The automotive industry is undergoing a broad transformation as electric vehicles (EVs) gain ground alongside traditional internal combustion engine (ICE) vehicles. While both types of vehicles share certain core design and manufacturing principles, they differ significantly in components, manufacturing processes, supply chains, and cost structures. These differences have shaped the evolution of automotive supply networks, investment strategies, and workforce development in distinct ways.
Core Components of Combustion and Electric Vehicles
Combustion engine vehicles rely on a range of mechanical systems designed to support gasoline or diesel-powered operation. Key components include an internal combustion engine, transmission system, exhaust system, fuel tank, radiator, and associated fluid management systems. These parts operate in a coordinated manner to convert chemical energy into mechanical energy via controlled explosions within the engine.
In contrast, electric vehicles are built around a completely different propulsion system. The central components include an electric motor, power inverter, large-scale battery pack, battery management system, onboard charger, and electric drivetrain. While EVs still use chassis, suspension, and braking systems similar to ICE vehicles, the elimination of the engine and its supporting subsystems results in a simpler mechanical architecture.
Differences in Manufacturing Processes
Manufacturing a combustion engine vehicle involves multiple complex machining and assembly steps. Engine blocks are cast and machined with tight tolerances, and transmissions are assembled from dozens of moving parts. Fuel systems and exhaust treatment technologies, such as catalytic converters and particulate filters, require specialized manufacturing capabilities.
Electric vehicle manufacturing places less emphasis on traditional machining. Instead, assembly lines are adapted for installing battery packs and electric drive units. Thermal management systems in EVs are often more integrated, managing not only vehicle cabin temperatures but also battery operating conditions. The cleanroom-like environments required for battery module assembly differ from the more rugged machining facilities used for ICE production.
EV manufacturing generally involves fewer moving parts in the powertrain, which can simplify some aspects of production, though it introduces complexities around electronics integration and high-voltage safety systems.
Cost Structures and Economic Implications
Combustion vehicles tend to have a lower up-front manufacturing cost because the supply base is mature, and economies of scale have been established over decades. Raw materials such as steel and aluminum dominate ICE vehicle construction, with relatively modest demands for specialty materials beyond catalytic converter precious metals like platinum and palladium.
Electric vehicles, while mechanically simpler, require expensive battery materials such as lithium, nickel, cobalt, and graphite. These materials are globally sourced and subject to geopolitical and environmental constraints. The battery pack represents the single most expensive component in an EV, often accounting for 30% to 40% of total vehicle cost. As a result, even with fewer parts, EVs have historically cost more to manufacture, although that gap is closing as battery prices decline.
Operating costs, which are not part of the manufacturing process but are relevant to buyers, generally favor EVs due to lower fuel and maintenance expenses. However, manufacturers must invest heavily upfront in battery development and supplier relationships to make EV production sustainable over the long term.
Supply Chain Considerations
The traditional automotive supply chain is well-established, regionalized, and diversified. It includes decades-old relationships with engine, transmission, and fuel system manufacturers, many of which are located close to final assembly plants to minimize logistics costs.
Electric vehicle supply chains are newer, more globally dispersed, and less vertically integrated. Many EV manufacturers rely on international suppliers for battery cells, with significant sourcing from Asia. Lithium, cobalt, and other materials may be mined in Africa, refined in China, and then shipped to battery plants in Europe or North America. This creates longer, more fragile supply chains that are vulnerable to disruption and geopolitical friction.
In response, EV manufacturers are increasingly pursuing vertical integration. This includes investments in battery recycling, localized cell production, and direct sourcing agreements with raw material producers. These moves seek to reduce dependence on foreign supply chains and improve long-term cost stability.
Workforce and Factory Infrastructure
Combustion vehicle manufacturing plants employ large numbers of workers skilled in machining, casting, and traditional mechanical assembly. Supporting industries include engine foundries, gearbox suppliers, and fluid systems specialists. Training for ICE vehicle production often revolves around metalworking and complex mechanical systems.
EV factories require a different skill set. Electrical and software engineering expertise plays a larger role, and technicians must be trained in safe handling of high-voltage systems. Assembly lines must be retooled to accommodate large battery modules and electric motors, with more emphasis on cleanroom procedures, robotics, and electronics integration.
This shift affects not only the factory floor but also upstream education and workforce development pipelines, as workers and engineers adapt to the demands of electrified mobility.
Design Philosophies and Platform Approaches
Automakers traditionally developed unique platforms for ICE vehicles based on the size and function of the vehicle, such as sedan, SUV, or truck. These platforms incorporated standardized locations for the engine, fuel tank, exhaust routing, and other key elements.
EVs, on the other hand, are increasingly built on modular platforms known as “skateboards.” These designs house the battery pack flat along the floor and use standardized electric motors and inverters that can be scaled across different vehicle sizes. This architectural change allows for more flexible design, better weight distribution, and simplified manufacturing.
Some legacy automakers are attempting to retrofit ICE platforms for EVs as a transitional measure, though this often leads to compromises in efficiency and performance. Companies entering the market without legacy constraints often design fully electric-native architectures from the start.
Environmental and Regulatory Influences
Regulatory requirements have long influenced ICE vehicle design. Emissions standards necessitate exhaust treatment systems, and fuel efficiency mandates drive engine optimization technologies. These factors have resulted in incremental, often costly, engineering changes over time.
Electric vehicles are shaped by different regulatory pressures. Governments offer incentives for EV purchases and tax credits for battery production, while also imposing future bans on combustion vehicle sales in some regions. This regulatory momentum accelerates investment in battery production, rare earth material sourcing, and recycling technologies.
Sustainability considerations are driving both segments to reevaluate material sourcing, end-of-life vehicle recycling, and production energy sources. However, EV manufacturing must address the environmental footprint of battery production, particularly around mining and processing of raw materials.
Challenges and Opportunities in Transition
Manufacturers transitioning from combustion to electric production face a mix of technical, economic, and strategic challenges. Retooling factories, securing battery material supply, and upskilling workers require significant investment and planning. At the same time, EV manufacturing provides an opportunity to redesign vehicles around newer, more efficient platforms and to enter fast-growing market segments.
Startups in the EV space often benefit from a clean slate, avoiding legacy costs but facing steep hurdles in scaling production and building trust with consumers. Traditional automakers carry institutional knowledge, capital, and supply relationships, but may struggle to shift away from profitable ICE products quickly.
The landscape is still in flux, with innovation in solid-state batteries, alternative chemistries, and motor technologies potentially reshaping the cost and performance balance between the two vehicle types.
Summary
Electric and combustion vehicles differ in fundamental ways that shape every stage of production, from parts sourcing to assembly line layout. Combustion vehicles rely on mature, highly mechanical systems and long-established supply chains. Electric vehicles substitute these with electronics, battery technologies, and global sourcing strategies tied to critical minerals.
As the market adjusts to rising demand for electric mobility, manufacturing strategies will continue to evolve. Success in either segment depends on managing costs, securing reliable supply chains, maintaining workforce readiness, and responding to shifting regulatory frameworks. The pace and shape of this transition will influence the global automotive industry for decades to come.
