EV Market Consolidation and Supply Chain Resilience: Uncovering Undervalued Component Suppliers in July 2025

The electric vehicle (EV) market is undergoing a seismic shift. As automakers consolidate their supply chains and prioritize battery efficiency, component suppliers with specialized expertise in high-performance manufacturing and cost discipline are emerging as key beneficiaries. In July 2025, three undervalued players—Benchmark Electronics (BHE), Methode Electronics (MEI), and Plexus Corp (PLXS)—stand out for their ability to navigate industry headwinds while positioning themselves for long-term growth.

The Case for Consolidation and Resilience

The EV sector's rapid evolution has forced automakers to streamline their supplier ecosystems. Companies that can deliver complex, energy-efficient components—such as liquid-cooled systems, advanced sensors, and high-density power modules—are gaining traction. Meanwhile, battery efficiency remains a critical focus, with thermal management and lightweight materials driving innovation. This environment favors suppliers with technical depth, global manufacturing agility, and strong balance sheets.

Benchmark Electronics (BHE): A Powerhouse in High-Performance Computing

Benchmark's recent work on the Aurora exascale supercomputer at Argonne National Laboratory underscores its leadership in advanced manufacturing. The company's expertise in liquid-cooled components and system integration aligns with EV trends, particularly in thermal management for high-capacity batteries. Financially, BHE's P/S ratio of 0.53 (well below the industry median of 2.55) and EV/EBITDA of 12.6 highlight its undervaluation. Its Q2 2025 revenue of $642 million, with 20% from aerospace and defense (a sector experiencing robust growth), further strengthens its position.

Benchmark's recent dividend of $0.17 per share and a debt-to-equity ratio of 0.24 signal financial prudence. While not yet a direct EV component supplier, its capabilities in precision engineering and global manufacturing make it a strong candidate for future EV-related contracts.

Methode Electronics (MEI): Pivoting to Data Center Growth

Methode's EV segment, though currently challenged, remains a cornerstone of its strategy. In Q4 2025, EV applications accounted for 20% of its $257 million in net sales, but inventory write-downs and customer delays led to a $30.4 million pre-tax loss. However, the company is pivoting EV assets to the data center market, where demand for power distribution products is surging.

MEI's Value Score of 99 (deep value) reflects its extreme undervaluation, with a P/S ratio of 0.22 and P/B of 0.34. Its recent dividend cut and board restructuring aim to streamline operations, while its pivot to data centers could unlock new revenue streams. Investors should monitor its ability to execute this transition, as data center growth could offset EV sector headwinds.

Plexus Corp (PLXS): Global Manufacturing with Margin Potential

Plexus, a contract manufacturer with a global footprint, benefits from its low-cost structure and expertise in electronics production. Its P/S ratio of 0.80 and EV/EBITDA of 11.7 are attractive, though its P/B of 2.26 (above the industry median) suggests some caution. The company's focus on high-margin sectors like industrial automation and medical devices positions it to capitalize on EV-related demand for precision components.

PLXS's Q2 2025 guidance of $635–$685 million in revenue, coupled with a 4.7% operating margin, highlights its operational resilience. As EV supply chains consolidate, Plexus's ability to scale production and manage costs could drive margin expansion.

Strategic Considerations for Investors

1. Supply Chain Resilience: All three companies have diversified geographic footprints and strong R&D capabilities, reducing exposure to regional disruptions.
2. Battery Efficiency Trends: Benchmark's thermal management expertise and Methode's pivot to data center power solutions align with long-term EV efficiency goals.
3. Valuation Metrics: BHE and MEI trade at significant discounts to industry peers, offering margin of safety for long-term investors.

Conclusion: Positioning for the Next Phase of EV Growth

The EV market's consolidation phase is creating opportunities for component suppliers with specialized skills and disciplined capital structures. Benchmark, Methode, and Plexus exemplify this trend, combining undervaluation with strategic positioning in high-growth areas. While risks remain—particularly for Methode's EV pivot—these companies offer compelling entry points for investors seeking exposure to the EV supply chain's next chapter.

As the industry shifts toward efficiency and resilience, these undervalued suppliers may emerge as critical enablers of the EV revolution.