OEMs and Suppliers Navigate EV Transition: Trust, Transparency, and New Partnerships
The automotive industry is witnessing shifts in supplier relations, with Original Equipment Manufacturers (OEMs) and suppliers adapting to the electric vehicle (EV) transition. Recent developments and insights emphasize the importance of transparency, risk sharing, and revised contract terms.
Oliver Bronder of VW Group Logistics underscored the need for transparency in the supply chain. Meanwhile, Dave Andrea of Plante Moran suggested that sharing risk and cost is crucial to fostering trust between OEMs and suppliers.
The North American Automotive OEM Supplier Working Relations Index showed mixed results. While Honda, GM, Nissan, and Stellantis demonstrated improvement, Ford's scores declined for the second year, from 242 points in 2022 to 197 this year. Stellantis remained at the bottom with a score of 152.
Effective communication was identified as vital for enhancing relations. Toyota, GM, and Honda were advised to refine their communication strategies.
BMW's Programme Commission strategy aims to promote better collaboration by uniting production, finance, sales, purchasing, and supply chain teams. Carmakers are encouraged to revise outdated contract terms and purchasing practices to align with the new realities of the EV transition.
In positive developments, Valens Semiconductor has made progress in supplier relationships, notably through its partnership with Samsung to develop MIPI A-PHY products for automotive connectivity. Dragonfly Energy, too, has expanded its OEM collaboration with Ember RVs, marking a significant commercial success in the premium off-grid segment.
As the automotive industry navigates the EV transition, OEMs and suppliers are discovering new ways to collaborate and build trust. While challenges persist, such as those faced by Ford and some Japanese automakers, the industry is moving towards more transparent, risk-sharing relationships. Recent triumphs, like those of Valens Semiconductor and Dragonfly Energy, offer optimism for a stronger, more profitable future.
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