As regulation drives the transformation of the automotive industry into a producer of electric vehicles, carmakers are becoming more susceptible to disruptions in the supply of minerals and materials used in the building of lithium-ion batteries. Competition with other industries for resources, the concentration of suppliers in specific global regions, and the associated time and (increasing) cost in shipping these materials from those regions across the world, are all factors.

What is also an issue for the automotive industry is the lack of supply chain visibility at the sub-supplier level and the need for a clearer picture of the contingencies necessary to deal with supply shortages before they occur.

“The imbalance created by the ongoing chip shortage is an excellent example of a perfect storm caused by the convergence of evolving market trends, overlayed with geopolitical tensions and post-pandemic demand surges,” says Rekha Menon-Varma, co-founder and managing partner at Vertaeon, a software-as-a-service (Saas) provider of tools to analyse risks and mitigate disruption.