New mobility technologies have forced suppliers and automotive original equipment manufacturers to push boundaries with material and parts development.
OEMs are getting ready to roll out a variety of new electric vehicle platforms within the next six years, highlighted by investments from General Motors, Ford, Fiat Chrysler Automobiles, Volvo, Volkswagen and Toyota, among others. Fuel economy pressure from government regulations regarding greenhouse gas emissions are driving OEMs to make these significant investments.
What remains to be seen is how fast the public will embrace these new technologies, as a variety of hurdles must be cleared before electric vehicles have the chance to take significant market share. The three biggest obstacles are battery range, the charging infrastructure—especially in the U.S.—and affordability.
Most forecasts have internal combustion engine-based platforms dominating the overall fleet for at least the next decade, meaning suppliers and OEMs must walk the fine line between investing for the future and focusing on its core business.
Two suppliers aren't waiting around for EVs to take over.
Freudenberg Sealing Technologies has been up front about the potential threat to its core business—with about 70 percent of its automotive sales, just north of $1 billion, on the line should it fail to adapt.
Two of its strategic acquisitions in 2018 are, so far, paying off. The firm acquired Elcore and a significant interest in Michigan-based Xalt Energy to form its Battery and Fuel Cell Division. CEO Claus Moehlenkamp said Xalt is projected to more than triple its sales for 2019—about $50 million—under Freudenberg's ownership, and the firm forecasts it will double again to $100 million in 2020.