🎈Autowist Report 86

In-house SW and SDV, US Ban on Chinese SW in Cars, Western battery alliance, Mahindra-VW Deal, New Renesas Product, Leaked Xiaomi Car Roadmap

Author

Harikrishnan Radhakrishnan
September 26, 2024

IN TODAY’S REPORT

💼BRIEFING

Top insights and analysis that is moving the needle in the automotive industry

In-house SW ≠ SW Defined Vehicles

  • There are many definitions of what a SW defined vehicle is around the internet. Every OEM has their own interpretation. A lot of the definitions that I see being thrown around is that OEMs need to develop SW in-house to be SW defined.

  • But that is a rather naive and misleading. Just because the OEM develops all the software in-house does not mean they will be SW defined, and conversely it does not mean that an OEM can never be SW defined if it has suppliers who deliver parts of their vehicle SW.

  • The key point is ownership. The OEMs have to own the SW of the vehicle. Irrespective of who is developing it. The ownership of the SW is one step closer to making sure that the right customer feature is being developed at the right time. If that is an item in the supplier backlog, really does not matter.

US Ban on Chinese Software in Cars (Link)

Summary

The Biden administration is proposing a ban on Chinese software and hardware in connected and autonomous vehicles in the U.S., citing national security concerns over data collection and potential foreign manipulation. The proposed regulation, expected from the Commerce Department, would prohibit imports and sales of vehicles from China with key communications or automated driving system components. The public will have 30 days to comment before the rules are finalized.

The ban would take effect for software in 2027 and hardware in 2029, impacting vehicles with features like Bluetooth, satellite, and autonomous driving capabilities. This follows rising concerns about Chinese companies collecting sensitive data from U.S. drivers and infrastructure.

My take on this

  1. I cannot imagine how this will work. TO build a car, thousands of employees are involved on the OEM side, but also on the hundreds of suppliers. But that is not it, there are multiple tool vendors, 3rd party consultants, testing labs, infrastructure providers all involved in getting a new vehicle to market. How will they realistically enforce this ban?

  2. The nationalities of all the people involved is also at question here. What if there is a Chinese national working on a vehicle but they are situated in the EU

  3. The ban comes into effect starting 2027. Isn’t that ample amount of time to plant SW and malicious utilities in vehicles until then?

  4. Closing the doors on Chinese manufacturers in the US domestic market does really ensure that they are safe from the proposed threat, while millions of consumer devices are being used in the US that is still manufactured in China.

  5. There is the other side of the coin too. What is prompting US for such a restriction: The United States' response comes as a reaction to China's restrictions on foreign technologies like Apple CarPlay and Android Auto within its domestic market.

    China enforces strict regulations on foreign technologies involving data transmission and user data collection, citing national security and privacy concerns. As a result, the Chinese market favors domestic alternatives such as Baidu CarLife, Tencent's TAI, and Huawei HiCar.

  6. China is able to do it due to the autonomy they have over the Chinese Supply Chain

  7. In a way this will force other countries to get their act together and to really invest in bringing supply chains local to their market instead of relying on China.

Has Ford cracked the Apply/Android Balance (Link)

  • The latest Lincoln Nautilus has a 48-inch Panoramic Display that integrates both the instrument cluster and infotainment, allowing Apple Maps or Google Maps to be mirrored while using in-car functions like climate control.

  • This is first-of-its-kind when it comes to integrating simultaneous use of device mirroring together with other vehicle related functionality.

  • This system is the result of Ford’s partnership with Google, announced in 2021. It leverages Google’s cloud services, offering features like Google Assistant voice control, over-the-air software updates, and access to a growing number of automotive-approved Android apps.

  • The real question is whether having a bigger screen so you don’t have to switch between carplay to access climate features is the actual solution to the problem of not having buttons in the first place? Unfortunately, I think not. In my opinion, this approach helps with a second order problem, created by having screens in the first place. A better integration of carplay could solve this in a more intuitive way without having even larger screens.

Western nations join forces to break China’s grip on critical minerals (Link)

Key points:

MSP initiative: The coalition aims to increase collaboration among nations and private industries to break China's stronghold on critical minerals, especially in nickel, lithium, and cobalt processing.

China's dominance: Chinese companies control over 90% of rare earth processing and more than half of the processing for key minerals used in batteries and high-tech equipment.

Western response: Through MSP, Western governments are offering financial support to critical mineral projects, such as the Kabanga nickel project in Tanzania, to create alternative supply chains and reduce dependency on China.

Private sector involvement: Companies like BlackRock, Goldman Sachs, and Rio Tinto are participating in the push to attract more private investment into critical minerals, supported by government initiatives.

Strategic goal: The overall aim is to provide low-income countries with alternatives to China’s financing, particularly in resource extraction and processing, and to ensure a more diversified global supply of critical minerals.

  • Where this hits the most for Automotive companies is of course in securing the raw materials and supply chain around building batteries.

  • Somehow the scarcity of minerals have prompted OEMs to either 1. Have strategic alliances with Chinese Players so they are also promised the necessary battery resources. OR 2. they have to secure the supply chain themselves.

Mahindra is negotiating to acquire a 50% stake in Skoda Auto Volkswagen India, with the deal potentially valued around USD 1 billion. Talks have progressed, and Mahindra insists on equal partnership, similar to its previous Ford deal. If successful, Mahindra would gain increased production capacity and access to Skoda Auto VW's technology, while Skoda VW would benefit from Mahindra’s lower-cost vehicle architecture and industry expertise.

The deal involves Mahindra investing INR 4,000-5,000 crore, including non-cash contributions like its New Flexible Architecture (NFA) platform. Skoda VW could use this platform for future internal combustion engine (ICE) and electric vehicle (EV) models. Audi would continue sourcing vehicles from Skoda VW under a contract manufacturing arrangement.

This alliance aims to mitigate risks for Skoda VW, which is facing challenges meeting production targets for its India 2.0 models and future regulatory standards. The partnership could help Skoda VW invest in the Indian EV market and comply with upcoming CAFÉ(Corporate Average Fuel Economy) 3 standards by FY28.

  1. Inherit yet another vehicle architecture?: The strategy to inherit yet another vehicle architecture is just another indication how VW has lost its grip on their own vehicles. Is the internal culture and processes of the company to blame? or the strategy that directed it? While other OEMs are racing to streamline, VW is collecting architectures from around the world.

  2. Production Capacity, is that what VW can really give up when they are currently facing challenges to meet production capacity? Perhaps this is based on the premise that VW is going to build new plants in India with newer technology. And they can really “outsource” their older plant to Mahindra in return for tech and supplier synergies.

  3. In my opinion, this deal gives the best to Mahindra. They are in the right position to use this deal, increase their industry clout even further in the Indian market.

Source: VW

Renesas’ New Products

Renesas Electronics Corporation has introduced its 4th-generation R-Car SoCs, expanding its offerings for entry-level Advanced Driver Assistance Systems (ADAS). The new R-Car V4M and V4H SoCs provide a balance of robust AI processing, fast CPU performance, and power efficiency, targeting Level 2 and 2+ ADAS applications such as smart cameras, surround-view systems, and driver monitoring.

These SoCs, built using a 7-nm process, feature up to 17 TOPS deep learning performance, high-speed image processing, and support for both real-time and AI-driven applications. Renesas' scalable ADAS platform enables OEMs to reuse software, reducing engineering costs. The company is also developing 5th-generation R-Car SoCs for future automotive markets, offering solutions from entry-level to luxury vehicles.

The R-Car series has shipped over 450 million automotive-grade devices, and the new devices maintain compatibility with existing products. Renesas' new R-Car Open Access (RoX) platform also supports Software-Defined Vehicles (SDVs), enabling rapid development with cloud-based tools.

Sampling of the R-Car V4M and V4H series has begun, with mass production slated for Q1 2026.

  1. Why this x-axis and y-axis?

    1. X axis mentions DMIPS, Camera interfaces, Vehicle features like Front vision and Driver Monitoring

    2. Connecting end vehicle features directly to SoC seems a bit too simplistic to me. There are so many other factors that go into determining which level of ADAS functionality is achievable.

    3. The same goes with Driver monitoring systems and connecting that to product line seems a bit misleading to me.

    4. In most cases, the SoC is not the limiting factor in implementing these features like Park assist or Auto Parking. Other factors like HW architecture, Functional Safety Concept, Electrical system topology, Function allocation on a vehicle level all go into deciding whether the feature is achievable or not on a particular SoC.

  2. DMIPS vs TOPS vs GLFOPS?

    1. What is DMIPS: Dhrystone MIPS (Million Instructions per Second), or DMIPS, is a measure of computer performance relative to the performance of the DEC VAX 11/780 minicomputer of the 1970s. The Dhrystone test is based on a standard loop of synthetic code, intended to mimic the types of operations required in real computer algorithms of that time. DMIPS/MHz remains a widely-used performance metric due to its simplicity, in spite of a number of shortcomings.

    2. What is TOPS: TOPS (Trillions or Tera Operations per Second) is a classic example of a simplifying metric.  It tells you how many computing operations an AI chip can handle in one second — how many basic math problems a chip can solve in that very short period of time.

    3. What is GFLOPS(Giga FLOPS): Floating point operations per second (FLOPS, flops or flop/s) is a measure of computer performance in computing, useful in fields of scientific computations that require floating-point calculations.

  3. Pin Compatibility: Does pin compatibility actually help reduce engineering costs? Is it a reality to build a platform once and use it in different performance steps with different SoCs without having to cross-compile, or validate the variants. i would take that claim with a grain of salt.

BYDs Battery Cost Model and Vertical Integration (Link)

Summary


Top battery manufacturers in China, such as BYD, achieve super-low costs through several strategic advantages:

Vertical Integration: BYD benefits from owning stakes in lithium producers, allowing them to source lithium carbonate at near-cost prices. For example, BYD's Zhabuye project in China supplies lithium at about $4.9/kg, significantly below market rates. This gives them a price advantage over competitors who must buy at market prices, which can be as high as $10.5/kg.

Cathode Active Material (CAM) Margins: The margins for LFP (lithium iron phosphate) cathode materials are currently negative (-1%) for most producers. However, BYD benefits from its shareholdings in suppliers like Hunan Yuneng and Anda Technology, allowing it to source cathode materials at cost, further reducing its overall expenses compared to rivals.

Factory Automation: Advanced automation in Chinese battery factories reduces labor costs dramatically. For instance, CATL, another top battery manufacturer, reportedly operates a facility with only 50 workers, keeping operational costs very low.

Cell Format: BYD’s Blade battery uses a larger prismatic cell format, which holds more active material per unit of weight and volume. This higher energy density reduces the overall cost of the battery by increasing efficiency and reducing the number of cells needed for the same output.

Optimized Yields: Chinese manufacturers have optimized their production yields, reducing the number of defective cells. Even a 1% improvement in yield can have a significant impact on reducing costs, as fewer cells are scrapped during manufacturing.

Recently BYD announced that they have a new EV Ship carrier so they can get their EVs shipped around the world in their own distribution network. (Link)

BYD

BYD’s shipbuilder, Guangzhou Shipyard International, unveiled the new car carrier at an undocking ceremony over the weekend.

Following the undocking ceremony, BYD’s new car carrier is about ready to embark. The vessel will undergo a series of tests before it officially begins operations.

The 7,000-vehicle vessel, “BYD Hefei,” is the second car carrier the company has revealed. BYD introduced its first, “Explorer No 1,” in January. It has already completed two European trips, Spain and Germany, and also docked in Brazil.

BYD Explorer No 1 unloading cars in Brazil (Source: BYD)

Xiaomi Car Roadmap Leaked!!

Xiaomi's automotive plans were revealed in a Bosch technology roadmap, indicating the launch of two electric models in 2025: the Xiaomi SU7 Ultra and its first SUV, codenamed MX11. A six-seater extended-range (EREV) SUV will follow in 2026.

According to the Bosch roadmap, both the Xiaomi SU7 and MX11 will feature Dynamic Power Braking (DPB) and Electronic Stability Program (ESP) systems. Meanwhile, the N3 will adopt Bosch’s latest Intelligent Power Braking (IPB) 2.0 technology.

⚡ROUNDUP

Key headlines shaping the auto industry this week

  • Munich-based DeepDrive raises €30 million Series B to build production lines of EV motor tech (Link)

  • Exclusive: US to propose ban on Chinese software, hardware in connected vehicles (Link)

  • Mahindra keen on acquiring 50 percent stake in Skoda Auto Volkswagen India (Link)

  • GM CEO is "surprised" EVs are political (Link)

  • BYD prepares to unleash its second 7,000-car carrier to fuel its global EV expansion (Link)

  • Rivian Teases Driver Comfort Assist As New Autonomy Platform+ Feature (Link)

  • VW CEO Blume expects significant concessions from unions in crunch talks (Link)

  • GM releases NACS adapter for access to Tesla Superchargers (Link)

  • The big shift: Moving commercial vehicle OEMs to centralized E/E and Software (Link)

  • Driving the future: How connectivity will shape the truck industry (Link)

  • Dynamic Map Platform Expands HD Map Coverage to 16 European Countries (Link)

  • Mercedes-Benz upgrades its automated driving system to 95kph (Link)

  • Northvolt outlines revised scope of operations in Sweden (Link)

  • Nio Reaches 4,000 EV Charging Stations in China (Link)

  • Bosch Document Leaks Xiaomi’s Vehicle Roadmap Through 2027 (Link)

  • General Motors Issues Google Maps Warning, Users Told to Update ASAP (Link)

  • Why 2024 isn’t panning out the way it was supposed to for the EV market (Link)

  • Western nations join forces to break China’s grip on critical minerals (Link)

  • How this transportation tech startup is using AI to improve public transit (Link)

  • Faraday Future launching Second Brand, Faraday X (Link)

  • Hyundai Motor Company and Skoda have come together and signed a Memorandum of Understanding (MoU) to develop a hydrogen mobility ecosystem. (Link)

  • Renesas leads ADAS innovation with power-efficient 4th-generation R-Car automotive SoCs (Link)

  • Dongfeng Motor launches new strategy, product, partnerships in automotive sector (Link)

  • US seeks to limit China, Russia’s role in connected vehicle supply chains (Link)

  • A $1 Billion Fund Aims To Revitalize America's EV Suppliers (Link)

  • Tesla’s EV boom overshadowed by alarming production bottlenecks (Link)

  • Volkswagen integrates AI into the myVW mobile app with Google Cloud (Link)

  • Rolls-Royce Going Full Electric After 2030, New SUV Reportedly in the Pipeline for 2027 (Link)

  • Polestar Announces New Tech Hub in India, Partnering with Infosys (Link)

  • GAC Trumpchi Concept 1 – first collaboration with Huawei (Link)

🔬PATENTS

Fresh innovations from global automotive OEMs

Ford Patents Drug Detection System To Protect Consumers From Planted Drugs(Link)

A new Ford patent, filed in March 2023 and published September 19, describes an "unknown cargo detection and evidence collection system" designed to prevent vehicle owners from becoming a "blind mule" for drug traffickers.

If the system detects some sort of unusual activity—like someone standing too close to the vehicle for too long—then it can activate the cameras, record the surroundings, and store the footage as evidence. Any extra weight added to the vehicle, like several hundred pounds of drugs, would also make it drive differently, which Ford's system would monitor.

💡STARTUP SPOTLIGHT

Emerging startups disrupting the automotive and mobility industry

Hayden AI x Improve Public Transit (Link)

Summary of Hayden AI's Use of AI to Improve Public Transit:

Company Overview: Hayden AI, a San Francisco-based startup, is using artificial intelligence to enhance the efficiency, safety, and reliability of public transit in cities across the U.S.

Technology: Hayden AI's system uses AI-powered cameras mounted on buses to monitor bus lanes, detect violations (such as vehicles obstructing lanes), and send evidence to authorities for enforcement.

Key Benefits:

- Improved Bus Lane Efficiency: Reduces delays by ensuring bus lanes are clear, leading to faster on-time arrivals.

- Reduced Collisions: By enforcing bus lane regulations, bus collisions have decreased (e.g., 20% reduction reported by NYC’s MTA).

- Environmental Impact: AI helps reduce greenhouse gas emissions by minimizing idle time for buses.

- Increased Ridership: As routes become more reliable and safer, more people choose to use public transit.

Case Studies:

- NYC Metropolitan Transportation Authority (MTA): Reported a 5% increase in bus lane speeds and expanded the system to bus stops and double-parking enforcement. By 2024, over 1,000 buses will be equipped with the technology.

- AC Transit (Oakland, CA): Cited a 34x increase in citation efficiency and announced plans to expand the system to all bus stops on its routes.

Growth and Funding: Hayden AI raised $90 million in a Series C funding round, bringing its total raised to over $193 million since 2019. The company plans to invest in platform improvements, new product development, and international expansion.

🐦AUTO BUZZ

Top posts, tweets, and videos from the automotive industry

📈MARKET SNAPSHOT

This week’s key movers in the automotive stock market

📆CALENDAR

Upcoming auto industry events and earnings calls

  1. 26 Sep: Micron Technology Q4 Post Call

  2. 26 Sep: Blackberry Call

  3. 1 Oct: Traton Capital Markets Day 2024

  4. 3 Oct: VinFast Q3 2024

  5. 4 Oct: Fisker Q1/Q2 2024

  6. 8 Oct: GM Investor Day