EV Mode Creates Crisis Mode For Engine Parts Makers

Paul Niedermeyer
by Paul Niedermeyer

For manufacturers of engine timing chains, main bearings or any of the hundreds of unique components for engines and transmissions, EVs like the Nissan Leaf pose an enormous threat. Decades of investment in the manufacturing technologies and IP are potentially rendered irrelevant if the switch to battery-powered EVs progresses at the rate that its optimists proclaim. Bloomberg tells the tales of woe from anxious Japanese suppliers: “It’s a crisis-like situation,” said Toru Fujiwara, head of Tsubakimoto’s auto-parts division. “With electric cars, there’s no way we can apply our current technology.” Especially when their current technology lacks AC or DC.

If President Obama’s pledge to have one million plug-in cars on roads by 2015 and Japan Prime Minister Yukio Hatoyama’s goal to reduce emissions 25 percent by 2020 from 1990 levels come to fruition, the impact will be below the belt as well as below the bottom line:

“The shift to electric cars may be more dramatic than people think,” Kawamura said. “The auto industry will need to shoulder much of that cut.”

Traditional suppliers must balance innovations with meeting their customers’ immediate demands as improving fuel efficiency is a top industry priority, according to Tsubakimoto’s Fujiwara.

Still, suppliers should not delay expanding to meet the potential surge in electric-car demand, said Hisataka Nobumoto, chairman of the Japan Auto Parts Industries Association that includes NTN.

“As current technologies and businesses are reassessed, decisions on where and how to pursue new areas must be made as early as possible,” he said. “By doing so, survival may be possible.”

Now that’s a cheery assessment. No doubt a shrinking market share for tradition propulsion systems would reduce efficiencies of scale and wither profit margins. At least there are still margins on supplier profits in Japan to shrink. And expansion into the primary EV component manufacturing areas is limited, since motors and batteries make up a disproportionate share. Entry barriers into battery making is daunting, and the supplier base has already largely congealed. Fujiwara: “We have to come up with completely new technology,” without naming possible products. Is the timing chain going the way of the buggy whip?

Paul Niedermeyer
Paul Niedermeyer

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  • Bryanska Bryanska on Nov 20, 2009

    What got us here won't get us there.

  • Nikita Nikita on Nov 20, 2009

    Similar to the railroads, the military and then the airlines went from gasoline pitson engines to jets in about a decade. Curtiss-Wright couldnt adapt, Pratt and Whitney did. GE came in and filled the gap left by C-W. GM's Allison went on a side tangent, turboprops. Betting on which new technology will dominate is always a huge risk.

  • W Conrad Sedans have been fine for me, but I were getting a new car, it would be an SUV. Not only because less sedans available, but I can't see around them in my sedan!
  • Slavuta More hatchbacks
  • ED I don't know what GM is thinking.I have a 2020 one nice vehicle.Got rid of Camaro and was going to buy one.Probably won't buy another GM product.Get rid of all the head honchos at GM.This company is a bunch of cheapskates building junk that no one wants.
  • Lostjr Sedans have been made less practical, with low rooflines and steeply raked A pillars. It makes them harder to get in and out of. Probably harder to put a kid in a child seat. Sedans used to be more family oriented.
  • Bob Funny how Oldsmobile was offering a GPS system to help if you were lost, yet GM as a company was very lost. Not really sure that they are not still lost. They make hideous looking trucks, Cadillac is a crappy Chevy pretending to be fancy. To be honest, I would never step in a GM show room now or ever. Boring, cheap ugly and bad resale why bother. I get enough of GM when i rent on trips from airports. I have to say, does anybody at GM ever drive what everyone else drives? Do they ever then look at what crap they put out in style fit and finish? Come on, for real, do they? Cadillac updated slogan should be " sub standard of the 3rd world", or " almost as good as Tata motors". Enough said.