Accelerating success: Rapid scaling as a winning strategy for electric vehicle start-ups

The global EV (Electric Vehicle) market surged in recent years, from 5% of new car sales being electric in 2020 to 14% in 2022. Norway achieved 80% BEV (Battery Electric Vehicles) market share (new car sales)* in 2022, while the UK’s BEV market share of new cars sold rose to 18% in June 2023***.

Despite the growth, succeeding in this fiercely competitive EV market requires rapid development from concept to market-launch and flawless production execution. And so, the critical question for an EV start-up becomes: how to achieve fast scaling and reliable production at the same time? The following sections will outline some of the key phases we focus on at Capgemini to help guide organisations.

How to achieve rapid scaling with reliable production

‘Time to scale,’ the total time a start-up takes to go from prototype to building a significant market share, is a vital factor that will separate the winners and losers in this space. In addition to the obvious first steps of getting adequate funding and putting an entrepreneurial team together, the key steps to achieve rapid scaling include:

1. Well-defined new product development and quality management: Employ a rapid prototyping approach with requirement capture, quality governance and supplier integration as key pillars to iteratively refine the EV model. This allows for quick feedback loops and continuous improvement, resulting in more reliable production.
2. Critical make/buy decisions and supplier partnerships: Forge strong partnerships with dependable suppliers. Conduct a thorough make or buy analysis on critical parts early on and set up clear contractual terms on lead times and payment terms with suppliers. A well-structured supply chain is vital not only to avoid bottlenecks but also for financial planning.
3. Integrated digital foundation for mass production: Set up production facilities with scalability in mind. Scalability comes from standardisation of processes and cross-functional integration. Setting up a digital core of integrated product life cycle management (PLM), enterprise resource planning (ERP), and manufacturing execution system (MES) should be a priority. In tandem, implementing intelligent production lines and using robotics can significantly reduce production cycle times and minimise errors.

The following section, delves deeper into what we have learned from our experience of helping start-ups scale production.

How to build a digital core to support reliable, rapid scaling.

Our experience in helping an electric truck start-up scale to mass production has revealed that while creating a standard scaling roadmap may not be difficult, customising it to suit the start-up’s people and funding capacity can present significant challenges. Nonetheless, we have found that overcoming this challenge is possible by adhering to a few guiding principles, as follows:

1.Develop a well-defined operating model: This involves creating a clear roadmap that outlines the organisational structure, roles, responsibilities, and processes needed to achieve the company’s goals at various stages of its growth.

2.Establish an integrated enterprise architecture: Start-ups should focus on the following key aspects:

a. Standardisation and interoperability: Ensure that different software systems and applications used in various business functions can communicate and exchange data seamlessly, allowing for efficient workflow.

b. Cross-functional collaboration: In tandem, encourage cross-functional collaboration among teams to foster innovation and break down silos.

c. Data governance and security: Implement robust data governance practices to support data integrity and quality. Additionally, prioritise data security to safeguard sensitive information from potential cyber threats.

d. Digital twin technology: Adopt digital twin technology by creating a virtual representation of physical assets and processes. This technology allows for real-time monitoring, analysis, and optimisation of production processes, enhancing operational efficiency and reducing downtime. And you can find more about digital here.

e. Cloud-based solutions and big data analytics: Embrace cloud-based solutions to host enterprise applications, databases, and analytics tools. Cloud computing can help a start-up scale rapidly without significant infrastructure investments. Combined with big data analytics, a cloud-first approach allows for efficient data processing and actionable insights, empowering start-ups to adapt quickly to changes. For example, an integrated yet simple cloud-based solution could look like the one in Figure1 below.

3. Build a digital core for production: Set up the right size solution for product lifecycle management (PLM), enterprise resource planning (ERP) and manufacturing execution system (MES). Integrate functions across PLM-ERP-MES to create a digital core that will enable standardisation, visibility, and reliability of the processes. An effective digital core can cut down waste in time and material. Additionally, a powerful MES combined with IoT-Enabled Smart Manufacturing supports predictive maintenance, reduces downtime, and optimises production efficiency. Moreover, within the ERP systems or as an add-on low-code cloud-based solution, use artificial intelligence (AI) for predictive analytics to forecast demand, improve cashflow forecasting, optimise inventory levels, and find potential production issues before they occur. AI-driven insights can enhance operational efficiency and ensure uninterrupted production.

But remember…

While tackling the reliable rapid scaling challenge, EV start-ups must avoid overambitious expansion. Strive for a minimum-viable business (MVB) approach, focusing on essential core capabilities, tailored processes, and integrated digital infrastructure for rapid growth.

A tailored MVB solution for an EV start-up involves blending the best practices from traditional manufacturers with an agile approach for functional capability roll-out aligned with growth. Additionally, EV start-ups can choose to develop customised low-code solutions to meet burning needs in the short term while connecting those solutions to a data-lake to enable scalability in future and avoid fragmentation of data.

How Capgemini can help

At Capgemini, we have a proven track record in guiding start-ups, as well as OEMs (Original Equipment Manufacturers) in launching new EV products.. Figure 3 shows a snapshot of Capgemini projects with start-ups and OEMs at various stages of their journey. Reach out to us for a discussion and explore Capgemini’s ground-breaking research on automotive transformation. Find out more here.

Sources: *IEA EV Outlook 2023; **Reuters; ***SMMT, UK.