Counterpoint Research is attending Japan Mobility Show from 25th to 28th October 2023
Our Senior Analyst, Soumen Mandal will be attending the Japan Mobility Show 2023 at Tokyo Big Sight, Tokyo, Japan. You can schedule a meeting with him to discuss the latest trends in the technology, media and telecommunication sector and understand how our leading research and services can help your business.
When: 25th to 28th October 2023
Where: Tokyo Big Sight, Tokyo, Japan
About the Japan Mobility Show:
The inaugural edition of Japan Mobility Show will feature the participation not only of the automotive industry but also of established companies and startups from multiple other industries whose activities extend beyond mobility. A total of 475 enterprises will be participating, far exceeding the 192 companies that took part in the final edition of the Tokyo Motor Show in 2019.
Japan Mobility Show aims to serve as a unique venue for collaboration—a show where exhibitors and visitors can discuss and envision, together, what the future will look like.
Click here (or send us an email at contact@counterpointresearch.com) to schedule a meeting with them.
The auto industry has been feeling the heat for quite some time now, mostly due to the denting sales and falling demand. And as the novel Coronavirus (COVID-19) outbreak worsens, automakers have been impacted even more. Auto shows, mainly, the Geneva Motor Show, where automakers launch their upcoming cars, has been canceled.
Besides, dependence on China for components manufacturing and assembling has exposed weakness for the auto industry. And adding to that, lockdown in countries like China, Italy among others has also decreased the footfall for car showrooms. Although, dealers and carmakers are looking for alternatives like augmented reality and virtual product launches to keep the show going.
US and Europe account for the majority of global demand; China is growing faster
Safety regulations and customer experience driving exponential growth globally
Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego
June 26th, 2019
Revenues from connected cars globally are projected to grow five-fold, reaching over US$24 billion by 2025, the latest research by Counterpoint’s Smart Automotive Service shows.
For this study, a connected car is defined as a passenger car, having an embedded SIM card for internet connection, with proprietary Telematics Control Unit (TCU) hardware managing data exchanges. The study further categorizes potential OEM revenues by services offered and the originally installed hardware equipment. Connected services include advanced navigation, infotainment (music, social media, news, etc.) subscribed by the driver, as well as emergency assistance and diagnostics alerts as value added, and in some cases, mandated services.
Commenting on the analysis, Aman Madhok, Senior Analyst for Smart Automotive at Counterpoint Research said, “Deep technology applications, specifically, smartphones and notepads, in daily life has created expectations for seamless ‘on-the-go’ technology accessibility in cars, especially among emerging millennial car buyers. Connected cars are gaining preference and going mainstream, with the rising awareness of their enhanced overall comfort, safety, and convenience while driving.”
The Counterpoint Research study reveals that more than 286 million connected passenger cars will be added globally during the 2019-2025 period. US and Europe together accounted for the most connected car shipments in 2018. However, during the forecast period, China is expected to account for more than 35% of connected car shipments. Madhok adds, “Cost sensitiveness of car buyers in China, coupled with a lower share of premium cars, had initially stunted connected car penetration in the country. However, with more and more connected features being offered now by OEMs in mainstream car models, we will expect significant growth.”
OEMs find connected services an important area for generating additional revenues and shoring up profit margins. In partnership with telecom operators, OEMs offer car owners optional connectivity plans ranging from daily, monthly, and annual subscriptions. For example, in the US, AT&T offers monthly plans between US$10 to US$20 on its network for backhaul. The Average Revenue Per User (ARPU), for connected services is the highest for developed countries, where data plans are expensive, e.g., US$180 annually in the US in 2018. For emerging economies like China, the ARPU is considerably lower.”
Exhibit 1: Global Connected Car Shipments (%)
Vinay Piparsania, Consulting Director for Smart Automotive at Counterpoint Research, added, “With more and more countries adopting their own versions of Europe’s eCall, automotive OEMs are taking the opportunity to install original and proprietary embedded telematics systems, opening up significant revenue opportunities to offer connected and subscription-based services globally. By incorporating innovative smart connected features, OEMs are looking to differentiate their models.”
Exhibit 2: Global Connected Car Revenues (%)
Cautioning on the challenges for automakers, Vinay added “Digital features in cars today are expensive and complex. OEMs need to step up their game to provide in-car experiences which are as seamless and intuitive as smartphones. This explains why OEMs are collaborating and even investing in software companies. While OEMs continue to prefer embedded onboard infotainment to diversify their revenues, it is clear that the smartphone’s dominance on personal connectivity is overwhelming. There continues to be considerable debate over how connectivity will develop within the vehicle, i.e., the choice between built-in connectivity or brought-in mobile systems. OEMs failing to innovate, and bring costs down through scale, will lose the race, leaving behind significant revenue on the table.”
The comprehensive and in-depth “Connected Car Revenues to Grow Five-Fold by 2025” report is available for Industry Beats Premium subscribing clients. Please feel free to reach out to us at press(at)counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.
The EU wants to foster home-grown companies to compete with Chinese and Korean competitors and to take battery cell production into its own hands. Germany is apparently in the center of it. The German government wants to reduce the dependence of its automakers on Asian electric vehicle (EV) battery suppliers and protect its auto industry jobs at home. Therefore, it is now trying to move further towards vast battery cell production by EU companies. Its EV battery push, however, might be coming too late.
The EU Is Now About to Make Progress with Plans for EV Battery Manufacturing
The EU has lagged far behind its economic counterparts in building up battery manufacturing capacity. Despite the world’s biggest incentives for EVs, the batteries to support the policies have been made in China and Korea. Although there are various manufacturing initiatives underway in the EU, most of them are by the Korean players. However, the EU is now about to make progress with plans for battery manufacturing to compete with those imports under the state aid rules. The European Commission has been working on both an EU Battery Alliance (EBA) and an EU Action Plan on rechargeable batteries. Initiatives include the introduction of state aid for EV battery research and billions of euro fund for EU companies to build gigantic battery factories.
The EBA was launched by Vice President for Energy Union Maroš Šefčovič with member states and industry in October 2017. It aims to stimulate entrepreneurs to manufacture ‘Made by Europe’ batteries and to create a competitive and sustainable supply chain in Europe. Consequently, a Swedish battery supplier, Northvolt started construction in mid-2018 on the first phase of its planned battery gigafactory by partnering with Scania and BMW respectively.
The main outcome of the EBA has been the strategic action plan for batteries adopted in May 2018. It was built on discussions with key industry stakeholders, interested member states and the European Investment Bank. Under the action plan, the EU is taking a proactive approach to major raw materials for batteries to secure its strategic independence. It is not only mapping and exploring EU resources for secondary raw materials through recycling batteries, but also trying to set up free trade agreements for raw materials from outside the EU.
Germany Will Play a Central Role in the Development of Battery Cell Production
Over the past ten years, Germany has invested around €500 million into battery cell research, but until now nothing much has come of it. Chancellor Angela Merkel has been in favour of battery cell development, but major German manufacturers have been reluctant to push ahead and are even more dependent than ever on Asian suppliers. However, recently the German government stressed the urgency of the project strongly and expressed willingness to build vast battery cell production lines in Germany with a budget of €1 billion.
At the Networking Conference Electromobility 2018 in Berlin, the German Minister of Economics Peter Altmaier announced a €1 billion investment to support local battery cell production. Then highlighted that the goal is to take 30 percent of global demand for battery cells from German and European production by 2030.
The funding aims to reduce the country’s dependence on Asian EV battery cells and to protect German manufacturing jobs. Germany has faced a potential threat from the decline in demand for gasoline-fueled vehicles. The budget will be divided between a consortium assembled to produce lithium-ion batteries for EVs and a research facility to develop solid-state battery technology with higher energy density, longer driving range and greater safety standards.
Most important task will be the construction of gigawatt-sized lithium-ion battery cell production lines in Germany. The German government hopes that the first production line could be available from 2021 and those batteries must be smart, have a high energy density and be easy to recycle. It is looking to have 30 percent of such production coming from Germany and Europe by 2030, with a forecast that the battery cell market in 2030 will have a global volume of €600-800 billion.
Global Li-Ion Battery Capacity Projection (GWh)
Source: Counterpoint Research
Conclusion
Chinese and Korean leaders have already been on mass production of lithium-ion batteries over the past decade. Gaining cost-competitive advantages, they plan to ramp-up huge additional production capacity accordingly. For the EU, therefore, it does not seem effective to spend significant efforts to establish new production lines on current commercial lithium-ion technology. Instead, we suggest that the EU concentrates on strengthening its supply chain of raw materials through recycling batteries for now. Germany, meanwhile, needs to focus on a lab-scale research and pilot lines for solid-state batteries rather than lithium-ion battery market entry. Only then, could it seize an opportunity to hold a dominant position in the advanced battery market optimized for the next generation vehicles for the long term.
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