Gas Stations on Notice? The EV Revolution is here; It's electrifying

One key consequence of our unprecedented access to data, insights, and social media is the ringside view to witness change in real-time. Previously, most of the world only saw change post facto, but now we can observe the ebb and flow of new technology adoption as it happens.?

This is especially true in the world of auto engineering, where innovations in R&D are rapidly transforming the industry.?

Nevertheless, the reason for this preamble is to drive home a key point: the shift towards EVs is here to stay and will only accelerate, regardless of what the press releases (or Tesla ’s numbers) might suggest this year.

Despite the enthusiasm for EVs, large automakers are struggling to produce affordable EVs that match the reliability of ICE* vehicles.?

As a result, many customers are opting to wait. For instance, 福特 recently announced that it is "delaying" production of battery electric vehicles (BEVs) to focus on hybrids, reflecting current market demand (source: New York Times ). However, it’s important to note that "delay" is not synonymous with "abandon."

What are the factors driving these “delay” decisions??

1. Profitability: It is a major concern as Ford and 通用汽车 are each losing thousands of dollars on every EV sold. The initial market for high-cost EVs, like those from Tesla, Rivian , and Fisker , appears to be tapped out. And to attract the broader market, automakers need a reliant charging infrastructure, a wider range and lower prices.
2. Software: While OEMs excel at hardware, software remains a work in progress. A glitch in car software is not just an inconvenience but can be life-threatening (source: Axios ). As highlighted throughout our series, mastering software is crucial for the future success of EVs.

It makes sense that EV development and adoption is facing issues, primarily because of safety concerns. While the car's evolution is analogous to that of the mobile phone in terms of technological advancement, it differs in its potential consequences—software bugs in a car can be life-threatening.?

Similarities with a phone:

1. Increasing use of software for feature updates like over-the-air (OTA) updates
2. Rapid model upgrades
3. "Fast charging" as a competitive advantage (A thinker: Is this why 小米科技 is venturing into cars?)
4. Similarities in the app ecosystem (Android Auto, Apple Carplay) and features (payments).?

Unlike a phone:?

1. While a software bug in a smartphone, like a screen flicker or overheating, is an inconvenience, in a car, a bug can mean death.?
2. Undercooked software, poor integration and or inadequate quality checks can lead to unexpected behavior in edge cases (i.e., situations where ML algorithms are not thoroughly tested or trained for). Examples include issues like braking power loss in the Fisker Ocean (source: TechCrunch ).

Developing, testing, and operating cars is several times more complex and riskier than mobile phones.

In the background, electrification technology continues to advance.

Next-generation batteries are achieving higher ranges and faster charging times. For instance, 宁德时代新能源科技股份有限公司 (CATL), the world’s leading Li-ion battery manufacturer, has introduced an ultra-fast charging battery. It can charge to a 370-mile range in just 10 minutes.

Next-gen batteries based on emerging technologies such as sodium-ion, semi-solid state, and solid-state are in development. These innovations promise smaller, cheaper, and longer-lasting batteries, addressing the key issues with EV adoption - range anxiety and lengthy charging times.

In addition to advancements in battery technology, an expanding charging network is also crucial. In the USA, there is now approximately one fast EV charging station for every 15 gas stations, highlighting substantial infrastructure growth (Source: Bloomberg ).

Vendor Ecosystem in 5 Years: What Might It Look Like?

The existing clique of large automotive suppliers ( Bosch , Aptiv , 麦格纳国际 , DENSO , 大陆集团 etc.) might look different in 5 years. Some consolidation seems inevitable, as incumbents may acquire each other's assets to enhance relevance and integrate new technologies. Part 1 of our series highlighted these strategic "partnerships" being forged by incumbents to acquire new technology.?

Future suppliers will have to deliver cutting-edge embedded system solutions, not just hardware (source: SAE ). This shift will require onboarding more software engineers and providing support through the operating lifetime of? cars, possibly through subscription models (Sound familiar to SaaS?)

New entrants like CATL, 英伟达 , and Mobileye will emerge as key players in components such as battery technology, sensors, computing, connectivity, and security. They might achieve enough scale to rival established names like Bosch in the automotive ecosystem.

New Global Automotive Hubs? The Middle East and China

Middle East:

1. EVs are a key lever? in diversifying oil-reliant economies.
2. Expectations of a new brand emerge and significant manufacturing setups in the next decade.
3. Saudi Arabia is leading the charge with substantial investments in Lucid Motors , establishment of CEER (its first car brand), and development of an EV metals plant (source: The Economist ).

China:

1. Boasts the most advanced EV ecosystems globally.
2. Leads in BEV production and exports (e.g., 比亚迪 ), battery technology (CATL), holds significant lithium reserves and processing capabilities, on par with the US in deploying robotaxi technology, showcasing advanced autonomous driving capabilities (source: Video ).

The Opportunity: Investing in Automotive Innovation

Amidst all the productive chaos and creative destruction, the automotive industry is ripe for investment opportunities. India, with its growing automotive market and software engineering chops, stands poised to emerge as a hub for auto tech innovations.

We are keeping an eye on use cases pertaining to vehicle design, development, and lifecycle management:

• Testing Workflows: For sensors to entire vehicle systems, optimizing testing processes is critical.
• Simulation and Digital Twins: Managing libraries, processes, and newer workflows for more efficient development.
• Autonomous Systems: Advancing sensor fusion, testing methodologies, and end-to-end system integration.

India's potential in these areas could shape the future of automotive technology. Thank you for staying with us through the series!

Stay tuned as these innovations unfold!

ICYMI, here are the previous articles from the series -

1. The Growing Tech Dependence of Automakers mirrors Smartphone
2. Partnerships Reshaping the Auto ER&D Sector (Part 1)
3. Partnerships Reshaping the Auto ER&D Sector (Part 2)
4. Self-Driving Cars: A history in the making since 1980’s