The rise of inexpensive Chinese electric vehicles has upped the pressure on legacy automakers who have turned to suppliers, from battery materials makers to chipmakers, to squeeze out costs and develop affordable EVs quicker than previously planned.
“Automakers are turning to affordable vehicles, knowing they've got to or they will lose out to Chinese manufacturers,” said Andy Palmer, chair of UK start-up Brill Power, which has developed hardware and software to boost EV battery management system performance.
Palmer, formerly Aston Martin's CEO, said Brill Power's products could boost EV range by 60% and enable smaller batteries. The battery is an EV's most costly component.
Fears of slowing demand because EVs are expensive have increased urgency to reduce costs.
That urgency can be seen everywhere. Renault said last month it plans 40% cost reductions for its EVs to reach price parity with fossil-fuel models.
Stellantis is building a European plant with China's CATL to make cheaper LFP batteries and recently unveiled the Citroën electric e-C3 SUV, which starts at €23,300 (about R460,186).
Volkswagen and Tesla are developing €25,000 (R505,510) EVs.
Vincent Pluvinage, CEO of California-based OneD Battery Sciences, said on his recent visits with European automaker customers, every meeting started with the same refrain: "'Reducing costs is more important than anything else.'”
OneD adds silicon nanowires to graphite EV battery anode material to boost range and cut charging time, saving $281 (about R5,268) — nearly 50% — versus using graphite alone for a 100kWh EV battery.
This can reduce EV battery weight by 20% for the same range, Pluvinage said. General Motors is a OneD investor and customer.
OneD has developed a manufacturing process on relatively inexpensive machinery used in the solar panel industry, as Pluvinage said automakers dislike complex, costly new processes. OneD's first test plant will open early next year.
Germany-based Veekim has developed an EV motor with magnets using a form of ferrite, or iron powder, instead of rare earths, which five automakers and suppliers are testing for affordable EV projects.
Legacy automakers want to cut rare earths use because China dominates mining and processing. Veekim CEO Peter Siegle said using cheaper ferrite and low-cost processes — including 3D-printed copper wiring — can cut an EV motor's price by 20%. Motors can cost more than €500 (about R10,109).
'All about the cost'
It is not only start-ups seeking EV cost reductions.
Chip maker NXP is working with automakers to reduce the amount of electronic control units, or minicomputers, in EVs, which can number between 200 and 300, said Allan McAuslin, director of vehicle control and electrification.
Siemens has developed software simulation called digital twins to halve expensive EV development time.
China's EV makers are planning even cheaper models.
BYD's Dolphin hatchback, for instance, starts in the UK at £26,000 (about R613,559), nearly 30% below the starting price for the VW ID.3 hatchback.
US automakers, somewhat protected from Chinese EV imports by subsidies in the Inflation Reduction Act, also seek more affordable EVs.
GM said it has saved billions partly by developing a more inexpensive battery pack with LFP batteries for its revamped Bolt EV, which will launch in 2025, two years earlier than planned.
Ford said it will cut costs partly through a 50% increase in “insourcing” of parts like batteries and inverters.
Premium automakers want lower costs for EVs, too.
Michigan-based Our Next Energy (ONE) is developing an “Ares” battery pack with cheaper LFP technology that should give automakers the same electric driving range for half the price and a “Gemini” pack for customers including BMW that offers extended range and should cost $75/kWh (about R1,405/kWh) compared with an average today of $130/kWh (about R2,436/kWh), CEO Mujeeb Ijaz said.
Suppliers said automakers like less expensive parts that also reduce production costs.
California-based CelLink has developed a laminate sheet to replace wire harnesses — labour-intensive to make and install — that can be installed by robots.
CelLink raised $250m (about R4,687,765,000) from investors last year and in May announced a $362m (about R6,787,883,720) US government loan for its Texas factory.
CEO Kevin Coakley said since opening that plant “we've got some form of a purchase order from basically every major automaker that's come through there”.
Israeli start-up Addionics has developed porous, three-dimensional copper and aluminium electrode battery materials that look like sheer silk scarves when held up to the light and use far less material, including 60% less copper.
Those electrodes provide faster charging and boost EV range by 30%, CEO Moshiel Biton said. But automakers are more interested in projected savings of up to $7.50 (about R140) per kWh.
Biton said: “What we hear from carmakers today is, 'We don't need longer range, we want lower costs'.”
Fear of cheap Chinese EVs fuels dash by automakers for affordable cars
Image: Supplied
The rise of inexpensive Chinese electric vehicles has upped the pressure on legacy automakers who have turned to suppliers, from battery materials makers to chipmakers, to squeeze out costs and develop affordable EVs quicker than previously planned.
“Automakers are turning to affordable vehicles, knowing they've got to or they will lose out to Chinese manufacturers,” said Andy Palmer, chair of UK start-up Brill Power, which has developed hardware and software to boost EV battery management system performance.
Palmer, formerly Aston Martin's CEO, said Brill Power's products could boost EV range by 60% and enable smaller batteries. The battery is an EV's most costly component.
Fears of slowing demand because EVs are expensive have increased urgency to reduce costs.
That urgency can be seen everywhere. Renault said last month it plans 40% cost reductions for its EVs to reach price parity with fossil-fuel models.
Stellantis is building a European plant with China's CATL to make cheaper LFP batteries and recently unveiled the Citroën electric e-C3 SUV, which starts at €23,300 (about R460,186).
Volkswagen and Tesla are developing €25,000 (R505,510) EVs.
Vincent Pluvinage, CEO of California-based OneD Battery Sciences, said on his recent visits with European automaker customers, every meeting started with the same refrain: "'Reducing costs is more important than anything else.'”
OneD adds silicon nanowires to graphite EV battery anode material to boost range and cut charging time, saving $281 (about R5,268) — nearly 50% — versus using graphite alone for a 100kWh EV battery.
This can reduce EV battery weight by 20% for the same range, Pluvinage said. General Motors is a OneD investor and customer.
OneD has developed a manufacturing process on relatively inexpensive machinery used in the solar panel industry, as Pluvinage said automakers dislike complex, costly new processes. OneD's first test plant will open early next year.
Germany-based Veekim has developed an EV motor with magnets using a form of ferrite, or iron powder, instead of rare earths, which five automakers and suppliers are testing for affordable EV projects.
Legacy automakers want to cut rare earths use because China dominates mining and processing. Veekim CEO Peter Siegle said using cheaper ferrite and low-cost processes — including 3D-printed copper wiring — can cut an EV motor's price by 20%. Motors can cost more than €500 (about R10,109).
'All about the cost'
It is not only start-ups seeking EV cost reductions.
Chip maker NXP is working with automakers to reduce the amount of electronic control units, or minicomputers, in EVs, which can number between 200 and 300, said Allan McAuslin, director of vehicle control and electrification.
Siemens has developed software simulation called digital twins to halve expensive EV development time.
China's EV makers are planning even cheaper models.
BYD's Dolphin hatchback, for instance, starts in the UK at £26,000 (about R613,559), nearly 30% below the starting price for the VW ID.3 hatchback.
US automakers, somewhat protected from Chinese EV imports by subsidies in the Inflation Reduction Act, also seek more affordable EVs.
GM said it has saved billions partly by developing a more inexpensive battery pack with LFP batteries for its revamped Bolt EV, which will launch in 2025, two years earlier than planned.
Ford said it will cut costs partly through a 50% increase in “insourcing” of parts like batteries and inverters.
Premium automakers want lower costs for EVs, too.
Michigan-based Our Next Energy (ONE) is developing an “Ares” battery pack with cheaper LFP technology that should give automakers the same electric driving range for half the price and a “Gemini” pack for customers including BMW that offers extended range and should cost $75/kWh (about R1,405/kWh) compared with an average today of $130/kWh (about R2,436/kWh), CEO Mujeeb Ijaz said.
Suppliers said automakers like less expensive parts that also reduce production costs.
California-based CelLink has developed a laminate sheet to replace wire harnesses — labour-intensive to make and install — that can be installed by robots.
CelLink raised $250m (about R4,687,765,000) from investors last year and in May announced a $362m (about R6,787,883,720) US government loan for its Texas factory.
CEO Kevin Coakley said since opening that plant “we've got some form of a purchase order from basically every major automaker that's come through there”.
Israeli start-up Addionics has developed porous, three-dimensional copper and aluminium electrode battery materials that look like sheer silk scarves when held up to the light and use far less material, including 60% less copper.
Those electrodes provide faster charging and boost EV range by 30%, CEO Moshiel Biton said. But automakers are more interested in projected savings of up to $7.50 (about R140) per kWh.
Biton said: “What we hear from carmakers today is, 'We don't need longer range, we want lower costs'.”
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