European EV Platform Strategy: Flexible, Focused, or Both!

In June 2022, the EU Council confirmed that the sale of cars and vans with internal combustion engines (ICE) will be banned from 2035. Nevertheless, this effectively marks the end of the sale and production of ICE Light Vehicles (LV) in Europe. As a result, it has become economically infeasible in most cases to develop ICE technology that will soon become redundant while investing enormous sums in electromobility. With an ICE model that has a platform dedicated to battery electric vehicles (BEVs), he builds with BEVs, which also incurs operating costs and further increases risk.

European automakers are therefore developing strategies to successfully navigate the transition. More specifically, they are deciding whether to develop a focused (BEV-only) or flexible (fuel-rich) platform, or a combination of the two. The advantages and disadvantages of each approach are described in a previous blog (BEV Development: Reducing Progress Costs). In addition, the chart below outlines these strategies by dividing vehicle groups, brands, and BEV-enabled architectures into three categories.

Note: Excludes platforms that may not have been originally developed with the EV option.

It is clear that most of the industry favors a focused platform approach, with premium brands with higher margins and wealthier customers looking to better absorb the high costs associated with EVs. It is clear that there is a tendency to become a producer. Or they’re part of a larger group with sizable budgets, geographic reach, and production capabilities that can cut costs through greater economies of scale.Ford looks like an outlier. It may be, but it’s initially buying VW’s MEB and MEB ECO platforms to save development costs for BEV models in the region.

Mercedes-Benz and Jaguar Land Rover are premium brands, but instead decided to combine focused and flexible platforms. The former will introduce flexible MMA in smaller models from 2024, while larger vehicles will be underpinned by his BEV-focused platforms (MB.EA, AMG.EA, and VAN.EA) from 2025. increase. This strategy highlights the difference in price sensitivity between segment sizes. Vehicles in the traditionally low-margin small segment may not be financially viable until battery costs drop. In fact, his BEV-specific platform for smaller models such as the MEB ECO and CMF B EV was released later than the larger models and is being rolled out across the industry. Separately, JLR plans to relaunch the struggling Jaguar brand as a BEV only, setting Land Rover to utilize the EMA and MLA multi-fuel platforms, further positioning it in the luxury market. increase.

The only manufacturers that have opted for a purely flexible platform strategy are Stellantis and Toyota. However, while this is generally seen as a short-term fix, the model cannot optimize BEV designs nor provide ICE capabilities. So why remain completely flexible? will enable BEVs to be brought to market with less investment and shorter development times, ultimately facilitating access to ‘mainstream’ BEVs.

As important as the introduction of BEV is the continuation plan for the ICE model. BMW summed this up when it highlighted the risks to vehicle production and market access to mobility by stopping sales of ICE models before BEV prices reach parity. A flexible and combined approach will allow the factory to build ICE alongside his BEV variant of the same model as long as there is demand until 2035. Meanwhile, focused producers tend to extend the current BEV lifecycle to run alongside their ICE counterparts, as Porsche is doing with the Macan.

Considering all this, it is surprising that BEVs are expected to account for 56%, 41% and 37% of average European LV production for concentrated, composite and flexible automakers respectively in 2029. It’s not what you should do.

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