A configuration approach key to EV market success

The demand for electric vehicles (EVs) is rising sharply. In the US alone, the EV market reached a record high in 2022 of an estimated 918,500 sales—an increase of over 50% from 2021.

Meeting increased demand in a timely fashion can be a challenge for any car maker, but EV companies in particular experience some unique hurdles to fast production times. Shortages of electronic components, lithium batteries and raw materials can create a glut of orders with few cars rolling off the assembly line.

However, it’s not just how these vehicles are manufactured that is creating this situation; it’s also how they’re sold. The trend of car buying is rapidly shifting online, which means those manufacturers whose product, pricing and engineering data are already aligned on the production side are not only providing their customers with a better buying experience, but are also a step ahead of the competition. A configuration management approach can play a key in making this happen.

The challenges of EVs

EVs are still relatively new, and they’re still facing huge competition because they require a whole new type of production line from what is used with a gasoline-powered car. At the same time, there’s a built-in competition between buying an EV versus buying a traditional car. That makes it even more important for EV manufacturers to know exactly what they’re producing, what features they want to provide and what options with which to equip cars in each region for a given model year. These competitive factors mean that they need to offer something extra: a better buying experience for the customer.

A configuration management approach can help manufacturers to deliver more vehicles, faster and at greater profit margins while still exceeding customer expectations

As EVs become more common, more and different regulations are emerging, particularly around the chemicals contained in the batteries that power EVs and used in different parts of the manufacturing process. These differ by country and are regularly evolving. For EV manufacturers, staying in compliance with these regulations makes it extra important that they maintain precise control over the definition of the components and materials they put into their products.

Then there are changing demands for the buyer experience. A recent study found that Generation Z is the fastest-growing segment for EV purchase consideration. Younger people have different demands when it comes to the buying experience than the previous generations. They want to start the buying process at home, figure out what options they can get in a certain car in their country, and determine the price. They want to continue that buying experience at a dealer or in a showroom. That’s an omnichannel experience and this requires that EV manufacturers have full control of their product definitions and prices to ensure a smooth, coherent and consistent buying experience.

More cohesion across functions and departments

As manufacturers in the EV space tackle these challenges, they need a cohesive solution that spans the various departments involved. This will help with internal collaboration to build products, align on product definitions, and determine what options are available for a certain car and so on. Most car manufacturers today don’t own the entire production and development of all the parts that go into a product; they’re likely sourcing some components from sub-suppliers. That also makes it more important for them to have a single source of truth for working with the product definition.

Today, more consumers seek an omnichannel buying experience. This also requires alignment across engineering, manufacturing and service, and sales. Having a single source of truth ensures that sales departments know exactly what they can realistically offer customers. It enables a smooth, frictionless transaction from order to delivery with no back-and-forth spent on correcting errors or misconfigurations.

There’s also a need for flexibility on the buyers’ behalf while also reducing complexity on the manufacturing side. For instance, imagine if you could install the same seat in all cars with options for heating and cooling, and then buyers can enable these options later if they want to. You wouldn’t have the complexity of managing 15 different types of car seats in multiple markets.

A demanding younger generation does not just accept the ‘one size fits all’ concept. They want a car that is exactly configured to their needs. They want the option to decide later if they want heated seats and to activate that option then. The configuration process lives on.

Why choose configuration management?

A configuration management solution gathers product configuration from the sales, service, manufacturing and engineering departments and validates all possible configurations. Then the system organises this data in a file that’s condensed and easy to access, validates this data, and provides fast and accurate access to it in the configuration process.

With this system in place, customers have a better buying experience because misconfigurations aren’t possible; there’s no back-and-forth to correct a customer’s order. Engineers aren’t able to design a product that you can’t manufacture. The sales staff don’t have the ability to sell a product that you can’t engineer. The manufacturing function can’t receive an order that’s unfulfillable, and the service department will have a clear picture of the installed base so they can offer efficient, profitable maintenance.

The car purchasing landscape is swiftly transitioning towards complete online transactions, and demand for EVs is rising sharply. Manufacturers that have already synchronised their product, pricing and engineering data during production not only enhance the user experience but also gain a competitive edge. A configuration management approach can help manufacturers to deliver more vehicles, faster and at greater profit margins while still exceeding customer expectations.