Regulations in fuel economy and emissions are tightening globally. What does this mean for the automotive OEM market? One important impact is that environmental regulations are spurring the development of hybrid and electric vehicles, which can help increase energy security, improve fuel economy, lower fuel costs, and reduce emissions. These benefits along with the regulations are motivating consumers to purchase hybrid and electric vehicles over a conventional vehicle.


How Growing Interest in Hybrid and Electric Vehicles Impacts OEMs

The automotive industry, including the OEM firms serving automakers, are caught in between the rapidly changing global fuel economy regulations, and consumer demand that has not yet caught up with environmental concerns. OEMs must navigate through many pressures in order to meet automaker demand for electronic components that help new hybrids and electric vehicles to function.


As the automotive industry works to develop the hybrid and electric vehicles that will inspire a change among consumers, the OEM market is subject to change as well. Here are a few ways the OEM market is already changing and how the OEM industry can respond.


Hybrid and electric vehicles are changing the automotive OEM market in the following ways:

  • New technologies and products
  • New competitors
  • Tightening environmental regulations
  • Public perception of hybrid and electric vehicles as luxury goods

OEMs should be responding in the following ways:

  • Expand product ranges to accommodate the rise of electric and hybrid vehicles
  • Invest in training of staff on new products
  • Find the best possible remanufacturing partner and service center for repairs
  • Accelerate price development of products to facilitate the overall growth in the market
  • Develop suitable supply chains to serve changing market demands
  • Analyze the overall electric and hybrid vehicle market and keep up to date with the growing government regulations in order to ensure they are equipped and ready as the market grows.

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