The Impact of Electrification on the Motor Trade

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The Automotive industry has seen radical change in the last decade with new technologies making even the unthinkable possible as we see the development of autonomous vehicles.

A major focus for manufacturers across the entire transport industry is the electrification of vehicles; reducing their impact on the environment whilst providing the best user experience possible. This has been transformative not just in the way that vehicles are made but how they are marketed, sold and serviced further down the line.

Here we look at the potential impacts of electrification on the UK Motor Trade and how the industry my need to adapt in the near future.

Diversity and Innovation

Innovation in technology and a focus on the environment have opened up the automotive market to new brands who are already becoming leaders in the hybrid and Electric fields. Tesla has completely transformed the automotive industry and has forced traditional market leaders including Ford and General Motors to rethink everything. Tesla has made consumers excited about electric vehicles and has changed long standing, negative perspectives. In the past, electric vehicles have been thought of as inconvenient, ugly and expensive. Consumers have been reluctant to buy them because they’ve been considered as below par and inspirational. Tesla has demonstrated the opposite by creating state of the art hybrid and fully electric cars forcing other brands to follow suit. This innovation has created excitement in and around the automotive industry which is great for consumer engagement and continues to see brands challenge themselves in order to produce the best product.

Manufacturing and Servicing

Traditionally, engines have been built from scratch by engineers. They are complex and require regular maintenance to ensure they are functioning at the optimum level. Battery Electric Vehicles are much less labour intensive to put together due to the fact they contain less component parts. They also require far less maintenance. To think that Tesla have designed vehicle software that can be updated online as if you were downloading the latest version of a mobile App is astounding.

However, the fear is that if these hybrid and electric vehicles require less human labour to build and less ongoing maintenance there could be a negative impact on employment.

It is important that Automotive businesses start thinking ahead and diversifying so that when the time comes that Hybrid and Electric vehicles take over the market, their teams do have the skills to service them. It is thought that while some Automotive jobs may become obsolete, new ones will be created as consumer demands change. Therefore, it’s essential that businesses work together with the government and the industry as a whole to reskill individuals and protect as many jobs as possible in the Manufacturing and Servicing teams.

Parts

Traditional Parts suppliers will also be impacted by the switch to low emission vehicles because older parts will become redundant. Parts Factors will already be keeping an eye on their stock levels of certain components to ensure they’re not left with a large supply of unwanted parts.  

The positive is that Electric and Hybrid vehicles will still require parts, just different types of vehicle parts. Batteries and Panels will become the major focus for the manufacturing and servicing of electric vehicles

It is also predicted that there will be a shift to higher quality parts that are made from lightweight aerospace materials. From a profitability point of view, this could help prop up many parts factors as they will come at a premium.

Vehicle Parts and requirements are set to change drastically so it is important that Parts Factors are looking to the future and planning ahead as much as possible.

Infrastructure

If more people are using hybrid and electric vehicles they will be a huge demand for additional infrastructure in order to charge these vehicles. This will include the installation and maintenance of charging points. This is likely to generate employment from an engineering perspective rather than an Automotive skills set. Could these sectors see a merge of talent?

There is no doubt that the rise of the low emission vehicle has already had a dramatic impact on all aspects of the Motor Trade including its manufacturers, supply chain and on the forecourts. This is set to grow rapidly as public perception combined with Government pressure are forcing change.

It will be interesting to see the evolution of the Motor Trade and the innovation that’s ahead!