Automotive issues and solutions

Issue #151, July 2nd 2022

The automotive industry witnessed quality issues in vehicles in 2021. J.D. Power's study reported a significant 11% drop in quality, due to supply chain disruptions and shortage of parts. The worst drop seen before was 3% year-over-year! The Stellantis CEO said the Electric Vehicle (EV) market would collapse if prices do not fall down. It is not a dooms-day scenario for the industry. Interesting solutions are worked out to manage these challenges. Stellantis' plans are cost reduction by means of vertical integration, maybe all the way upto purchase of a mine, in-house manufacture of parts and energy production, and extra revenue from software, services and premium vehicles. Tata Motors has formed a partnership with chip manufacturer Renesas for design and making of automotive electronics. Battery swapping as a business model is catching up in Europe. Regulations in the form of standards are one way for quality, safety, and cost control of EV batteries. Here are those updates that talk about challenges faced in the automotive industry and the solutions that are shaping up to address them.

Drop in new vehicle quality

New vehicle quality declined by 11% this year amid parts shortages, shipping snarls and global trade disruptions, according to J.D. Power’s 2022 Initial Quality Study. J.D. Power’s initial quality rankings are based on survey responses from new car buyers or lessees of current model-year vehicles who respond during their first 90 days of ownership. The rankings consider long-term dependability, appeal of the cars’ features, and the sales or dealership experience in separate surveys. Infotainment systems and mobile apps remain a pain point for most automakers. EVs on average had more problems than cars and trucks with traditional internal combustion engines. - CNBC

EV affordability and cost control

If EVs don't get cheaper, "the market will collapse," Chief Manufacturing Officer at Stellantis Arnaud Deboeuf said at the company's Tremery factory in France. "It's a big challenge." Stellantis is aiming to cut the cost of making electric vehicles 40 percent by 2030. Its plans are to manufacture some parts in-house and also pressure suppliers to cut the price of their products. While the company is spending big on the rollout of new EVs, it's pledging to maintain strong returns, relying on extra revenue from software and services as well as some premium vehicles. - Automotive News

Partnership for auto chips

Japanese chipmaker Renesas and India's Tata Motors have formed a strategic partnership to design, develop and make semiconductor solutions. The move comes as a persistent global shortage of semiconductor chips has hobbled the automotive and electronics industries, among others, forcing production cutbacks, while highlighting global dependence on a few sources, such as Taiwan. Renesas will collaborate with Tata Motors on developing "next-generation automotive electronics" to accelerate the growth of electric and connected vehicles. - Economic Times

Battery swapping for affordable EVs

Battery swapping is already widespread in China, but the new Power Swap Station, just south of Oslo, is Europe's first. The facility belongs to Chinese EV maker Nio. The company hopes that swapping-out the entire battery will appeal to customers worried about the range of EVs, or who simply don't like queuing to recharge. The firm is pursuing a rather different business model - where customers buy the car and lease the battery. The customer is not buying the most expensive bit of an electric car - the battery. That knocks around ￡7,700 ($9,700) off the purchase price. A buyer then has to factor-in the monthly subscription for the battery, which ranges from ￡120 to ￡215, depending on the size of the battery, but the latest battery technology. - BBC

Regulation for lithium batteries

A group of roughly 100 Japanese companies including Toyota Motor and Hitachi will seek a bigger voice in lithium, a vital part of EV batteries. In India, the BIS (Bureau of Indian Standards) has published the "performance standards for electronic vehicle batteries" in a bid to keep a strict control over the manufacturing of EV batteries. The new BIS standard called "IS 17855: 2022" has been designed for lithium-ion traction battery packs and systems of electrically-propelled road vehicles. This standard incorporates the test procedure for basic characteristics of batteries. - Nikkei Asia and Economic Times

Delay in right-to-repair case

A U.S. district court judge again delayed issuing an opinion in the automakers’ legal challenge of a Massachusetts “right-to-repair” law. Under Section 2 of the amended law, any OEM that sells a vehicle in the state that utilizes a telematics system “shall be required to equip such vehicles with an inter-operable, standardized and open access platform across all of the manufacturer’s makes and models.” The legislation became effective with the 2022 model year. - Automotive News