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How industry 4.0 can help meet the EV demand

3 minutes | 19 Dec 2018

concept of digital transformation

More drivers are becoming switched on to electric vehicles (EVs). Worldwide, EV sales hit 4 million before September, reports Green Media Tech. One million of those cars are in Europe says the Guardian, representing a 40% increase in the first half of the year compared to the same time in 2017.

Bloomberg NEF projects that the market will hit the 5-million milestone as soon as March 2019. Around 42% of upcoming EV sales will take place in China, 26% in Europe and 25% in North America. One in six cars sold worldwide in 2025 will be electric.

The question is, how will manufacturers meet demand? How are they doing it now?

As cars become smarter, connected with downloadable updates, they need a production process just as smart and connected. It’s time EV manufacturers fully embrace smart technologies.

Industry 4.0: don’t be afraid

Less than 30% of manufacturing businesses worldwide are rolling out Industry 4.0 technologies at scale, reports the World Economic Forum (WEF). That’s not specific to the auto industry, but it does highlight that the majority of manufacturers are reluctant to embrace new technologies, whether because of fear of the unknown or the perceived capital needed to invest.

“We are a long way away from fully capturing the benefits of [Industry 4.0] in an inclusive and holistic way,” says the World Economic Forum. Indeed, we are. McKinsey is more conservative reporting that only 16% of manufacturers have an Industry 4.0 strategy in place.

EV manufacturers striving to tap into demand for their vehicles can not afford to tiptoe on the issue of technology, especially when many competitors are already on the ball, implementing Industry 4.0 to make operations efficient.

Industry 4.0 concept showing industrial machinery in a smart factory

Manufacturers often hold back because they believe Industry 4.0 means an entire overhaul of their existing processes. They feel a massive investment is in order for new machinery and training. Industry 4.0 doesn’t have to be all about robotics and artificial intelligence. The truth is, adopting Industry 4.0 can be perfectly seamless with only small changes needed to current systems.

First, you need a strategy

Whether you’re a start-up or already established in the game and trying to get a piece of the EV pie, you have some challenges ahead of you. McKinsey, in line with IBM, suggests that manufacturers who ‘are still struggling with how to unlock value from Industry 4.0’ should use these suggestions as a guide:

Industry 4.0: Creating a strategy

  1. Focus on a limited number of Industry 4.0 applications, rather than trying to cover all levers at once.
  2. Don’t be afraid to use technology work-arounds to begin implementing Industry 4.0 use cases while making large-scale investments to overhaul technology stacks.
  3. Build a portfolio of third-party technology providers, as Industry 4.0 is causing a shift from the single-provider model to one that hinges on a set of integrated technology providers.
  4. To capture value from Industry 4.0, establish a dedicated cross-functional team that drives innovation based on a culture open to change and experimentation.
  5. Start experimenting with new business models. Most Industry 4.0 quick wins will be found in improving operational effectiveness.

Keep in mind that you already understand disruption and how powerful it can be. After all, your products – EVs – are disrupting the automotive industry. Now it’s time to disrupt your own processes.