Why do electric vehicle OEMs need to audit their suppliers before onboarding?

We have seen too many cases of manufacturer doing great profiles on Alibaba and even nice websites but turning out to be nothing more than a small workshop with no quality systems in place or a trade company with no manufacturing at all. We would like to share a case example of a story that we see play out repeatedly.

Let’s take an example of John, who launched his new electric car start-up last year.

John decided to onboard a hub motor supplier for their new electric vehicle. The booth at the trade show was great and the Alibaba profile looks perfect with all the certificates uploaded for review, and the supplier has a website in English too. The supplier also mentions international export experience to 29 countries! Additionally, the pricing is also fitting John’s budget. What next? John orders samples for testing. Everything seems fine and the management team signs the supplier agreement without any supplier audit.

The shipment comes in and the quality of the products is not the same as the samples. John discusses with the vendor and they agree to do a better job from the next batch. In the second batch, the same issue persists. Now John is worried but it’s too late: the vehicle has been launched in the market, and the production needs to go on. What went wrong? How could have John avoided the problem?

hub motor from china- quality inspection
Hub motor assembly at a factory in Wuxi, China

While working with China is easy due to various factors like infrastructure and manufacturing environment, the tricky part is finding the right supplier. Samples are made separately and not on production lines, so they will usually have good performance. Even after finding the right partner, quality fade is still a common. One of the important checkpoints to avoid these issues is having a detailed quality audit before you on-board the supplier. An in-depth quality checkup will show if the supplier is diligently complying to their quality systems. If possible to implement, regular quality checks during production run help to keep a tap on production and QC processes followed by the manufacturer.

In China, when manufacturing, only one rule applies: nothing is true before you see it with our own eyes. Due diligence is a necessity because ISO9001 certifications can be bought for 350USD and hiring a quality management consultancy to help in obtaining a CE mark in 2 months is easy. We were once visiting a supplier in for checking their facility and asked about their certifications. The owner replied, "Tell me what certificate is needed, will send you a copy in two months".

This is not to say that all the suppliers have fake facilities and quality systems, but rather to encourage electric vehicles OEMs sourcing from China to invest time in finding reliable and professional partners. While performing these checks yourself might be time and resource consuming, it is a vital part of entering long-term business relationships. If companies feel they can’t invest resources in maintaining quality of production for their manufacturers in China, supplier audits and quality checks can be easily outsourced to reliable third party consultants at much lower costs and can still be as effective in managing your quality.

Aurora Ventures can help with onboarding and managing suppliers for EV producers purchasing from China. If you would like to know more about our services, please reach out to connect@auroraventures.in

#BuyfromChina #ElectricVehicle #SupplyChain #QualityAudits #Manufacturing #EVs #AuroraVentures