Pneumatic tyres still the future: Growing tyre business during transition to EV

With much talk of the impact of electric vehicles and rapid tyre technology developments, Tyres & Accessories recently interviewed Stapleton’s Tyre Services managing director, Andy Fern. As well as considering the main trends that have impacted the tyre market in 2023, the discussion also considers which factors will continue to influence the market’s ongoing direction in future.

Considering that both industry (ETRMA) and third-party (GfK) data suggest demand hasn’t yet returned to pre-pandemic levels, we began with the current state of retail market demand from Stapletons’ perspective, which is, of course, one of the market-leading wholesalers:

“I don’t tend to track GfK or ERMC too closely, but we obviously form quite a large part of the UK market…Our experience of the last few months was that it was a bit better than the equivalent period last year”, Andy Fern explained.

But the market is also different to the pre-Covid environment: “Definitely the…trends have changed…I would say weekends aren’t quite what they used to be…there’s been a smoothing effect through a working week. If I look at the way we sell tyres now, you don’t quite get the same peaks and troughs, which tells me people are planning their tyre change with a bit more flexibility than how they used to pre-Covid.

“So, if somebody is working from home on a Friday, they might have planned ahead and go get their tyres changed. Whereas before Covid they’d probably have to do it on a Saturday, for example.

“…in summary, it’s been pretty busy this last few weeks but we expected it to be because it’s MOT season. And the MOT season is now more pronounced this time of year than it used to be due to the MOT extension implemented during Covid.”

What’s an electric vehicle tyre?

On the subject of MOTs, the official DVSA data shows a significant variation between tyre-related failures on EVs and ICE vehicles. There are also regional variations within that trend. With that in mind, has Stapleton’s and its retail customers witnessed those phenomena?

“I think the first thing I would say is: the demands that an EV puts on tyres are pretty extreme. [And] I would say modern day premium tyres are becoming very technical pieces of kit. [In] the last 10 years we’ve seen quite some migration towards SUVs – particularly in the UK – so that’s brought its own challenge in terms of tyre fitments and tyre sizes (but that’s been 15 years in the making).”

In general, there are two things that the latest tyres have to cope with: weight and power. EVs are demanding in both respects. They also generate high torque levels that put a substantial amount of stress and strain on the modern-day tyre. But it doesn’t end there.

“Throw in the fact that you’ve got pretty, strong requirements from OEMs in relation to noise, and you see a lot more foam inserts now in tyres than there ever used to be [plus] rolling resistance requirements for obvious reasons i.e. range”, Fern continued.

“You used to have a Renault Megan, Ford Focus, Vauxhall Astra, VW Golf fitted with the same tyre size. Now we’re seeing multiple different fitments and EVs just added to that complexity…” – Stapleton’s Tyre Services managing director, Andy Fern

So, have EVs overcome the so-called range anxiety problems enough to support their mass-market take-up and consequently their dominance in the tyre space?

“It’s still at a tipping point really where range is acceptable or not. For the driver, for the consumer, we don’t think we’ve reached that point yet where range is as acceptable as it needs to be, particularly in the winter months…the big subject really is the requirements on the tyre, which are enormous versus what we used to see with ICE vehicles.”

“If a design engineer had said a car is going to be two-and-a-half tonnes in weight, it’s got to produce 500 horsepower and it’s going to need to do this, this and this as well…20 years ago, you’d have probably been talking about a supercar. Now you’re talking about…an i4 M50, which is basically an electric four-series and almost the demands that supercars used to ask of tyres 15 to 20 years ago…So what it is doing is allowing premium tyre manufacturers to differentiate. To be able to make a tyre that is able to conform to those requirements.

“That’s the challenge, I would say mid-range and budget tyre manufacturers face: How do they keep up with the technological requirement we’re seeing in modern-day vehicles?”

On the subject of electric vehicle tyres, we’ve seen a range of different policies from manufacturers relating to whether or not electric vehicles need electric vehicle tyres. How does Stapleton’s handle that complexity?

“I used to work for a premium manufacturer, so I remember this from a few years ago…10 or 15 years ago there was the run flat repair policy, so you’d have one manufacturer saying you can repair them. Other manufacturers said you can’t repair run flats.

“It’s similar here. Now…the brands have come out and said what their policy is. Some have said their tyres are EV-ready. Some have come out with dedicated EV tyres and then made that very clear in terms of branding. I think for somebody like ourselves that means stocking these tyres and distributing them to our customers – because awareness in the customer base is very weak – we are quite early, I would say, in the journey. Awareness will need to improve like anything that’s a bit new. That’s normal. The easy thing in the short term is to say: like for like. So, if it came on those tyres from new, then the recommendation would be to keep those tyres. If you want to keep that range, the performance, et cetera, et cetera…maintain like-for-like replacement.”

The challenges of SKU proliferation

The growth in SUV sales along with the ongoing transition brings with it real logistical challenges for distributors. What does that look like from a wholesale perspective?

“Our largest warehouses today will be stocking in the region of 8 to 9000 SKUs. 10 years ago, that figure would have been more like 4000 SKUs. 20 years ago, it would have been 3000 SKUs. We’re on this growth curve of SKUs that is bordering on being out of control. I mentioned SUVs because the SUV was one factor that triggered that change. You used to have a Renault Megan, Ford Focus, Vauxhall Astra, VW Golf that would all have the same tyre size fitted. Now we’re seeing multiple different fitments and EVs just added to that complexity.

“The challenge for tyre manufacturers is in terms of their production processes. How do they keep up with the demands of this growing SKU mix?…So if we’re at 8 to 9,000 today, we know that in the next few years it’s going to be 10/15/20 thousand SKUs.

“Of course, that’s also the challenge for us as a distributor. Nevertheless, the reality is that some manufacturers have relied on the wholesale distribution of their brands precisely because SKU proliferation has made direct distribution without such wholesale support prohibitive.”

And that counters some of the long-term ambitions of vehicle makers and by extension tyre makers. We’ve all heard the narratives that emphasise mobility-focused alternatives to vehicle ownership and the inevitable move towards greater vertical integration. But all that assumes that there will be a service provider fitting tyres at the end of the day.

That all sounds “very futuristic,” Fern responded, continuing: “I have heard some of those same sort of anecdotes…my view is: if you make the tyre, stock the tyre, fit the tyre, you’ve got a pretty fundamental role to play in tyres for many years to come. Whichever way vehicles go in five years to 10 years’ time, and well beyond that…a pneumatic tyre is still the future for a long time yet.”

“It’s always interesting to look at the UK and how it compares to the European countries, because the UK is a very mature tyre market where distribution plays a big role. It’s a bit of a different model in some of the European countries, but the UK is always good to look at from a tyre perspective because it’s a very mature market both in terms of distribution and in terms of things like fleet.”

Cars like the BMW i4 M50 ask as much of tyres as the supercars and that is a product development challenger for tyremakers and results in a logistical challenger for distributors (BMW i4 M50, Kith collaboration pictures – Photo: Stapleton’s)