With the eventual move to electric mobility, a big challenge facing legacy carmakers is how and when to switch over production plants from making ICE cars to making EVs. With markets around the world going electric at different stages, global carmakers need to produce both ICE vehicles and EVs simultaneously.
Setting up a dedicated new EV facility is expensive
The challenge lies in building them together in the same plants, as setting up new, dedicated electric vehicle facilities is expensive and not ideal for those with existing production plants. “It costs a couple of million euros to adapt a plant to make both ICE and EVs, but not a couple of 100 million which you would have to spend to build a new plant,” says Jörg Burzer, member of the board of management of Mercedes-Benz AG, production and supply chain management, speaking to the Indian media at an event in Stuttgart, Germany.
Lessons from Pune applied in Germany
The company is thus adapting its plants around the world to be flexible in making different powertrain models together, and Burzer says its CKD plants like India have helped. “We had the flexibility in Pune because we are already producing a lot of different cars on the same line, so we have learned a few lessons in production flexibility from CKD plants like these,” said Burzer. He also added that “the flexibility in India is even higher because you have SUVs and sedans on the same line, we don’t have that in our volume production.”
This has helped Mercedes adapt its Factory 56 at Sindelfingen, Germany to a flexible model capable of producing the ICE, hybrid and BEVs on one line. This is important as Factory 56 serves more than 100 markets and this flexibility helps Mercedes fulfil its different requirements. Burzer illustrates this point by saying that when the EU goes all-electric in 2035, they will still be producing a “very small volume” of ICE cars for markets that are yet to switch over.
Having said that, the Mercedes production chief is also sure that, by 2025, there will be some production facilities that will switch over 100 percent to EVs.
The challenge beyond continuing ICE car production, however, will also be lifecycle management and technology upgradation of the engine itself, as they will have to be updated to meet customer demands and well as tougher regulations. This could be challenging with small volumes. Clearly then the switch to electric mobility will not be as easy as throwing a switch.
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Mercedes EQB India launch confirmed for late 2022