WANT TO DISCOVER MORE?
SEARCH

How carnage in the Used Car market is impacting BEV adoption in Europe

Munich, March 2024

How carnage in the Used Car market is impacting BEV adoption in Europe

Munich, March 2024

E

UROPEAN POLICYMAKERS DEFINE ELECTRIC MOBILITY AS THE FUTURE.

Governments in Europe unanimously share the vision that electrifying the vehicle fleet is the best way to achieve a more sustainable future. With its new regulation, which states that from 2035 all new cars and vans registered will have to be zero-emission versions, the European Union is a global front-runner in the adoption of electric vehicles.

However, this places OEMs under a lot of pressure to update their vehicle portfolio within a relatively short time span. In order to maintain a profitable business case, nearly all OEMs initially focused on producing rather pricy high-end SUVs. Cost parity between comparable new BEV and ICE vehicles has still not been achieved in most cases and, in particular, affordable vehicles in the smaller segments are yet to be launched. For instance, FIAT is offering the electrified version of its 500 with a premium of 78% and even Jaguar’s high-end SUV F-Pace is one third cheaper than its electrified brother (according to UK list prices). This pricing policy limits the overall size of the potential buyer group and prevents the BEV market from moving from early adopters to the mass market.

Average advertised prices of new electric vehicles in the UK
Chart-1-01
Chart-2-01

Source: AutoTrader as of 17.01.2024

BEV SALES GROWTH IN EUROPE IS DECLINING

After some initial strong growth – also fueled by high government tax incentive schemes – the relative market share growth of battery electric vehicles (BEVs) is gradually slowing down across Europe.

TOTAL PASSENGER CAR REGISTRATION VOLUME EU5

Increasing relative share of BEV in EU5 registration volume (2017-2023), (registered cars in thousands) 

Source: Berylls Strategy Advisors, ACEA

Whilst the share of BEV registrations across all drivetrain types is steadily increasing for the top 5 EU markets (14% in 2023), the momentum of growth is slowing down (+23% in 2023 vs. +103% in 2021 for the top 5 EU markets). BEV customer subsidies are being increasingly reduced in many EU markets (e.g., subsidies for corporate and private cars in Germany were terminated at the end of 2023).

BEV PASSENGER CAR REGISTRATION VOLUME PER EU5 MARKET

Increasing size of registered BEVs in EU5 (2017-2023), (registered cars in thousands)

Source: Berylls Strategy Advisors, ACEA

However, differences in BEV adoption exist across EU5 countries, with every fifth newly registered car being a BEV in Germany in 2023 whereas only every 20th to 25th new car was a BEV in Spain or Italy.

BEV PASSENGER CAR REGISTRATION SHARE PER EU5 MARKET

Increasing relative share of BEVs per EU5 market registration volume (2017-2023), (all figures in %)

Source: Berylls Strategy Advisors, ACEA

RESIDUAL VALUES OF USED BEVs ARE DEPRECIATING MORE QUICKLY THAN ICEs

We identify the BEV used car market as one of the key reasons for this slowdown, combined with affordability issues due to challenging economic conditions with high interest rates.

Used BEVs are performing significantly worse than ICEs throughout top European markets with regard to their residual values. On average across Europe, more than 50% of the initial value is lost after an average of three years and 60,000 kilometers.

RESIDUAL VALUE PER DRIVE TRAIN

Comparison of residual values along drive trains (BEV, Diesel, petrol), (all figures in %)

chart-6-01
chart-7-01
chart-8-01
chart-9-01
chart-10-01

Source: Berylls Strategy Advisors, Autovista24, part of the Autovista Group

The situation is leading to a significant excess value loss for BEVs compared to ICEs, especially when factoring in the higher initial new car prices of BEVs.

In Germany, on average BEVs had an excess residual value loss of 13% compared to petrol vehicles in December 2023. The rest of Europe’s top 5 markets displayed similar tendencies with excess residual value losses ranging from 13% (Spain) to 21% (Italy) when comparing BEVs to petrol vehicles. Apart from Spain and France, used cars in all top 5 European markets have lost drastically in residual value. In the UK, the residual value of BEVs plummeted dramatically from 63% to 40% in the course of 2023.

Based on an average new BEV list price of EUR 43,529 as stated by Autovista Group for Germany in December 2023, the absolute amount of excess loss of an average BEV compared to an average petrol vehicle is 13%, which equals EUR 5,659 compared to the initial list price. Looking at a 36-month lease contract with a total of 60,000 km, this would make a BEV EUR 157 more expensive per month compared to a petrol car, just to cover the excess loss and excluding interest effects, in addition to the higher lease installments due to the higher list price.

Likewise, lower residual values also affect new car lease contracts, as providers will try to pass on higher depreciation to their customers. An analysis conducted by Transport & Environment in 2023 reveals that across major European markets, leasing companies charged consumers 57% more to lease an EV compared to an equivalent petrol model.

RESIDUAL VALUE PER DRIVE TRAIN AND EXCESS LOSS IN COMPARISON TO PETROL

Comparison of residual values per car of BEV vs. Petrol and Diesel in DE, (rounded figures, December 2023)

Source: Berylls Strategy Advisors, Autovista24, part of the Autovista Group

BEVs ARE BURNING TAX INCENTIVES AND THE POCKETS OF VEHICLE OWNERS

The calculation is even more alarming when the initial incentives funded by taxpayers’ money are also taken into account. The current market & technology immaturity is turning out to be a gigantic value burn.

Just assuming the gap between the residual value developments of BEVs and petrol vehicles remains constant in the future, the additional value loss of all the 524,000 BEVs registered in Germany in 2023 in three years’ time compared to petrol vehicles will equal EUR 2.99 billion. The figure surpasses the total of German BEV tax incentives (BAFA environmental bonus) of EUR 2.4 billion for all eligible BEVs in 2023.

COMPARISON OF LOSS IN RESIDUAL VALUE FOR BEVS AND SUBSIDIES IN GERMANY

Excess in loss in residual value of BEVs outpaces environmental bonus in DE in 2023

Note: Excess in residual value loss as aggregation of excess loss of residual value per BEV to petrol (13%) of 524.000 registered BEVs at avg. list price of 43.529 EUR in 2023 in Germany

Source: Berylls Strategy Advisors, Autovista24, part of the Autovista Group

The value losses become even more apparent when comparing the residual values of similar BEV and ICE models:

Upfront price difference based on stock advertised on AutoTrader.co.uk

Source: autotrader.co.uk

WHO CARRIES THE RESIDUAL VALUE RISK OF BEVs?

In Germany, less than one third of new vehicles are bought by private customers. On the other hand, more than two thirds of all new cars are registered to corporate customers. The greatest share is the ‘true fleet’ segment, which comprises fleets of company cars, either for particular purposes or as an employee incentive. The second biggest segment comprises vehicles registered for tactical reasons by OEMs or their dealer networks, which are typically brought to the market later with discounts. Rental fleets also make up a relevant part of the total fleet.

Sales Split per channel in Germany in 2023 Total vs. BEV only

Source: Berylls Strategy Advisors, KBA

According to information from Dataforce, there was a setback in electrification following the final ending of the environmental bonus (BAFA) in 2023. During the last few months, the bonus was only eligible for private customers, which explains the decrease in the corporate segment. In the private market, the BEV-related share of new registrations fell from 35% in December 2022 to just 11% in December 2023. The share of BEVs in fleet registrations also remains at a low level.

BEV trend in vehicle registrations over the last 24 months in Germany (in thousand)

Source: Dataforce

A large number of these vehicles are sold via lease contracts that are typically returned to the leasing company at the end of the contract. Based on information from Dataforce, in 2023, 29% of private BEV customers opted for a leasing offer while the overall share of private customers taking the leasing option was only 7.2%. In the fleet segment, the majority of vehicles are bought via lease contracts.

In total, that leaves a majority of the residual value risk accumulating with the financial services companies of OEMs (Captives) or independent (Non-Captive) leasing companies.

VICIOUS CIRCLE: HOW DECLINING VALUES OF USED BEVs WILL HARM NEW BEV MARKET

Automotive dealers and OEMs are therefore currently seeing a drastic decline in demand for used BEVs, which is placing further pressure on resale values. As long as residual values continue to decline, it is hard to make a positive business case for buying a new or almost new electric vehicle due to this value loss. Even the cheaper cost of operation – drastically depending on actual cost for electricity – cannot compensate for this loss.

In an interconnected model, these factors also have an impact on demand and the sales prices of new BEVs.

Looking at the current price discounts for new BEVs in Germany, it becomes apparent that OEMs and dealers will need to continue discounting BEVs in order to stimulate at least a certain level of demand. A recent analysis presented by the German newspaper Auto Motor und Sport based on price data from leading automotive platforms (carwow.de, meinauto.de, neuwagen24.de) shows that in January 2024 the average discount was 18% compared with an average discount of 21% in 2023. This point is especially interesting as environmental subsidies (BAFA) were terminated at the end of 2023. Therefore, OEMs and dealers within the German market are giving discounts at their own expense to offset the lack of a government bonus.

Discount comparison for selected BEV models in the German market

Source: carwow.de, meinauto.de, neuwagen24.de; all figures are rounded; last update: January 2024

From our perspective, there are several trends that reinforce one another, limiting the attractiveness of owning a BEV and potentially leading to a carnage in the BEV market in the coming months:

  • After years of disrupted supply chains, vehicle availability is back to a fast supply, which is generating an overstock of new BEVs. The situation is resulting in price pressure and reduced production shifts

  • In 2023, Tesla leveraged its healthy unit economics and initiated several rounds of price discounts that negatively impacted the residual values of the total existing BEV fleet

  • High stock levels at OEMs and dealerships are further aggravating the situation with BEVs continuously coming in from the first user cycle of early adopters of BEVs

  • New BEV market entrants from China are still behind with their sales targets and thus likely to use price reductions as a tool to win market share
  • Customers still have very little experience with BEV technology and wonder how long used batteries will last, what ranges are realistic, and at what mileage the carbon-intense battery production amortizes its footprint during use compared to an ICE. As technology is progressing, customers will expect more mileage in the future due to improved technology and rather postpone their transition towards BEVs

  • The state of battery health in used BEVs is still a big question mark for many potential buyers, as the charging behavior has a strong influence on the battery lifetime and limited information and standards on battery history are reducing customer trust
  • As described earlier, the lack of medium- to low-priced electric vehicles is still excluding large potential buyer segments from the BEV market. Although used car prices are strongly declining, overall price levels are still higher than what many customers can afford
  • OEMs are increasingly leveraging their financial services arms (Captives) to offer highly incentivized leasing rates to increase the ‘take’ rates of BEVs. In an environment of relatively high interest rates, competitive leasing rates can only be offered by anticipating relatively high residual values. As we illustrated before, this is not very likely and the pressure might increase once these leased vehicles return to the used car market in a few years, i.e., today’s sales volumes will be bought at the expense of future residual value losses
  • According to data from mobile.de, search queries for BEVs decreased from 5.8 million in 2022 to 5.4 million in 2023. However, the number of BEVs offered on the platform significantly increased from 17,000 in 2021 to 74,000 in 2023. On average, list prices were EUR 42,718 for a BEV on mobile.de. However, the price customers are willing to pay stands at EUR 23,946. Therefore, the price gap between offering and demand is more than twice that of ICEs
  • The majority of BEVs were sold to fleet customers, especially rental fleets. Most of them are reducing the share of BEVs in their fleets, stating challenging residual values, low customer demand and high operating costs as the key reasons
  • Customers are concerned about an insufficient charging infrastructure withsstill a rather low ratio of registered BEVS to charging stations in most EU markets. We expect a rise from a ratio of currently 17 BEVs per public charging point in 2023 to 24 BEVs per public charging point in 2030 within the EU

HOW TO WEATHER THE STORM AND STAY SUCCESSFUL

Overall, the outlook for OEMs, their Captives, leasing companies, and auto dealers can appear rather daunting in the next few years with regard to electrification. In order to stay profitable in the BEV market going forward, we at Berylls see several levers that need to be utilized in order to be successful. In our upcoming series, we will further deep-dive into these fields.

  • Customer Experience & Sales Funnel Management: review your BEV Customer Journey and install intelligent BEV Funnel planning, steering and optimized media spend to accelerate omni-channel touchpoint conversions & drive conversions
  • Pricing: apply effective and consistent pricing strategies across the complete new and used BEV portfolio to secure and optimize profitability Learn more
  • Remarketing: centralize & optimize remarketing activities as well as establish digital direct-to-consumer remarketing channels to increase customer loyalty
  • Multi-cycle sales models: manage vehicles on one’s own balance sheet over multiple years via non-ownership Vehicle-as-a-Service models (VaaS) to control the residual value curve and maximize the vehicle lifetime value (VLV) Learn more
  • 4R (recycling, remanufacturing, reuse, refurbishment) & circularity: leverage upcoming stricter regulations regarding the recycling of batteries and vehicle components and apply different life cycles for the vehicle and the battery up to the recycling stage Learn more
Authors
Christopher Ley

Partner

Michael Dümig

Project Manager

Philipp Neubauer

Senior Consultant

Felix Riebel

Consultant

Christopher Ley

Christopher Ley joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in October 2021 as Partner. He has over 14 years of top management consulting experience with focus on new business models and market expansions within the automotive & mobility industry. He is an expert around Vehicle-as-a-Service, comprising vehicle finance & leasing, fleet management and mobility services. Christopher Ley is advising OEMs, Captives, Financial Services Companies, PE & VC Investors, Leasing & Rental Companies, Fleet Managers and Mobility Startups around the transformation from one-time sales towards use-based multi-cycle business models on a global level.

Prior to joining Berylls, Christopher Ley has been working for other international management consulting firms, amongst others Monitor Deloitte and Alvarez & Marsal. He holds a diploma degree in business administration from Johannes Gutenberg-Universität in Mainz and an MBA from Colorado State University.

Contact us More about Berylls

Enablement via Generative AI: Bridging the Talent Gap in the Emobility Transition

Munich, March 2024

Enablement via Generative AI: Bridging the talent gap in the Emobility transition
Munich, March 2024

T

here is a lack of employees for the transformation towards e-mobility. Generative AI has the potential to close this gap and reduce costs at the same time.

  • E-mobility requires talented specialists with new skills from OEMs and suppliers, but the labor market is largely empty. Berylls has investigated how AI can help to offset the consequences of this shortage.

  • The Berylls analysis shows that the use of AI can speed up work processes. The experts believe it is possible to reduce working hours by up to 25 percent.

  • As production efficiency increases, the need for personnel decreases and the shortage of skilled workers in the relevant sectors loses its terror.

  • Berylls calculations show that the global top 10 OEMs can significantly reduce the need to hire new specialists through the use of AI and thus leverage a personnel cost savings potential of almost 550 million euros.
Download the full study now.
Berylls Insight
Enablement via Generative AI: Bridging the Talent Gap in the Emobility Transition
DOWNLOAD
Author
Dr. Alexander Timmer

Partner

Lisa Theresa Schmidt

Consultant

Yalun Li

Consultant

Valentin Froh

Project Manager

Dr. Alexander Timmer

Dr. Alexander Timmer (1981) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors), an international strategy consultancy specializing in the automotive industry, as a partner in May 2021. He is an expert in market entry and growth strategies, M&A and can look back on many years of experience in the operations environment. Dr. Alexander Timmer has been advising automotive manufacturers and suppliers in a global context since 2012. He has in-depth expert knowledge in the areas of portfolio planning, development and production. His other areas of expertise include digitalization and the complex of topics surrounding electromobility.
Prior to joining Berylls Strategy Advisors, he worked for Booz & Company and PwC Strategy&, among others, as a member of the management team in North America, Asia and Europe.
After studying mechanical engineering at RWTH Aachen University and Chalmers University in Gothenburg, he earned his doctorate in manufacturing technologies at the Machine Tool Laboratory of RWTH Aachen University.

Contact us More about Berylls

Truck Charging: The challenges in its quest for decarbonization

Müchen, Januar 2024

Truck Charging: The challenges in its quest for decarbonization Munich, January 2024

T

he trucking industry is faced with a formidable challenge in its quest for decarbonization, given its substantial climate footprint. The International Energy Agency reports that a staggering 40% of global road transport emissions originate from this sector.

Discover the transformation in long-haul trucking with electrification. Industry leaders must embrace unique services for a competitive edge. Our latest insight highlights these changes and emphasizes the urgency to act for success in a dynamic industry environment.

Download the full insight now.

Berylls Insight
Truck Charging: The challenges in its quest for decarbonization
DOWNLOAD
Authors
Dr. Alexander Timmer

Partner

Lukas Auchter

Senior Consultant

Steffan Lemke

Consultant

Dr. Alexander Timmer

Dr. Alexander Timmer (1981) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors), an international strategy consultancy specializing in the automotive industry, as a partner in May 2021. He is an expert in market entry and growth strategies, M&A and can look back on many years of experience in the operations environment. Dr. Alexander Timmer has been advising automotive manufacturers and suppliers in a global context since 2012. He has in-depth expert knowledge in the areas of portfolio planning, development and production. His other areas of expertise include digitalization and the complex of topics surrounding electromobility.
Prior to joining Berylls Strategy Advisors, he worked for Booz & Company and PwC Strategy&, among others, as a member of the management team in North America, Asia and Europe.
After studying mechanical engineering at RWTH Aachen University and Chalmers University in Gothenburg, he earned his doctorate in manufacturing technologies at the Machine Tool Laboratory of RWTH Aachen University.

Contact us More about Berylls

Automotive Software’s Next Challenge Is Procurement – And It Needs to Be Addressed Today

Munich, November 2023

Automotive Software’s Next Challenge Is Procurement – And It Needs to Be Addressed Today Munich, November 2023

T

he structured and linear procurement model of the past must give way to a new collaborative approach. 

Automakers need to adapt their procurement systematics and acquire new skills in order to source software successfully.

Earlier this year, Mercedes-Benz announced it would no longer be offering a proprietary automotive navigation and map system in favor of collaborating with Google. This signaled a significant change in the company’s software and procurement strategy. The German OEM was effectively announcing that developing, running, and maintaining core elements of its vehicle software stack required new supplier relationships in order to stay competitive with other car manufacturers – including collaboration with companies from non-automotive sectors.

Today, an estimated 73% of value creation in automotive R&D is hardware-related, but before long, the majority of value will be delivered by the software running on it. We can already identify some successful frontrunners today like Tesla and new entrants from China.

In recent years, OEMs have realized that they do not possess the in-house capabilities and resources to develop a full software stack including E/E architectures, underlying operating systems, and consumer-facing applications and services. BMW’s Senior Vice President of Electronics and Software Christoph Grote recently said: “It is completely unrealistic to build almost all software components yourself as a car manufacturer. Those who do so isolate themselves.”

However, the balance of power is also shifting. Large tech companies like Apple, Google, Tencent, and Huawei become essential contributors to software-defined vehicles. Driven by high customer expectations for the standardized integration of their platforms and services across car brands, the bargaining power of OEMs is steadily decreasing.

Consequently, OEMs needed to learn that while in the past, they were in the position to dictate a customer/supplier collaboration with Tier-1 and Tier-2 suppliers, this role may be subject to change in the era of the software-defined vehicle.

Pricing stands as the most potent lever for increasing profitability within the automotive sector. Consequently, it should take center stage for all Original Equipment Manufacturers (OEMs). However, it’s essential to recognize that Revenue Management extends beyond Pricing. It involves a strategic business practice adopted by companies to maximize their revenue and profitability through the optimization of product or service pricing. This discipline entails the application of diverse pricing strategies, data analysis, and forecasting techniques to make informed decisions about price setting, resource allocation, and capacity management. The primary components are depicted in the chart below. Pricing emerges as the most significant lever for enhancing profitability, making it of utmost importance for top management.

A new collaborative and flexible software procurement framework is needed

This significant role and power shift implies that OEMs will have to source key elements of their vehicle software externally while at the same time ensuring state-of-the-art integration into their vehicles in order to maintain a competitive edge. The traditional “design-bid-build” model, which is characterized by highly specified requirements, strict cost discipline, and high-volume orders, is unlikely to work in this case.

A new collaborative and flexible software procurement framework for design, development, and delivery is needed to enable co-development and partnerships. You cannot plan software development efforts years in advance. As a result, the framework must reflect the needs of the fast-moving and fast-changing nature of software projects where scope, timeline, and technology change more frequently than in classical procurement processes. This will require both internal empowerment and new evaluation criteria to assess software partners.

Figure: Software Procurement is different

Source: Berylls Strategy Advisors

In terms of internal empowerment at OEMs, we have identified four success factors:

  • Eye-level collaboration: The classic relationship between an OEM and its suppliers is a hierarchical one in which the OEM sets targets and directions and makes the important decisions. If a project goes wrong, many OEMs have specialized task force teams that will “invade” the supplier and take over operations. Due to the existing lack of software competencies at OEMs and the power of large tech providers, this approach will not work for many software projects. Software collaboration demands shared beliefs and a strategy underlying a joint approach toward the development of software products. This is why our first success factor is “eye-level collaboration.” This means that shared responsibility allows each party to contribute their unique expertise and capabilities while sharing risks related to technology, market, and regulatory compliance. Procurement must take this position on the OEM side and constantly steer this relationship with supplier management. This establishes the foundation for more flexible requirements and target setting as well as new contract and business models.

 

  • Flexible requirements and target setting: The playing field of software-defined products needs a completely different approach to target setting and documentation. Moving away from rigid specification sheets and towards flexible requirements will allow for changes and adaptations in the scope, timeline, and deliverables of the software. This approach will benefit from agile development methodologies, which emphasize iterative and incremental delivery of software and may include performance metrics that are tied to the achievement of project milestones and goals (e.g., achievement of a defined number of story points), rather than strict adherence to predefined functional requirements. Challenges arising out of this “softer” target agreement must also be addressed through new contract and business models.

 

  • New contract and business models: Traditionally, the classic contract model between an OEM and a supplier has focused on two parameters – unit price and development cost. Software was usually included in the (one-off) unit price of the hardware component. Today, however, new business models are needed for continuously developed and delivered software components. OEMs may need to evolve beyond a software license model based on production volume, irrespective of software usage intensity, and consider time-/usage-based payment models that better take into account ongoing supplier development and maintenance costs. Indeed, we predict that software-as-a-service business models will become the new normal. A further step is the participation of software suppliers in vehicle or function sales (e.g., autonomous driving functionality). This business model is applicable, especially in terms of long-term strategic partnerships and cooperation.

 

  • Software assessment competence: Procurement needs to increase its ability to understand and evaluate software and deepen its connection to hardware. This includes knowledge of the overall software architecture with all its dependencies, common programming languages, software development methods, and systematic procedures for the management of critical projects. Therefore, procurement needs to establish a close relationship to development departments in order to build up this understanding in addition to its commercial competence. This competence is crucial in order for procurement to remain a neutral partner between the supplier and the OEM development departments. It is the foundation for negotiation in the initiation phase and the basis for a successful partnership.

In addition to internal empowerment, OEMs should consider four evaluation criteria when assessing potential software partners:

  • Software delivery model: Compelling software products are the result of efficient development, rigorous testing, feedback loops, and appropriate adjustments throughout the product lifecycle. Suppliers need to offer a software delivery model that implements new requirements fast in agile teams using shorter release cycles and DevOps methods. Short feedback loops within the development value chain, from the OEM to the supplier, are a prerequisite for shortening time-to-market while maintaining quality. This enables continuous development, refinement, and delivery of software components “as-a-service” over the entire lifecycle. It stands in contrast to the traditional, SOP-focused delivery models used for hardware projects.

 

  • Software flexibility and efficiency: A modern vehicle with its increasingly centralized computer architecture processes hundreds of millions of lines of software code – it is now estimated that a typical electric vehicle uses four times as much code as a commercial jetliner. Even though computing power is continuously increasing, the complexity of porting software to multiple platforms makes the flexibility and efficiency of acquired software a strategic issue. Buyers and suppliers must move from developing static, monolithic software tailored to specific hardware to prioritizing a flexible and modular cross-domain software portfolio.

 

  • Automotive software steering competence: Nowadays, organization in agile teams to develop and maintain software is pretty much standard. But the implementation of these practices varies vastly across organizations and hierarchies. Currently, there is no global blueprint on how car software is developed and steered. The supplier’s management team in particular needs to be able to assess and handle the steering of software projects and the interfaces to the OEMs as part of automotive systems engineering. This includes efficient decision-making, prioritization, harmonization with hardware engineering, and communication in a much more volatile setup than with traditional hardware projects. And, if a project turns critical, the ability to manage overarching task forces up to and including the highest levels of corporate leadership is crucial.

Berylls Research

How to not mess up software projects
Click here
  • Processes, methods, and tools: As future automotive software will consist of both prepackaged on-board components and ad-hoc additive components, this combination will require holistic underlying processes, methods, and tools. When choosing a supplier, the consistent use of PMT across the value chain needs to be considered to ensure collaboration efficiency. One special area of focus is the requirement management process that needs to be standardized via tools and aligned processes.

The big shift

The move to software-defined vehicles is transforming the automotive procurement landscape and requires procurement professionals to adapt their practices in order to effectively source and manage software suppliers.

This means that the process and the principles of procurement must reflect the business logic of software, which is closer to signing a service contract than buying a product. To establish an innovative and future-proof software procurement organization, OEMs will need a deeper understanding of software development, supplier management, industry standards and regulations, intellectual property, and talent management. The key is self-empowerment: OEMs need to develop the necessary skillset while at the same time creating flexible and resilient organizations to manage software supplier relationships that have broken free of the “captive supplier” model and more closely resemble collaborations and joint ventures. Markdowns will not be the dominant measurement for success of procurement.

This shift will not be easy, but the software-defined automotive future demands it.

Author
Sebastian Bräuer

Associate Partner

Sebastian Bräuer
Sebastian Bräuer (1982) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in 2022 as Associate Partner. He started his career in consulting where he led and supported assignments with focus on operational excellence programs primarily in automotive but also in consumer goods and chemicals. Later Sebastian worked for an German OEM in leadership roles regarding organizational development, digital product offering and digital car strategy. At Berylls Sebastian focuses on topics regarding Digital Car.
Sebastian graduated in economics and engineering at the Technical University of Dresden.
Contact us More about Berylls

Navigating the automotive revolution: Insights into the future of automotive operating systems

Munich, March 2024

Navigating the Automotive revolution: Insights into the fututre of automotive operating systems
Munich, November 2023

I

n the landscape of the automotive industry, an enormous transformation is underway. The very essence of vehicles is being redefined, not under the hood, but in lines of code and algorithms.

Automotive Operating Systems (AOS) have emerged as the catalysts for this revolution, promising a future where software dictates the driving experience. In our in-depth survey conducted among industry experts spanning OEMs, Tier-1 suppliers, Big Tech players, and engineering service providers, a tapestry of insights has been woven, illuminating the path forward.

Download the full study now.
Berylls Insight
Navigating the automotive revolution: Insights into the future of automotive operating systems
DOWNLOAD
Author
Dr. Jürgen Simon

Associate Partner

Sebastian Böswald

Associate Partner

Felix Günther

Consultant

Dr. Jürgen Simon

Dr. Juergen Simon (1986) is Associate Partner at Berylls by AlixPartners (formerly Berylls Strategy Advisors), an international strategy consultancy specializing in the automotive industry. He is an expert in sales and corporate strategies as well as M&A and can look back on many years of consulting experience.
Dr. Juergen Simon has been advising automotive manufacturers and suppliers since 2011 and has in-depth expert knowledge in the areas of holistic strategy development, business models and commercial due diligence. He also focuses on market entry strategies and topics related to the „Software Defined Vehicle“.
Prior to joining Berylls Strategy Advisors, he worked as senior consultant at the Droege Group, a consulting and investment firm.
As a graduate economist from the University of Hohenheim, he completed his doctorate at the Institute of Management at the Karlsruhe Institute of Technology (KIT) before joining Berylls.

Contact us More about Berylls

Accelerating Automotive R&D: Strategies and approaches to maximize efficiency and speed

Munich, November 2023

Accelerating Automotive R&D: Strategies and approaches to maximize efficiency and speed

Munich, November 2022
A

utomotive OEMs face challenges in sustaining profitability due to escalating product complexity, which in turn results in heightened research and development expenditures.

Five improvement strategies can help not only to reduce R&D expenditures but also increase innovation cycles.

Download the full insight now.

Berylls Insight
Accelerating Automotive R&D: Strategies and approaches to maximize efficiency and speed
DOWNLOAD
Author
Sebastian Böswald

Associate Partner

Sebastian Böswald

Sebastian Böswald (1991) joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in April 2021. He is an Associate Partner and an expert in both transformation and operations. Over the last decade, he has focused his work on strategy and organizational design, as well as on two megatrends shaping the automotive industry: software-defined vehicles and CASE (connected, autonomous, shared, and electrified mobility). In these fields, he has advised our global OEM clients as well as Tier-1 suppliers and tech companies.

Prior to joining Berylls, he worked for PwC Strategy& and started his career at BMW as a project manager for product strategy and digital charging services.

He received a Bachelor of Science in Automotive Computer Science at the Technical University of Ingolstadt as well as a Master of Science in Management from the Technical University of Munich.

Contact us More about Berylls

Semi-annual index rebalancing: WidsomTree Berylls LeanVal global automotive innovators index

Munich, October 2023

QUARTERLY INDEX REBALANCING Q3 2022

Munich, August 2022
F

ew things shape modern life as much as individual mobility. Be it as an expression of freedom and individuality, or as an economic driver. 

To reflect this, we have developed the WisdomTree Berylls LeanVal Global Automotive Innovators Index – the WTCAR. It tracks the performance of the 100 most relevant publicly listed automobility players worldwide.

By design, the WTCAR covers the industry’s entire value chain – from vehicle manufacturers and suppliers, to dealer groups, and providers of mobility services or infrastructure.

Rebalancing updates

The automotive industry experienced a severe blow from the capital markets in 2022, and the recent decline in stock prices has wiped out most of the gains that the sector had made from the pandemic lows.

Now, there are still several major effects impacting the global capital markets. First, central banks remain committed to fighting inflationary pressures and have incrementally raised interest rates as a strategic countermeasure over the past months, slowing down the recovery of the economy. Second, supply shortages caused by the Covid-19 crisis is continuously moving into the rear-view mirror, allowing for a more opti- mized production utilization. Third, political influences like the Inflation Reduction Act in the US, the war in the Ukraine, and the pressures bet- ween China and Taiwan are continuing to influence the developments at the global capital markets.

Berylls Insight
Semi-annual index rebalancing: WidsomTree Berylls LeanVal Global automotive innovators index
DOWNLOAD
Authors
Dr. Jan Burgard

Berylls Group CEO

Malte Broxtermann

Associate Partner

Björn Simon

Senior Consultant

Jakob Rüchardt

Consultant

Dr. Jan Burgard

Dr. Jan Burgard (1973) is CEO of Berylls Group, an international group of companies providing professional services to the automotive industry.

His responsibilities include accelerating the transformation of luxury and premium OEMs, with a particular focus on digitalization, big data, connectivity and artificial intelligence. Dr. Jan Burgard is also responsible for the implementation of digital products at Berylls and is a proven expert for the Chinese market.

Dr. Jan Burgard started his career at the investment bank MAN GROUP in New York. He developed a passion for the automotive industry during stopovers at an American consultancy and as manager at a German premium manufacturer. In October 2011, he became a founding partner of Berylls Strategy Advisors. The top management consultancy was the origin of today’s Group and continues to be the professional nucleus of the Group.

After studying business administration and economics, he earned his doctorate with a thesis on virtual product development in the automotive industry.

Contact us More about Berylls
Malte Broxtermann

Malte is an expert in the development and implementation of automotive digitization strategies.

He focuses on helping clients scale (generative) artificial intelligence to improve their bottom line across the entire automotive value chain. His primary customers are automotive manufacturers and their suppliers, especially those active in the Software-Defined-Vehicle space.

Before his time at Berylls by AlixPartners (formerly Berylls Strategy Advisors), he advised leading North American utility companies. Prior to that, he saved lives as emergency medical technician. Malte holds master’s degrees in economics from Maastricht University and Queen’s University in Canada.

Contact us More about Berylls

Model Based Systems Engineering in Truck R&D

Munich, September 2023

New Premium China Survey

Munich, July 2023
T

he trucking industry is currently grappling with significant pressure induced by an ongoing transformation predicated on three fundamental changes to its long-standing operations.

Download the full insight now.

Berylls Insight
Model based systems engineering in truck R&D
DOWNLOAD
Authors
Steffen Stumpp

Associate Partner

Frederik Ruhm

Associate Partner

Steffan Lemke

Consultant

Activate Download
Steffen Stumpp

Steffen Stumpp (1970) joined the Berylls Group in October 2020 as Head of Business Unit Commercial Vehicles. At this point, he already looked back on extensive professional and leadership experience in the commercial vehicle industry. Stumpp started his career in an OEM and went through different roles in research, marketing, product planning and after-sales service. When he switched to the automotive supplier industry, he took over the responsibility for worldwide sales and marketing of a medium-sized tier 1 supplier. After another step as head of sales he decided to join Berylls, where he is now responsible for the commercial vehicle business.

Stumpp is a graduate engineer and has studied industrial engineering at the KIT in Karlsruhe and the Technical University of Berlin with focus on logistics.

Contact us More about Berylls

Digital Automotive Commerce: Creating Web 3.0 experiences and strategy from business to implementation

Munich, August 2023

New Premium China Survey

Munich, July 2023
A

pple's newest Vision Pro is here and brings with it the promise of reinvigorated momentum in immersive Web 3.0 applications for OEMs.

 

As we set out in two publications last year, the Web 3.0 applications – namely in „the Metaverse“ – are high risk, uncertain reward opportunities that are not for every OEM.

Download the full insight now.

Berylls Insight
Digital Automotive Commerce: Creating Web 3.0 experiences and strategy from business to implementation
DOWNLOAD
Authors
Henry Lundt

Principal

Paul-Alexander Bures

Senior Consultant

Christian Barbuia

Senior Associate

Activate Download
Henry Lundt

Henry Lundt (1984) is a Principal at Berylls Mad Media (part of Berylls Group), the experts for transforming sales & marketing in the automotive industry. He is an expert in digital automotive commerce as well organizational transformation and can look back on many years of consulting experience in various roles.

Henry Lundt has been digitizing automotive sales & marketing for manufacturers and suppliers since 2009 and has experience in the areas of holistic strategy development, digital product development & applying and optimizing agile working models. Beyond this, Henry Lundt built expertise in digital automotive commerce, consulting our clients to build and optimize transaction journeys. Prior to joining Berylls Mad Media, he set up Berylls Digital Ventures as first Berylls Group entity – prior to joining Berylls, Henry Lundt was Head of Automotive at TD Reply, a marketing & innovation consulting firm, focused on digital business.

He graduated as business economist from the University of EBC Berlin in marketing & media with a combined studies in Business Management in University of Sunderland & University of Newcastle upon Tyne (UK).

Contact us More about Berylls
NO TIME TO READ THIS WEBSITE?

T +49-89-710 410 40-0
info@berylls.com

Copyright Berylls by AlixPartners