful for understanding the high-level business opportunities for both Avery Dennison and tape converters. One of this year’s key topics was the current and future state of electric vehicles (EV) in the US and globally.
From my perspective, there were four main areas of focus during the seminar:
EV technology innovations
One of the main factors that will accelerate the adoption of EVs is technology. Specifically, manufacturers are working on tech that makes vehicles even safer and more reliable, and easier to own and use (think range, charging time, and vehicle comfort).
American Axle, a tier 1 supplier based in Detroit, is best known for making traditional truck axles. With an eye on the future, they’re now working on innovations that make vehicles smarter, lighter, safer, and more efficient. The company presented its plans for a next-generation electric drive unit that combines the inverter, motor, and transaxle in a single unit (these elements are separate in today’s EVs). The benefit, according to the company, is a more mass- and volumetric-efficient design that decreases power loss by 10%, adding additional range.
Meanwhile, Ohio-based Lordstown Motors discussed the durability testing run on their hub motor technology. Rather than having a central motor connected to the drive wheels by traditional axle shafts, the company’s “Endurance” EV truck will have electric hub motors in each wheel. Removing most of the traditional drivetrain lowers the vehicle’s weight and cost, and allows more room for larger batteries. Lordstown Motors says it’s on track to start delivery of the Endurance this fall.
The EV market landscape
Steve Patton of Ernst & Young, LLP shared some numbers from their Mobility Consumer Acceptance Survey that paint a picture of where the EV market is and where it’s headed.
Globally, 42% of consumers surveyed would consider buying an EV. In the US, 29% would consider it. Of those who would globally, 67% said they’d be willing to pay a premium.
Interestingly, 23% of current EV owners said they wouldn’t buy an EV again. Most of these respondents cited concerns about the lack of charging infrastructure and greater lifestyle comfort afforded by traditional ICE engine vehicles.
Patton and the panel of analysts also reflected on the recent OEM and government commitments to getting more EVs on the road. For instance, GM has committed to making its entire new vehicle lineup all EV by 2035. Volvo has announced the same goal with a 2030 target. The EU is moving toward a potential ban on new sales of internal combustion vehicles by 2030. Some US states are looking at similar bans in the 2030 - 2035 range.
Regulatory requirements
The change of administration and narrow party flip of the US Senate is affecting the outlook for EVs.
In early August (while the conference was happening), the president signed an executive order that sets a goal to have EVs be 50% of new car sales in the US by 2030. While the order is not legally binding, GM, Ford, and Stellantis NV (the parent company of Chrysler) issued a joint statement that they aspire for EVs to make up to 50% of US sales by 2030.
The president is also directing the EPA and the US Department of Transportation to change the rollbacks of Corporate Average Fuel Economy (CAFE) standards set into motion by the previous administration. These standards require OEMs to maintain specific miles per gallon ratings across their new car fleets. Few OEMs currently meet these new standards, so this change would put extra pressure on them to invest more heavily in EV and other efficiency technologies.
Congress has been considering the future of EVs as well. Its trillion-dollar infrastructure bill, which passed the Senate in August, includes $7.5 billion for EV charging stations, $73 billion for a more robust electric grid, and 7.5 billion for zero- and low-emission buses and ferries. That bill still needs to pass the House, however, and be signed into law by the president.
The evolution of the automotive industry
My final takeaway concerns the evolution of the automotive industry itself as the market shifts toward an EV future.
AlixPartners compared the “past state” of the industry to what it sees as the “future state.” We’re currently in a transition period.
In the past, OEMs were the center of focus. They identified and developed the needed technologies, worked with several tiers of suppliers, and handled vehicle assembly and sales through dealer networks.
The future state is less OEM centric, and instead and the OEM becomes one of four key players, which also include:
Traditional suppliers. They’re becoming stronger and adding more value to the chain.
Software companies. Their contributions are becoming increasingly sophisticated and central to the vehicle ownership experience.
Charging and fleet management providers. In addition to traditional fleet management and charging providers, this includes financing/insurance and vehicle maintenance. The traditional model of vehicle ownership (own-insure-maintain-sell/trade) is evolving, being replaced by new models such as ride-sharing and short-term rental.
EVs are here to stay … why that could be great for your business
These are exciting times for EVs, with change happening not only on the technological side but on the industry and regulatory sides. There’s a sense the marketplace is approaching its tipping point, and that EVs will be mainstream in a matter of a few years.
EVs present many opportunities for pressure-sensitive tapes. OEMs and suppliers are using tapes to solve thorny challenges related to lightweighting, heat management, noise/vibration/harshness, and more. Those OEMs and suppliers are also working with tape converters who have a desire to grow in this industry.
OEMs, suppliers, and converters, in turn, can rely on the Avery Dennison Performance Tapes EV Battery Portfolio. It’s a broad selection of pressure-sensitive tape products, many of which are compliant with OEM specs. They’re backed by our technical support and service programs, so customers can be confident they’ll have the tape they need when they need it.
About the author:
Michael VanHaerents is an automotive segment business development manager for Avery Dennison Performance Tapes. He leverages nearly 20 years of adhesive and sealant engineering and program management experience in the automotive industry to help build strategic relationships, create product specifications, and build new technology portfolios for new and existing adhesive and tape applications. Based in the Detroit area, he can be reached at michael.vanhaerents@averydennison.com, and welcomes your connection on LinkedIn.
