Cross pollination of ideas for auto, EV industry

Issue #274

The electric vehicle (EV) or the broader automobile sector is not siloed, but an ecosystem, interacting with other industries for ideas and trade. At a recent tech summit, Indian Space Research Organisation (ISRO) Chairman S Somanath urged domestic production of car sensors. A series of battery fires and slowing EV sales could shift the focus from cost towards safety and standards. Reduced EV sales could result in substantial losses in semiconductor revenue, especially if buyers shift back to conventional gasoline models. Britain’s car finance industry is in disarray, with analysts warning of worst-case scenarios similar in magnitude to the country’s costliest consumer banking scandal following a court ruling. EVs need to account for 70% of new car purchases in 2030 to keep the sector on a net zero path, a target that looks challenging. American drivers could soon be sharing the road with more self-driving cars if the Trump administration is able to follow through on its reported plans to loosen the rules. Below are some interesting cross currents between the EV or automotive industry and other sectors.

Satellite technology to car sensors

At the recent Bengaluru Tech Summit, Indian Space Research Organisation (ISRO) Chairman S Somanath urged domestic production of car sensors to reduce reliance on imports and highlighted the need for cost-effective manufacturing to achieve viability. He pointed out that while India invests significantly in producing space sensors, the high production cost of car sensors makes domestic manufacturing less viable.

"For car sensors, viability is achievable only if production costs are low and manufacturing is scaled up," he said. Somanath called for greater industry collaboration to address this challenge. - Economic Times

Battery standards for safety

The race to produce ever cheaper batteries for EVs is entering a new stage as a series of fires and slowing EV sales put the focus on a new metric: safety. Bringing down battery prices has been a major priority for automakers looking to make EVs more attractive to buyers. Some 30% to 40% of the cost of an electric car comes from the battery. A series of fires and slowing sales could drive focus toward standards. - Nikkei Asia

Semiconductors and EVs

President Trump’s skepticism toward EVs and potential rollback of EV incentives are likely to curb US sales. However, the global impact may remain limited as the US accounts for a smaller portion of global EV demand. For semiconductors, the shift is significant, as EVs utilize far more semiconductor content than gasoline vehicles. Reduced EV sales could result in substantial losses in semiconductor revenue, especially if buyers shift back to conventional gasoline models. - Tech Insights, Auto News

Car financing and banks

Britain’s car finance industry is in disarray, with analysts warning of worst-case scenarios similar in magnitude to the country’s costliest consumer banking scandal. The burgeoning crisis stems back to a landmark judgement in late October, when the court ruled it was unlawful for car dealers to receive bonuses from banks providing motor finance — without getting the customer’s informed consent. The decision caught many in the motor finance industry off guard and appears to have paved the way for a multi-billion-pound redress scheme to compensate consumers. - CNBC

EV sales and net zero targets

In just over five years, the world will arrive at its first major checkpoint on climate action: a 2030 deadline to meet a series of green targets. But instead of doing a retreat, CO2 emissions actually hit a new record last year. That means the world faces a steeper, far costlier and more disruptive journey to reach net zero by 2050. Electric models need to account for 70% of new car purchases in 2030 to keep the sector on a net zero path, BNEF forecasts. In a base case scenario, where governments add no new policy support, EVs should account for 45% of new car sales in 2030. - Bloomberg

Slackening autonomous car rules

American drivers could soon be sharing the road with more self-driving cars if the incoming Trump administration is able to follow through on its reported plans. Donald Trump and his transition team have indicated they would like to loosen federal regulations around fully autonomous vehicles, according to a recent Bloomberg report. Currently, the National Highway Traffic Safety Administration (NHTSA) will grant an exemption so that each manufacturer can deploy up to 2500 autonomous vehicles per year. There were already attempts during Trump's first term as well as under the Biden administration to increase that to up to 100,000, but neither piece of legislation was passed. - Bloomberg, Car and Driver

Source for banner image at the top: Tatiana Gorilovskaya, CC BY-SA 3.0 <https://creativecommons.org/licenses/by-sa/3.0>, via Wikimedia Commons