In the EV industry, we're definitely in what seems to be a tipping point. There has been a buildup and now it seems that we are entering that special moment - why now?
If one goes back in time, EV was an enabler to meet the CO2 requirements of a fleet Now, it’s not just about meeting regulatory requirements, but also about addressing a consumer need. Going from where we are now (about 20-30% of the market) to fully electric is not a matter of if, it's just a matter of when.
What are the main obstacles you face?
The first obstacle is consumer acceptance, and the cost that the market can sustain on a large scale. When technology comes to market, there are always the first adopters. However, the tipping point really happens when the scale comes into play.
Then, there is a domino effect in terms of how it can impact pricing. When the battery costs decrease exponentially take rates will go up. We have to look at the overall ecosystem – in terms of the rare earth elements, mining methods, safety and power consumption. These are some of the big factors that need to be addressed. We see the industry looking at them more pragmatically now as the scale is coming into play. I always say it's important to keep capital efficiency right in the forefront, otherwise we will get to a point where there is too much capacity, and too much capital that does not add value. We have to keep this in mind as we head toward this newer and brighter future.
We have been seeing that this industry is going to expand everywhere - India, China and South America being the biggest sellers and producers. Is Magna going to assert its presence in these markets even more?
Our vision is to advance mobility for everyone and everything – and that applies globally. We use the word “mobility,” because it is a large ecosystem and can be used as a service or personally. Magna is fortunate to be present in 28 different countries. Therefore, we have a good insight and footprint when adapting products for each region rather than just applying the same broad brush for everything. The uniqueness of Magna is the ability to understand the bigger picture; designing, engineering and even building vehicles in some cases. Therefore, we are one of those unique suppliers that can think like an OEM without being an OEM.
We have 340-plus manufacturing locations in 28 different countries. We will leverage that and continue to be the example of what we call the “factory of the future.” Whether it's automation, robotics, Industry 4.0, enterprise digitization – this expansive production cornucopia is what helps us from a margin expansion point of view. We also have big plans to be an enabler of the new mobility ecosystem, be it through infrastructure development or supporting brand owners to bring about their new models.
Do you have a final message for our readers, something you would like to emphasize as a final note?
I want to emphasize the importance and attractiveness of the automotive industry. It is one of the most complex, high-tech industries in the world that produces in high volumes and is highly regulated.
Mobility has influenced how human civilization developed, and it will continue to have a huge impact on our economy and society at large. I believe that Magna - with where we stand and how we stand - is very well-positioned to advance mobility for everyone.
