28-01-19 EV silent change
U.S. auto industry having just wrapped up its fourth-strongest sales year on record — while at the same time stressing over whether sales are facing a pending drop — the global auto industry has taken a big shine to electric vehicles.
And the shockwave is hitting automakers, parts suppliers at nearly every tier level and materials companies.
It's a rapid outlook shift for the electric drivetrain, which just a year or so ago was seen as something of a niche player, relegated for use in megacities and a few key markets such as California. The internal combustion engine (ICE), market watchers had said, was here to stay — at least for the foreseeable future. But in 2018, despite falling gas prices, battery-electric vehicle sales rose 199 percent, according to the Automotive News Data Center.
Now, though, some of those same industry watchers are taking a 90-degree turn and predicting that not only are electric cars a viable alternative for the near future but also they are increasingly about to displace the reliable gasoline engine.
"The auto industry is facing the most profound transformation since its inception, going from traditional internal combustion engine vehicles, with human drivers, to electric motors replacing ICEs and autonomous vehicles replacing drivers," Jeff Schuster, president of Americas operation and global vehicle forecasting for LMC Automotive said in a December report on General Motors Co.'s restructuring.
Jeffrey Sauger for General Motors Battery cells are stacked and framed by a GM-designed "Spider Robot" at the GM Brownstown Battery Assembly Plant in Brownstown Township, Michigan. The Brownstown facility assembles six different batteries supporting nine vehicles across the the GM global portfolio.
Limited growth in US
That's a pretty big shift in a short period. After all, it was only 13 years ago that the documentary film "Who Killed the Electric Car?" made some waves. (The filmmakers' follow-up, "Revenge of the Electric Car," in 2011 didn't make the same splash.)
And to be clear, EVs are still a niche in North America, accounting for less than 1 percent of U.S. sales in 2018.
For mainstream automakers, especially, electric cars are just a small number. General Motors sold about 18,000 of its Volt sedans, out of nearly 3 million vehicles sold for the year. A refreshed Nissan Leaf saw a 31 percent climb in sales to 14,000 units, but compare that to 410,000 of its Rogue crossover vehicles.
But look to the headline-grabbing upstart Tesla for a different perspective. The California-based automaker sold 182,000 all-electric vehicles in 2018 — more than Ford Motor Co.'s Lincoln vehicles and GM's Buick nameplate combined. Its Model 3 made up 138,000 of those sales.
And beyond U.S. borders, public policy in China is turning that country — the world's biggest single auto market — into a buyer of electric vehicles. Six cities in China were responsible for 21 percent of all electric vehicle sales in 2017.
That's why companies like Ford and GM are putting their money into electric vehicles today, regardless of what consumers have been buying in the past.
When GM announced its restructuring plan in the fall of 2018, it made clear that it was moving away from fuel-sipping sedans but sticking with alternative powertrains. Mark Reuss, the new president of GM, noted that the company will launch at least 20 new battery-electric and fuel cell vehicles globally by 2023, which is just around the corner in auto production planning terms.
"While it's true that the industry is changing, its also true that some periods are more transitional than others," said Steve Kiefer, vice president of global purchasing and supply chain for GM. "We believe it will change more in next five years than in the last 50."
$73M for plastics in EVs
For plastics suppliers, those should equal a very big business opportunity.
In 2012, consulting group Frost & Sullivan estimated that plastics used in electric vehicles would see "tremendous growth" with the need to reduce vehicle weight to improve performance.
Between 2010 and 2017, the value of plastics in electric vehicles was expected to grow to $73 million, with investments in powertrain plastics, battery casing plastics, thermal management system materials and wire and cable plastic materials beyond lightweight parts.
Without federal tax credits and state rebates, EVs are still more expensive than cars with ICEs, but battery costs are falling faster than anyone predicted, the utility company said.
For the past several years, as cheap fuel prices made it easy to buy and use ICE vehicles, the high cost of producing lithium-ion battery packs and the new engines to power cars was seen as prohibitive.
BNEF found similar pricing changes in battery packs. BNEF noted in its 2018 report on electric vehicles that when it first started tracking EV battery pack prices in 2010, the average battery pack price was $1,000 per kilowatt hour. By the end of 2017, that number had dropped to $209 per kilowatt hour, or a 79 percent drop in seven years. At the same time, BNEF said, average energy density improved 5-7 percent per year.
The Evansville, Ind.-based company has started supplying its material for global carmakers who want lightweight material that is both electrically and thermally conductive for their vehicles.
"It is a big deal for a small company to have a material going into automotive around the world," CEO Doug Bathauer said. "Our goal as a company is to take that [success] and leverage it," providing proprietary intellectual property rights and issued patents to end users through licensing, joint ventures and material production.
European-based parts making powerhouse Plastic Omnium SA is investing $2.9 billion to prepare for future vehicles, including EVs.
The company said in April it signed an order with Chinese carmaker NextEV to supply all of its electric vehicle body parts, and it announced that production of the first high-pressure tank for rechargeable hybrid vehicles is scheduled to start at the end of the year.
It expects plastic tanks to make up 70 percent of the systems for plug-in hybrid electric vehicles by 2025.
A German auto supplier, which contributes under-the-hood functional systems to today's engines, is preparing its products for EVs.
"There are still unanswered questions relating to the increased demand for electricity that will result from greater numbers of electric vehicles and the need to expand the charging infrastructure," said the head of new business areas and battery technology in a sustainability report from the company.
"The main focus is on how to make housings and components for lithium-ion cells more efficient in terms of their function and production, with particular regard to electromobility applications. We are working with other companies towards a common goal."
Also in Germany, a company, which make injection molds electronic controls, is wrapping up its purchase of the ePower business unit of a company, a maker of onboard charging systems for electric and hybrid vehicles.
Describing it as a "speedboat" in a growing automotive segment, said ePower was the "perfect addition" to the company's e-mobility business.
The acquisition comes on top of a $7.6 million investment to set up a new e-mobility laboratory for its electromobility business segment at its headquarters in Bad Neustadt, Germany.
Center for Automotive Research Dziczek
Going beyond the engine
Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich., said the news of GM's restructuring also hinted at the company's future transportation plans.
When GM announced it was shutting auto assembly plants, it also said it would stop production at transmission plants in Warren, Mich., and near Baltimore. What kind of a car doesn't need a transmission? An electric one.
"The bigger concern, which isn't the headlines, is GM pulling back on transmissions," Dziczek said. "Correcting transmission capacity is just maybe the first step in moving toward a more electrified future. That has big ramifications across the manufacturing sector. Conventional powertrain [manufacturing] is all over the Midwest."
Battery-powered cars have just more than a dozen moving parts, compared with hundreds in one powered by a traditional internal combustion engine.
"If there are fewer parts, there are fewer suppliers and therefore fewer jobs," she said. "We won't have the same job footprint. A plant that assembles vehicles, engines or transmissions has a greater economic footprint contribution. How many of these jobs really get replaced if these plants make only electric cars?"
Schuster, though, is careful to note that it may be another 15 years before the traditional car is really replaced, so the investments needed to transform companies like GM may take decades to see a return.
But automakers are continuing their very long, long-term view of an EV automotive future.
"This is not some vague declaration of intent," then-Volkswagen CEO Matthias Mueller said at the 2017 Frankfurt Auto Show. "The transformation in our industry is unstoppable. And we will lead that transformation."
And a change in leadership at VW isn't slowing its push into electric vehicles. At the 2019 North American International Auto Show in Detroit, the current CEO, Herbert Diess, announced the company will invest $800 million in an electric vehicle plant in Chattanooga and add 1,000 jobs in the region.
And that, Diess noted, does not include investments by suppliers it expects will set up shop for that new plant
All in all, the pace of electric vehicles construction will definitely and proportionally reflect the plastic parts demand, mostly for the targets wanted on light weight structures hence consumption, efficiency;
Read more here
#markets #electricvehicles #automotiveindustry #toolmanagers #shapes #molds #moulds #moldsfromportugal #moulds4_0 #industry4_0