Nearly 14 million battery-powered electric vehicles (EVs) were sold last year, marking a 35% increase from 2022, according to a report of the International Energy Agency (IEA).
This surge has brought the global tally of EVs in circulation to 40 million despite global economic and political instability and a generally sluggish automotive market.
EV sales will account for a half of all car sales by 2035, driven by evolving consumer preferences and government policies promoting the transition to green mobility, the IEA predicted.
The burgeoning potential of the EV market is a catalyst for the industry's expansion, attracting both established players and promising newcomers, namely Chinese automaker BYD commanding 20% of the global EV market, Tesla – the world's most valuable automotive company, and VinFast – Vietnam's first EV manufacturer.
Traditional automakers are also pivoting toward electrification. German luxury carmaker Audi announced in late 2022 that it would cease production of internal combustion engine vehicles by 2029 to focus exclusively on EVs.
Meanwhile, South Korea's Hyundai plans to invest nearly $42 billion in EV production, aiming to manufacture over 1.5 million EVs annually and rank among the top three global EV makers by 2030.
New demands, new challenges
Major automakers' active participation has steadily advanced technology, lowered production costs, and made EVs more accessible to diverse consumer segments.
However, this shift has posed challenges for suppliers and original equipment manufacturers (OEMs).
Sharing with local media, an automotive industry expert said that while EVs require fewer components than internal combustion engine vehicles, their production involves unique challenges that compel OEMs to revise their strategies.
For instance, EVs typically weigh significantly more than gasoline-powered cars due to large battery packs. This necessitates enhancing tire load capacity and reducing the weight of other components while maintaining structural durability, particularly in the chassis.
Additionally, critical components like batteries, charging systems, power converters, and electronic control units are not traditionally supplied by conventional automotive parts manufacturers.
The EV industry also levels the playing field for new entrants, challenging century-old automakers. Similarly, the component supply chain may see a shift, as conventional OEMs struggle to pivot from producing internal combustion engine parts to EV components - especially given the continued profitability of gasoline-powered vehicles, according to EV Quotient.
This opens opportunities for new players to fill gaps in the green transportation supply chain.
Vietnam's position in EV manufacturing
Vietnam's EV industry is taking shape, led by VinFast, a subsidiary of Vingroup. After phasing out gasoline-powered vehicles in early 2022, VinFast has launched multiple EV models across various segments while developing a network of public charging stations to stimulate consumer demand.
In addition to VinFast, automakers like Audi, Mercedes-Benz, and BYD are distributing EVs in Vietnam, though these vehicles are mostly imported or assembled locally.
Some car parts are cast using Bühler's Carat Die Casting. Photo courtesy of Bühler.
