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  • Chinese EV platform in Europe, Flexible Architectures, Qualcomm vs. NXP in automotive

Chinese EV platform in Europe, Flexible Architectures, Qualcomm vs. NXP in automotive

Audi x SAIC, Huawei X JAC

Summary

Audi and Shanghai Automotive Industry Corp. (SAIC) are developing electric-powered models built in China for the Chinese market. These models will reportedly be sold without Audi’s familiar four-ring badge, though an earlier statement by SAIC described them as “true Audi with authentic Audi DNA.” The project, codenamed “Purple,” aims to develop up to nine individual models, all planned to be revealed by 2030, influenced by Audi's Skysphere, Grandsphere, Urbansphere, and Activesphere concepts.
The Nebula platform supports both 400V and 800V architectures as well as wheelbases ranging between 106 and 122 ins. (2,692 and 3,099 mm) , according to information provided by SAIC. (Link)

On August 6, Huawei and BAIC Group's collaborative model, the STELATO S9, was officially released to the market. The next day, significant progress was reported on Huawei's partnership with another automaker, JAC Group, for their luxury brand "Zunjie" (name in Chinese pinyin). (Link)

My take

  1. Audi inheriting, or having to use the Nebula Platform from SAIC is an indication as to how how behind the European OEM is.

  2. More of these joint venture vehicles are a decoy move by Chinese OEMs to sell their platforms to other OEMs

  3. Chinese OEMs are aware they cannot compete with established European OEMs in their home turf. So keeping the same branding but overcutting them on technology is the most viable strategy for them.

The case for flexible architectures

Summary

Audi chief executive Gernot Döllner has indicated that the brand may not stop building ICE-powered vehicles by 2033 as originally planned. In mid-2021, Audi aimed to eliminate internal combustion engines by 2033, but has since softened its approach, increasing focus on plug-in hybrids due to the slowdown in battery-electric vehicle adoption.
As we recently learned, future Audi combustion models will be offered as plug-in hybrids. Audi describes this as a “bridging technology,” but has now admitted this “bridge is longer than we thought.” (Link)

The recent global slowdown in EV sales has led many automakers to reconsider their ambitious targets and focus more on hybrids and ICE models. BMW seems to have optimized this strategy by using flexible architectures that support both ICE and EV powertrains, unlike some premium carmakers like Mercedes-Benz, Audi, and Volvo, which have separate platforms for ICE and EV models.
Audi has segregated its new ICE and EV models to either be based on the PPC (Premium Platform Combustion) or PPE (Premium Platform Electric) platforms, respectively. The Q4 e-tron available abroad, meanwhile, is based on VW’s MEB born-electric platform. (Link)

Why does this matter?

  1. Flexible architectures mean that platforms are the product. Similar to how MEB and MQB platforms determined vehicle portfolio for the VW brands

  2. Typically OEMs have different platforms for ICE and EVs. For example

    1. VW: MEB for EV, MQB for ICE

    2. Audi: PPE for EV, PPC for ICE

    3. Mercedes: EVA2 for EV, MRA2 for ICE

  3. BMW has developed the CLAR(Cluster Architecture) platform that can be used for both ICE and EV. This means they don't really have to base their strategy trying to guess when EV's take off. This flexible strategy helps BMW manage costs and extend the life of combustion engines with hybrid technology while preparing for a more electrified future.

  4. The pit that most OEMs have fallen into is trying to time the market. Trying to guess the inflection point. But BMW's strategy is to shield themselves from that by using technology

Tale of two chips

Summary

Netherlands-based chipmaker NXP Semiconductors is struggling to reduce its high inventory levels amid stagnant automotive demand, as stated by President and CEO Kurt Sievers during the company’s Q2 earnings call. Revenue from the automotive segment, NXP’s largest revenue source in 2023, dropped in the second quarter, contributing to an overall revenue decline of 5% year over year. The company initially aimed to get 2.5 months' worth of inventory into the distribution channel this year but now expects only 1.8 months' worth next quarter due to continued hesitation from auto customers to increase orders. NXP's strategy is to keep inventory channels lean while anticipating a reacceleration in the auto sector in the second half of the year. (Link)

Highlights from Qualcomm's Q3 report

What is actually going on?

  1. At least from the figures, it looks like NXP is losing their automotive business to Qualcomm.

  2. Here are some reasons as to why that might be

    1. Qualcomm is more aggressive in terms of product lines

    2. Qualcomm can better anticipate the automotive market needs as they are much similar to consumer trends in the smartphone world.

  3. On the other hand, given all the geopolitical tension looming, NXP might have decided to take a more safer route to maintain a larger inventory which can serve them in the long term