By Melissa Lowery

Flying cars? Not yet. But electric vehicles are going mainstream as the major automotive/mobility companies go all-in on electrification.

Driven by consumer demand, regulatory changes, a shift toward renewable and clean energy, and advances in technology, electric vehicles, or EVs, are the future of mobility. Deloitte’s 2022 Global Automotive Consumer Study shows preference for EVs either dominates or is equal to preference for gasoline/diesel vehicles in most markets — except for the United States and Southeast Asia.

But even in those two regions, interest in EVs is increasing year over year. For the most part, the study shows, “people are drawn to an EV because of an expectation of lower fuel costs, or they are concerned about climate change and want to reduce emissions.”

The automotive industry is listening to consumers and working toward zero-carbon emissions. In November 2021, a group of automakers — including Ford Motor Co. and General Motors Co. — joined several countries and cities in pledging to phase out fossil-fuel vehicles by 2040. In January 2022, the Renault-Nissan-Mitsubishi Alliance announced a common road map to becoming carbon neutral by 2050. Honda previously announced a similar goal.

To achieve 100% carbon neutral status, original equipment manufacturers, or OEMs, must also focus on the manufacturing process, but the consumer side means heavy investment in EVs. After decades of limited options and lengthy waiting lists, drivers will soon have a wealth of EVs to choose from.

Toyota plans to invest about $70 billion globally in EVs for both Toyota and Lexus brands with about half of that investment occurring over the next eight years. Ford — which is building a new mega campus in Tennessee and twin battery plants in Kentucky to drive its shift to EVs — is investing $22 billion in electrification through 2025 as part of its plan to lead electrification, beginning with its most iconic models: the Mustang, F-150 and Transit. GM recently announced it is accelerating its EV production, including a $7 billion investment in a new facility in Michigan.

Meanwhile, The Renault-Nissan-Mitsubishi Alliance will invest $26 billion in electrification over the next five years, leading to 35 new EV models by 2030. These numbers are just a fraction of the anticipated overall global investment in EVs. Reuters reports that OEMs are planning to spend $515 billion on electric vehicles and batteries through 2030.
 
In addition to OEM investments, the federal government recently passed historic infrastructure legislation that includes funding to build a national network of EV chargers. According to a statement from the White House,

“U.S. market share of plug-in EV sales is only one-third the size of the Chinese EV market. That needs to change. The legislation will invest $7.5 billion to build out a national network of EV chargers in the United States.

This is a critical step in the President’s strategy to fight the climate crisis, and it will create good U.S. manufacturing jobs. The legislation will provide funding for deployment of EV chargers along highway corridors to facilitate long-distance travel and within communities to provide convenient charging where people live, work and shop. This investment will support the President’s goal of building a nationwide network of 500,000 EV chargers to accelerate the adoption of EVs, reduce emissions, improve air quality and create good-paying jobs across the country.”

Calling on diverse suppliers

With this multi-pronged investment comes enormous opportunity for diverse suppliers. While many EV parts will be the same as their petroleum-powered predecessors, recent technology requires new suppliers.

Matt Greene, senior manager, supplier diversity, Toyota Motor North America Inc., is excited about the prospect of finding qualified diverse suppliers to fulfill these contracts.

“I’ve really been energized by electrification because it is new to us and there is a lot of opportunity,” he said. “For example, we’re basically replacing the existing powertrain and, traditionally, we don’t have a lot of diverse suppliers in powertrain. So, to me, this is like a whole new world where we could bring diverse suppliers in.”

Travis Spencer, senior manager, supplier diversity and inclusion, Ford, sees opportunity throughout the battery lifecycle. Given the huge demand that already exists for other products that require batteries — cell phones, laptops, etc. — OEMs are looking for solutions to recycle and repurpose those units, he said.

“We’re electrifying our entire portfolio at Ford, which means demand for batteries will only escalate from here,” Spencer said. “If I were a diverse supplier, I would be thinking, how can I partner with another supplier to repurpose old batteries and supply materials for the new electrified vehicles.”

Greene concurred, noting that OEMs are already building out those supply chains, and supplier-diversity champions are ensuring that diverse suppliers are included.

“If you think about batteries, there’s going to be some injection molding, there’s going to be some stampings and, of course, the chemicals that help make up the battery,” he said. “All of this is new business, so I’m reaching out and trying to find diverse suppliers to potentially supply in that space.”

The future of mobility is electric — and it should be powered by diverse suppliers.

To learn more about Toyota’s EVs, visit toyota.com.
To learn more about Ford’s EVs, visit ford.com.
To learn more about General Motor’s EVs, visit gm.com.
To learn more about Honda’s EVs, visit honda.com.
To learn more about Nissan’s EVs, visit nissanusa.com.