Questioning the status quo in auto industry

Issue #42, Dec 22nd, 2020

The automotive industry has matured beyond linear supply chains supplying physical parts. Electronic components are an integral part of the product today. Software that run on these components play a key part and need to be upgraded on a regular basis. Factories of the future may not be long assembly lines. Micro-factories especially for electric vehicles can disrupt existing factories, customizing vehicles and making each vehicle as an unique product. Below are some recent developments or ideas in the automotive industry, as reported in the media. They question the status quo prevalent today, heading into new horizons.

Microfactories instead of assembly lines for EVs

Russian-born entrepreneur Denis Sverdlov wants to revolutionize auto making, replacing Henry Ford’s century-old conveyor-belt assembly lines with tiny factories that cost far less. Arrival Ltd., which will start producing electric buses and vans next year, is betting that doing just the opposite will help reduce production costs. Its micro-factories need about $50 million in investment, compared with $1 billion for conventional ones, and 10 of of them could make as many vehicles as a traditional outlet for half the capital expenditures and in a 10th of the space, it says. - Bloomberg

Chip shortage hurting auto recovery

Volkswagen said it would cut production in the first quarter in China, Europe and North America because of a shortage of chips, the latest evidence that chip production is straining to meet demand after pandemic-related cuts earlier this year. Shortages first observed in China have spread to the rest of the world, and car makers are beginning to respond by cutting production, which could cause ripples throughout the global economy.- WSJ

Apple's autonomous car efforts

Apple is moving forward with self-driving car technology and is targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology. Apple's automotive efforts, known as Project Titan, have proceeded unevenly since 2014 when it first started to design its own vehicle from scratch. At one point, Apple drew back the effort to focus on software and reassessed its goals. Doug Field, an Apple veteran who had worked at Tesla, returned to oversee the project in 2018 and laid off 190 people from the team in 2019. Since then, Apple has progressed enough that it now aims to build a vehicle for consumers. - ET Auto

Realigning auto component supply chains

Automobile companies in India will need to map vulnerabilities and realign their supply chains to meet current challenges in the wake of the coronavirus pandemic, according to a report by consultancy firm EY. With the supplier base of a majority of components in the Indian auto industry not diversified, the report -- Non-linear automotive supply chain - COVID-19 and Beyond -- said the impact of the global health crisis on the industry has been deep-rooted. This can apply not just to India but other countries too. - Economic Times

Autonomous car trend in 2021

Business BBC News reports "Autonomous cars" as one of the technology trends in 2021. On the streets of Phoenix, Arizona more than 300 cars are operating by themselves, collecting and dropping off passengers with no human driver at the wheel. It is part of the Waymo One service which, in a first for such an autonomous service, was opened up to the public in October. Rivals are not too far behind. - BBC