Auto News Weekly: 08/17 - 08/23

Happy Monday! Apologies for not posting on Friday, got a little side tracked as our kids are returning back to school (thank god!).

LinkedIn! Welcome to week four of Auto News Weekly, where I delve into the latest and most impactful developments in the automotive industry. This week, I've identified five key trends and stories that are poised to shape the future of the sector. Here’s my take on what they could mean for the industry, technology, and consumer experiences. As always, I welcome your feedback, thoughts and comments, let's roll!

1. Volkswagen’s Quantum Leap in Battery Tech - 大众 Volkswagen 谷歌 #quantumAI #quantum #google #SlalomConsulting

Volkswagen has partnered with Google's Quantum AI team to push the boundaries of battery technology. What is quantum AI - it's the use of quantum computing to solve complex problems that are beyond the reach of classical computers. Regarding Volkswagen's partnership, quantum AI is being used to analyze and simulate the behavior of new materials at the quantum level. This capability allows for the discovery of more efficient and effective battery materials, potentially improving energy density, reducing charging times, and extending the range of EVs. It's estimated that quantum computing could accelerate material discovery by 10 to 100 times, which is a game-changer for battery development.

What This Means:

After doing some additional research on the topic, quantum computing could revolutionize the EV market by enabling the creation of batteries that outperform anything currently available. For VW, this partnership with Google is not just about staying ahead of the EV game; it's about redefining the limits of what's possible in sustainable mobility. However, the success of this hinges on the ability to process and analyze massive amounts of data generated by these quantum simulations.

This is where AI capabilities become critical. VW will need robust data infrastructure and advanced AI models to interpret and apply the finding from quantum computing effectively, (something we at Slalom excel at). The large amount of data generated by these simulations must be integrated into the company's existing processes, requiring sophisticated data management systems and AI-driven insights.

2. GM’s Ultium Platform Expansion - 通用汽车 #EVs Tesla #teslatechnology #gmtechnology #SlalomConsulting

General Motors (GM) has announced the expansion of its Ultium platform to include heavy-duty trucks and commercial vehicles. The Ultium platform is central to GM’s EV strategy, with the company aiming to sell 1 million electric vehicles annually by 2025. This expansion is a clear signal of GM’s ambition to dominate the electrification of the larger vehicle market—a segment where Tesla has been making significant strides with its Cybertruck and Semi.

What This Means:

First, I'll admit it, I'm on the waiting list for a Cybertruck, although having recently driven the Ford Lighting, I might change lanes (see what I did there?).

GM’s move is a direct challenge to Tesla in the EV truck market. By extending its Ultium platform, GM is not only expanding its EV portfolio but also securing its position in a market that is crucial for the future of electrification. Currently, GM holds roughly 39% market share of the U.S. truck market, and this expansion ensures that they can maintain—and potentially grow that share as the industry transitions more towards EVs.

For Tesla, this could mean intensified competition, particularly in the commercial vehicle segment, where reliability, range, and total cost of ownership are key selling points. GM’s deep roots in the truck market give it an advantage that Tesla will have to overcome, although the design of the Cybertruck itself has definitely shifted some traditional truck enthusiasts.

This underscores the need for automakers to have a robust strategy that not only focuses on innovation but also on market dynamics and consumer behavior.

3. Ford's Push for AI-Driven Production - 福特 Amazon Web Services (AWS) 微软 #AI #EVs #supplychain #SlalomConsulting

Ford definitely made headlines a few times this past week; one of them was with the announcement of doubling down on it's Ai-driven initiatives to optimize manufacturing processes. Utilizing AI for predictive maintenance, quality control, and supply chain management, Ford is aiming to enhance efficiency, reduce costs, and improve the overall quality of it's vehicles. Ford has been leveraging tech from AWS and Azure to analyze massive datasets from its manufacturing operations, enabling it to predict equipment failures before they occur and to fine-tune production schedules in real-time. It was also reported that predictive maintenance can reduce unplanned downtime by 50-60% and increase equipment lifespan by 20-40%.

What This Means:

Oh, so many things. AI just isn't a buzzword anymore; it's a transformative force in many industries with a tremendous amount of impact for the automotive and manufacturing industry. For Ford, the integration of AI means fewer disruptions on the production line, higher quality products, and a more agile response to market demands. Predictive maintenance, powered by AWS, MSFT or GCP, ensures that Ford's factories are running at optimal levels of efficiency, reducing downtime and maximizing production.

The impact continues even further by improving the level of response time to consumers, and responding to consumer needs and shifts, enabling them to quickly adapt production to changes in demand. As the automotive industry becomes increasingly competitive, the ability to produce high-quality vehicles efficiently will be a key differentiator.

4. Ford Cuts Production of Large EV SUVs - 福特 #strategic #EVs #SUVs #LargeSUVs #SlalomConsulting

This was the talk of the town last week. In a surprising but strategic decision, Ford announced that it will be cutting the production of its large electric SUVs. This decision comes as the company faces challenges related to the high cost of EV production, supply chain disruptions, and shifting consumer preferences toward smaller, more affordable EVs. Large EVs can cost up to 20-30% more to produce than smaller models, largely due to the battery size and materials required.

What This Means:

Pivot. Pivot. Pivot. I miss that show. Strategy is everything, and Ford's decision to scale back production of large EV SUVs is closely tied to its broader strategy of leveraging AI to enhance manufacturing efficiency. By focusing on smaller, more agile production runs, Ford can better align its output with real-time market demands while managing costs. This move also reflects the ongoing challenges in scaling up EV production, particularly for larger, more resource-intensive vehicles.

The move toward AI production and the shift in strategy will be challenging. AI-driven insights will allow Ford to optimize its production strategy, ensuring that the company can meet consumer demand without overextending its resources as the cost of everything continues to increase.

For the industry, this decision highlights the challenges of the EV market, where consumer demand, production costs, and advancements in tech must all be balanced. Ford's move may set a precedent for other automakers, particularly those struggling with similar challenges in scaling up their EV production.

5. Nissan's Circular Economy Initiative - 日产 #EVs #tech #innovation #SlalomConsulting

Nissan, yup, Nissan, the creators of the iconic Nissan Z took a bold step towards sustainability this past week with their new focus on circular economy for EV batteries. The company plans to reuse, recycle, and repurpose batters from its EVs, minimizing waste and reducing the environmental impact of battery production. Nissan expects this initiative to reduce its raw material costs by up to 15% and could contribute to achieving their carbon neutrality goals by 2050.

What This Means:

Circular economy is a game-changer for the EV industry. By committing to reuse, recycle EV batteries, Nissan is not only reducing its environmental footprint, impacting climate change, but also setting new standard for sustainability in the industry. But, Nissan isn't the only one challenging the industry in the race of innovation and environmental impact. Toyota also announced their focus on incorporating recycled materials into their batteries but have not yet developed a fully circular system.

This announcement also enhances the company's reputation among environmentally conscious consumers and could potentially lower cost by reducing the need for raw materials, saving consumers thousands on their next purchase. This could also position Nissan as a leader in sustainable manufacturing, giving it a competitive edge in a market where sustainability is becoming increasingly important.

The Wrap Up:

Each of these trends showcases the dynamic and rapidly evolving nature of the automotive industry. From battery tech to advancements in AI and shifts in production strategies, the road ahead is full of both challenges and opportunities. At Slalom, we're not just watching these developments - we're actively helping our clients navigate and lead in this transformative landscape. If your organization is transforming and you'd like to explore how we can help drive your business forward, let's connect!

Looking forward to hearing your thoughts and comments!

#automotive #automotivetechnology #sustainability #EVs #SlalomConsulting