According to Reuters, many auto suppliers have chosen to deal with the price hikes generated by current events, fearing that increasing component prices might put them at a disadvantage later on.

Shane Kirrane, commercial director at Autins Group, stated that "if you don't, you're not going to have a business in five or six years supplying major carmakers."

The pressure comes as many big car manufacturers decided to ditch dirty materials from the supply chain in order to please both investors and regulators.

BMW wants all its battery suppliers to use clean, renewable energy when manufacturing these components, while the German car brand hopes that most of its aluminum and steel suppliers will do the same.

At the same time, Volvo is another big carmaker that wants to implement 25% recyclable plastic in its vehicles by 2025.

This is why many suppliers are trying to catch up with the current standards and they try to do so by developing recyclable parts and by installing green energy sources for their business, such as solar panels and wind turbines.

Another issue is the fact that they can't increase the prices they charge car brands much, due to the fact that they are also focused themselves on optimizing costs in order to ensure they have enough funding for innovation, which is necessary for the transition.

Joe McCabe, CEO of researcher AutoForecast Solutions, stated that "we're going to see a real big shakeout the next five, 10 years in the auto supply chain."

Mercedes-Benz is a German car manufacturer that wants to use recyclable materials in its cars and also aims to use steel made with renewable energy.

Because of this, company officials said that suppliers are faced with a "monumental task" when it comes to the energy transition.

The company even announced recently that it will extend the use of wind energy for internal operations, starting with the testing facility located in Papenburg, Germany.

Volkswagen is another big name in the industry and it wants to reduce its vehicles' carbon footprint by 30%, including the supply chain.

Company officials claim that it's working with suppliers and briefly mentioned a joint effort that should tackle the rise in energy prices.

Ralf Klaedtke, chief technology officer at TE Connectivity, said that "for smaller suppliers, the challenge is even more severe."

"The suppliers that don't qualify for sustainability will be ruled out of the procurement process", he mentioned.