The shift from legacy supply chain technology to more advanced capabilities will allow automotive companies to avoid being negatively affected by what has yet to happen. Another electric vehicle giant will start mining lithium in Nevada for future battery production. is increasing collaboration with Canada to supply battery minerals, while several industry players have begun investing in rare mines and prioritizing a geocentric supply chain model to enhance local mining operations of lithium, cobalt, nickel and graphite.įor example, one multinational automotive manufacturing company will extract lithium in California and expects to start production in 2024. Challenges supplying critical ingredients for vehicle production, such as cobalt, lithium and nickel, have become a major barrier to manufacturing - and many automakers are getting creative to mitigate these shortages. Raw material shortages have resulted in noise around revisiting supply chain strategies. For this reason, it is imperative for automakers to implement the proper infrastructure, which enables data and business insights, in order to establish trust and allow for fast execution and business continuity. While expanding the supply chain here will have a positive impact, the policy formulation and implementation transitions associated with manufacturing typically involve a lengthy time frame. Complex global supply chains and triggers such as material shortages, cost pressures, and increased waiting periods and localization guidelines have brought more opportunity for local manufacturing in the automotive supply chain in the U.S., which will in turn make this market more competitive with global manufacturers. auto market is one of the largest global markets, with a combination of import and local production supply chain strategies. Global uncertainties and geographic regulatory guidelines Here are the five major factors impacting the automotive supply chain.ġ. But this cultural and technological shift toward resiliency - with an added focus on sustainability - cannot happen overnight, and there are many elements to consider for automotive companies on this journey. To ensure preparedness for potential future crises, many auto manufacturers have begun digitizing their supply chains and prioritizing risk management as a part of their strategy. The semiconductor shortage and other geopolitical factors have resulted in supply and demand issues across all functions, which has led many companies in the industry to focus on building a future-proof supply chain that is both flexible and resilient. Advancements in electric mobility, autonomous solutions, automotive retail and vehicle connectivity have propelled the sector forward and left enterprises and consumers alike excited for what comes next.ĭespite all of this growth, the COVID-19 pandemic ushered in challenges, specifically surrounding supply chains.
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The automotive industry has undergone significant disruption in recent years.