The Effects of Electric Vehicle Manufacturing on the Automotive Supply Chain: A Case Study of Tesla and Ford

Reyes, Christopher

The Effects of Electric Vehicle Manufacturing on the Automotive Supply Chain: A Case Study of Tesla and Ford

Author(s)

Reyes, Christopher

Date Issued

April 10, 2023

Abstract

Consumers now see a more comprehensive range of electric vehicles (EVs) available as automakers transition from international combustion engine (ICE) vehicles to EVs. The Biden administration’s goal of EV sales accounting for 50 percent of all new car sales by 2030 is becoming more achievable given the recent $374 billion climate spending bill. This paper investigates the growing adoption of EVs’ impact on the automotive supply chain regarding battery production. The growing demand for EVs has contributed to rising concerns over how the automotive supply chain will adapt from procuring raw materials to delivering the final product to the customer. The dominant explanation for this trend in demand is a shift in consumer preferences and government regulation. Previous research has primarily relied on observational data and thus has had to wait for trends to develop over time, especially in an emerging market. I use a case study from a peer-reviewed academic journal titled Energy to find what consumers and automotive companies are looking for in an EV and how automotive companies can develop a profitable business model. Contrary to what has been assumed, the rise in demand for EVs is an increase in consumer interest and government policies. However, the suppliers and manufacturers of traditional gasoline and diesel-powered internal combustion engine (ICE) vehicles need to decide whether investing in scaling their EV production is profitable.

Major

Economics

First Reader(s)

Nonnenmacher, Tomas W.