Transitioning to EVs Puts Extra Burden on Supply Chains
DETROIT—Legacy automakers have already committed more than $500 billion in EV investments to transform themselves. However, if not properly managed, the transition from traditional supply bases could cost an additional $70 billion.
According to AlixPartners, one big challenge involves battery raw material costs that are up to 125 percent higher than internal combustion engine (ICE) costs. Other bottlenecks include scarcity and price inflation of parts and commodities (including increased use of chips on EVs), and a lack of readiness for the EV era in the supply bases of both automakers and Tier One suppliers.