Opinion: Local assembly can optimise EV production

June 24, 2025

From the newsletter

Africa’s EV transformation requires tailored, localised strategies. In this week’s exclusive opinion piece, Chiagoziem Ezechi, an independent EV consultant, argues that optimising the functionality of local assembly lines is key. Local production will reduce costs and allow manufacturers to flexibly cater to regional preferences, balancing BEVs and hybrids. 

  • Mr Ezechi highlights the importance of "micro-factories," which produce up to 10,000 units annually. These factories can reduce capital costs by up to 50% and lower maintenance expenses, as only individual components need repair, rather than the entire assembly line. 

  • Generative AI is already revolutionising EV development, enabling engineers to design prototypes optimised for cost, weight and performance, he adds. By 2028, half of all major manufacturers are expected to utilise this tech.

More details

The global automotive industry is undergoing its most profound transformation in a century; the transition to EVs. With global EV sales surpassing 17 million units in 2024 and rising by 35% in Q1 2025, the road to mass adoption is accelerating, but not without complexity. Industry leaders must navigate shifting market demands, geopolitical volatility, and rapid technological change to deliver affordable, high-quality EVs. Increasingly, the solution lies in local assembly line optimisation, a strategy that extends beyond cost-cutting to deliver resilience, agility, and long-term competitive advantage.

The Strategic Imperative: Cost, Customisation, and Resilience

Local assembly is no longer merely about market proximity; it is a strategic lever to mitigate risk and drive sustainable growth. Traditional giga-factories demand immense upfront investment. In contrast, “micro-factories” producing around 10,000 units per year can reduce capital costs by up to 50%. UK-based EV manufacturer Arrival, for example, developed its micro-factories for just $50 million, compared to over $1 billion for conventional plants. These agile setups also offer environmental advantages, using up to 90% less water, 50% fewer chemicals, and 80% less energy. Their modular nature allows for updates by component rather than entire lines, improving maintainability and reducing downtime through standardised hardware.

EV markets vary significantly across regions. Local assembly allows manufacturers to adapt to regional preferences, balancing production between battery electric vehicles (BEVs), hybrids, and internal combustion engines (ICE). BMW, for instance, foresees a 50/50 sales split between EVs and ICE by the end of the decade. By enabling quicker model shifts, this flexibility reduces time-to-market and improves customer service, halving part delivery times from 10 days to just 48 hours. BMW’s Rosslyn plant in South Africa is being upgraded to manufacture plug-in hybrid BMW X3s for global export, aligning with evolving market requirements.

The Smart Factory: Precision, Agility, and Digital Intelligence

Modern EV manufacturing is defined by its embrace of cutting-edge technologies to drive productivity, quality, and innovation. Artificial Intelligence (AI) and robotics now form the core of modern automotive manufacturing. Top applications include quality control (56%), robotic assembly (45%), and process optimisation (45%). Companies like Tesla use AI-driven robotics extensively in their Gigafactories, reducing production time by 30%. These systems enable predictive maintenance, precision assembly, and advanced machine vision for quality assurance.

Digital twins, virtual replicas of physical systems, enable real-time monitoring and simulation. BMW and Volkswagen employ this technology in their factories in Mexico and Germany to minimise errors and optimise throughput. Virtual commissioning can cut development timelines by 65%, while Generative AI accelerates prototype design by exploring thousands of configurations optimised for weight, performance, and cost. By 2028, half of all large manufacturers are expected to use Gen AI to unlock new value from engineering archives.

Modular EV platforms offer production agility and cost savings by allowing multiple models to be built on a shared base. This reduces complexity, simplifies parts sourcing, and enables rapid shifts in production based on market signals.

Building Resilient Supply Chains and Sustainable Operations

A resilient EV future depends on transparent supply chains and sustainability at every level. The inherent complexity of EV supply chains, which span multiple tiers from raw material extraction to final vehicle assembly, necessitates end-to-end transparency. Without adequate visibility beyond Tier 1 suppliers, manufacturers remain vulnerable to unforeseen disruptions and face significant risks of non-compliance with ethical sourcing regulations

Traditional Just-In-Time (JIT) supply chains, once praised for efficiency, are increasingly vulnerable to global disruptions, as seen in the 2021 semiconductor shortage that cost the automotive industry over $200 billion. The EV sector's dependence on critical components like batteries and chips makes pure JIT models especially risky. To remain resilient, JIT systems must evolve through hybrid models with buffer stocks, diversified sourcing, and the integration of AI-driven analytics, digital twins, and flexible logistics. These strategies can significantly reduce disruptions, delays, and improve overall supply chain responsiveness.

Sustainability and circularity are essential to the strategic success and long-term viability of EV production, encompassing both the environmental impact of manufacturing and the lifecycle management of critical components like batteries. Leading EV factories such as Tesla’s Gigafactory 1 and GM’s Factory ZERO are powered by renewable energy, while micro factories significantly reduce resource consumption, using up to 90% less water, 50% fewer chemicals, and 80% less energy than traditional plants. Battery lifecycle management is becoming a key focus, with the global EV battery recycling market projected to grow from $0.54 billion in 2024 to $23.72 billion by 2035, driven by regulatory mandates, supply chain needs, and rising demand for recycled content. Automakers like Mercedes-Benz, Toyota, BMW, and VW are investing in closed-loop systems and innovative methods, such as glycine-based recovery techniques, that can reclaim nearly 100% of valuable metals without high heat or toxic chemicals.

Developing the Future Workforce: Skills for the Electrified Era

The electrification of mobility is reshaping the skills landscape. Demand is surging for expertise in battery systems, software, AI, and cybersecurity, while traditional mechanical skills are declining. The industry faces a projected 111,000-worker shortfall by 2031. In response, manufacturers are expanding automation and investing in workforce development. Partnerships with universities, technical colleges, and training providers are creating tailored EV curricula, apprenticeships, and upskilling programmes aligned with industry needs.

Conclusion

Optimising local EV assembly is more than an operational upgrade, it is a strategic transformation. By combining modular, lean manufacturing with digital innovation, skilled workforces, and sustainable supply chains, manufacturers can unlock deep cost savings, quality gains, and rapid adaptability. These capabilities will not only secure competitive advantage but also catalyse industrial growth, job creation, and technological progress, particularly in emerging markets. Localised, intelligent assembly will be the cornerstone of a resilient and inclusive global EV transition.