What steps can OEMs and suppliers take to ensure the resilience of their future supply chains?
In the rapidly evolving Electric Vehicle (EV) industry, OEMs and suppliers are facing a labyrinth of challenges as they strive to build a resilient future supply chain. A potential global shortage of critical minerals looms large, with a lack of mining and processing capacity threatening to disrupt the balance through to 2030. Announced supply in key regions such as the US, FTA countries, and Europe falls short of the burgeoning demand, potentially igniting fierce competition for resources.
Apart from that, there are more layers of complexity to this already intricate puzzle: Insufficient supply of essential materials like electrolyte salts and battery components High geographic and supplier concentration Social impacts of battery production Growing capacity Adhering to global regulations and standards The list goes on. In this context, OEMs and suppliers must navigate these multifaceted challenges with a blend of strategic foresight and innovative solutions. But how?
Diversifying investments becomes crucial, starting with “no regret” moves beneficial in nearly all scenarios, and progressing to calculated medium-sized bets and big bets that require strong convictions despite uncertainties. Dynamic planning is essential in this volatile environment, requiring a shift from static five-year plans to agile strategies that can adapt to changing signposts and market conditions. Building transparent, robust, and circular supply chains is another key strategy, demanding thorough due diligence on inputs to identify critical materials, their origins, risks, and potential failure points. Forging strategic partnerships and striking long-term agreements can help limit uncertainties and derisk large capital investments. Engaging with communities and governments is equally vital, particularly in understanding current EV policies and building mutually agreeable outcomes, especially in mining regions.
What initiatives should OEMs and suppliers prioritise to construct a resilient supply chain for future operations?