How Manufacturers Can Keep Up With the Growing Demand for EVs
People are becoming more interested in owning electric vehicles (EVs). That reality is generally good news for the manufacturers who create them, but it also means those producers may struggle to meet demand. Here is how to make that outcome less likely.
Dedicate More Manufacturing Facilities Solely to EV Production
One strategy for dealing with the rising demand for electric vehicles is to create more manufacturing facilities that only make those products. That is a significant undertaking, but it could be one of the best long-term solutions for removing bottlenecks.
This option does not necessarily mean building a new facility, though. Canada’s first dedicated EV manufacturing facility opened in December 2022 and was formerly an automotive assembly plant owned by General Motors Canada. It takes significant forethought and effort to secure the resources for operating a plant that only handles EV production. However, it could help EV makers get ahead of competitors and tackle some of their delays.
Remain Open to Changes in Plans
Electric vehicles are part of a relatively new but fast-moving sector, meaning manufacturers may make plans they ultimately cannot keep. In December 2022, news broke that Toyota intended to discuss changes to a three-year EV framework with its suppliers soon. Earlier coverage of the matter pointed out how the automaker hoped to bring 30 EVs to the market by 2030.
However, various sources believed Toyota would tweak that strategy and perhaps overhaul it to better compete with brands like Tesla. Careful assessments may show manufacturers can become more resilient to the pressures of heightened demand by focusing on the production of current vehicles and reducing the planned number of marketplace entrants, for example.
Diversify the Supplier Network
Most successful manufacturers understand the value of expanding their supplier networks. Then, if one company does not have a vital part, people can get what they need elsewhere. It is also ideal to shop online when possible. Then, procurement specialists at EV manufacturers can place orders at the most convenient times, even if they are outside business hours. Some providers have more than a million components in their online inventories.
Having a supplier network encompassing several countries is also a good idea. If one area of the world has supply chain challenges due to anything from bad weather to pandemic lockdowns, a supplier located elsewhere may have less impact from those issues.
Know What Could Affect Backlogs
Manufacturers can also stay on top of production slowdowns by understanding their likely causes. A more generalized trend is many people are eager to own and drive electric vehicles because they will not contribute to carbon emissions. The manufacturing process is still a significant emissions contributor, but that is starting to change, too.
Electric vehicle enthusiasts have tracked backlog estimates for Tesla on social media and believe a $7,500 federal tax credit in the United States could cause sales to boost there. However, some models had no backlog in the country. When manufacturers stay familiar with what could make people wait longer to get the EV models they want, those companies can give accurate messaging and estimates.
Invest in New Technologies
Many automakers worldwide are continually pressing the boundaries of technology to develop new offerings. One of the significant concerns is how to create new products that are less dependent on precious resources that often slow down production and otherwise derail manufacturers’ plans.
Battery development is one area of ongoing attention. Automakers think the batteries will become critical differentiators as the EV market becomes more crowded. Investing in new technologies is also an excellent way to stay aware of trends in the market and adapt accordingly. If EV makers can harness technology to make some components out of easily sourced materials, they will be better able to keep up with demand.
Respond Promptly to New Developments
The tips above will help EV manufacturers make the necessary changes to increase their chances of keeping up with the demand for these products. However, in addition to these suggestions, affected parties must be ready to react as soon as feasibly possible when things change in the marketplace. Otherwise, they will be racing to catch up compared to more responsive competitors.
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