Daily Management Review

Automakers Race To Produce Inexpensive Cars Out Of Fear Of Low-Cost Chinese EVs


Automakers Race To Produce Inexpensive Cars Out Of Fear Of Low-Cost Chinese EVs
The emergence of low-cost electric vehicles from China has increased the pressure on established automakers, who have resorted to suppliers, such as manufacturers of battery materials and semiconductors, in an attempt to reduce costs and expedite the development of affordable EVs.
"Automakers are really now only turning to affordable vehicles, knowing they've got to or they will lose out to Chinese manufacturers," said Andy Palmer, chairman of UK startup Brill Power, which has developed hardware and software to boost EV battery management system performance.
Palmer, the former CEO of Aston Martin, claimed that Brill Power's solutions might enable smaller batteries and increase EV range by 60%. The most expensive part of an EV is the battery.
The urgency of cutting costs has intensified due to concerns that the high cost of EVs will slow down demand.
Its urgency is evident in all places. In order to bring its EV prices up to level with those of fossil fuel vehicles, Renault announced last month that it intends to reduce costs by 40%.
With China's CATL, Stellantis is constructing a plant in Europe to produce LFP batteries at a lower cost. Citroen recently introduced the electric e-C3 SUV, which has a starting price of 23,300 euros ($24,540).
EVs costing 25,000 euros are being developed by Tesla and VW.
The CEO of OneD Battery Sciences, located in Palo Alto, California, Vincent Pluvinage, reported that during his recent visits to European carmaker clients, the opening line of every discussion was always the same: ''Reducing costs is now more crucial than anything else.''
For a 100 kWh EV battery, OneD adds silicon nanowires to the graphite anode material to increase range and reduce charging time. This results in a savings of $281, or roughly 50%, over utilising graphite alone.
According to Pluvinage, this can lower the weight of EV batteries by 20% for the same range. OneD's customer and investor is General Motors.
According to Pluvinage, automakers are not fond of intricate, expensive new procedures, so OneD has created a manufacturing process using comparatively cheap machinery employed in the solar panel business.
Early in the upcoming year, OneD's first test facility will open.
Veekim, a company situated in Hodenhagen, Germany, has created an electric vehicle motor that uses magnets instead of rare earths. Five automakers and suppliers are testing this motor for use in cost-effective electric vehicle projects.
Because China dominates the mining and processing of rare earths, legacy automakers want to reduce their use. According to Peter Siegle, CEO of Veekim, the cost of an EV motor can be reduced by 20% by utilising less expensive ferrite and low-cost techniques, such as 3D-printed copper wire. Over 500 euros can be spent on a motor.
Not just startups are looking to cut their EV expenses.
The number of electronic control units, or mini-computers, in EVs can range from 200 to 300. Chipmaker NXP is collaborating with automakers to lower this number, according to Allan McAuslin, director of vehicle control and electrification.
Siemens has cut the costly time needed for EV development in half by creating digital twins, a software simulation.
The entry of cheaper electric vehicles (EVs) from China, whose manufacturers are preparing even more affordable variants, has European automakers reacting.
For example, the starting price of BYD's Dolphin hatchback in the UK is 26,000 pounds ($33,000), which is around 30% less than the starting price of the VW ID.3 hatchback.
However, the Inflation Reduction Act's subsidies provide some protection against Chinese EV imports, so American automakers continue to look for more reasonably priced EVs.
GM stated that it had saved billions in part by creating a less expensive battery pack using LFP cells for its redesigned Bolt EV, which will go on sale two years ahead of schedule in 2025.
Ford stated that a 50% increase in "in-sourcing" of components like batteries and inverters will help reduce costs.
Premium manufacturers also want EV prices to drop.
CEO Mujeeb Ijaz of Michigan-based Our Next Energy (ONE) stated that the company is working on two battery packs: a "Gemini" pack for customers, including BMW, that offers extended range and should cost $75/kWh instead of the current average of $130/kWh, and a "Ares" pack with less expensive LFP technology that should give automakers the same electric driving range for half the price.
According to suppliers, automakers have a preference for less costly parts that can help lower production costs.
The San Carlos, California-based company CelLink has created a laminate sheet that can be placed by robots in place of labor-intensive wire harnesses.
Last year, CelLink secured $250 million from investors, and the U.S. government announced in May that it would finance $362 million for the company's Texas manufacturing.
CEO Kevin Coakley stated, "We've gotten some form of a purchase order from basically every major automaker that's come through there" since the plant opened.
Addionics, an Israeli firm, has created three-dimensional, porous copper and aluminium electrode battery materials that, when held up to the light, like sheer silk scarves. Moreover, they require a significant fraction of the material—60% less copper, to be exact.
According to CEO Moshiel Biton, such electrodes accelerate charging and increase EV range by 30%. However, estimated savings of up to $7.50 per kWh are more appealing to automakers.
"What we hear from carmakers today is, 'We don't need longer range, we want lower costs,'" Biton said.