Automotive Procurement 101: OEM Categories

In the dynamic realm of automotive manufacturing, the landscape is evolving at an electrifying pace. With the rise of electric vehicles (EVs) reshaping the industry, Original Equipment Manufacturers (OEMs) are reimagining their procurement strategies to meet the demands of this transformative era. Let's embark on a journey through the diverse categories that define automotive OEM procurement, with a spotlight on the electrified future:

1. Drivetrain components: Drivetrain components for electric vehicles encompass advanced battery systems, electric motors, and power electronics. These cutting-edge components are the heart of EV propulsion systems, driving efficiency, range, and performance. In addition to these, self driving technology both hardware and software are becoming key differentiators between EV manufacturers. These technologies are closely guarded by OEMs and often single sourced in partnerships or are vertically integrated.

2. Raw Materials: The shift towards electric mobility has profound implications for raw material sourcing, with increased demand for lithium, cobalt, and other key elements used in battery manufacturing. Additionally, structural components such as chassis, doors, windows, body share common supply base with gas powered vehicles. The shift towards EV has not significantly altered the requirements yet.

3. Sub-assemblies: Electric vehicles also rely on a myriad of components and sub-assemblies, from high-voltage wiring harnesses to regenerative braking systems. These modular building blocks enable OEMs to realize the unique performance and efficiency characteristics of electric propulsion. LightSource's costed BOM management system is uniquely positioned to streamline the coordination required for working with these complex assemblies.

4. Charging infrastructure: While some notable OEMs have their own vertically integrated charging infrastructure, most firms will opt for a partnership that requires careful cultivation. Indirect materials for EV charging services encompass a wide array of supporting technologies and solutions. These elements play a crucial role in enabling the widespread adoption and sustainability of electric mobility.

5. Tooling and equipment: In the realm of electric vehicle manufacturing, specialized tooling and equipment are essential for producing battery packs, electric motors, and other critical components. These investments lay the foundation for efficient and scalable production of electric vehicles.

6. Aftermarket parts and services: The rise of electric vehicles brings new opportunities in the aftermarket sector, with a growing market for EV-specific replacement parts, accessories, and maintenance services. OEMs must adapt their aftermarket offerings to cater to the unique needs of electric vehicle owners.

7. Service infrastructure: As the electrification wave sweeps across the automotive landscape, OEMs require specialized services to support their EV initiatives. From battery recycling to technical support and maintenance for electric drivetrains, these services fuel innovation and accelerate the transition to electric mobility.

8. Outsourced manufacturing: As the demand for electric vehicles continues to surge, OEMs may leverage outsourced manufacturing partners to scale production capacity rapidly. Contract manufacturers specializing in electric vehicle production play a pivotal role in meeting market demand and accelerating time-to-market.

9. Quality assurance and testing: Ensuring the safety and reliability of electric vehicles requires comprehensive quality assurance and testing programs. OEMs invest in rigorous testing protocols for battery performance, thermal management, and vehicle electrification systems to deliver peace of mind to customers.

As automotive OEMs navigate the electrified landscape, the procurement journey takes on new dimensions, driven by innovation, sustainability, and a commitment to shaping the future of mobility. By embracing the diverse categories that define automotive OEM procurement in the era of electric vehicles, OEMs can chart a course towards a cleaner, smarter, and more sustainable automotive future.

Successfully navigating the automotive industry's procurement landscape requires a strategic and flexible approach. Managing key categories effectively is essential for ensuring efficiency, cost-effectiveness, and innovation, crucial elements for sustainability and success in the industry.

LightSource specializes in sourcing solutions for the automotive industry's direct material categories. Its platform enhances BOM management and sourcing, providing intuitive tools for quick insights and identifying cost-saving opportunities. Discover more about LightSource's BOM cost management capabilities and how it can transform your procurement process here.

LightSource is an evolving north star in the sourcing software space. LightSource is more than just sourcing software. It is a sourcing operating system with the mission to elevate the procurement function.

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