This article showcases how organizational resources devoted to the project will change between the initial vehicle concept and the start of the development process. It explores the average size of the teams and the different responsibilities, the scale of the project, and complexity during three selected phases of the project. It also explains the organizational changes when entering the ev car market.
It provides new entrants with an overview on the overall complexity involved in an automotive project as well as potential challenges they may face in each of these phases.
From vision to reality, a new entrant's organizational set-up will naturally grow and evolve. The number of tasks increases, as does the number of people involved both internally and externally. In addition to the resources necessary to establish an automotive production chain and brand, the organizational, financial, and time demands also typically increase towards the end of the project.
CONCEPT DEVELOPMENT PHASE: OUTLINING THE FUTURE PROJECT
At the start of a vehicle project, most tasks will remain largely theoretical. During this early project phase, the most important task for the new entrant is to build the core team behind their automotive vision before even planning to enter the ev car market. The team’s key responsibility is to define the direction of the vehicle project, the features to be implemented, technical specifications, and targets and strategies for marketing and branding.
Also, during this early phase, core suppliers and investors are identified and the groundwork for conducting a feasibility study is completed. The most amount of time is typically devoted to the study during this early phase as it plays a key role in converting the new entrant’s marketing goals into technical tasks, deliverables, and milestones. It should ideally be completed together with a technical partner (e.g., a future contract manufacturer) to help ensure correct procedure is observed. Read more in the article “Automotive Feasibility Study: 4 Steps to Validate Your Vision.”
Team size during the concept development phase
If all tasks related to development and production are performed by a contract manufacturer, the new entrant's core team will usually consist of approximately 20-30 people during the concept development stage. This team should possess a broad and diverse range of technical, marketing, and project management skills. This team typically includes:
- The CEO, CFO, and CTO
- Staff for financing, IT, project/program management, and HR activities to manage the new entrant’s organization.
- A launch management expert to facilitate a seamless market entry
- Marketing and branding experts
- A purchasing department
- Sales and after-sales departments
Ideally, the team should also include staff who already have experience with the automotive sector and people with an entrepreneurial mindset.
Main deliverables during the concept development phase
During this phase, the new entrant’s vision will be outlined, with technical, business, and scheduling targets established at this time. Once the targets have been defined, a target agreement is agreed on, which marks the end of the concept development phase and the transition to the development phase.
By this point, the new entrant should:
- define a clear work split within their core team.
- define, assess, and confirm the program objectives and product targets and risks.
- select all key suppliers, investors, and manufacturing partners.
- agree on a production concept, including location and layout.
- create a BOM highlighting all resources necessary for starting serial production (including those for establishing the production infrastructure).
- confirm a complete program timing plan.
- outline strategies for product positioning, sales, and supply.
THE NEW ENTRANT’S BIGGEST CHALLENGE ENTERING THE EV CAR MARKET
Once the new entrant has completed the concept development phase, all of the previously defined plans will need to be implemented before vehicle development can properly start. During this phase, the new entrant will face a considerable increase in the complexity of their organizational structure as each defined target requires its own personnel and processes to be finalized.
Size of team at the start of the development phase
As the new entrant moves into the development phase, the manpower required in the project greatly increases. When the manufacturing facilities are set up, they also need the necessary workforce to maintain them. This infographic shows all tasks necessary to establish an automotive project’s organization:
Essentially, all components of the future subsidiary behind the automotive project are established during this transitional phase. A subsidiary typically employs hundreds of workers with distinct skills, all of which have to be hired, trained, and retained.
It should be noted that the majority of these components are directly linked to the production facilities of the vehicle. This means that new entrants can decrease their time and cost requirements for production start-up if they decide to team up with a contract manufacturer.
How much this will be reduced by varies depending on the scale of cooperation – for more information about the benefits of contract manufacturing, see “The Benefits of Working With a Vehicle Manufacturing Partner.”
Why projects fail before the development phase
It is mainly during the development phase and not during entering the EV car market where new entrants experience the largest one-time increase in costs, complexity, and size. Preparing for a seamless serial production is also the phase where new entrants should be the most cautious.
Projects may fail during this phase due to over-stretching resources, previous miscalculations, sudden team changes, or investors and suppliers losing trust and withdrawing from the project. Therefore, a new entrant should develop an extensive and flexible project strategy and a reliable core team to master this critical phase.
When the necessary infrastructure for vehicle production has been established and start-up has commenced, the project’s size and complexity will remain relatively stable. At this point, the new entrant can focus their efforts on finalizing vehicle development and preparing for the production launch.
To recap, the organizational structure during automotive development does not evolve in a linear way. Instead, new entrants will experience two notable jumps in volume and complexity.
The first jump typically occurs at the start of the project as the core team is formed, investors, contract manufacturers, and key suppliers are determined, and the automotive vision itself is validated. The second jump tends to happen between the concept and development phases and involves establishing the complete serial production environment for the vehicle. During this phase, suppliers are secured, production facilities are established, and project and production processes are initiated. This phase requires considerable one-time costs as well as time, commitment, and communication skills from the core team. This is also the reason why many new entrants stumble during this phase.
Once the vehicle goes into serial production, the project organization usually doesn't change a great deal. As most processes will be in motion at this point, new entrants can focus on ensuring a functional production process and should not face further significant challenges on their way to the road unless severe unexpected disruptions occur.