🎆Autowist Report 77

Chinese EV OEMs: Competing both in price and semiconductors (Link)

1. Chinese OEMs have faced tariffs on multiple markets, to give an edge to local carmakers. In a similar but opposite manner, Foreign OEMs also have to play by the rules of a joint venture if they want to enter the Chinese market.

2. Apart from intense price wars(which actually triggered these tariffs), Chinese OEMs are also competing to design their own semiconductor chips for their cars.

3. Except Tesla and Volvo and related brands(via ECARX), most other OEMs still rely on Nvidia, Qualcomm, NXP etc. for their chips.

4. The real question is whether owning your own chip give an OEM a lasting competitive advantage over your competitors? Here's my take:

5. First we need to understand the advantages of performing functions directly on purpose-built hardware compared to performing them on software that runs on general purpose hardware.

6. For example, an encryption algorithm that is running on a purpose built hardware chip will always outperform the SW implementation of that algorithm in terms of performance, time, energy consumed.

7. So the next step would be to understand which of the current or future functions would benefit from "running on hardware".

8. Then we need to give additional positive weightage if the function is to be carried out with high reliability and deterministic behaviour, need to be performed 10-100 times per second, needs to be secure from threats, if the feature requires true-parallel execution, high latency requirements, low power consumption.

9. And a negative weightage if the function is a nice-to-have, when we are not sure what we actually want and we need to have the solution to be more flexible, there is no real-time requirement, when we have no portability requirements.

10. As you can imagine, there are a lot of functions that could go into either categories. So owning your own chip is only beneficial if you have "enough" functionality that fits into the criteria mentioned above and that is strategic to the value chain you have with your customers. Otherwise, it is just a gimmick and brings no real value to the OEM's tech stack.

11. Apart from a functionality angle, there is also the vertical integration angle. The added benefits you get by owning the complete tech stack. This can help in getting the most out of your hardware and software. But that does not still change the fact that the development and validation cycle of such a chip is still multiple years. It would take a considerable investment to get an end-to-end platform off the ground.

P.S: I plan to do a further analysis of this in a future issue. Subscribe here to not miss it

Geely, Chery, and JAC to establish car manufacturing in Algeria (Link)

Geely, Chery, and JAC, three major Chinese automakers, plan to establish car manufacturing facilities in Algeria, responding to Algeria's 2023 import restrictions aimed at revitalizing its declining economy. This move aligns with Algeria's strategy to attract foreign automakers to boost local industry.

Chery intends to set up a plant in Bordj Bou Arreridji, initially producing 24,000 units annually, with plans to increase to 100,000 units within three years and export to other North African countries. Geely, through its partner Sovidem, plans to invest $200 million in a plant with a capacity of 50,000 units annually, starting production in 2026 with the Geely GX3 Pro model. JAC's plans are less detailed, though it has previous experience in Algeria with a light truck KD plant.

Algeria's Geopolitical and Foreign Policy Outlook

Algeria's geopolitical and foreign policy outlook in 2024 reflects its historical commitment to non-alignment, while it grapples with the challenges of regional instability and the need to modernize its economy.

Algeria's foreign policy remains deeply intertwined with its relationships with global powers like Russia and the United States. Despite its traditional ties with Russia, Algeria has maintained a neutral position in the Russia-Ukraine conflict, reflecting its broader strategy of balancing relationships without aligning too closely with any one power bloc.

The ports of Algeria:

Algeria's Economic Outlook

Source

BYD Aims for 50% Overseas Sales as It Posts Strong First Half (Link)

In 2024, BYD aims to sell approximately 3.6 million electric and plug-in hybrid vehicles, primarily in China, but with significant growth expected internationally. To support this expansion, BYD has already set up a factory in Thailand and is developing additional capacity in Hungary, Brazil, Turkey, and Indonesia. The company is also entering strategic partnerships, such as a deal with Uber to deploy 100,000 EVs.

However, achieving the 50% overseas sales target may take until 2030 or beyond, as suggested by analysts. Despite its successes in markets like Brazil, Israel, and Australia, BYD faces challenges in Europe due to consumer reluctance and additional tariffs imposed by the European Union.

From a previous report:

TATA Motors' new Chinese battery supplier (Link)

1. Up until now Tata Motors have been using battery packs developed in-house by Tata AutoComp Systems. But the recently launched Tata Curvv EV gets batteries from another supplier, Ocitillion.

2. Curvv EV has been equipped with Octillion-sourced battery packs. Interestingly, only the smaller 45 kWh battery pack in MR variants of Curvv EV get the Octillion-sourced battery packs populated by 15.2 Ah cylindrical cells sourced from another Chinese firm called EVE.

3. It is a no brainer to for an OEM to switch to a multi-sourcing strategy for batteries, if the overall strategy is not to be fully vertically integrated(like BYD). Among the key components that go into an EV; I foresee that the battery will be the first foundational component to be "commoditized", while electric machines, High power components etc. will be more strategic for OEMs to develop in-house.
   

Let's look a bit more into these new suppliers:

About Octillion

About EVE Energy

AirConsole Gaming in VW Vehicles

Here's what I understand:

1. From the AirConsole website, I can see that they currently offer 19 games. Some of which are: Ludo, GoKart racing game, Overcooked, Word Duel. The graphics and the thumbnails remind me of the very early flash based games of the 2000s.

2. AirConsole has a subscription model that charges $1.99 per month when billed yearly (and $7.99 per month when billed monthly). My assumption at this moment is that this subscription would be baked into what the customer pays for the car OR a subscription that they have to opt-in to.

3. On the developer side, the developers are free to build games on AirConsole and they can insert a paywall in their game. The revenue from the subscription is split in the following way:
   

   

4. From looking at the gaming page, I can see that they have a Unity plugin. Unity is a game engine, which means it's a software framework designed to streamline the creation and development of video games. It provides the necessary tools, libraries, and functionalities that allow developers to create both 2D and 3D games.

5. There is a lot more variety of games that we can expect to be ported by app/game developers. Unity, was built from the beginning to be an engine for 3rd-party developers. Unity is used by millions of developers around the world and has been the foundation for many successful games, including titles like Monument Valley, Hollow Knight, and Pokemon Go.

Kia EV9 Battery Teardown

Summary

• Munro & Associates conducted a teardown of the Kia EV9's high-voltage battery pack, revealing that the engineers likely prioritized repairability in its design.

• The battery pack includes two access plates underneath for servicing, allowing specific components like the big fuse and battery management supervisor unit to be replaced without removing the entire pack.

• The battery pack is easy to remove from the vehicle, requiring only a few electrical connectors, ports for the liquid cooling system, and several bolts, with no need for special tools or adhesives.

• Once removed, the 38 individual modules within the pack are easy to access, remove, and replace. The pack operates at a minimum voltage of 462V and a maximum of 643V.

• The battery tray was praised for its high-quality welds and the efficient design of the cooling system, which uses a simple aluminum cold plate with a single inlet and outlet for the coolant.