New suppliers are racing to join the electric car market

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By Nick Carey and Paul Lienert

WOKING, England (Reuters) – The global auto industry has committed US$1.2 trillion to electric vehicle (EV) development, giving new suppliers a unique opportunity to secure supply contracts from battery packs to motors and inverters.

Startups specializing in batteries and coatings to protect EV parts and suppliers traditionally focused on niche motor sports or Formula One (F1) racing have pursued EV contracts. Automakers design platforms that last a decade, so high-volume models can generate big revenue for years.

The next generation of electric vehicles is expected to hit the market around 2025, and many automakers have asked for help to fill gaps in their expertise and provide an opportunity for new suppliers.

“We’ve gone back to the days of Henry Ford, when everyone was like, ‘How do you get these things to work?'” says Nick Fry, CEO of F1 engineering and technology company McLaren Applied. .

“This is a great opportunity for companies like us.”

McLaren Applied was bought by McLaren from private equity firm Greybull Capital in 2021 and adapted an efficient electric vehicle inverter developed for F1 racing. An inverter helps control the flow of electricity to and from the battery pack.

The IPG5 silicon carbide inverter weighs only 5.5 kg (12 lb) and can increase the range of an electric vehicle by more than 7%. According to Fry, McLaren Applied is working with about 20 automakers and suppliers, and the inverter will be used in high-volume luxury EV models from January 2025.

Mass market automakers often prefer to develop EV components in-house and own the technology. After years of pandemic-related parts shortages, they are reluctant to rely too heavily on suppliers.

“We simply cannot afford to rely on third parties to make these investments for us,” said Tim Slatter, Ford’s UK boss.

Traditional suppliers such as German heavyweights Bosch and Continental are also investing heavily in electric vehicles and other technologies to stay ahead in a rapidly changing industry.

But smaller companies say there are still opportunities, particularly among low-volume manufacturers who can’t afford big investments in electric vehicles, or luxury and high-performance automakers looking for an edge.

Croatia’s Rimac, an electric hypercar maker that is partly owned by Germany’s Porsche AG and that also supplies battery systems and powertrain components to other automakers, says an undisclosed German automaker will use a Rimac battery system in a high performance model – with an annual production of around 40,000 units – starting this year with more registrations.

“We want to be 20%, 30% better than they can, and then they work with us,” says CEO Mate Rimac. “If they can make a battery pack of 100 kilowatt hours, we have to make a pack of 130 kilowatts with the same dimensions for the same cost.”

NO TIME TO WASTE

Some suppliers, such as Cambridge, Massachusetts-based Actnano, have long-standing relationships with EV pioneer Tesla. Actnano has developed a coating that protects EV parts from condensation and its business has expanded to include advanced driver assistance systems (ADAS) as well as other automakers such as Volvo, Ford, BMW and Porsche.

Instead of using a wiring harness, California startup CelLink has developed a fully automated, low-profile, easy-to-install “harness flex” to group and route wiring in a vehicle. CEO Kevin Coakley declined to name customers, but said CelLink wiring harnesses have been installed in about a million electric vehicles. Only Tesla has this scale.

Coakley said CelLink is working with US and European automakers and a European battery manufacturer on battery wiring.

Others focus on low-volume manufacturers, such as British startup Ionetic, which develops battery packs that would be too expensive for smaller companies to manufacture themselves.

“Right now, electrification is too expensive, which is why you can see some manufacturers delay the adoption of electrification,” said CEO James Eaton.

Swindon Powertrain has been developing powerful motorsport engines since 1971. Meanwhile, however, the company has also developed battery packs, electric powertrains and e-axles and works with around 20 customers, including car manufacturers and an electric vertical takeoff manufacturer. and take-off (eVTOL) aircraft.

“It became clear to me that if we don’t accept this, we will end up working for museums,” said managing director Raphael Caille.

But time may be running out.

According to Mate Rimac, the major car manufacturers have been struggling to bring electric vehicles to market over the past three years and have now largely strategised.

“For those who have not signed projects, I am not sure how long the window will remain open,” he said.

($1 = 0.8226 pounds)

(Reporting by Nick Carey; Editing by Mark Potter)

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