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Four potential strategies for moving forward were identified in the report: divest from combustion parts and shift to EV production; commit to combustion engine supplies and simultaneously prepare for closure; move to assert dominance as a particular parts supplier; or position to be acquired.
Suppliers whose components do not have a strong aftermarket focus will be particularly vulnerable, Robinet said. Small firms are also at a higher risk for disruption, and many are facing the decision over whether to take on the costs associated with rebuilding their businesses to meet an electrified future.
Responses will need to vary widely from situation to situation, Robinet emphasized. How much renewal interest there is for components is a factor that will impact suppliers’ flexibility, mobility and opportunities, he said.
Overall, though, urgency is key, as “the options become more and more limited over time.”
While Robinet believes it is time to understand an EV transition as a “when” instead of an “if,” he urged suppliers to be calculated in their adaptation.
“With EVs, everything is new — new processes, sometimes a new plant, new suppliers, new components,” Robinet said. “And anytime anything is new, there’s also going to be a certain level of risk.”
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