Plastics remain important as vehicles change, but processors need to be vigilant

Left, Austin Biskner. Right, Mark Barrott.

Plastics automotive parts suppliers will need to be on top of their games in the years ahead to deal with the uncertainties of a changing market.

The transition from gasoline to electric vehicles has not been a smooth one, but the overall trend toward electrification continues.

And while past predictions about the pace of change have proven to be overly aggressive, market still continues to undergo a fundamental change.

The move from internal combustion engines to battery-powered vehicles can represent both a challenge and opportunity for plastic part suppliers. And one thing is certain: There's going to be change in how plastics are used.

Some areas of EVs will see increased use of plastics while the elimination of the traditional engine will cut back on resin use in other applications, attendees at the recent Manufacturers Association for Plastics Processors conference in Indianapolis.

"The headline news for me is there's headwinds and there's tailwinds," said Mark Barrott, a partner at Plante Moran who is the automotive/mobility practice leader for the business consulting and financial services firm.

Previously predicted sales volumes for electric vehicles are now being kicked down the road three or four years as "the tailwinds still outweigh the headwinds for now. Now, that's a pre-election point of view."

A Democratic win in the White House could help boost the continued adoption of electric vehicles while a republican win might provide additional pause.

"But, as a plastic supplier, you're going to face intense volatility for the next two, three, four years. That's regardless of administration," he said, as vehicles change.

So communication between plastic processors and their customers will be key. "You need to be talking to your customer, whether it's a Tier 1 or 2 [parts supplier] or OEM [original equipment manufacturer] about these volume strategies. You need to be very on top of the volume strategies and reacting to that," he said.

EV makers will continue to look for increased use of plastic to provide lighter vehicle weights and better range. But the elimination of internal combustion engines creates a hit on overall plastic use.

Barrott estimates about 25 percent of all plastic used in a typical vehicle using an internal combustion engine is under the hood. But changes with EVs, which seek to use plastic in different ways to lighten a vehicles weight to extend range. EV batteries also are a major use of plastic.

About 50 percent of all plastic, on average, is use on interiors for traditional internal combustion engine vehicles, and the remaining 25 percent is spread across the rest of the vehicle outside of the engine.

"All the under hood goes away for the most part," he said, with EVs. "And it's replaced by this thing called a frunk [front trunk], which is a big plastic component."

"You need to be very on top of the volume strategies and reacting to that. And pushing your OEM or your customer, Tier 2 customer, about those volumes and how you're going to react to it," Barrot said.

Austin Biskner is senior manager in Plante Moran's automotive and manufacturing practice.

He told MAPP attendees that there is about 410 pounds of plastic in a typical internal combustion engine vehicle while a typical battery-powered vehicle increases slightly to about 425 pounds.

"That 'frunk' component actually outweighs all of the under hood black plastic today. From an overall perspective still a significant amount of plastic within the vehicle," Biskner said. "Very strong story and future for the future of composites even in an EV world."

A key issue in the purchase of new vehicles, regardless of how they are powered, is price. Consumers, in general, remain wary of pure EVs. That means hybrid vehicles continue to play a role in the transition from gasoline to electric.

Past predictions had EV sales expected to be around 15 to 20 percent at this point, but the reality is that they are at about 9 or 10 percent these days, Barrott said.

Consumer education remains a need to push the sale of EVs to the general public, which Barrott believes has not been taught enough about EVs.

"What does it mean to drive it? And what does it mean to buy it? And what does it mean to maintain it? It's just a different product that people are not used to. And the U.S. consumer is not that great at change," he said.

Earlier sales estimates were aggressive and fueled, in part, by earlier adopters' enthusiasm with Tesla and General Motor's Bolt EV, he said.

"But then as you get down into, you know, folks that are not early adopters and not techno heads or green heads, then you get into a part of the consumer base that's not as open to buying an EV or changing what they've always bought. And so that headwind is definitely there," he said.

Higher vehicle prices and interest rates in recent years also have worked against additional adoption of EVs, he said.

But while there is still hesitancy in the consumer market, times are changing.

"It's all across the vehicle. Every single part and component of the vehicle is being impacted by this transition to electrification. And that's also true in the internal combustion world, because we're lightweighting, we're focusing on different materials, we're focusing on different designs and architectures," Barrott said.

"No breaking news siren need here, there is an incredible amount of volatility in the marketplace that's driving and impacting that transition," he said.

* Source : https://www.plasticsnews.com/automotive/plastics-vehicles-remains-important-processors-need-be-vigilant