Electric Vehicle Mandates May Doom Engine Suppliers

Politicians are demanding that the world ditch combustion engines, and it comes with plenty of collateral damage. According to ReutersUntil electric vehicles really take off, auto parts makers face a perilous few years in which they must invest heavily in new machinery while battling declining sales of current cars due to supply chain entanglements. .

Before a major shift in favor of electric vehicles, diesel was expected to be the green fuel of the future. As a result, suppliers invested millions in new machinery to make parts for new diesel models. As recently as 2015, diesel accounted for almost 52% of car sales in the EU. But after Volkswagen’s “Dieselgate” emissions fraud scandal, diesel fell to 19.6% of EU sales in 2021 and has continued to fall further this year. Volkswagen was then ordered to pay billions in fines, while greatly aiding the electric vehicle charging infrastructure program known as “Electrify America.”

With government forces behind the growth of electric vehicles, we can see the after effects happening in real time.

The GM LT6 camshaft and valvetrain layout for the 2023 Corvette Z06. Image via General Motors.

Engine Parts Suppliers: Adapt to Survive

While major engine parts suppliers like Vitesco Technologies Group AG and Schaeffler are already investing in the transition to electric, smaller players like Evtec, formerly Liberty Aluminum, must adapt or die. Some major automakers have warned of substantial job losses, as EV engines have only a third of the parts of a combustion engine and require less labor. Fewer parts also means fewer suppliers. As a result, providers must transform into an electric vehicle-centric business or diversify into other industries. Or go out of business.

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Decline in sales of combustion engine cars has already cost jobs, with Stellantis switching its plant in Tremery, France, the world’s largest diesel engine plant, to EV engines. That change reduced Tremory from 3,000 employees in 2019 to 2,400 people. Many of which will not be replaced when they retire. German supplier Bosch is converting its plant in Rodez, France, from diesel injectors to new products, including hydrogen fuel cells, which will eliminate 750 of 1,250 jobs.

Smaller suppliers are already struggling with rising energy and raw material costs as legislators dictate market demand, as well as the need to invest in “greener” products needed to comply with CAFE regulations. and MAFE, and similar policies outside the US, that automakers have. to meet. As such, according to the report, companies that have to budget for new equipment to make electric vehicle parts are stretched thin. Suppliers that make key components could be bailed out, but automakers can’t afford multiple bailouts.

Ford is working to develop a prechamber ignition system for the F-150 and its line of EcoBoost engines, borrowing from F1.
3.5L EcoBoost V6 engine. Image via Ford.

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