Apprehensions in auto industry

Issue #124, Dec 31st, 2021

As we sign off 2021, I take this opportunity to wish all subscribers to the automotive trends newsletter a Happy New Year, for a healthy, productive and wonderful 2022 and ahead, for you, your family, friends and colleagues.

Decision makers in the automotive industry continue to face tough situations. One question faced by Tesla was whether true autonomy could be achieved only with cameras for vision, or if other sensing devices like radar are required. But Tesla's focus on software has helped it better manage the chip shortage when compared to its peers. It has been able to quickly rewrite the software necessary to integrate alternative chips. The Electric Vehicle (EV) apprehension faced by some auto OEMs like Toyota seem to stem from the rapid pace of their adoption and its impact on the society, not from the technology itself. The software driven focus at Toyota would have ramifications for its suppliers. Fanuc sees cobots as the differentiating factor in a growing market for robots used in EV manufacturing. Ford talks about a shift to an order-based system to manage the chip shortage and going forward. Below are some apprehensions faced by the automotive industry and how they are managed.

Tesla's software focus to manage chip shortage

Tesla has been able to keep production lines running in part by leaning on in-house software engineering expertise that has made it more adept than many rival auto makers at adjusting to a global shortfall of semiconductors, industry executives and consultants said. Chips are used in everything from controlling an electric motor to charging a phone. Faced with shortages earlier this year, for example, Tesla was able to quickly rewrite the software necessary to integrate alternative chips into its vehicles, the company’s chief executive officer, Mr. Musk, has said. - WSJ

EV apprehensions

Over the course of the past year, many of the world’s biggest carmakers have gone “all in” on electric vehicles. General Motors, Ford, Mercedes-Benz and Volvo Cars have set end dates for the sale of any vehicles containing an old-school engine. Yet others, most notably Toyota, BMW and Stellantis, have shied away from the headlong rush into battery models. Their concern is not the direction of travel — all three have plans to sell significant numbers of electric vehicles over the next decade — but the speed of the shift, and its wider consequences for society and the climate. - FT

How autonomous are Tesla's cars?

Unlike technologists at almost every other company working on self-driving vehicles, Elon Musk insisted that autonomy could be achieved solely with cameras tracking their surroundings. But many Tesla engineers questioned whether it was safe enough to rely on cameras without the benefit of other sensing devices — and whether Mr. Musk was promising drivers too much about Autopilot’s capabilities. Now those questions are at the heart of an investigation by the National Highway Traffic Safety Administration. Since the start of Tesla’s work on Autopilot, there has been a tension between safety and Mr. Musk’s desire to market Tesla cars as technological marvels.- NYT

Software driven everything industry

New approaches to software are driving a wave of change with the potential to overturn conventional wisdom in manufacturing. How well will Japanese industry be able to respond to "software-defined everything" (SDx), the software-driven transformation of all kinds of goods and services? Toyota is trying to create software-driven mobility in the city of the future. The project will expand the "software first" approach to auto manufacturing, according to CEO James Kuffner. The shift in strategy at Toyota, at the top of the huge auto industry, will have a major impact on the pyramid of parts suppliers and other businesses.?- Nikkei Asia

Robots for EV making

Industrial robot maker Fanuc sees big opportunities in the global shift to EVs, President and CEO Kenji Yamaguchi said recently. "Automakers around the world are shifting their focus toward electrification, and I expect related investments in industrial robots to accelerate," Yamaguchi said. In order to better compete with rivals, Fanuc plans to focus on collaborative robots or cobots that feature special capabilities, like easy controls and the ability to operate safety near people. - Nikkei Asia

Ford's move to order-based system

The automotive industry may never be the same after 2021, an infamous year that brought massive changes sparked by supply chain issues and the coronavirus pandemic. The supply chain issues – most notably, a global shortage of semiconductor chips – led to historically low vehicle inventories but also record pricing and profits amid resilient consumer demand and the lack of available cars and trucks. It’s a situation that some auto executives such as Ford Motor CEO Jim Farley have pledged to continue when the industry is not in a time of crisis because of the higher margins for the automaker as well as its dealers.

“This is a better way to run our business,” Farley told investors. “We have the most complicated go-to-market system I think on planet Earth. We could simplify all of that with tighter inventories.” Instead of a 75-day or more supply of vehicles, Ford is targeting a 50 days’ supply. To help manage this, Farley wants to move the company more to an order-based system. - CNBC