Rise in EVs tests aftermarket logistics

Galvanising the aftermarket for an electric future  

Storing parts for electric vehicles (EVs) alongside traditional ones will not affect the storage priorities that exist today but the management of lithium batteries brings with it a range of new challenges. Karen McCandless looks at how the rise in EVs in Europe will have an impact on the aftermarket and the logistics supporting it

As we usher in an era of e-mobility, OEMs are focusing their efforts on the ever-expanding EV market, producing more models to meet consumer demand. Volkswagen plans to make 70 all-electric models available on the market by 2028. The company expects 40% of its vehicles sold in Europe to be purely electric by 2030.

The International Energy Agency’s Global EV Outlook, an annual publication that identifies and discusses recent developments in electric mobility, also predicts that market share for EVs in all modes except two-wheelers will reach 30% by 2030.

Yet servicing and maintaining these vehicles requires a different approach compared with internal combusion engine (ICE) vehicles. While OEMs expect that EVs will need less servicing, manufacturers will be challenged to adapt their aftersales businesses to meet the needs of EVs in areas such as parts replacements, logistics and handling of lithium batteries.

Moving parts

EVs have fewer moving parts. Volkswagen statistics suggest that they have about 3,000 parts compared to traditional ICE vehicles, which have 4,000. According to US advanced transport consortium Calstart, 70% of an EV’s parts may be different to those of a combustion engine-powered vehicle.

While the EV market has been expanding at some pace, people will be driving traditional combustion engine-powered vehicles or hybrids for years to come, meaning OEMs and their service outlets need to have parts on hand to service all the different types of vehicles on the road for the foreseeable future.

“E-mobility will initially further increase the complexity of our aftersales logistics,” says Dr Christian Dahlheim, head of VW Group Sales. “Plug-in hybrids have both powertrains, which means they have around 4,500 parts per vehicle, while pure electric vehicles are currently estimated to consist of less than 3,000 parts. In the long term, the product range we have to provide our customers will become smaller, but in the short and medium term it will be much more extensive.”

Business as usual 

Despite the increase in the number of parts automotive manufacturers have to supply to repair combustion engine vehicles, hybrids and EVs, service centres will continue to operate in much the same way, storing as few parts on their premises as possible.

According to Horst Hanschur, vice-president for retail business development at Audi, as the retail trade does not normally stock up on original parts that are needed infrequently or at higher prices, there won’t need to be any changes to OEMs’ logistics processes in the short to medium term.

“For the lower demand for original parts to have a noticeable effect on the storage capacity in the retail trade, electric cars must have a higher share of the market,” he says. “Any influence on the required total storage capacity will therefore only become apparent later.”

Achim Glass, head of global automotive vertical at logistics provider, Kuehne + Nagel, believes that with the shortening lead times for fulfilling part replacement orders, dealers will be reluctant to increase their inventories.

He explains: “The number of parts and components that will be replaced for a full EV battery pack will be fewer compared to a traditional engine. Oil filters, oil pans, cylinder heads and water pumps are considered standard engine replacement parts. Those parts – along with the fuel tank – don’t exist in an EV. But that’s only marginal, given that there is still a very high overall number of replacement parts.”

Current BMW electrified vehicles

BMW i3

BMW i3s

Mini BEV

BMW 745e/Le/Le xDrive

BMW 330e

BMW 530e GEN4 + xDrive

BMW 225xe GEN4

BMW X5 xDrive45e

BMW X3 xDrive30e

BMW i8 Coupé

BMW i8 Roadster

BMW X1 xDrive25Le (China only)

Mini Cooper S E Countryman ALL4

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Impact of batteries

While in the short term OEMs will continue to operate a similar aftersales process and supply chain when it comes to parts replacement, increasing electrification will lead to a growing set of new car components and manufacturers will need the technical skills and understanding to deal with these.

One set of challenges comes from the storage and transport of new and damaged lithium batteries that power electric vehicles.

“The market is very unpredictable,” says Steve Christensen, executive director of the Responsible Battery Coalition. “When you buy a lead-acid battery you know they are designed and built for a certain time period, and after that time has passed you’ll need to come in to get a replacement. But there isn’t a particular lifespan of a lithium-ion battery so it’s hard to predict when a car will come in.”

The transport of lithium batteries is one of the biggest challenges OEMs face. When sending new battery packs from the central storage to the dealerships, the relevant mode of transport is subject to dangerous goods regulations. Drivers must be trained and certified to handle dangerous goods, special paperwork is required to accompany the goods, and vehicles must be equipped with special safety equipment.

“The lithium-ion battery technology is the game changer,” says Glass. “The battery is hazardous material and might spontaneously combust in the case of penetration or impact. As a result, batteries can catch fire and lithium-ion battery fire can’t be extinguished. There is an additional dimension that goes into the planning of lithium battery transportation, and often it makes the entire transport more expensive.”

In addition, batteries don’t get transported in a straight line from point A to point B. They might have to be moved to a distribution centre and then on a truck to the dealership or maintenance workshop before reaching the customer, even crossing borders at some point. At the same time regulations on their movement varies from country to country, according to Christensen.

A diverse mix of some 480,000 original parts are stored in Volkswagen Baunatal plant

Replacing, recycling and reusing 

To ensure it can safely stock these batteries, Volkswagen currently operates a pilot facility in Baunatal in Germany which, among other things, tests the optimum storage conditions for the batteries.

“This includes, for example, the ideal power supply required for storage due to cell chemistry, and the best adapted maintenance current,” says Dahlheim. “In the medium term, due to the high number of e-vehicles we are aiming to deliver, we will create appropriate storage facilities for the batteries based on the findings of the pilot facility. This includes plans to build a warehouse for high-voltage batteries at our Baunatal plant.”

Christensen said it was the aim of the Responsible Battery Coalition to create a closed-loop system for recycling lithium-ion batteries – or whatever the material used in batteries that power EVs will be.

“This will create much more predictability at service centers for OEMs and more stability in the market in general, but we still have a long way to go,” he points out.

AnchorSkilled staff

Dealing with the replacement of lithium-ion batteries – whether the battery has been damaged or reached the end of its life in terms of power – requires special tools and skilled staff. At Audi, any member of staff who works on battery EVs and plug-in hybrid electric vehicles must have received electro-technical training from an Audi high-voltage technician.

“High-voltage batteries and the modules belonging to them must be stored in accordance with national laws and battery classification,” says Hanschur. “If lithium-ion batteries or modules are defective then they need to be recycled in accordance with national laws. That is why high-voltage batteries are only repaired in battery competence centres which meet the corresponding requirements and standards.”

According to Glass, anyone working with lithium batteries – including warehouse and dealership staff – must undergo dangerous goods training because batteries can combust at any time with a risk of fire. This also means that storage areas must be approved to store lithium batteries, which can add extra costs for the additional safety equipment that is required.

Prioritising the service market

The rise of EVs, along with the increasing number of connected cars on the roads, and a change in ownership models from buying to renting for a specific period of time, will lead to a focus on aftermarket services rather than parts replacements.

In a survey from research firm McKinsey, more than half of industry experts said that they expected aftermarket services to become more important than parts. McKinsey also noted that an increase in EVs on the road was one factor that may lead to redistribution of 30-40% of aftermarket profits along the value chain.

As EVs usually have fixed maintenance intervals, OEMs and dealerships can plan regular services more precisely compared to combustion engine cars.

“This means less volatility in the EV aftermarket in the context of maintenance and service,” explains Audi’s Hanschur.

Connected vehicles will also allow for predictive maintenance whereby data sent continuously from on-board sensors to workshops or dealerships can help detect actual or potential issues earlier in the lifecycle. Customers can then be alerted and bring their vehicle in at a pre-arranged time, allowing dealerships to be prepared with the relevant parts.

Over-the air digital communication could allow for remote diagnostics and product updates that mean customers don’t have to visit a workshop for repairs. Scheduled maintenance could also be based around customer data such as driving behaviour and vehicle usage, making the maintenance process much more predictable.

According to Hanschur, predictive maintenance will also improve all areas of EV servicing. “Customers can be informed of unexpected service events and service partners are enabled to prepare the workshop visits more comprehensively,” he says.

Volkswagen’s goal is to use predictive maintenance from 2022.

Use of predictive models generated with the aid of neural networks and AI will reliably predict when certain components are highly likely to fail says Imelda Labbé, head of VW Group After Sales

Predicting the future

Future generations of vehicles, whether they are EVs or conventional drivetrain vehicles, will have more sensors on board and be more connected. This will make vehicle maintenance more predictive and more convenient for customers.

To stay ahead of this trend, Volkswagen has introduced an on-board diagnosis dongle called DataPlug. This is plugged into a vehicle's diagnostic interface and connects via Bluetooth to the associated We Connect app on the user's smartphone. It sends upcoming service events to the customer’s preferred workshop at the user's request.

“These automatically generated service leads are sent to the so-called Service Lead Inbox of the workshop,” says Imelda Labbé, head of Volkswagen Group After Sales. “The service consultant can then proactively contact the customer with proposed appointments and other information. This means that customers do not have to take any action themselves but can rely on being automatically contacted by their workshop if maintenance is required.”

“In about two years’ time, the vehicles will be connected to such an extent that they will be able to send service leads independently without the DataPlug,” Labbé continues. “Due to developments in sensor technology, these leads are also increasingly aligned individually to specific vehicle measurement values, such as the condition of the battery or brake pads.”

“E-mobility will initially further increase the complexity of our aftersales logistics. In the long term, the product range we have to provide our customers will become smaller, but in the short and medium term it will be much more extensive”
Christian Dahlheim, head of Volkswagen Group Sales

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Investment in EV development and in the transport and logistics to support it is needed to fulfil the goals many have to meet stringent incoming regulations on emissions control, especially in Europe. However, that investment is going to be curtailed over the next five years as the global vehicle market enters a downturn, with aggressive competition consolidating the market. The weakening macroeconomic climate could expose OEMs investing in the development of EVs to considerable risk, just at a time they are coming under intense regulatory pressure to invest in EVs.

Finally, the so-called EV revolution purports to be a way of cleaning up the traditional gas-guzzling, pollution belching car, especially in the wake of the diesel crisis. However, it is a question of what is used to fuel the power stations required to feed the charging network and the plants making these vehicles as to whether the planet will be any cleaner overall as a consequence. 

Marcus Williams Editor