Impact Of Electric Vehicles On The Automotive Ecosystem

In the latest Automotive Software survey in 2021, a question has been asked from the people: “Which has the biggest impact on the Automotive Ecosystem?”. They were asked to rank the four choices which are as follows:

  1. Automakers
  2. Dealers
  3. Suppliers
  4. End customers

In an initial analysis of the responses to this survey, it is clear that the car owners were regarded as the least influential, receiving far fewer first and second choices.

Now, let’s discussed the impact of electric vehicles on the autonomous ecosystem in more detail:

Automakers

  • As soon as the automobile manufacturers realized that electric vehicles are disrupting the industry, they started investing heavily in electric vehicle divisions.
  • Teams will fight for their share of R&D budgets and existing powertrain heavyweights will refuse to shift to electric divisions gracefully, causing significant internal changes.
  • In order to improve the supply chain, it is necessary to establish many new partnerships.
  • In the future, the automobile will be a true computer on wheels as new technologies are developed.

Dealers

  • The Dealer should have learned the basic knowledge to sell both electric and conventional vehicles.
  • It is essential that dealerships equip their personnel with a variety of skill sets in order to sell electric vehicles.
  • As electric vehicles enter the market, the automotive business model is expected to undergo a transformation. In fact, it is expected that the profit from car repair services in UAE would be less profitable as it requires less maintenance.

Suppliers

  • When automobile manufacturers switch to electric powertrains, suppliers will be adversely affected. It is only possible for some suppliers to survive and succeed when they take appropriate initiatives, such as Bosch which has a separate division devoted to batteries.

End Customers

  • Electric vehicles will be favored by incentives and subsidies
  • By combining rapid growth in charging stations along with supercharging facilities, electric vehicles will be easier to adopt by consumers.

Whole Journey Ahead – Impact on Automobile Ecosystem

In the future, the electric car will be used everywhere in the world, and sooner it will become a reality than expected. The next 5 to 10 years will be amazing and exciting for motorists as AI vehicles will be driven around the whole world.

Further, automobile manufacturers will spend billions of dollars on this new changing technology to stay up to date. This will also be an interesting phase for conventional car manufacturers as they deal with an investment decision.

Even though it is not currently a profitable business for automobile manufacturers to have electric car divisions, the electric car tide will force them to explore it. Most of the current technologies will have to be discarded by conventional automobile manufacturers.

It will result in a complete disruption of industry economics since virtually all reusability between existing and new models will disappear. A division within a car company that holds a great deal of influence will lose its power. It is unlikely that they will transfer energy and money to the electric divisions.

Moreover, there will also be an effect on the automotive ecosystem consisting of dealers and suppliers. Dealers will face the difficulty of selling both electric and conventional cars together in the market. Whereas, the automakers will face a tough time in a different way; the future revenue and margins from an electric car are far lower compared to a conventional car.
By designing, electric cars will require less car repair and maintenance service in Dubai which gives a direct impact on the profitability of dealers and automakers. The electric car revolution could affect auto service companies in Abu Dhabi, Dubai, and all over the states that are traditionally dependent on profits from servicing. These companies could lose 50% or even more in their profitability as the industry switch toward electric vehicles.

Finally, This shows an accurate reflection of every aspect. The aspects which tell how the industry is portraying the electrified and automated future go beyond what consumers want and need today. Well, to be honest, it is not a bad thing to look ahead of your customers. As many of the latest automotive technologies have been made in such a way.

Some Warnings With Recent Innovations

According to the survey, probably more concerning for the industry is that survey respondents believe tech firms have neck-and-neck with car manufacturers when it comes to influencing.

The Automakers do receive more 1st choice votes, but when combining the 1st and 2nd choice votes the gap between them and tech companies gradually disappears.

One more thing that has been cleared in this article is the challenge that legislators have. The complex structure of the automobile and the rapid pace of change in technology is becoming a problem for those who make laws and regulations. In light of the fact that cars have increasingly become a software platform on wheels, some may question the utility of national and international standards and regulations.

By Master James

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