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How to Get Your Vehicle on The Road: Here's how to Produce a Car & Free Whitepaper

Dietmar Kleindienst
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This article will help you take the first steps in the right direction if you wish to find out about how to produce a car: from important aspects to consider beforehand regarding the current situation on the EV market to the first steps in establishing your new automotive company in the industry.

TABLE OF CONTENTS:
> How to produce a car? Five key facts to consider before realizing your automotive vision
> The electric vehicle market and why you should enter it right know!
> How to produce a car? Here's the fastest way!
> The key components of your future automotive network
> 5 questions every vehicle development and production partner will ask
> The feasibility study: an important milestone when you're thinking about how to produce a car
> How a show car will empower your vehicle vision
> Final notes on the question: How to produce a car

The world is changing – and so is the automotive industry. Global megatrends such as sustainability, digitalization, and urbanization challenge the ways we think about mobility and the way how to produce a car.

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However, as vehicles become increasingly electric and software-driven, this is also an opportunity for new players to enter the market.
Are you considering producing your own car, but are unsure when and how to get started? Are you looking for the answers to your questions about how to develop a car?

As automobiles are considered the most technologically complex mass product, it is easy for new players to get lost in the shuffle because of the immense complexity of the undertaking.

However, let’s say it in advance, if you want to enter the automotive industry with a unique electric vehicle, now is the best time to do it!

how to produce a car shown buy a figure starting to climb up stairs to success

 

HOW TO PRODUCE A CAR? FIVE KEY FACTS TO CONSIDER BEFORE REALIZING YOUR AUTOMOTIVE VISION

The electric vehicle (EV) market is developing at an astonishing speed. However, this doesn’t mean that success is guaranteed. Before planning their market entry, it’s important for new entrants to realize the complexity of the EV market, vehicle development, and launching production of an EV in general. So if you are thinking about how to produce a car, here are five facts you schould consider before getting started:

Fact 1: The Electric Vehicle Market is Hotly Contested

Rising awareness for resource depletion and climate change as well as scientific advancements that foster greater efficiency, profitability, and affordability are all factors driving the rapid growth in market share of EVs. By 2030, it is estimated that EVs will have a global market share of 35 percent – by 2040, they will overtake combustion engines as the dominant form of transportation, especially in Europe and China.

Fact 2: Having a Clear Product Vision is Essential to Market Success

For successful entry into the EV market it is essential to have a clear product vision when you start to think about how to produce a car: Carmakers must know exactly what the vehicle represents, why it stands out from the rest, and why a potential customer or partner should be interested in both the vehicle and the brand.

Just as important is the ecosystem one intends to sell in: Is the required infrastructure available? Is the product vision technologically feasible? Is there demand on the market for the vehicle’s unique selling points (USP) in the first place?

Analyzing the potential market is crucial before defining the product vision and before even starting to think about how to produce a car – and of course the more detailed the market studies are, the more likely it is to identify a suitable market segment.

Fact 3: Partners Will Not Support an Idea Without The Facts to

Back It Up

A detailed market study is also helpful to underscore one’s credibility as a new entrant. Most new players on the market start from scratch and need investors and partners to establish the ecosystem and infrastructure necessary to bring a vehicle to market.

However, before investing resources, time, and funds in a new project, partners and investors will want to make sure your future product is competitive and there is enough demand for it. The more studies you have to back up your claims and the clearer your idea of the required time and resources, the better.

Fact 4: Regardless of Past Experience, You Are a New Player

in The EV Market

Whether your company has a long history in other industries or is just starting out, entering the EV market means starting from scratch. Thus, every pitch to potential partners or investors is an opportunity to prove the viability of your endeavor.

Because setting up a team and doing market studies is extremely costly, having financial reserves and adequate time is important, especially for new companies even before they start to think about how to produce a car

Fact 5: Use the Potential - It's Now or Never!

E-mobility will likely become a dominant force in the vehicle industry. However, the market is filling up with competitors, so the window of opportunity for a successful market entry is not getting any bigger.

The right time to enter the market is right now. It is still in the process of consolidating and there is ample opportunity to get established in this growing industry branch.

THE ELECTRIC VEHICLE MARKET - AND WHY YOU SHOULD ENTER IT RIGHT NOW!

The time for e-mobility has come! As battery-electric vehicles (BEVs) become increasingly cost competitive, they become an attractive and affordable option for car buyers. Tax incentives and grants as well as rising fuel prices and growing concerns about sustainability have intensified this trend.

National Incentives and Zero-Emission Policies Set The Stage For a Growing Electric Vehicle Market

In view of greenhouse emission targets, the transportation sector is facing substantial changes over the next few decades. Thus, many regions – particularly Europe, China, and the U.S. – have introduced incentives aimed at electric vehicles.

The Global EV Outlook 2021 states that more than 20 countries have electrification targets or bans on internal combustion engines and eight countries plus the European Union have announced net-zero pledges.

The Market Share of Electric Vehicles is Expected to Rise to Over 35% By 2030

A total of 12 million EVs were on the roads worldwide in 2020, with figures across all segments showing exponential growth. Generally speaking, the EV markets in North America, Europe, and China currently show the most potential – with China being the largest though particularly difficult market. Other regions, such as India and Africa, have not yet reached significant numbers so far.

Old And New Players Can Establish a Presence on The Market

The range of available models on the BEV market is expanding, including a variety of SUVs and commercial vehicles from both traditional OEMs and new entrants. Over the last few years, large, established automotive groups have started to invest heavily in e-mobility which is intensifying the trend towards EVs.

In 15-20 Years, Electric Vehicles Are Likely to Become The Dominant Mode of Transport

With high-voltage batteries becoming cheaper – a drop by two-thirds in just five years and maximum driving ranges as well as charging infrastructures gaining competitiveness, EVs can now replace conventional cars on most short to medium length trips.

With the expected growth rates, we can expect that electric propulsion will replace internal combustion engines (ICE) in about 15-20 years in Europe and China. Most EVs currently on the road are passenger cars, but market niches and further applications show still significant potential.

how to develop a car showed by a painting of a creen car on white background

HOW TO PRODUCE A CAR? HERE'S THE FASTEST WAY!

Producing a car from scratch is a complex, time-consuming, and cost-intensive undertaking. To successfully enter the market, you need to consider the components, production site, engineering and manufacturing teams as well as the most efficient way to carry out the project. However, there are a few ways to make the path to a production-ready vehicle a little easier.

Team Up With Experienced Manufacturers

By providing their technical know-how and manufacturing facilities, contract manufacturers make the visions of new entrants a reality. Engineering service providers supply their R&D capacities. Additionally, they help new players gain access to suppliers and, in some cases, even investors.

However, only a few of them offer engineering and manufacturing from a single source as a true one-stop shop.
Aside from the biggest single cost factor in automobile production – the production plant itself – the cost of system development (e.g., engine, steering, brakes, and electric/electronic systems) is a substantial burden.

Setting up a core development and project steering team as well as establishing a suitable sales and after-sales network are further cost drivers. Keep this in mind when you're thinking about how to produce a car. As a result, teaming up with an engineering service provider helps lower the cost of product development.

Don't Prioritize an Early Launch Over a Well-Planned Launch

Naturally, most new entrants want their vehicle on the road as soon as possible. However, shortening the time-to-market may help to quickly generate revenues from early sales, but it may reduce the time available for certain project processes, such as setting up a strong after-sales network. Thus, it is important to plan accordingly and not sacrifice thoroughness in the name of speed. Keep this in mind when thinking about how to produce a car.

The Benefits of Sharing Capacatives

Bringing a new EV to market from scratch – including designing a completely new vehicle and building a new production plant – requires several years and a substantial investment. Even more, a large part of the overall investment is made during the first year and a half, while cash flow from vehicle sales only starts after production has begun.

Sharing production capacities and teaming up with an experienced partner for facilities, teams, and know-how helps to lower the financial hurdles during the advanced phases in preparation for launch and speed up the process by several months.

You're Thinking About How to Produce a Car? Consider a Shared Plattform!

As the underlying structure of the vehicle, the platform usually includes the rolling chassis, engine, battery, as well as the high-voltage architecture and large parts of the low-voltage architecture. While licensing an existing platform comes with certain restrictions in terms of technical flexibility, it decreases time-to-market and development costs.

In addition, a shared platform also comes with an established supplier network. This is a major benefit for future vehicles as well. As a platform license usually covers the invisible parts of a vehicle, there is still a lot of leeway to customize the brand-specific parts, such as outer panels, HMI, and interior trim.

Include Multiple Vehicles in Your Planning to Produce a Car

Developing multiple vehicles on the same platform is usually considerably less time- and cost-intensive, as many elements of the previous vehicle development can be reused. Because a car platform is generally used for several years before it is replaced, it can serve as basis for further derivatives of the initially developed vehicle.

Thus, it makes sense to consider developing multiple vehicle variants early on in the project phase and to use the available resources as efficiently as possible.

a man and a woman are discussing about how to produce a car and watching a virtual installation of a new car

THE KEY COMPONENTS OF YOUR FUTURE AUTOMOTIVE NETWORK

Building an automotive network is one of the earliest considerations for a successful market entry. Developing and producing a car requires resources, connections, manpower, and experts.

In basic terms, an automotive network refers to two types of distinct systems: structural elements of management and operational systems of the product development process. Both are equally important to the success of the project.

First: Structural Elements of Management

Aside from a successful product concept, a new automotive business requires a more expansion array of management and communication processes that needs to be established. These processes are clustered into four larger elements, all of which can only be established via symmetric engineering – which means that the entire network needs to be set up at once.

The first element is the basic business model as the structural foundation for the automotive business and brand. Developing the business model requires an overview over all relevant business processes, an outline of the business case, and in-depth knowledge of the target market, including an assessment of the potential market share.

The second element is the marketing and branding strategy for the vehicle. This defines how the vehicle will be communicated, establishing a connection between a new entrant and their customers, stakeholders, partners, and investors. This includes finding a name and defining unique selling point (USP) for the brand which in essence sets out what exactly the buyer gets when he or she purchases the product.

The third element is investor management: A large part of the required capital is needed right when the automotive business is launched, especially for new entrants who need to win over investors with a convincing vision and brand identity as well as a realistic business case and project plan.

The fourth element includes distribution and after-sales. Customer and project support kick into action only when the vehicle enters the market, but they require a number of partnerships with garages and workshops, for example. This means planning must begin at the start of the project.

Second: Operational Systems of Product Development

Product management and product development defines the vehicle and its properties in the requirements specification book according to the brand values, USPs, and business concepts. In doing so, they draw on an understanding of the framework, market conditions, challenges, and benchmarks, which requires a lot of skills and experience.

Next, a strong supply chain is essential for a successful vehicle project and ensures that the products are delivered at the right price, quality, and time. Maintaining good relations with suppliers is a continuous team effort and ensures consistently high product quality.

Finally, production is a complex and resource-consuming endeavor which needs to be perfectly aligned with product development.
Outsourcing these systems to experienced partners offers many benefits, primarily because they already have extensive resources and a large network at hand.

The Challenge of Starting Right and Seeing it Through

All the systems specified above have to be started and maintained in parallel. An automotive business relies on this type of simultaneous engineering – it’s not a linear series of steps, but rather entails establishing an interconnected network in a single process carried out at one time.

Starting a new automotive business and getting a vehicle on the road demands entrepreneurial spirit as well as clear processes and procedures with precisely defined responsibilities for each specific area. Furthermore, it is essential to establish trust between the new entrant, its partners, and the experts on the basis of open communication and a streamlined process for sharing expertise.

FIVE QUESTIONS EVERY CAR DEVELOPMENT AND PRODUCTION PARTNER WILL ASK

Suitable partners for vehicle development and production are essential to implement and resolve technical aspects of the project. However, as this entails substantial investments, manufacturers will need to assess their potential client, their organizational structure, as well as their vision and business plan to decide whether the partnership will deliver the desired outcome. Here are five key questions they will most likely ask.

Question 1: How Do You Plan to Finance Your Vehicle?

Even with the most cost-efficient approach, a new vehicle project is a costly undertaking, with a ROI of several years, until such time as sales outpaces development costs. It is essential to have a clear idea of the overall investment and the currently available resources as well as a detailed financial plan for the upcoming years. Without that, potential partners may not be willing to take on the risk.

Question 2: What Market Do You Want to Sell Your Vehicle on?

Every potential partner will expect the new entrant to have comprehensive knowledge of the target market. Clear information about potential competitors, trends, and developments as well as projected sales figures and pricing will be required for a successful project pitch.

Question 3: What Supplier Do You Have in Mind?

Potential partners will likely also ask about the supplier they intend to partner up with, the current state of negotiations with them, as well as the pricing of the components. If that data is not available yet, a strategy for getting the necessary information should be available. The same applies to the planned sales network: Potential partners will most likely ask for information on targeted vendors, their relations with them, and on pricing.

Question 4: How Do You Plan to Move Forward Once a Partnership Has Been Established?

Along with having the right development and production partners, it is critical to have a general timeframe for getting a new vehicle on the road. With suppliers and investors on board as well as their support and experience, it is possible to prepare a more comprehensive and detailed schedule for manufacturers. Finally, the new entrant may also seek out the experience of the manufacturing partner to finalize their schedule.

Question 5: Are You a Reliable Partner?

A common level of trust and a spirit of partnership are more important than having a great pitch. Since developing a vehicle requires advanced organizational skills and a high degree of diligence, establishing a foundation of trust between the new automotive company and the production partner is essential. This of course also applies to relations with investors, suppliers, and other partners.

THE FEASIBILITY STUD: AN IMPORTANT MILESTONE WHEN THINKING ABOUT HOW TO PRODUCE A CAR

Even after establishing the basic framework for an automotive network and gathering large amounts of key information, it’s time to answer the question of feasibility. In other words, can the planned EV be realized within the limitations of the market, the ecosystem, and the personal wishes of the entrepreneur?

A Definitive Blueprint For Your Project

The feasibility study is the centerpiece of all advanced work done to prepare for the project. In most cases, it is a joint undertaking between the new entrant and their development and production teams and provides a clear answer to whether the automotive vision in question is realistic from a technical and commercial perspective.

The study is an objective measuring tool, providing a complete and definitive overview of all technical and commercial requirements. For that very reason, it needs to be concluded before the start of the concept phase.

Also, the study provides a complete catalogue of risks associated with the product vision and is a guarantee for potential partners that the project is worth investing in.
Compared to the overall investment necessary to develop a new vehicle and considering the value of the study for the project, it is a small but incredibly important cost.
Generally speaking, a feasibility study is broken down into the following four core steps:

Step 1: Confirming The Viability of Your Vision

Before starting with the specific business fields of vehicle development, the product vision will be the primary factor that needs to be validated. This encompasses all questions regarding the target market for the vehicle, the ecosystem chosen to develop it in, as well as the USP, technical specifications, features, and vehicle variants to be implemented. These will once again be specified and then organized and assessed within the overarching development process.

Step 2: Defining Development Targets and Potential Conflicts

In general, there are five major aspects to consider during the project: development, production, the supply chain (also including identification of key suppliers), product distribution, and after-sales management.

Strategies are defined for each of them which are then translated into product targets (objectives and deliverables based on the evaluation of benchmark vehicles) and technical programs (the measures planned in order to reach those objectives). By examining these two aspects side by side, potential risk factors and target conflicts can be identified and strategies for resolving conflicts can be defined.

Step 3: Defining The Technical Specifications For The Base Vehicle

Based on the previous findings, the vehicle specifications can now be defined. These include: the BOM (bill of materials), planned features, styling, and general layout. After completing this phase, the first testable prototype, or mule, can be developed. A hardware plan containing all key hardware required to properly test the prototype is also included in this step. This process is carried out in tandem for each planned vehicle variant.

Step 4: Finalizing Planning and Strategies

After all strategies, requirements, deliverables, risks, and solutions have been defined, the timetable for each business field are coordinated with and integrated into the overall project schedule. Additionally, an organizational plan for the following concept phase, including technical risks and opportunities of the project, are created.

Finally, the necessary quality planning as well as a business and financing plan with a detailed estimate of program costs are provided and changes/potential improvements are discussed, until all stakeholders reach a general consensus and the feasibility phase can be wrapped up.

person is calculating the costs of how to produce a car and how to develop a car

HOW A SHOW CAR WILL EMPOWER YOUR VEHICLE VISION

Defining a clear brand identity and planning the public debut of any vehicle happens near the end of the early concept stage, as soon as it has been adequately demonstrated that the vision is viable. For new entrants, the initial debut on the EV market is a vital stepping stone towards bringing their vision to the road. A show car ensures that both the vehicle and its history are presented in a palpable manner.

Every Vision Has a Story to Tell

Communicating a future automotive brand should be done as soon as possible, since the public launch of a vehicle is still two to three years off. When the vehicle finally goes on sale, it needs to have a public profile to gain the trust of the intended target audience.

However, that doesn’t mean activities to promote the vehicle cannot start until the vehicle is finished. Creating a story accompanying the product vision, developing a success story out of the journey, and emphasizing the unique und recognizable assets of both the vehicle and the associated brand contribute to a strong brand.

The Show Car: A Presentation of Your Vision

Of course, really firing up people for an upcoming vehicle works best if there is a product for people to see: the show car. This is used to demonstrate the unique selling points of the vehicle, its design, and the planned features, and it generates enthusiasm among investors, potential buyers, and journalists. It is therefore a must have for every planned public debut.

In general, it’s recommended to start planning a show car when drawing up the feasibility study, since the show car will take about six to ten months to complete. It makes sense to focus on implementing all aspects of the product vision, meaning the styling and looks of the car as well as all features that distinguish the car. However, it’s all right if the show car is not the finished product, in other words, it does not have to ready for the road.

Planning Your Debut

The event at which the show car will be presented is just as important as the car itself. Public motor shows are one option, but there is relatively little control over the presentation. Hosting a private event is a more time-intensive option, but it gives the organizer full control over every aspect of their public debut.

Thinking About How to Produce a Car?
Invite The Experts - And Listen to What They Have to Say!

Choosing to host a private event also means that the company is free to choose whom it invites. This could include specific people they want to showcase their vision to the most. This is an especially useful step when looking for partners and/or investors to back the project. In other words, a private event can be a great opportunity to meet with a select group of potential investors, business partners, or journalists.

Speaking of journalists, the presentation of the show car will be the first and most important opportunity to obtain feedback from automotive journalists and generate media coverage. This will provide a clear picture about potential improvements to the product and brand, provided, that the feedback can be properly organized and interpreted.

FINAL NOTES ON HOW TO PRODUCE A CAR

Realizing your visions in the automotive industry as a new entrant is a major undertaking with many requirements, steps to consider, and people to win over.

All challenges notwithstanding, now is the best time for bringing a new – and most likely electric - vehicle to market. Electric vehicles are a rapidly growing segment that will likely dominate the market in 20 to 30 years. Competition is already fierce but will become even more so in the next couple of years. If you want to enter the EV market, it therefore makes sense to secure your share of the market now.

For a detailed guide through the most important milestones along your way, please refer to our whitepaper “Ten milestones for bringing your car from vision to reality” as well as our other articles on this page. They will help you with getting your vehicle development and production started in a fast, structured way.
So, what are you still waiting for? Let’s take the first step to making your automotive vision a reality.

Learn more about "10 Milestones for Taking Your Car from Vision to Reality"

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Dietmar Kleindienst

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