February 2022 Volume 4

EQUIPMENT & TECHNOLOGY

In Conclusion As the demand for better, cleaner, and more efficient over-the-road vehicles increase, we can be confident that demand for components produced by the forged process will also increase. The resulting eAxle technology of electric vehicles offers the potential opportunity for growth in an automotive industry grappling with the push for climate-conscious transportation and the loss of petrol-fueled vehicles. Josh Carney President Integral Power Technologies, LLC Phone: 440-223-4987 Email: jcarney@integralpowertechnologies.com

Figure 3: Concept of eAxle drivetrain

Treating eAxles as an Emerging Industry As the global automotive market shifts to all-electric vehicles, the demand for new types of forged transmission and drivetrain components may push existing axle and drivetrain component suppliers to their production limits. This limiting effect could create a competitive opportunity for forging companies not already serving the automotive market. In his book "Competitive Strategy," authorMichael E. Porter defines emerging industries as "newly formed or re-formed industries that have been created by technological innovations, shifts in relative cost relationships, emergence of new consumer needs, or other economic or sociological changes that elevate a new product or service to the level of a potentially viable business opportunity." From this point of view, both existing suppliers of traditional (petrol) forgings and those that have not yet entered into the automotive market, or are in declining markets, may regard the eAxle vehicle market as an entirely newmarket for their forged products. Ease of Entry One benefit newentrants (non-automotive suppliers)may experience is that they are not as constrained by the costs of retooling for new forging designs, as would be the case for companies presently producing lengthier components, i.e., rear-drive axles and engine crankshafts. Forging companies producing components such as forged structural hardware and aerospace components have equipment capable of making forgings 10 to 15 inches in length (depending on upset length) as well as shorter components like gears and bearing components. For them to retool for eAxle components may be less costly when compared to redesigning equipment initially intended to forge lengths of 20 to 30 inches. A final benefit is that the sales process itself may also come with greater ease in the emerging eAxle market. Presently, the market for automotive forgings is mature, with well-established buyer and supplier relationships. If demand outstrips supply, buyers are forced to investigate new sources of forgings for new designs. This situation increases supplier leverage and may keep profits high for both the supplier and the buyer of automotive forgings.

FIA MAGAZINE | FEBRUARY 2022 11