The auto industry's drive to a greener and cleaner future is a treacherous road for companies in its beleaguered supply chain. Only the strong and the shrewd may survive.
Many auto suppliers, already squeezed by rampant inflation and energy prices, say they have little choice but to shoulder the extra costs of making their components sustainable to meet automakers' environmental targets.
"If you do not, you are not going to have a business in five or six years supplying major carmakers," said Shane Kirrane, commercial director at Autins Group, which has plants in Britain, Sweden and Germany that make acoustic and thermal insulation for cars.
All major automakers have committed to green targets, seeking to purge dirtier materials from their supply chains to satisfy regulators and investors as they transition to electric vehicles.
BMW, for instance, expects all of its battery and many of its steel and aluminum providers to produce materials made using renewable energy, while Volvo is targeting 25 percent recyclable plastic in its cars by 2025.
Many suppliers are consequently making large investments to green up their acts, from developing recyclable parts to hooking up their businesses to renewable energy, according to interviews with more than a dozen industry players.
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