ADAS Suppliers AI chips

Three Takeaways from Top Suppliers’ ADAS Revenues in 2020

  • The ADAS market grew in 2020 but how did ADAS revenues evolve in 2020 for major Suppliers?
  • What are the key ADAS technologies experiencing strong demand for Suppliers?
  • Keys to Top-ADAS Suppliers strategy in 2020-30

1. Top ADAS Suppliers saw ADAS order-book grow in 2020 but revenues dropped

Major Automotive Suppliers are already generating substantial growth from increasing vehicle automation, primarily from radar, camera, and ultrasonics for Level 1 and 2 driver assistance systems which are becoming mandatory across major markets, such as Europe.

The availability of Lv.2-Driving features in Europe, such as Audi’s Adaptive Cruise Assist and Tesla’s Autopilot, grew by 43.3% in 2020 to 139 models to 5.77 million cars, according to Auto2x.

Auto2x assessed that the Top-3 ADAS Suppliers, Continental, Bosch and Valeo, collectively recorded ADAS revenues of €6.13 billion in 2019, up 29.4% from 2018. The majority of these revenues come from the sales of ADAS sensors.

Auto2x

ADAS Suppliers revenues-Auto2x
ADAS Suppliers saw revenues rise in 2020

In 2019, Bosch sales of driver assistance systems rose by 12% to around €2 billion. Apart from the leaders, other ADAS suppliers with smaller market shares in ADAS saw a substantial increase in ADAS business in the last 2 years. In 2019, ZF’s Electronics & ADAS division recorded sales of €1,848 million, up 10.9% from 2019 (€1.67 billion), according to their 2019 Annual report. The division accounted for 5% of ZF’s total sales. The main driver for the growth in ADAS was the rising demand for camera-based ADAS.

2020 was a turbulent year for the auto industry causing rippling effects on Suppliers revenues

Bosch, the world’s largest supplier by automotive revenue, saw revenues down by 7.9% in 2020 to€71.6 Billion from €77.7Bn in 2019, according to its preliminary figures.

The pandemic also affected revenues from ADAS despite the growth in ADAS penetration.

The rise in ADAS Lv.1 & Lv.2 launches in 2020 was offset by lower volumes and some delay in the sourcing of ADAS due to the pandemic in H1 2020.

In their latest quarterly sales announcement, Continental said its unit sales of ADAS in Q1-Q3’20 were down year-on-year due to delayed ADAS sourcing.

Valeo’s Comfort & Driving Assistance Systems business group saw sales drop by 12% to €3.23 bn in 2020, from €3.65 bn in 2019.

Auto2x

ADAS order-books experienced mixed results in 2020

ADAS Suppliers

In the first half of the year, many suppliers saw order intake negatively impacted by customer decisions to suspend requests for quotation in light of the disruptions caused by the health crisis. But the 2nd half of the year saw a rebound.

Valeo’s order intake returned to pre-crisis levels in the second half of 2020, with more than half coming from ADAS and powertrain electrification. Valeo claims its Order Intake for ADAS over the past 3 years has been more than €11 billion.

2. Supercomputers & Lidar fueled new growth for ADAS Suppliers

ADAS sensors such as cameras and radar for cruising, parking, and safety ADAS still account for the majority of ADAS sales for major Tier-1s. ADAS suppliers introduced new functionalities in 2020, such as Bosch’s new MPC3 video camera with AI-based object detection.

But 2020 also saw new business lines grow in order intake, among them supercomputers and lidar.

Three Takeaways from Top Suppliers' ADAS Revenues in 2020 1
ADAS Suppliers (Image credit: Bosch)

  • In December 2020 Bosch announced they received more than €2.5 Billion worth of orders for vehicle super-computers for automated driving in 2020. Its central computers have been on the roads since 2019 to reduce the complexity of electronic systems. Bosch expects that vehicle super-computers will become a multi-billion market growing to €20Bn by 2030. The company claims its vehicle computers will increase computing power in vehicles by a factor of 1,000 by the start of the next decade enabling autonomous driving, electrification, and connectivity.
  • ZF announced new contracts won in Domain ECU (in million units).
  • According to the current TOP500 list of the world’s most powerful computer systems, Continental’s new supercomputer occupies the top spot in the automotive industry.

3. Keys to Top-ADAS Suppliers strategy in 2020-30

Improving the capabilities of ADAS sensors and systems will not be enough to maintain a strong position in the Connected & Automated market. In addition to the slowdown caused by the pandemic, the automotive revenue pool moves from hardware to software. According to McKinsey, software’s share in the value of a vehicle will rise from just 10 percent today to 30 percent in the future. 

Suppliers re-organize ADAS segments to strengthen position

Major Automotive Suppliers aim to secure their position as leading providers of automated driving solutions. They are also looking to become providers of Mobility solutions and focus on Software and AI. These forces sparked a strong uptake in the re-organization of ADAS segments of major Suppliers in 2020.

  • Bosch: To capitalize on the market opportunity for Automated Driving Software, Bosch created a new division called Cross-Domain Computing Solutions, which started operation in Jan’21. The division pulls together the company’s software experts.
  • Continental: New structure started in Jan’20 with the Chassis & Safety division transforming to the Autonomous Mobility & Safety (AMS) under the Automotive Technologies Group
  • ZF Group’s structure was adjusted as of January 1, 2019, with the Active & Passive Safety Technology Division divided into three Divisions: Passive Safety Systems, Active Safety Systems, and Electronics and ADAS.

Read more

Read our reports to understand the strategies of major Suppliers in ADAS sensors, AD platforms as well as collaborations. Our reports also provide an in-depth analysis of how the regulatory framework affects the OEM strategy for Level 3 deployment.

For more information, please contact us on (+44) (0)20 3286 4562 or info@auto2xtech.com.

Carmakers face revenue losses in 2020 which impact Autonomous plans

Carmakers see revenues shrink by $130Bn threatening autonomous roadmaps

  • VW Group, Toyota Motors & General Motors collectively lost $94.38 Billion of revenues in Q1-Q3 2020 and push for further transformation
  • Capital constraints faced by carmakers require new strategic approaches in 2021 as the pressure for further investment in autonomy & electrification accelerates
  • Software-based business models, such as vehicle super-computers and SW-defined architectures, camera-based ADAS for L2/L2+, lidar and AI are the new value pools for carmakers and suppliers
  • Auto2x reports explore winning strategies of carmakers in Autonomous Driving and Automated-Mobility-on-Demand over the next decade to unlock new revenues
Carmakers face loses in 2020
$130 Billion of losses by carmakers in 2020 put pressure on investments

Global carmakers face $130 Billion COVID-19 pothole in Q1-Q3 2020 year-on-year

Toyota Motors reclaimed that No.1 spot in global vehicle sales in 2020 but saw a sharp decline in revenues shrink by 18.1% and profit margin cut by half from 7.5% to 3.8% in Q1-Q3 2020 vs. Q1-Q3 2019.

German OEMs VW Group (- €31.13bn in Q1-Q3 2020, -16.7% y-y), Daimler (- €17.93bn, -14.3%) and BMW Group, (- €5.37bn, -7.1%) collectively lost $54.40 Billion in the same period. The 3 German carmakers saw profit margins shrink in 2020 by -1.3% on average.

Renault’s revenue growth by 36.6% in the first nine months of 2020, an increase by €10.55Bn, could not offset Nissan’s losses. Renault has recently announced a new strategy called “Renaulution”,  which “aims to shift Groupe Renault’s strategy from volume to value”, according to the brand.

Carmakers see revenues shrink by $130Bn threatening autonomous roadmaps 2
Carmakers see profit margins shrink in Q1-Q3 2020

The Top-8 Suppliers recorded automotive revenue of €250.2 Billion in 2019 but saw revenue drop in 2020

Bosch, Denso & Continental led Suppliers’ Ranking by global Automotive Revenue between in 2019 among ADAS suppliers. Automotive revenue for Bosch, Continental, and ZF shrank in 2019 whereas Hyundai Mobis and Valeo were among those recording revenue hikes. The Top8 Suppliers in ADAS, incl. Bosch, Denso, Continental, Magna, ZF, Hyundai Mobis, Valeo, and Veoneer recorded automotive revenue of €250.2 Billion in 2019, according to Auto2x analysis.

In 2019, Bosch sales of driver assistance systems rose by 12 percent to around 2 billion euros, according to the company. In 2020, Bosch reported revenues of €71.6 Billion, down 7.9% from the year before.

Bosch

To learn about the rankings and market shares of ADAS hardware component suppliers (radar, cameras, Lidar, ultrasonic sensors) by ADAS revenues read our reports.

Software, ADAS & Autonomous Driving and AI create new revenue pools for Carmakers

EuroNCAP requirements for 5-star safety rating, the General Safety Regulation 2 coming in effect in Europe from 2022 and brand competition push ADAS penetration in EU car sales as part of optional or standard equipment. Also, ADAS can provide new revenues and product differentiation. Carmakers and Suppliers are monetizing the increasing ADAS content per vehicle.

Vision-based fusion technologies will experience strong demand as the rating scheme evolves to incorporate ever more sophisticated functionality Parking assistance, emergency braking, and lane assist systems are the most popular ADAS in the U.K, the NL, Belgium, & France (Bosch survey).

Carmakers will need to continue the investments in ADAS & Autonomous Driving to remain competitive. We assess Lv.0-to-L2+ account for 99% of new car sales across 4 major car markets in 2020 and c.85% by 2025 respectively showcasing the opportunity in driver assistance systems to be the predominant solution for the next decade.

Auto2x

Auto2x expects that leading ADAS players will introduce 71 Level 3 -equipped vehicles in Europe in 2025 while Level 3 penetration will reach 21.2% of new car sales in Europe in that year. A higher level of vehicle automation will require an augmented sensor set, new architecture, and innovative validation methods among others. In more detail, ADAS Average Content per Vehicle in 2020 will range from €489 for Level 2, with 17 sensors per car, to €960-€2.100 for Level 3 depending on the usage of lidar or not for redundancy.

Automated Driving Market size
Automated Driving revenue to double between 2020 and 2025

Finally, Software & AI represent new value pools. Software represented around 10% of overall vehicle content in 2018 for a D-segment car ($1,220) & it will grow with a compound annual rate of 11% to reach 30% ($5,200) in 2030, according to McKinsey. Major Tier-1 Suppliers are already monetizing the growth. For example, Bosch has already been building Vehicle super-computers for ADAS & Automated driving and received more than €2.5 Billion worth of orders in this domain in 2020. They expect the market to be worth €20Bn by 2030.

Read more

Read our reports to understand carmakers’ strategies to reach higher levels of vehicle autonomy and the opportunities they create for ADAS sensors, AD platforms as well as collaborations. Our reports also provide an in-depth analysis of how the regulatory framework affects the OEM strategy for Level 3 deployment.

For more information, please contact us on (+44) (0)20 3286 4562 or info@auto2xtech.com.

Level 3 in 1 in 5 cars in Europe in 2025

21% of new cars to be highly-automated in 2025

  • With the ALKS regulation opening the road for Level 3 deployment in 2021, and Autonomous Driving roadmaps largely insulated from the pandemic, “eyes-off the road” technology will be commercialized in Europe and Japan this year
  • Cars equipped with Level 3 features in Europe will more than double between 2021 and 2025 but hands-off functionality will be restricted to highway functions due to regulation and Lidar deployment strategies
  • Premium car brands, such as Audi, BMW, and Mercedes-Benz will dominate deployment of Level 3 – Driving features in 2021 but by 2025 Volume brands will lead both market shares in Lv.3 sales and models equipped with Level 3 capabilities
  • BMW will hold the lion’s share in Level 3 – Traffic Jam Pilot & Highway Pilot features sold in Europe in 2021; VW the claim the top spot in 2025
Lv.3 in 1 in 5 cars in Europe in 2025
Level 3 penetration in new car sales to rise to 21% in Europe in 2025, says Auto2x

Regulation delayed the transition to Level 3 “conditional eyes-off” from 2017 to 2021

Technologically, 2017 was the year of transition from Partially (SAE Level 2) to Conditionally-Automated driving (SAE Level 3) in passenger cars, with Audi becoming the first to announce a Level 3 Driving feature, the AI Traffic-Jam Pilot in the 2018MY A8. But with regulation restricting the deployment of “eyes-off-the-road” on private car ownership, Level 3 introduction is delayed by more than 3 years until later in 2021 in Europe when the Automated Lane Keeping Systems regulation comes into force in the signatories the UNECE R.79.

Europe is not the only geography to see Conditional Automation in 2021 with Nissan and Honda announcing deployment plans in Japan. Nissan’s ProPilot 2.0, which the company originally planned to launch in Japan by the end 2019 in the Nissan Skyline, falls into the definition of L3+ Highway Pilot. What’s more, Changan is among the Chinese carmakers planning to start of production of Lv3 autonomous cars in the world’s largest car market this year.

Read more about China’s potential to read the Autonomous Driving race here.

Autonomous Driving roadmaps could remain insulated from the pandemic but further collaboration is needed

Despite the disruption the automotive industry has witnessed due to the pandemic, the Autonomous Driving roadmaps of some carmakers remained largely unaffected driven by safety regulation, market competition. Mercedes-Benz, BMW, Nissan, and Honda are among the carmakers announcing a shift to Level 3 from 2021. What’s more, back in May 2020, Volvo confirmed its commitment to self-driving cars as they remain a priority for the Swedish OEM. Volvo plans to launch a Lv.4 system from 2022 featuring Luminar’s lidar.

21% of new cars to be highly-automated in 2025 3
Mercedes-Benz new S-Class will feature a strong suite of ADAS and Level 3 DRIVE PILOT which will be activated later in 2021 (Image credit: Mercedes-Benz)

The capital constraints together with the need for further expertise in AI and software to accelerate time-to-market will fuel further collaboration between players.for example to develop AD platforms. This shift from working independently to a collaborative approach is demonstrated by recent announcements of the alliances between leading car manufacturers and major ADAS Suppliers or mobility providers.

21% of new cars to be highly-automated in 2025 4
Partnerships in Connected & Automated Driving in 2020

Read more about the most important technology partnerships between carmakers and other automotive players in 2020.

“We expect that in 2025, 21.2% of new car sales in Europe will offer Highly-Automated Driving (Level 3) features as optional or standard equipment. Even though the majority of Lv.3 features will come from premium car manufacturers in 2021, by 2025, Volume OEMs will account for the lion’s share.

The functionality of Lv.3 features will quickly expand from low-speed, single-lane Traffic Jam Pilots to more advanced Highway Pilots supported by Lidar.”

Auto2x

Premium car brands will dominate Level 3 deployment until they start shifting to Level 4 from 2022

Premium car brands, such as Audi, BMW, and Mercedes-Benz will dominate deployment of Lv.3-Driving features in 2021 but by 2025 more Volume brands will launch capabilities. BMW will hold the lion’s share in Lv.3-Traffic Jam Pilot & Highway Pilot features sold in Europe in 2021 but they will lose the top spot to VW by 2025.

BMW plans Level 3+, Level 4 capable vehicle by 2021, announced as ‘iNext’ back in Sep’18 or iX in Nov’20, developed through the partnership formed with Mobileye and Intel in July 2016. iX will act as a tech flagship for BMW with 100% BEV and leading AD for the brand. The German brand formed partnerships for solid-state Lidar with Innoviz for its L3/4 platforms through Magna as a Tier-1. We assess that L3 will expand quickly across BMW’s carlines between 2021 and 2025 so that by 2025 L3 will be available in 52.4% of BMW’s model range, or 11 models out of the 21 models.

ADAS content is increasing to bridge the technological gap for higher levels of autonomy

Auto2x expects that leading ADAS players will introduce 71 Level 3 -equipped vehicles in Europe in 2025 while Level 3 penetration will reach 21.2% of new car sales in Europe in that year.

A higher level of vehicle automation will require an augmented sensor set, new architecture, and innovative validation methods among others. In more detail, ADAS Average Content per Vehicle in 2020 will range from €489 for Level 2, with 17 sensors per car, to €960-€2.100 for Level 3 depending on the usage of lidar or not for redundancy.

21% of new cars to be highly-automated in 2025 5
Audi A8 ADAS sensor set for Lv.3 AI Traffic Jam Pilot

Level 3 could cost €3.000 & Level 4 €10.000

APTIV
Automated Driving Market size
Automated Driving revenue to double between 2020 and 2025, says Auto2x

This will drive demand for ADAS sensors, supercomputers, AI, high precision maps, etc. It will also drive further collaboration between OEMs and Tier 1s-2s for the development of AD platforms-be it Level 4 for car-sharing or not. Volume OEMs, as well as AD laggards, are also in demand for cheap and scalable AD platforms in their quest to remain relevant.

Read more

Read our reports to understand carmakers’ strategies to reach higher levels of vehicle autonomy and the opportunities they create for ADAS sensors, AD platforms as well as collaborations. Our reports also provide in-depth analysis of how the regulatory framework affects OEM strategy for Level 3 deployment.

For more information, please contact us on (+44) (0)20 3286 4562 or info@auto2xtech.com.