Transmission Licensing: A Forward-Thinking Strategy in a Fragmenting World
Licensing Is No Longer An Alternative - It’s The Safest Path to Production Sovereignty.
Global trade has entered a new era of strategic uncertainty— shaped by shifting alliances, policy changes, and increasing scrutiny around critical materials. For the automotive industry, these dynamics have elevated supply chain resilience from a back-office concern to a boardroom priority. Tariffs, export controls, and changing eligibility criteria under regulations like the Inflation Reduction Act (IRA) or EU Battery Regulation are no longer occasional disruptions—they’re recurring variables in a decentralized trade environment. In this new reality, OEMs must move beyond designing for cost efficiency alone and embrace strategies that build flexibility, reduce exposure, and future-proof operations.
Nowhere is this shift more visible than in the Battery Electric Vehicle (BEV) automotive sector. BEVs and their supply chains—from the raw materials to components and assemblies—are central to domestic industrial policy and a frequent high profile target in trade disputes. The result is tariff whiplash and sudden eligibility shifts. Policy uncertainty is now a strategic constraint, not a short-term inconvenience for BEVs.
The pressing question for automotive OEMs isn’t how to design traditional supply chains more carefully—it’s how to minimize business exposure to these shocks. Inmotive’s nimble approach provides a solution: an elegantly designed EV transmission that reduces risk exposure in two ways: First, by materially lowering dependence on critical minerals. Second, by offering a licensed technology that can be built anywhere. To understand why this matters—and why a shift in strategy is no longer optional—it’s worth examining how today’s supply chains became so exposed in the first place.
How Dependency Drives Risk In Legacy Supply Chains
Decades of globalization led automakers to prioritize their supply chains for cost efficiency over resilience. In practice, this often meant relying on single regions or sole Tier-1 suppliers for critical components. That strategy saved costs in stable times, but today it has become a liability. Trade wars aside, history provides cautionary tales: in 2011, a devastating earthquake in Japan knocked out a key microchip factory, crippling vehicle production globally because so many OEMs depended on that one supplier’s output. More recently, the COVID-19 pandemic and associated lockdowns in China exposed the fragility of over-concentrated sourcing. Everstream Analytics 2023 risk report assigned a stunning 90% risk score to delays from China-based suppliers, warning that even if a Tier-1 supplier claims to avoid China, its sub-tier network likely has hidden exposure 1. In other words, a single factory closure or port shutdown in Asia can still idle assembly lines in Detroit or Stuttgart – a sobering reality for any OEM tethered to far-flung supply lines.
Real-world case studies abound. The global semiconductor shortage of 2020–2022 forced automakers worldwide to cancel production of an estimated 11.3 million vehicles in 2021 alone, costing the industry over $200 billion in lost revenue. Why? Because virtually every carmaker was chasing the same handful of chip fabs in East Asia, which couldn’t ramp up supply amid disruptions.
Overreliance on specific countries has similarly created strategic vulnerabilities. China’s dominance in EV materials is a prime example. The country produces over 70% of the world’s lithium-ion batteries and controls a similar share of the refining of critical battery minerals. Western OEMs that depend heavily on Chinese battery suppliers or rare-earth magnet producers are effectively hostage to geopolitical protectionism– a reality highlighted in 2010 when China temporarily cut off rare earth exports, and again today as U.S.-China tensions threaten access to materials for EV motors and batteries.
Reclaiming Control of Production and Compliance By Licensing Technology
How can automakers adapt to this new reality? One powerful approach is to take greater direct control of critical components – not by reinventing them from scratch, but by licensing the technology and producing those components in-house or with regional partners. Licensing an advanced EV subsystem (such as Inmotive’s two-speed transmission) gives an OEM the rights to manufacture it anywhere, with flexibility in sourcing, rather than being tethered to a single supplier’s factory on the other side of the world. In essence, it transforms the OEM from a passive buyer into an active producer, without the time and cost of full internal R&D. This model can dramatically mitigate trade risk in several ways:
Local Manufacturing: With a licensing agreement, an automaker can build the licensed component in whichever jurisdiction best circumvents tariffs or meets local content rules.
Diversified Sourcing and Dual Production: Licensing agreements often include “have made” rights or provisions that allow the OEM to have the part manufactured by alternate suppliers. This means if one plant goes down or a trade embargo hits a certain country, the OEM can rapidly shift production elsewhere using the licensed designs.
Compliance with Domestic Regulations: Perhaps one of the biggest advantages is the ability to tailor manufacturing to comply with domestic industrial policies. Around the world, governments are erecting new rules favoring local production and “friendly” supply chains.
Strategic Flexibility: Ultimately, licensing key technology is a way of building optionality into the supply chain. The OEM holds the blueprint and process know-how (under license) and can decide when and where to scale production. It’s a hedge against geopolitical swings.
Inmotive’s EV transmission licensing model exemplifies this forward-thinking approach. By licensing the Ingear two-speed transmission to OEMs, Inmotive isn’t simply selling hardware – it’s transferring knowledge and manufacturing capability. At a time when policymakers are effectively telling industry “build it here, or else,” licensing is a savvy way to answer that call without reinventing the wheel.
Ingear’s Common Materials Creates an Advantage the Critical Minerals Crunch
The benefits of Inmotive’s Ingear transmission go beyond geography – they extend into the periodic table. In an era of “mineral nationalism” and critical material protectionism, the composition of your technology can be as crucial as the location of your factory. A standout feature of Ingear is that it is engineered from non-rare, widely available, and recyclable materials. Instead of specialty alloys or import-dependent elements, the Ingear uses tried-and-true components like hardened steel links and sprockets, built with standard manufacturing processes. In fact, Inmotive proudly notes that no rare-earth materials and no complex manufacturing techniques are needed for its transmission. Finally, Ingear’s simple open loop control means that no new silicon chips or sensors are required.
This is a strategically significant choice. It means an OEM licensing Ingear isn’t just free from geopolitical risk associated with where it’s made – they’re also shielded from the risks regarding what it’s made of. Moreover, the use of materials that are abundant and recyclable means that many components can be sourced from existing domestic recycling streams. That means less reliance on international mining operations, and a stronger ability to close the loop inside national borders.
Ingear elegantly sidesteps much of the global scramble for rare earths and battery metals. Its steel-based construction can be produced with common industrial materials available in any regional market. The implications:
Resilience to Material Shortages
Local Sourcing from Recycled Stocks
Cost Stability
Upstream Environmental and Social Impact Reductions
Resilience to a Shallow Supply Chain
In effect, every Ingear that an OEM deploys is potentially allowing them to trim down the use of lithium, nickel, and rare magnet materials. It is a compounding strategic benefit: the transmission itself isn’t consuming rare minerals, and it helps other parts of the EV consume fewer of them as well.
Accelerating EV Cost Down and Speed to Market:
Speed is another currency of competitive advantage, especially in the fast-evolving EV market. New technologies can quickly make the difference between a market leader and a laggard. Yet traditional in-house development of something like a novel transmission can take many years of R&D, testing, and refinement. Licensing compresses that timeline dramatically – essentially handing an OEM a turnkey solution that is farther down the product development process and proven, ready to be deployed. In the case of Inmotive’s two-speed transmission, the technology has been under development and refinement for several years by a focused team of specialists, reaching benchmarks like 99% efficiency and successful integration trials. By licensing it, an OEM can skip the 5-7 year cycle it might take to invent, design, test, and validate a comparable transmission from scratch.
To appreciate the time saved, consider an analogous scenario: When Ford and GM teamed up to develop a 10-speed automatic transmission for ICE vehicles, it was a multi-year joint effort pooling hundreds of engineers – and that was with two industry giants collaborating to share the load. Smaller automakers or those late to a technology trend simply can’t afford to wait that long or spend that much for one component. Licensing provides a jump-start. For instance, one U.S.-based EV OEM that partnered with Inmotive is targeting production of an Ingear-equipped electric drive unit by 2027 . Less than a three-year turnaround from the licensing agreement (in 2025) to a market-ready, next-generation powertrain. By contrast, if they had begun their own two-speed transmission project in 2025, they might still be in prototyping by 2027, not in production. The licensing route shaves years off the development calendar.
Speed-to-market yields several strategic benefits:
Early Mover Advantage: In the EV race, being first (or early) with new capabilities – whether that’s longer range, better efficiency, or improved performance – can capture consumer attention and market share. A licensed solution like Ingear allows an automaker to introduce a differentiated EV (with better range/acceleration due to the multi-speed transmission) model cycles sooner than if they waited for an internal project to mature. Those one or two extra years of selling a superior product can be worth billions and solidify brand perception as an innovator.
Focused Internal Resources: By leveraging external innovation through licensing, automakers can redirect their own engineering talent to other core areas (battery chemistry, vehicle software, etc.) instead of expending them on reinventing a transmission. This accelerates innovation across the board. It’s akin to how many OEMs license infotainment or autonomous driving tech rather than doing 100% in-house – it’s faster to integrate a proven system and concentrate internally on differentiation elsewhere.
Concurrent Integration vs. Sequential Development: When licensing a subsystem, integration becomes the main task, and that can often happen in parallel with ongoing vehicle development. The OEM doesn’t have to sequentially finish R&D of the transmission before testing it in a vehicle; they receive the designs/prototype, and can immediately begin adapting it to their EV platform. This concurrency speeds up overall vehicle development. In contrast, a ground-up internal project might cause other programs to wait or iterate multiple times as the component evolves.
Inmotive’s model of working closely with the OEM (as in joint development agreements) further accelerates this process. The collaboration means the licensing isn’t a simple handover – it’s a knowledge transfer with support. The result is that an OEM can plug the Ingear technology into their vehicle program with minimal hiccups. It’s telling that strategic thinkers in the industry are increasingly open to such partnerships; even the biggest automakers are partnering or purchasing tech startups to leapfrog in capabilities (from autonomous systems to EV architectures). Licensing is a form of partnership that rapidly injects new technology into the product pipeline.
The bottom line is that in a rapidly shifting market and policy environment, time is of the essence. An inflexible strategy of only relying on internal R&D for every innovation might actually increase risk – the risk of being too slow to adapt. By contrast, licensing enables an agile response to technological demands. If multi-speed EV transmissions are the next step-change in efficiency (and history suggests they are), then those who move fast to implement them will set the pace. Inmotive’s licensing offers that speed edge on a silver platter.
Why the Licensing Model Will Soon Seem Obvious in Hindsight
Looking back a few years from now, it’s very likely that the industry will view the mid-2020s as an inflection point – a time when the old paradigms of globalization and vertical integration were upended and new strategies emerged as no-brainers. One of those will be the model of licensing key EV technologies to enable distributed manufacturing and resilient supply chains. What today might seem “forward-thinking” will, in hindsight, appear plain common sense given the environment. The pattern is familiar in the history of innovation and strategy: a period of upheaval exposes weaknesses, a few early movers adopt novel solutions to address them, and before long the rest of the industry follows suit, belatedly recognizing the wisdom of the approach.
All the signs point to this being that moment. We are witnessing simultaneous pressures – geopolitical fragmentation, resource nationalism, breakneck EV technological advancement, and regulatory transformation – that together create a perfect storm necessitating change. Strategic forecasting by risk analysts reinforces that such change is not optional. Everstream Analytics, for example, ranks geopolitical instability and tariff threats as a top risk to automotive supply chains in 2025, and warns that it will be “impossible to avoid conflict and its impact on sourcing, manufacturing and logistics” going forward . In other words, the external shocks we’ve discussed are here to stay. Companies that adapt their supply chain strategies to this new normal will survive and thrive; those that don’t will continually be caught off guard. When conflict, trade wars, or raw material crunches hit in 2026 or 2027, the OEMs that have local manufacturing capabilities will largely shrug, while those stuck in old supplier contracts will scramble. It won’t take many such incidents for the benefits of the licensing model to become glaringly clear.
We can draw parallels to earlier shifts. Recall how “just-in-time” manufacturing was once gospel – until the shocks of the past few years made “just-in-case” inventory and multi-sourcing the wiser course. Now, balancing efficiency with resilience seems obvious. The same is likely to happen with the idea of tightly controlling your EV core technology through licensing. It will simply become part of the standard playbook for de-risking supply chains. We might also compare it to the evolution of the tech industry: decades ago, proprietary vertically integrated models gave way to more open licensing and cross-licensing of IP, as companies realized they could innovate faster and spread standards by sharing technology under license (think of the common architectures in PCs or the licensed ARM cores in almost every smartphone). The auto industry is heading down a similar path out of necessity and commoditization – greater sharing of technology under licensed agreements that empower each OEM to build where and how it needs.
In hindsight, executives will likely say, “Why wouldn’t we license a critical technology like an EV transmission? It gave us control, flexibility, and shared risk at a lower cost than doing it ourselves.” Especially as success stories accumulate: Early adopters like Suzuki – who entered development with Inmotive – will have a head start, and latecomers will license just to catch up.
Final Thoughts
From a supply chain strategy perspective, the fragmentation of global trade might actually spur a renaissance in automotive manufacturing innovation. OEMs will localize production not just out of fear of tariffs, but because it is an efficient and feasible choice within their means via licensed tech. We will likely see more automakers owning assembly of components that they used to outsource, enabled by these IP agreements. This can improve profitability (by avoiding middleman markups) and deepen engineering expertise across regions. In essence, the industry could become more decentralized and more robust – a network of globally connected but locally sufficient operations. Licensing is the bridge to reach that model without each company having to reinvent the wheel.
Lastly, consider the competitive landscape and pattern recognition: those who seize inflection points win big. Think of Toyota’s early move on hybrid technology in the 1990s – seen as risky then, obvious in hindsight as hybrids proliferated. We are at a similar juncture with EV drivetrain tech and supply chain strategy. In a few years, an OEM executive will either be praised for their foresight for embracing a model like Inmotive’s, or condemned for clinging to old methods for too long. The case has been made by the converging data and examples we’ve discussed: licensing Inmotive’s EV transmission is not just a gearbox decision, but a supply chain masterstroke. It preempts the realities of a fragmented world, turning them from threats into manageable factors. Everyone will be wondering why it took so long to do the obvious.
About Inmotive Inc.
Inmotive is a pioneering developer of ultra-efficient multi-speed powertrains for electric vehicles. The company’s flagship product, the Ingear™ transmission, delivers superior efficiency and performance for a wide range of EV applications. Committed to advancing sustainable mobility, Inmotive partners with leading manufacturers to redefine what’s possible in electric and alternative energy transportation.