Challenges and opportunities in auto sector

Issue #64, Feb 26th, 2021

No industry sector is without challenges. The industry is facing new challenges in the EV segment. The challenges of today become the opportunities for today, for those willing to go deep into them to find a solution. Chip shortage is starting to hurt the automotive industry beyond shut downs to price inflation. Hyundai's global recall for battery issues is seen as the most expensive exercise - as expensive as replacing an entire engine. On the other side, used batteries from electric vehicles are refurbished and used for industrial applications. Here are some recent updates.

From chip shortage to inflation

Auto companies battling against the shortage of semiconductors are now faced with another issue-- increasing chip prices. The Indian auto OEMs have started getting requests from chip manufacturers to increase prices, said 3 companies familiar with the matter. The combination of supply shortages and surging demand has put pressure on prices with overall chip prices going up by 4-6% in 2021, with supply constraints set to last for the next 2-3 quarters. Not only car companies, semiconductor firms are also looking for alternatives. - Economic Times

EV batteries and the circular economy

Retired electric vehicle batteries that are repackaged into energy-storage systems are being targeted at industrial consumers that have been slower to adopt the technology than utilities or homeowners. Relectrify, an Australian technology developer, is beginning sales of units that repurpose expired Nissan Motor Co. Leaf batteries to create products capable of storing renewable power at manufacturing facilities, farms or remote mines. The systems can also be used to smooth out peaks in electricity demand at EV charging stations, or by utilities to improve the reliability of complex rural grids. So-called second-life battery systems harness the remaining lifespan in EV packs. - Bloomberg

Hyundai's costly recall

Hyundai will recall 82,000 electric cars globally to replace their batteries after 15 reports of fires involving the vehicles. Despite the relatively small number of cars involved, Hyundai's recall is one of the most expensive in history, signaling how electric car defects could create hefty costs for automakers — at least in the near future. The recall will cost Hyundai 1 trillion Korean won, or $900 million. On a per-vehicle basis, the average cost is $11,000 — an astronomically high number for a recall. Replacing an entire battery is an extreme measure, requiring a similar amount of work and expense as replacing an entire engine of a traditional internal combustion-powered car. - CNN

The future of car navigation with embedded systems

The Global Positioning System — a network of satellites that enables location pinpointing — exists courtesy of the Defense Department. There are drawbacks to using a phone for navigation, particularly if it doesn’t tap into a car’s infotainment system. Positioning a phone just so can be tricky, and because smartphones rely on a cellular signal for map data. But better than smartphones and on-dash devices are the navigation systems that automakers are plugging into their cars. These factory-installed systems offer better accuracy, more features and better integration. - Economic Times

Driverless in Spain

A new driverless electric bus has begun operating in the southern Spanish city of Málaga, in the first such project in Europe. The bus, which began running on Saturday, is equipped with sensors and cameras and links Málaga’s port to the city centre on an 8km (five-mile) loop it does six times a day. It could “interact with traffic lights” that were also equipped with sensors that alert the bus when they turn red. The bus uses artificial intelligence to improve its “decisions” based on data recorded along the route. - The Guardian

Autonomous car testing in China

China has drafted new rules that legalize autonomous driving tests on highways, putting it in line with the US, Germany and the UK. The Ministry of Industry and Information Technology’s new draft regulations allow for “road testing and example application of smart connected vehicles”, and highways are permitted as one of the scenarios to test driverless cars. The draft, published this week and open to public feedback, is expected to be implemented soon if there are no strong objections. It marks a step forward for the industry.