Evolution of automotive supply chain due to large scale production of electric vehicles

Abstract

With the concerns about environment and sustainability increasing, to limit the pollution caused by automobiles (which has caused significant share of the 7 million premature deaths due to air pollution as per World Health Organization (Bouton, Knupfer, Mihov, & Swartz, 2015)), a trend towards adoption of Electric Vehicles (EV) for mobility has been increasing. Another study conducted found that around 53,000 Americans die each year due to pollutants emitted by vehicles as opposed to 34,000 who die because of accidents on road (The death of the internal combustion engine, 2017). The total Electric Vehicle production stood at 873,000 units (and a sale of 650,000 units) in 2006 with China leading the market at 43% production followed by Germany at 23% and US at 17%. Owing to this increase in the supply of Electric Vehicles, China also increased its global supply of batteries to 25% third to Japan which has a share of 48% and South Korea with 27%. With 70% new registrations (around 350,000 units) in a year (Hertzke, Müller, & Schenk, 2017), China surpassed US in terms of number of EVs on road in 2016.