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Charges Aplenty, Chips a Scarcity

Picture of Jesus Grana By   ·  4 minute read

CX Insights - Trend Watch - Automotive Industry (ICYMI September 2022)

ICYMI - September marked the return of the Detroit Auto Show after a three-year hiatus! While it wasn’t as well attended as prior years, the Detroit Three were very engaged; a well summarized review of the show can be found here: Fuel For Thought: Detroit Auto Show 2022 – An Industry In Transition.  

It’s in the spirit of transition that we found a couple of trends in this month’s articles highlights, ranging from new EV players, a boost to renewable EV power and more.  

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The Apple of Our Eyes

With all the activity in EV, autonomous and subscription-based business models, the buzz around an Apple car seems to be back (not that it ever really died). It’ll be interesting to see if Apple becomes the next big U.S.-based car manufacturer – and if so, how well its experience in subscription models translate to the industry. Right now it’s anyone’s guess when there will be an Apple car – to reiterate, it’s probably a question of when, not if. 

  1. Subscription masters the new entrants in auto?: According to a recent poll by Strategic Vision and published by Bloomberg News, over a quarter of polled new vehicle owners would “definitely consider” purchasing an Apple vehicle. The problem? Apple isn’t earmarked to release a vehicle until 2025. Despite this, all OEMs from Tesla to Toyota are on notice, as Apple’s brand power and business savvy may shake up the current field of EV players. .

  2. Apple Car gains the VP treatment: While details are scant at the time of this blog post, we do know that Apple recently hired Gregory Baratoff, previous VP in charge of autonomous driving sensors from Hyundai MOBIS, to help oversee Apple Car production. This hire adds further credibility and hype to Apple’s upcoming autonomous vehicle venture.

The Power of Recycled ... Power

With the spirit of innovation and sustainability, we see that there’s plenty of ongoing electric vehicle investments. These ones go beyond the battery, as we read that multiple recycling and energy sustainable projects continue to flourish. From battery recycling to electric grid enhancement, the future seems brighter than expected (pun intended)! 

  1. A second life for Kia batteries: After stints at Google and SoftBank, Boston Dynamics found a home at Hyundai in 2020. Hyundai insists that Boston Dynamics’ robots are a good pairing for the OEM – and recently announced their $400 million joint venture to create the Boston Dynamics AI Institute in Cambridge, Massachusetts, to fuse robotics with Hyundai EVs. This news comes at a time when Ford has already partnered with the University of Michigan to create their own college-based robotics wing.

  2. The GM/Stellantis partnership chain: In response to high EV demand, General Motors and Stellantis have announced partnerships with Lithion Recycling and Punch Powertrain, respectively, to boost EV sustainability and supply. While GM and Lithion Recycling are focusing on establishing a “circular battery ecosystem” using recycled materials sourced domestically, Stellantis and Punch Powertrain aim to increase electrified dual-clutch transmission (eDCTs) production to further expand EV driving range. 

  3. Power the grid with your Ford F-150: North Carolina-based Duke Energy has recently partnered with Ford Motor Company to explore vehicle-to-grid (V2G) possibilities in the Tar Heel State. Launching in 2023, Duke Energy is allowing Ford F-150 EV owners to feed energy back to the grid during peak usage in exchange for lower lease payments. This pilot program may inform similar initiatives across the country – maybe even the globe.

How About Those Chips?

The old news about chip shortages still continues to fester. Demand is still increasing, particularly as new business models like digital payments make their way into the auto industry, while supply remains constrained. Even though steps have been taken to curb the shortage – like investments in domestic semiconductor production – as demand for chips continues to heat up, it seems that industry experts are agreeing that the shortage will extend well into next year. Here’s a couple of highlighted articles on the subject. 

  1. Mobile payments straining chip woes: With the push for connected cars comes vehicles acting as a mobile commerce endpoint. This also means that as the car slowly becomes less of a vehicle and more of a device, (to paraphrase JPMorgan CEO of Merchant Services Max Neukirchen) chips are in higher demand than ever. Here’s what this means for auto and semiconductor industry partnerships.

  2. VW doesn't see an end to the shortage: At least, not yet. The OEM is hunkering down for what it calls “the new normal,” as VW’s head of procurement Murat Aksel reported to their board that structural shortfalls as well as geopolitical conflicts will hamper semiconductor production progress not just for their company, but everyone else as well.

  3. Stellantis bets on the end of 2023 for chip uptick: Stellantis CEO Carlos Tavares offers another take on the chip shortage: While the auto chip shortage exists in part due to the consumer electronics market, a combination of billions in investments paired with declining consumer electronics interest will bring chips back to OEMs again. How long? According to a recent interview, he believes up to three years for true normalcy, but by late 2023 the worst should pass.

Miscellaneous News

We certainly don’t want to end on a negative note, and we have some news that’s sure to keep you looking towards the future – we certainly are! Cross-industry partnerships with the auto industry continue to proliferate as they represent new business models, expanded distribution channels and product features becoming service offerings. Take a look!  

  1. BrightDrop to deliver your Kroger order: The GM-developed subsidiary may be filling your grocery order soon! BrightDrop is testing out a new temperature-controlled eCart, titled Trace Grocery, to help streamline online grocery orders and get customers in and out of pickup lanes faster. Look for Trace Grocery to start popping up in your local Kroger later this year.

  2. Alexa, test drive this Volkswagen: This fall, VW and Amazon are partnering for a unique test- drive experience. Select regions will have the chance to schedule an in-person Alexa-guided test drive of VW’s ID.4 SUV on Amazon. Features of this test include a walkaround with a product specialist, followed by a real-life test drive with Alexa, who’s available to answer all queries – from model functionality to front seat massage activation.

For further information on how we got to where we are, I encourage you to check out our previous ICYMI blog posts throughout 2022.

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