Photo Nat Twiss / Spacesuit Media
A Culmination of Disruptive Announcements in the Global Auto Sector Leading to Partnership Opportunities for Parts Suppliers Within The Series
The third season of the FIA Formula E all electric motor sport series came to an exciting end in Montreal the last weekend in July. It was a fantastic two day event in the heart of the city, well worthy of a separate blog posting. However, this will focus on the automotive industry.
Between the time I left Toronto Friday morning and landed in Montreal to take in the weekend’s races, Porsche announced they would be entering the series in 2019 and dropping its FIA World Endurance Car sports car involvement. This was on the heels of Mercedes Benz’s announcement earlier in the week that it, too, was joining the series in 2019 that already sees Renault, Audi, BMW, Mahindra, Jaguar, NextEV, Venturi, Faraday Future, and Peugeot as OEMs in Formula E.
This was massive news in the world of motor sports and the automotive industry. And it was a culmination of a summer’s worth of global automotive OEM announcements on the electrification plans of their product lines, plus government environmental policy decisions on ending ICE vehicle sales, that will massively disrupt the automotive supplier world as it has existed over the last 100 years. And, this is on top of events occurring in the autonomous vehicle arena!
On display or in-action on the track was a full complement of fully electric and autonomous (Roborace) race cars and vehicle technology, along with companies playing in the ride sharing, electric taxi, electric bicycle, mining (of Lithium), and consumer electronics markets.
In the garage and hospitality area, global automotive parts and electronics suppliers the likes of Schaeffler, ZF, Qualcomm, Rohm, Panasonic, TE Connectivity, Molex, and Lear were evident as partners with either the teams or Formula E itself.
With some industry reports stating up to 60% of vehicles produced by 2030 could be electrified and generating a supplier market value of up to $200 billion, these companies are making big investments in the technologies that are, and will be, included in both EVs and AVs now and in the future. And, they are using Formula E and its ecosystem both as an R&D test bed for their product offerings, and a commercial marketing and communications platform for their companies.
Challenge For Suppliers
Because EVs have less amount of parts, traditional mid-tier sized automotive suppliers could very well begin seeing their sales opportunities to the OEMs shrink due to the global players investing heavily into this space. Plus, they will be up against a new set of competitors in the likes of traditional consumer electronics companies (Panasonic, Harmon Kardon, LG) who now are moving in to fill the vastly increased technical needs of these new “smart phones on wheels” vehicles. This is while they are creating closer commercial and technical tie ups with the OEMs operating in Formula E.
Talking to some team principals in Montreal, they are actively seeking both technical and commercial partners in the areas of EV compatible power trains (minus battery), electronics, software, and suspension components that can be utilized to gain a performance advantage on track. (One prompted that there may even be companies who have not thought Formula E could be a testing ground for their technology or product for EV road car application, but who may very well have something that could be applicable.)
Therefore it can be seen that Formula E, with its global reach and large scale participation of both OEMs and Tier 1 suppliers, can be a cost effective viable marketing platform, R&D test bed, product innovation driver, customer awareness generator, marketing communication and positioning tool, and B2B development instrument for an automotive supplier company not yet penetrating, or under performing, in the EV market. It can also possibly assist an automotive supplier to better deal with OEM challenges of the future in the EV space and/or better strengthen its existing OEM business relationships.
The future is bright for Formula E. With its global reach, solid OEM participation, successful first three seasons, and increasing “acceptance” by its skeptics, it has proven to be a benefit for both auto OEM and supplier partners. It should continue to be of similar or greater interest and benefit to these groups as it moves into season five when the cars will be quicker, last twice as long on a battery charge, and see some additional changes in the sporting regulations that will open up more opportunities on the car’s technical side.
Companies looking for ways to better benefit from the coming scale up of EV unit volume in the global marketplace should look at opportunities within the Formula E ecosystem to assist making it happen.