The Rise of Electric Vehicles, Subverting the Auto Industry
Market News

The Rise of Electric Vehicles, Subverting the Auto Industry

With the rise of the global electric vehicle market, how should Taiwan’s opportunities be grasped?
Published: May 20, 2021
The Rise of Electric Vehicles, Subverting the Auto Industry

Automotive Industry Overview

In 2020, after the COVID-19 epidemic hit the global economy, oil-producing countries repeatedly agreed to cut production to stabilize oil prices. At the same time, the stock price of Tesla, the electric car manufacturer that was once looked down upon by the market, continually rose against the trend with its stock increasing in value by 500 percent. Tesla stock again doubled in value after a 5-for-1 stock split in August 2020. Tesla’s market value has now exceeded 820 billion U.S. dollars, ranking it as one of the top 10 companies in the world by market value.

Tesla's growth not only leads the trend for electric vehicles but also, (almost like a science fiction film), through rapid improvement of technology and mass production capabilities, has guided the development of the automotive industry in a new direction.

Besides government subsidies and policies supporting the development of electric vehicles, Tesla's increase in mass production capacity and subsequent price reduction strategies have become important drivers of the popularization of electric vehicles.

Looking at electric vehicle manufacturers’ global sales in recent years, we see that Tesla’s total global sales in 2018 was 230,000, while sales of the second-ranked Chinese BAIC Group were 152,000 units. In 2019, with Tesla’s substantial increase in production capacity of its Model 3, Tesla’s total global sales of various types of electric vehicles reached 367,000, an one year increase of 59.56%. This put Tesla far ahead of second place China's BAIC, with its total sales of 163,000 units.

To seize the Chinese market and expand its mass production capacity, Tesla's super factory in Shanghai, China, was built from scratch in only one year. The production volume reached at the end of 2019 was an important milestone for Tesla's development, and Tesla’s set its  production target for 2020 at 500,000 units. Even though the Fremont plant in California and the Giga plant in Shanghai were closed for several weeks due to the COVID-19 epidemic, according to the data released by Tesla in early January 2021, the cumulative production of electric vehicles in 2020 reached its 500,000 goal. The annual growth rate was 36.12%. 

Foxconn launches MIH platform, sounding the horn of Taiwan's electric cars

It has been a long and gradual process for Taiwanese manufacturers to enter the electric vehicle industry. Taiwanese manufacturers are gradually expanding into the production of electric vehicle components such as the lithium battery copper foil for electric vehicles, battery cathode materials, cooling fans, LED lights, vehicle lenses, touch panels, charging grabs, main control computers, vehicle bodies, and battery charging and other power systems.

In 2020 Foxconn and Yulon allied to announce the establishment of the MIH (Mobility in Harmony) platform alliance, leading Taiwan’s electronics and automotive industries to formally integrate top technology and component companies to enter the electric vehicle industry. This was an transformation from the past where these manufacturers had been competing single-handedly. 

MIH electric vehicle’s software and hardware open platform has led to rapid development of Taiwan’s electric vehicle industry. In just over three months, the MIH alliance attracted 635 manufacturers from all over the world to join. Foxconn Group’s determination to deploy electric vehicles is a reflection of the rising global trend of electric vehicles. 

Multinational policies announced the ban on fuel vehicles, accelerating electric vehicles to the mainstream

The global awareness of energy conservation, carbon reduction, and environmental protection is on the rise. The governments of Norway, Germany, the United Kingdom, Belgium, France, and other countries have successively announced policies, subsidies, and timetables for banning fuel vehicles and promoting electric vehicles. The President of the United States also announced that about 650,000 of the government's official vehicles would be replaced by electric vehicles, and it plans to invest 500 billion US dollars in the future. It is estimated that 100% clean energy and zero-emission vehicles will be implemented by 2050.

The Ministry of Economy, Trade, and Industry of Japan has proposed that by the mid-2030s, the sale of fuel-fueled vehicles will be banned, and only hybrid and pure electric vehicles will be sold. The EU formally implemented strict carbon emission regulations to take effect from January 2021, and the major member states of Germany and France announced they will increase their subsidy policies related to electric vehicles.

In Asia, China has not yet clearly proposed a timetable for the ban on the sale of fuel vehicles. The Prime Minister of India has proposed a policy of fully electrifying two-wheeled vehicles by 2025 and banning fuel vehicles and only selling electric vehicles by 2030. Overall, the prohibition and restriction of fuel vehicles have become an important part of the carbon reduction policies of various countries. Electric vehicles are seeing rapid development trends and increased promotion and innovation in the automobile industry.

Economic Overview of the Automobile Industry
From 2025 to 2026, the golden crossover of electric vehicles and fuel vehicles

The timetable for prohibiting fuel vehicles in various countries is advancing quickly. From 2025 to 2026 will be a critical period for the development of electric vehicles. During this period, the sales of electric vehicles and fuel vehicles will show a golden crossover curve, with sales of electric vehicles overtaking that of fuel vehicles in the northern hemisphere. It is estimated that by 2030, the proportion of global sales of electric vehicles to fuel vehicles will increase to 4 to 1. With major auto-industry powers vying to compete, the era of electric vehicles will come faster than everyone thinks. It is expected that the era of electric vehicles will arrive around 2030 to 2035.

Not only Tesla, but Audi, and Apple are also coming to plant their flag in the electric car industry.

industry.

The electric vehicle market is fiercely competitive. It is estimated that by 2030, global electric vehicle sales will reach 22 million; nearly 10 times the current market size. With the average annual compound growth rate expected to reach 27% over the next 10 years, Foxconn’s launch of the MIH platform will take advantage of the change in the wind direction and ride the new wave of the automotive industry.  

Besides the new players in the electric vehicle market; Tesla, NIO, XPeng Motors and others, major well-known brand car manufacturers such as Audi, Daimler AG, BMW, Ford, Toyota, Nissan, Volkswagen, etc., are also actively participating in the development of electric vehicles. Even Apple intends to join in on the electric vehicle competition with the launch of the Apple Car.

The big challenge and key for Taiwan's development of electric vehicles is the development of the battery industry

For the development of electric vehicles in the Taiwan market, Foxconn believes that the key to its development lies in batteries. Taiwan already has a good battery industry foundation but needs to further improve performance and technology. In the future, two key elements of electric vehicle success will be battery development and energy management.

Taiwan has strong semiconductor and operating interface industries, but must also develop its battery manufacturing capabilities. Taiwan’s semiconductors, machinery, molds, and 5G networks will play key roles in the field of electric vehicles.  Development of batteries, motors, and electronic controls, the three key electric components of electric cars, will determine market competitiveness. The basic chemistry and material science of automotive batteries are very important. At present, automotive power batteries are dominated by Chinese, Korean and Japanese manufacturers.

Over the past two years, after feeling that it had fallen behind in the development of technology for car batteries, the European Union has actively begun to support car battery manufacturers with subsidies for R&D and manufacturing. The EU has realized that if it does not actively invest in key car battery technology products, the market will be controlled by other countries. Taiwan also needs to actively strive to catch up in the field of vehicle batteries, and the government must invest in countermeasures and resources.

Electric vehicles are driving the industrial revolution

Electric vehicles are currently driving the transformation of the traditional automobile industry. Replacing internal combustion engines with electric energy vehicles, the automobile industry is ushering in a leap-forward change. Five major technical needs that will drive electric vehicle development will include; power sources such as lithium batteries or fuel cells, chassis software and hardware integration platforms, intelligence and entertainment information systems, automatic or advanced driver assistance systems (ADAS), and the Internet of Vehicles. A key aspect of each of these systems will be power management and power consumption reduction.

Electric vehicles will also drive requirements for new equipment. For example, electric vehicles require a quiet design, different kinds of drive trains, electric servo controls, steering gears and brakes with ball screw components, etc. Electric vehicles will change the demand for components and equipment, presenting significant challenges and opportunities for component manufacturers.

The development of electric vehicles will also drive change in global engineering industries. It is expected that after electric vehicles become mainstream in 2030, manufacturers of more than 300 vehicle parts and accessories, such as engines, transmissions, and exhaust pipes, will be driven out of business.

Because the entire southern hemisphere has a weak electricity infrastructure, and an insufficient electricity supply, it has not been able develop the system of charging stations necessary for the electric vehicle industry. Therefore, the development of electric vehicles in the southern hemisphere is expected to be slower than in the northern hemisphere. It is estimated that after the electrification of vehicles in the northern hemisphere, the southern hemisphere may still widely use fuel vehicles. After 2030, traditional fuel vehicles may still have at least 20 to 30 years of continued use in the southern hemisphere.

Electric vehicles will drive major changes in related industries and supply chains, changing the sales and after-sales service models of the automotive industry. The maintenance required for electric vehicles will be significantly less than that required for fuel vehicles, leading to changes in sales and service models. Software-defined electric vehicle platforms will also drive software marketing models, and software updates will make electric vehicles smarter and smarter.


Published by May 20, 2021 Source :cna

Further reading

You might also be interested in ...

Headline
Market News
Smart Milling Machines, IoT, and High-Speed Milling
Technological advancements in the machine tools industry are constantly shaping the way manufacturers approach production. The integration of Smart Milling Machines with the Internet of Things (IoT), often referred to as Industry 4.0, propels the industry toward unprecedented levels of efficiency and productivity.
Headline
Market News
CNC Milling AI Technology and Nano-Machining
Advancements in Computer Numerical Control (CNC) milling technology have propelled CNC milling machines into a new era of precision, speed, and efficiency. Nano-machining allows the fabrication of components and structures with dimensions on the nanometer scale, typically ranging from 1 to 100 nanometers. These technological advancements, combined with the integration of artificial intelligence (AI) and automation, have had a profound impact across manufacturing industries.
Headline
Market News
Innovations in Grinding Wheel Technology: Materials, Design and 3D Additive Manufacturing
From the rudimentary stones used in ancient times to the highly sophisticated wheels of today, the evolution of grinding wheel materials and design has been marked by a relentless pursuit of precision and efficiency. Early grinding wheels were often made from natural abrasives like sandstone. Today, materials such as aluminum oxide and silicon carbide, along with advancements in design and the introduction of additive manufacturing, have revolutionized the grinding process.
Headline
Market News
Environmental Sustainability in Grinding Operations
Grinding operations have significant environmental impacts, contributing to carbon emissions and resource depletion. The manufacturing industry is transforming for sustainability, with grinding machines adopting eco-friendly practices and pursuing green certifications to enhance their role in sustainable manufacturing.
Headline
Market News
The Evolution of Advanced Precision Grinding Machine Technologies
The evolution of precision grinding machines has been nothing short of revolutionary. With the integration of cutting-edge technologies, the sector has witnessed remarkable advancements, including the incorporation of Artificial Intelligence (AI), automation, and Industry 4.0. The latest innovations in grinding machine technology include the seamless integration of AI and automation, advanced control systems, as well as the profound impact of Industry 4.0 on grinding processes, driving higher efficiency, precision, and adaptability.
Headline
Market News
EDM in the Era of Industry 4.0: Challenges and Solutions
The integration of Electrical Discharge Machining (EDM) into Industry 4.0 marks a new era of smart manufacturing, where interconnected technologies, data-driven processes, and automation play pivotal roles. Incorporating EDM into the broader framework of Industry 4.0 has brought forth many new challenges, ranging from cybersecurity concerns to interoperability issues and the optimization potential of data analytics. These challenges have spurred the discovery of unique solutions to address them.
Headline
Market News
The Rise of Solid-State Drives: Accelerating the Future of Data Storage
As the demand for faster, more efficient, and reliable data storage solutions continues to increase at incredible rates, Solid State Drives (SSDs) have brought about a monumental leap forward from traditional Hard Disk Drives (HDDs). Known for their robust performance, durability, and efficiency, SSDs have quickly become the preferred storage solution over traditional HDDs.
Headline
Market News
Optical Switches: Revolutionizing Data Transmission
Optical switches are devices used in optical fiber communication networks to selectively switch or route light signals from one optical fiber to another without converting the optical signal to an electrical signal. They are used in optical communication networks, data centers, and other industries where efficient signal routing and switching are paramount.
Headline
Market News
Lighting the Way: The Rise of Solar Powered LED Lights
Solar Powered LED Lights merge the low power requirements of LED technology with the renewable energy capabilities of solar power, offering an eco-friendly solution for diverse lighting needs across various settings. From emergency response and relief efforts to captivating art exhibits, creative minds are continually discovering new and innovative uses for this transformative technology.
Headline
Market News
Maximizing Connectivity: USB-C to HDMI+VGA+Audio Splitters
With the ever-increasing complexity of electronic devices such as smartphones, laptops, and PCs, there has been a corresponding need for versatile and efficient ways to transmit the ever-increasing data and multimedia. To meet these rising data transfer needs and enhance digital connectivity, various forms of connectors have been designed.
Headline
Market News
The Art of Bicycle Manufacturing: Blending Tradition with Innovation
From traditional craftsmanship to modern production techniques, bicycle manufacturing represents a blend of artistry, precision engineering, and technological innovation. The contrast between traditional and modern techniques can significantly affect the final product’s quality, performance, appeal, and brand loyalty. Quality control and testing protocols, along with collaborative efforts that drive innovation, and the enduring value of craftsmanship, significantly influence the art of bike building.
Headline
Market News
USB “Fast Charge” Car Chargers: Evolution and Technology
Staying connected in today’s digital world is no longer a luxury—it's a necessity. Reliable and continuous use of smartphones and other portable electronics would not be possible without the constant connectivity offered by portable USB chargers. One very important category of USB chargers is those used in cars, which convert the car's 12V electrical supply into a USB-compatible electric output suitable for consumer electronics. This has led to a robust market for USB car chargers, highlighting the unique applications and benefits of these types of chargers.
Agree