Preparing for the New, Faster EV Product Cadence

BEV platforms are already driving a new product-development and launch cadence that will alter future industry dynamics and commercial expectations.

The Ariya, Nissan's first all-electric SUV, is expected to go on sale in the U.S. in late 2021. (Nissan)

Amidst the significant structural shift the industry faces is the need to adjust business to the new product cadence. While it can be difficult to see past the near-term firefighting—the semiconductor shortage and the negative impact of labor, commodity and logistics economics—suppliers need to be prepared for dramatically altered product-development and launch timelines driven by the move to electrified vehicles.

Michael Robinet

Suppliers of most vehicle systems have grown accustomed to the current pace of program timing for regional and global light vehicle launches. Within the internal-combustion engine world, these fit into a 10-year overall cadence, measured from all-new platform to all-new platform. While the timing can shift depending on economic, company or market factors, most vehicle programs apply these constructs. A 10-year platform cadence enables a thorough review of technology, dimensions, protection for various bodystyles within a sizing envelope (usually a segment), and the ability to efficiently package select powertrain families and driveline types.

Many times, these new ICE-based platforms drive significant plant-level investment to enable a new build format or an altered vehicle ‘shingling’ process. Whatever the case, most mass-market OEMs roughly subscribe to a 10-year all-new platform/architecture perspective. Between the all-new platforms is typically a major revision timed roughly halfway (~5 years) and MCEs (mid-cycle enhancements, or refresh) timed at 2.5-year stages between the major and all-new investments. Most suppliers view the major (5) and all-new (10) milestones as their key opportunities to integrate new technologies.

Driven mainly by example set by the Japanese OEMs in the 1980s and 1990s, and the onset of regular cadence driven by global platforms, the industry adopted this clock-like cadence. More importantly, the industry morphed their program management, financial metrics and timing windows for adopting new technology into this 10/7.5/5/2.5-year cadence. Several factors have us expecting that these cycle dynamics will undergo significant change as propulsion systems are electrified.

In past columns I’ve outlined the significant battery-electric vehicle (BEV) pivot underway. Whether you subscribe to a notion of the industry shifting toward BEVs at a near-frantic pace or are less enthusiastic about the speed of adoption, the business model is changing. BEV platforms are driving a new cadence and as such, these expectations will alter future industry dynamics and commercial expectations. How will this change?

Without the packaging restrictions of an ICE-powered offering, BEVs have enhanced production and design flexibility. While not simple, altering wheelbase or track width takes on a new dynamic with BEV structures. The ability to alter the vehicle “top hat” and interior packaging design and function is enhanced and takes on greater importance. As such, a new cadence emerges.

Though the industry is now being educated on BEV platform dynamics, cadence will shift. OEMs are now expecting an all-new/major-revision timeline of seven to eight years, versus five years with ICE platforms. This opens the possibility to freshen the exterior design, interior packaging and even safety/convenience content more frequently. There could even be more than one MCE between major revisions of a BEV structure. Call it the 8-5-3-year cadence.

Regarding the financials, for decades suppliers have amortized the cost of tooling over a program life or the cost of new machines/presses over multiple program cycles. If the longevity shifts, so too will the financials. Additionally, suppliers expecting to complete a program after five years of production (and thus seek to replenish the margin if the incumbent sourcing is granted) now must shift their expectations. Changing the industry cadence will have a tremendous impact on OEMs, suppliers, toolers, dealers, and everyone connected to mobility.