Panel: The Challenges Facing Future Powertrain Development – Why is This So Difficult?
The process of developing next-generation powertrains in the automotive industry has never been more difficult. This complexity arises from a variety of competing pressures that OEMs and suppliers must navigate, including varying regional regulations, the allure of multiple competing technologies, often unrealistic customer preferences, and ongoing challenges with securing supply chains and perfecting manufacturing. The recent push for electric vehicle adoption has exposed a number of these challenges. The EV transition, driven primarily by policy and regulatory mandates, was initiated before the underlying technologies and supply chains were fully ready. As a result, this transition has faced considerable setbacks, leading to its complete failure or, at best, a delay of many years.
The U.S. automotive industry has spent the past five decades striving for energy independence, an achievement that has now been realized. However, this success is threatened by recent surges in global oil prices with energy price volatility placing further pressure on the industry, struggling under these shifting global dynamics. Heeding customer preferences is essential for any industry's success, yet these voices are often overlooked, to the detriment of the automotive industry.
Looking ahead, powertrain development in the United States will be marked by several key concerns with strategic decisions needing to be made by OEMs, suppliers, regulators and customers alike:
- Considering a return to the internal combustion engine, while remaining cautious about the potential for rising energy costs;
- Exploring hybrid and electrification technologies but facing challenges related to sourcing critical materials;
- Monitoring the rise of China as a formidable manufacturing competitor, with a focus on maintaining the U.S. market as a stronghold;
- Addressing the escalating costs associated with software-defined vehicle (SDV) development, including microprocessors, memory, and software; and
- Recognizing the growing competition for resources—components, power, capital, and talent—from the expanding fields of artificial intelligence and data centers.