Navigating the Road Ahead: Challenges for Traditional Automakers Partnering with Non-Automotive Suppliers in the Electric Vehicle Era

In the dynamic landscape of electric vehicles (EVs), traditional automotive original equipment manufacturers (OEMs) are facing a profound shift. As they transition into the electrified future, collaborating with non-automotive suppliers has become a key strategy. While this approach presents significant opportunities, it also brings forth a host of challenges, including experience, expectation, and end-product delivery to name a few. As the EV business cycle evolves, consumers facing inflationary pressures are moving away from high MSRP EV products. We can discuss why OEMs chose to make high-end EV products in a separate article, but the reality is clear that in 2023/24 affordable EVs are the only way out of the current quagmire. This is why insertion of newer technologies through non-traditionally automotive suppliers is becoming urgent. However, to achieve this end some inherent issues must be resolved which pertain to how new non-automotive suppliers interact with traditional OEMs. Among these factors, we will discuss a few top issues that I have observed from experience.

Experience Gap

Traditional OEMs and non-automotive suppliers frequently operate in distinct industries, each with its own practices, standards, and norms. While the automotive sector emphasizes durability, safety, and compliance with rigorous regulations, non-automotive industries often prioritize innovation, speed, and flexibility. However, this disparity in priorities can lead to significant challenges. Without high-fidelity requirements and test procedures, there's a risk of encountering challenges that could lead to suboptimal designs, resulting in wasted investments and delayed deliveries. To bridge this experience gap effectively, consider shifting the collaboration approach. Rather than solely relying on one perspective, integrate teams from both sides to manage the project. This proactive approach helps mitigate misunderstandings stemming from differing levels of experience and ensures a balanced approach that incorporates insights from both traditional OEMs and non-automotive suppliers.

Expectation Misalignment

Traditional OEMs have well-established processes and quality standards honed over decades of automotive manufacturing. On the other hand, non-automotive suppliers may lack familiarity with automotive-specific requirements and the complexities of the automotive supply chain. Non-automotive suppiers have to go through a steep learning curve in.a short time. Some of this learning is very subjective based on experience and interpretation. This mismatch in expectations regarding timelines, quality assurance, and regulatory compliance can strain partnerships and hinder project progress. It is important to create finely detailed expectations from the beginning of such a project to avoid these issues. Establishing RASIC charts with frequent communication on deliverables is essential to make this approach work.

Communication Challenges

Effective communication is essential for successful collaboration, yet differing communication styles and terminology between traditional OEMs and non-automotive suppliers can create barriers. There is no shortage of industry specific terms that could cause communication challenges. Miscommunications, misunderstandings, and lack of clarity regarding project requirements, milestones, and deliverables can impede progress and strain relationships.

Navigating these challenges requires proactive measures and a collaborative mindset from both traditional OEMs and non-automotive suppliers. Clear communication, alignment of expectations, and a shared vision for project success are essential. By fostering an environment of mutual understanding, respect, and cooperation, both parties can overcome these hurdles and harness the full potential of their partnership in driving innovation and advancing the electrification of the automotive industry.

In conclusion, while the collaboration between traditional automotive OEMs and non-automotive suppliers poses significant challenges, it also presents tremendous opportunities for innovation and growth. By addressing the experience, expectation, and end result mismatches head-on and fostering a culture of collaboration and mutual support, these companies can unlock new possibilities and drive positive change in the electrified automotive landscape.

For further insights on how to conquer the divide between traditional OEMs and non-automotive suppliers including startups, we invite you to connect with Smartware Advisors. Unleash the full potential of your hardware project with our specialized expertise. We excel in tackling the complex challenges of hardware development head-on, ensuring you avoid costly escalations and launch delays.