Electric vehicles have fewer parts than combustion-powered cars. That’s supposed to make things simpler. It doesn’t.
A Moody’s analysis released June 1 lays out a supply chain picture for automakers that looks less like a streamlined future and more like a juggling act performed on a trampoline. Vitaliano Tobruk, the ratings agency’s supply chain industry practice lead, told WardsAuto that EV manufacturers face a different sourcing reality than their ICE predecessors. It’s one defined by overlapping dependencies, competing industries, and ground that refuses to stop shifting.
The core problem is simultaneity. Battery investment hinges on consumer demand, government regulation, trade rules, energy costs, raw material access, and semiconductor allocation, all of which are moving at once. “When companies try to plan a longer-term investment, the ground is still moving,” Tobruk said.
That’s not a metaphor. It’s an operational reality.
Legacy automakers have it worst. They’re running not one supply chain but three, for ICE, hybrid, and fully electric powertrains. Their suppliers are doing the same, splitting investment across those parallel tracks.
The efficiency gains promised by electrification get eaten alive by the complexity of managing a transition that nobody can predict the pace of.
Then there’s the semiconductor problem, which hasn’t gone away. The auto industry now competes for chips with AI data centers, a sector growing faster and offering fatter margins to chipmakers. Tobruk called artificial intelligence “probably the biggest threat currently to auto supply chains.”
When TSMC or Samsung has to choose between filling orders for Nvidia or for a Tier 1 auto supplier, the math isn’t complicated.
Geopolitics adds another layer. Tariffs, trade tensions, regional EV mandates, and diverging safety and sustainability regulations across markets mean that supply chains can’t simply be global anymore. They have to be regionally calibrated, politically aware, and constantly reconfigured.
Faster vehicle development timelines compound the pressure, pushing new technologies into production before traditional risk frameworks can properly evaluate them.
Tobruk’s prescription is sensible but sobering. He advocates for end-to-end visibility across the entire supplier network, knowing not just who your Tier 1 suppliers are, but who supplies them, and who supplies those companies. Without that transparency, he argues, automakers can’t even identify where they need resilience, let alone build it.
But visibility alone doesn’t solve the structural bottleneck. Tooling validation, certification requirements, and regulatory approvals mean that finding an alternative source isn’t like switching vendors for office supplies. It takes months, sometimes years.
“Resilience means visibility, flexibility and also adaptability,” Tobruk said. “These three elements allow you to react quickly when an event happened.”
That’s the right framework. Whether the industry can actually execute it is another question entirely. Most automakers are still organized around planning cycles built for a world where demand was predictable and supply chains didn’t change direction often.
The EV transition was sold as simplification, fewer parts, fewer steps, cleaner architecture. At the vehicle level, that’s true. At the enterprise level, it has made everything harder.
Automakers are managing more complexity with less certainty, competing for critical components against richer industries, and navigating a regulatory landscape that shifts with every election cycle. The car itself may be getting simpler. Everything around it is not.
Share this Story