Summary
Anxiety is high for suppliers transitioning to electric vehicles in America.
ICE vehicles have more parts compared to EVs.
SEMA is advocating for multiple technologies to be considered, not just EVs.
MEMA supports EPA regulations but also encourages other technologies.
The Biden administration announced $100 million in funding to help automotive suppliers transition to EVs.
Article
Suppliers of parts and equipment for internal combustion engine (ICE) vehicles in America are anxious about the transition to electric vehicles (EVs). EVs have significantly fewer parts than ICE vehicles, leading to concerns about the future of the industry that has long relied on supplying parts for gasoline-powered cars and trucks.
The Specialty Equipment Market Association (SEMA), which represents mostly small suppliers, estimates that about a third of its products are “ICE dependent.” With EPA regulations aiming to cut vehicle emissions in half by 2032, SEMA is advocating for a broader range of technologies, including hybrids, clean diesel, and hydrogen vehicles, rather than solely focusing on EVs. The organization is urging Congress to roll back the regulations and not force a quick shift to EVs.
The potential impact of the transition to cleaner vehicles on suppliers is a concern for the entire auto industry. With EVs accounting for only about 10% of new vehicles sold in the U.S. each year, there is still time to help suppliers make the transition. The Biden administration has announced a $100 million fund to assist automotive suppliers in preparing for the future, including grants to help them convert to the EV supply chain.
Industry experts emphasize the importance of a holistic policy that supports the entire supply chain in the U.S. The transition to EVs presents opportunities for suppliers to innovate and adapt, such as remanufacturing batteries and developing components for electric vehicles. Those who prepare for the transition stand to benefit the most, as the automotive industry undergoes significant changes driven by advancements in technology and consumer demand.
As companies shift towards mobility services and technologies like connected vehicles and self-driving cars, the design and function of vehicles are evolving rapidly. Suppliers need to plan for these changes and align their business goals with the latest developments in the industry. Those that fail to adapt to the transition may struggle to keep up with the changing landscape of the automotive sector.
Overall, the transition to electric vehicles presents challenges and opportunities for suppliers of parts and equipment for the automotive industry. While concerns exist about the impact on businesses that have long supported ICE vehicles, there is also potential for innovation and growth as the industry shifts towards cleaner and more advanced technologies. With support from government initiatives and a proactive approach to adapting to change, suppliers can navigate the transition successfully and thrive in the evolving automotive market.
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