How COVID-19 Is Reinforcing Demand for Electric Vehicles

Executive Insights

Ambitious EV Tech Meets Environmental Mandates

Author: Sameer Pagnis, President, Global Automotive, TE Connectivity

Regulation and innovation are two concepts often thought to be locked in a stalemate. Regulation impedes the path toward innovative tech, while innovation attempts to wrest itself away from regulation’s clutches.

 

Historically, in the automotive industry, when it comes to electrification and emission standards, regulation has been viewed as both a burden and a forcing function. It gets manufacturers to develop products that are “good enough,” and each time a new bill is passed, opponents decry the death of auto innovation.

 

That is, until now.

 

Despite the disruption of COVID-19 and driven by the massive consumer trend toward high-powered, fully electric vehicles, we’ve arrived at a nexus of regulation and innovation where these two forces, winding together like a double helix, are breathing new life into the EV industry.

 

As we approach the exponential bend in the “S-curve” of EV innovation, what does that mean for automotive OEMs – both regional and multinational? It means that they must be ready to adopt new, flexible solutions in partnership with suppliers that can bring their most ambitious ideas to life.

 

 

With transformation accelerating, what customers expect from suppliers is also shifting. Nowadays, OEMs require truly strategic supply partners that can deliver advanced, dependable solutions that meet the specific needs of each OEM’s architecture.

Evolved Expectations for Automotive Suppliers

One thing has become clearer than ever in my work with our various global automotive clients:  Regulation has been pushing the EV market along to date, but the forces of consumer demand and technology are beginning to feed off of one another.

 

Policy is no longer seen as an obstacle to growth, but rather as a potential innovation accelerator. More and more, I’m seeing customers come to TE with proactive ideas on how to electrify their fleets long before regulation prompts them.

 

Without the right supply partner, OEMs can find themselves on their back foot when it comes to meeting this moment for EVs. Even with the impact of COVID-19, which saw car sales slump worldwide, EV sales broke all global records in 2020 – climbing to more than 3 million – and reaching a market share of over 4%. This amazing movement will prove to be a bellwether for HEMS in 2021 and beyond. Going forward, OEMs must be prepared.

 

The automotive industry is currently in a period of tradeoffs. As we trend toward electrification, companies are making major investments and commitments – for example, to convert their entire vehicle fleets to electric within the next two decades at latest. These tradeoffs are happening at a faster and faster pace around the world.

 

With transformation accelerating, what customers expect from suppliers is also shifting. Nowadays, OEMs require truly strategic supply partners that can deliver advanced, dependable solutions that meet the specific needs of each OEM’s architecture. And, as change comes faster and faster, they need support at scale. TE is a partner that brings innovation and a deep understanding of OEMs’ platforms and global needs, giving those customers confidence that their EV technology will work dependably into the future.

Engineer using virtual technology to develop an EV gear system.
The rate at which OEMs must develop new platforms and vehicles and launch them flawlessly is faster than ever.

Innovation at Speed and Scale

There’s also another important consideration: speed. The rate at which OEMs must develop new platforms and vehicles and launch them flawlessly is faster than ever. The window of time for getting it right is shrinking, and suppliers – in close synchronization with OEMs – can help launch new and innovative electric solutions that help auto manufacturers keep pace with regulatory mandates and escalating private sector competition.

 

It’s crucial for OEMs to understand the unique needs in their region. In China, for instance, a country of 1.4 billion people and around 275 million automobiles in use, there is plenty of room for growth as the market continues to trend significantly upward. The desire to enable a 10-minute charge as well as “range anxiety,” the fear that a vehicle does not have sufficient range to reach its destination, comes to fruition in a much different way in megacities than in rural areas. TE’s reach and expertise is vital in helping OEMs develop bespoke, regional solutions. We are a global company with massive reach, working on an engineer-to-engineer basis to co-create solutions with our customers.

 

Where TE places our bets is governed by the challenges our customers are facing. We started to invest in high-voltage and EV technology around 10 years ago, well ahead of the market. Thanks to that foresight, we’re ready to holistically service the full EV market at varying levels of momentum and maturity. The future of the electric vehicle isn’t approaching – it’s here.

 

If you are an investor interested in more information about TE Connectivity, please email our Investor Relations team.

About the Author

Sameer Pagnis, President, Global Automotive

Sameer Pagnis

Sameer Pagnis is president of TE’s global automotive business. He is responsible for the auto team’s productivity, quality, portfolio management, global pricing and new go-to-market strategies. Sameer has been with TE for 20 years and previously led our Automotive Americas organization, served as TE’s Chief Strategy Officer, and General Manager for our Industrial & Commercial Transportation and Application Tooling businesses.