In recent years, car manufacturers have been moving towards sustainable mobility and zero-emission models. On the other hand, many component suppliers are already under pressure from inflation, energy prices and rising raw material prices, leaving them to grapple with the puzzle of price stability and sometimes shrinking profits every month.

They are well aware that if they do not do this, they may not be able to withstand the pressure of competitors in the coming years. Thus, they incur additional costs while at the same time trying to move to a new reality, which is nothing more than the transformation of their parts and spare parts into greener products.

All major car manufacturers are committed to EU environmental targets. They are using more and more “green” materials as they move towards electrification. BMW, for example, has set a plan for its batteries and expects steel and aluminum suppliers to produce materials made with renewable energy, while Volvo aims to use 25% recycled plastic in its vehicles by 2025.

Consequently, many suppliers are investing heavily in upgrading their parts with recyclable materials and more renewable energy.

At the same time, many suppliers report that they cannot afford to increase the cost of the parts they give to manufacturers given the pressure they are under.

“In the next 5-10 years, we are in for big upheavals in the automotive supply chain,” says the CEO of automotive research firm Auto Forecast Solutions, adding, “Suppliers are being asked to develop new technologies to support electric vehicles. and invest in a greener supply chain. The automakers are saying, if you want to be part of this new green revolution, give us the highest possible price so I don’t go to your competitors.”

Suppliers are forced to invest heavily to reduce floor space, but mostly to be able to compete. British company Autins, which generated around £23m ($26m) in revenue last fiscal year, is aiming to use 100% renewable energy to lower its operating costs. The company supplies Volkswagen and Jaguar Land Rover with recyclable insulation material and has been forced to invest £50,000.

Plastic and rubber parts manufacturer Sigit, with an annual revenue of around $200 million, spent €10 million in 2019-2020 on a research center in Turin that developed a recyclable thermoplastic composite that is 90 percent lighter than the previous metal part. The company’s CEO, Emanuele Buscaglione, said the supply chain problems that began during the pandemic “destroyed our bottom line and caused major disruption to the industry.”

M. Busch, which manufactures cast iron parts (plates and gearboxes), uses renewable energy sources to replace gas in metalworking. The owner of the company, Andreas Güell, said that automakers only want to work with suppliers that use clean energy. German aluminum supplier Gerd Röders, owner of GA Roeders, which supplies raw materials to the VW Group and Continental, wants to switch to hydrogen energy instead of expensive natural gas, but needs the support of the government and automakers to be able to build green infrastructure. .

Source: RES-EMI