Sunday Breakfast with Auto2x #2
This analysis is part of our newsletter “Sunday breakfast with Auto2x” where we bring you 5 bite-sized themes shaping the future of automotive.
This week’s 5 themes shaping Automotive and Mobility
The Juice 🍊 Entrepreneurship
How software solutions can unlock another +$70 Billion in Connected Car Services and EVs by 2030
The Coffee ☕ Growth Fuel
12 Opportunity Clusters to watch in Electrified, Shared & Circular Mobility with $1 Trillion potential
The eggs 🍳 New features
Six new ADAS features for safety, convenience and networking from innovation in AI, Data and Web3
Pancake 🥞 Business models
Chinese Suppliers & Tech Giants threaten the leadership of major Tier-1s in ADAS & Electrification
The fruit 🍓What might be outside of your radar
Electric & hydrogen Mobility are on the rise: Early-stage start-ups raised $12 Billion since 2021, with EV Charging rising fast
The juice 🍊 How entrepreneurs are solving Mobility’s big challenges
Software solutions that facilitate data interoperability, easy service integration and speed-up development of Connected Car Services, could unlock another +$70 Billion by 2030
It’s true that cars are becoming increasingly “Connected” with each other, the road infrastructure, our homes, and more, due to the rising penetration of embedded, tethered or integrated connectivity.
By 2030, more than 80% of cars will be Connected, with service value of more than $100 per vehicle. But the Connected Car Services market is fragmented today, among other inefficiencies.
Auto2x
The integration of new services from providers of vehicle maintenance, parking, insurance, fleet management, analytics or other use cases, is costly and difficult. What’s more, the development of apps for in-vehicle infotainment faces challenges of scalability.
Auto2x spoke with AiDEN Automotive’s CEO Niclas Gyllenram to understand how their white label and bi-directional service hub aims at disrupting the automotive industry and connected services.
Learn more about their value proposition here.
Automotive suppliers need to digitize Program Management to handle the big wave of new electric cars coming by 2035
Carmakers are introducing aggressive roadmaps for new electric vehicles to capture the rising market. According to automotive industry data, the number of programs launched by global carmakers will increase by 50% to 65% over the next three years.
There is a huge wave coming at the suppliers who need to digitalize their Program Management functions to support the complexity and scalability of vehicle and parts manufacturing.
Auto2x spoke to Dave Opsahl the CEO of Actify, to understand how Actify’s software management can help suppliers overcome resource constraints and support the fast transition to electrified mobility and networked driving. Learn more here.
“We can automate a lot of the activity of launching a program, which today all happens manually. Our software helps suppliers communicate with their customers about Requests for Quotations (RFQ) and build. We make it possible for them to take the design information and be able to understand what’s the item at issue”
Dave Opsahl, CEO Actify
The Coffee ☕ Fuel of growth for the future of Automotive
12 Opportunity clusters to watch in Electrified & Circular Mobility with potential to add another $1 Trillion of revenues by 2030
Which opportunities are the most attractive in Automotive by 2030?
The automotive industry is undergoing massive change which creates tremendous opportunities, as demonstrated by the waves of new entrants such as tech giants and the proliferation of start-ups, among other indicators.
New business models, incl. data monetization, shared mobility, circular strategies, could add another $1 trillion to automotive revenues by 2030.
Auto2x
Auto2x is helping players scout and invest in opportunities with high potential in automotive and mobility. These opportunities are novel technologies or innovative business models which have high addressable markets, offer high value to consumers and are aligned with their expertise.
- Exponential technologies for Circularity, e.g. using computer vision to automate battery recycling, like Posh Robotics
- Decarbonization of the ICE car parc with e-mobility aftermarket kits; Digital Twin and metaverse applications for Industry 4.0.
- 3D-Printed or decentratlzed EV manufacturing with micro-factories;
- Energy-as-a-Service solutions for smart grid integration of EVs Component-as-a-service, such as Battery-as-a-Service or swapping;
Electric Cars and EV charging infrastructureOptimized EV charging and use of renewable resources;
- EV Charging battery passports: Everledger created “battery digital passports” with Ford to track EV batteries across their lifecycle;
- IonQ is using quantum computing to optimize battery chemistry for electric cars through simulation with quantum computing algorithms.
- Anti-microbial surfaces and self-healing materials in shared fleets; Web3 and blockchain business models for driver authentication and payments in car rental, car sharing and ride-hailing;
- Tele-operation in car-sharing or robo-taxis for emergency manoeuvres
The eggs 🍳– new customer features and emerging applications
Six new ADAS features for better perception, customer experience, digital wallets and electric AVs contributing €21 Billion by 2025 together with increasing sensor content
What are some key features in ADAS with high potential?
Revenues from ADAS & Automated Driving will almost double between 2020 and 2025, from €14 Billion to €35 Billion due to the increase in sensor content and new customer features, according to our forecasts.
Top new ADAS features which hold strong potential to add value to customers and create new revenue pools for carmakers and suppliers include:
- Level 4 Autonomous Driver DNA that reflects the brand’s unique driving characteristics in the automated driving mode.
- Level 4-5 Autonomous Guardian for enhanced safety, e.g. tele-operation for safe maneuvers in city or highway scenarios;
- Acoustic Traffic Monitoring: Understands machine noises, road signals to support blind-spot monitoring and real-time analytics.
- Self-charging autonomous electric cars. The Level 3/4 – capable vehicle navigates autonomously to the EV charging station in a private parking space or Lv.4-Valet Parking Garage.
- Web3 applications such as digital wallets for AVs or NFTs, such as vehicle history with NFTs in Alfa Romeo Tonale. In the future, they can extend to SOTA for ADAS and blockchain payments with digital IDs for autonomous vehicles.
- Promising applications of the Metaverse span across remote access for safety or feature development and Industry 4.0.
Read more about new technology and innovation in ADAS here.
The pancakes 🥞 Hit the sweet spot with innovative business models
Emerging Chinese Suppliers and tech entrants threaten the leadership of major Tier-1s in ADAS & Electrification
Which suppliers are better prepared for the new era of Mobility?
Automotive Supplier Readiness in Level 4-Automated Driving
To assess the readiness of suppliers we quantify their technological competitiveness, their strategy execution and their market positioning. We assessed the Top-20 ADAS Tier-1s, including Aptiv, Bosch, Continental, Denso, Mobileye, Valeo, ZF, in addition to Baidu, Alibaba, Amazon and others.
Technology Competitiveness: We assess that Continental has a higher readiness level in Technology due to a more mature offering in Lidar, SW stack and Computing Platform to monetize the rising sensor content;
Strategy Execution: Continental is a 100% system supplier from design and manufacturing to validation and expansion to new services in system integration and functions. This makes them well-positioned.
Market Positioning: Continental led the ADAS market in the period 2015-2018 by revenues, but they were overtaken by Bosch. The contracts with OEMs for ADAS and the ability to support driving and parking features for higher levels of automation are a strength.
A similar analysis is available for electrification. Learn more here.
How could new suppliers and Tech Giants disrupt major Tier-1s?
The outlook for Amazon, Microsoft and Chinese Alibaba, Baidu, Huawei
Traditional ADAS suppliers still maintain the lion’s share in automotive. But they face competition from US, Chinese and other Tech giants who are capitalizing on their expertise in AI, Cloud and Software transforming automotive.
We have identified a number of opportunities for Tech Companies to enter or disrupt the existing supply chain.
Next-gen Perception Hardware for Autonomous Driving: Computing, e.g. for Peta-ops chips for Autonomous Driving
AI: AI for Autonomy and HMI such as in-car AI assistants Data-based Mobility Business models such as in-car e-commerce 5G-6G,
Connected Infrastructure and Smart Cities Autonomous Shared Mobility: AMoD, autonomous deliveries
Baidu and INTEL lead the overall competitiveness, followed byMobileye
Mobileye spearheads its Autonomous Driving strategy and has captured a large share in ADAS helping INTEL score higher than Baidu in Strategy Execution; Baidu offers competitive technology offering today due to Apollo’s strengths.
The fruit 🍓What might be outside of your radar
Electric & hydrogen Mobility are on the rise: Early-stage start-ups raised $12 Billion since 2021, with EV Charging rising fast
How is start-up funding in Electric & Hydrogen Mobility progressing?
Three market forces are driving zero-emission powertrains: regulations, innovation in batteries and fuel cells and investments in Electrification, EV Charging & Hydrogen Mobility.
Early-stage funding of Automotive start-ups shrunk from $12.2 Billion in 2021 to $10.9 Billion in 2022 and just $1.5 Billion in Q1 2023. Early-stage funding, which includes Pre-Seed, Seed, A and B Series, amounted to $24 Billion between Q1 2021 & Q1 2023. Electric vehicles accounted for most of the funding between 2021 and Q1-2023 ($12B), followed by Mobility business models ($6B) and autonomous vehicles ($6B).
Is Hydrogen Mobility over-hyped or at an inflection point?
Hydrogen has the potential to reach TAM of $185 Billion by 2026, vs. $671B from EVs, $200 Billion for Biofuels and just $12 Billion for Fuel cells. Hydrogen Mobility is still in its infancy but there is potential in two domains.
Lowering the cost of Green Hydrogen below $1/kg
The European Commission states that Fuel-Cell hydrogen trucks can become cost-competitive by 2027, if hydrogen drops to €6/kg. We assess that the cost of green hydrogen is expected to see dramatic cost reductions this decade as the cost of renewable energy and electrolysers fall. One interesting player to watch is Advanced Ionics who has developed an electrolyzer that runs at temperatures below 650 C and it is reportedly able to produce hydrogen for $0.85/kg or less.
Commercializing eFuels and Hydrogen ICE to extend petrol & diesel
In terms of Hydrogen ICE, Toyota is making big bets not only to save the ICE but to replace EVs. We believe that in the near term, the low TCO positions H2-HPDI to be the most capital efficient means to use H2 and lower CO2 emissions from heavy duty applications. Finally, eFuels got a shot in the arm with the latest update from the EU that could potentially allow sales of new cars with internal combustion engines after 2035 if they run only on efuels. This shows the German car industry’s lobbying power, but techno-commercial challenges remain. Read more: Hydrogen and Fuel Cell Mobility.
In case you missed it
- Computing & software for the +$100B connected & autonomous market
- Early-stage funding in Automotive Start-ups –10% in 2022 to $11 Billion
- New features in ADAS, Electric cars & EV Charging, Web3 & Blockchain
- Top Technologies and Strategies for Sustainable and Circular Mobility
- Carmakers bet on Hydrogen Mobility and eFuels to extent ICEs.
