The Good, The Bad, and The Complicated

Dealing with car complexity

Personalizing cars to the requirements and taste of the individual owner has long been a key business driver in the automotive industry. But that goal appears to have spiralled out of control. In the age of powertrain shift to e-mobility, car complexity has reached the point where there are so many options to choose from that it is gotten overwhelmingly cluttered – not just for original equipment manufacturers (OEMs), suppliers, and dealers, but for buyers, too. By 2025, the number of battery-electric vehicles (BEVs) coexisting with legacy internal combustion engine (ICE) platforms will probably boost the number of variants per carmaker by 50-100 percent worldwide. Plus, roughly 30 to 40 percent of all OEM employees deal with variants and associated complexity issues, and more could be needed soon. This limits capital available for company transformation, new technologies, and new business models.

But there are ways out: Reducing complexity yields benefits across an OEM’s entire value chain – from research and development (R&D) and procurement and production logistics, to quality and sales/aftersales. Our experience suggests the sooner in the product development process a company attacks complexity, the bigger the impact. (See Exhibit 1.)



By pursuing strategies to crack the complexity code, automotive players could optimize the process, increase profits between €500 and €750 per car, improve their supply chain, and create a better customer experience. Companies need to build a sustainable culture that seeks out and eliminates destructive levels of complexity, rather than dealing with it as a one-off effort. We expect carmakers to reduce their overall complexity by 30-50% by 2030.

The Good, The Bad, and The Complicated