The Tokyo Motor Show, which recently opened in Japan, has garnered global attention from the automotive industry, particularly regarding EV technology, seen as the future of the automotive sector. Just like Toyota, a leader in the Japanese automotive industry, Nissan has showcased its ongoing development of Advanced Solid-State Battery (ASSB) technology at the event.

According to Nissan, the ASSB technology promises to provide double the energy density when compared to conventional liquid lithium-ion batteries, representing a significant milestone in battery innovation. Additionally, it is estimated that vehicles equipped with ASSB will experience a substantial reduction in charging times, taking only one-third of the current duration.

This development aims to address one of the fundamental challenges faced by EV users, making longer trips more convenient and practical while enhancing their overall confidence and enjoyment in electric vehicle ownership.

Kazuhiro Doi, Vice President of Nissan’s research division, believes that this technology could propel Nissan’s next generation of electric vehicles to a new level.

What’s particularly intriguing is that sports cars or supercars can utilize smaller and lighter battery packs, thereby improving handling, braking, and acceleration. Furthermore, according to Mydrivers, since ASSB batteries can operate normally in the range of room temperature to 100°C, they do not require a dedicated cooling system.

Currently, the ASSB technology is progressing according to Nissan’s previously announced plan. The first experimental production facility is still scheduled to commence operations next year, and the first mass-produced vehicle model utilizing ASSB technology is still expected to be launched in 2028.

(Photo credit: Nissan’s Facebook)

Foxconn Technology Group held its Tech Day on October 18, 2023, focusing on three key areas: AI Smart Factories, CDMS (Contract Design and Manufacturing Services), and Model N.

TrendForce’s insights:

1. Increasing EV Adoption Crucial for Sustained Growth

According to an intention survey by Gallup in April 2023, only 4% of respondents in the United States currently use electric vehicles, with an additional 12% considering a purchase. The majority of potential buyers in this category belong to households with an annual income exceeding $100,000. As per the salary survey by the New York Federal Reserve in July 2023, the average annual income for full-time employees in the United States stands at approximately $69,475.

Apart from concerns about driving range, the primary obstacle to the widespread adoption of electric vehicles is their relatively higher cost compared to traditional gasoline-powered vehicles. This pricing differential limits the consumer base for electric vehicles. The growth rate in electric vehicle adoption, which nearly doubled from 2020 to 2023, now faces a “30% plateau” challenge.

With the deadlines for banning gasoline cars in 2025 in Norway and 2035 in the European Union approaching, reducing manufacturing costs to reach a broader consumer demographic will be a critical factor in the successful transition of traditional automakers.

2. Foxconn’s CDMS Model Offers Cost Savings and Addresses Key EV Challenges

Take Volkswagen, the world’s second-largest automaker, for example. The investment in creating the MEB platform for their EVs amounted to approximately $7 billion. For many small or startup automakers, this figure is astronomical.

Furthermore, in recent years, automakers have made substantial investments to ensure the stability of crucial components like batteries and semiconductor chips. These costs are inevitably spread across the overall vehicle cost, which, in turn, affects the growth rate of electric vehicles.

The CDMS  model leverages Foxconn’s Model series of complete vehicle platform production lines. It combines modular component assembly and supply chain resources to offer car manufacturers a comprehensive development service, reducing their upfront development time and costs. This enables manufacturers to concentrate on brand marketing.

Foxconn’s active push into CDMS may prompt many traditional automakers to reevaluate the core value of in-house manufacturing, reduce costs, and expand their customer base, offering a solution to the current challenges faced by the industry.

3. While Automakers Predominantly Continue to Independently Develop Platforms, Foxconn Must Expedite Its Efforts to Compete for Next-Generation Platform Manufacturing Opportunities

Despite the considerable costs associated with platform development, many automakers have already invested resources in creating their initial NEP (New Electric Platform). In the early stages of new energy vehicle development, it attracted various capital investments, with ample development funding and a relatively high fault tolerance.

Consequently, many automakers boldly invested in building their dedicated platforms. However, as market competition intensifies, automakers are likely to exercise greater caution in various investments.

For some automakers, the timing to reintroduce the CDMS model for the next-generation platform planning could be optimal for Foxconn to make its entry. However, outsourcing the production of new energy vehicles may entail sacrificing their uniqueness, which can influence the types and quantities of vehicles that automakers are willing to outsource.

Moreover, automakers tend to be more conservative compared to the electronics industry, and they might have concerns that outsourcing to Foxconn could inadvertently nurture potential competitors.

Furthermore, if automakers only view outsourcing as a financial adjustment or a temporary strategy, the sustainability of such orders becomes uncertain.

While the Luxgen N7, built on the Model C platform under the CDMS approach, has achieved promising results in its presale, marking a successful initial step, expanding the economies of scale for CDMS will require Foxconn to seize the right timing to secure more outsourcing orders from international automakers.

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• [News] Foxconn Chairman Discusses Competitive Strategy in EV Industry

On the 25th of October, the European Commission announced that, through a sampling method, it has selected three Chinese automakers: BYD, SAIC Motor, and Geely, to initiate an anti-subsidy investigation.

The EU had previously declared its intent to investigate electric vehicles originating from China earlier this month. However, due to the multitude of companies involved, the European Commission resorted to a sampling method to determine the specific targets of this inquiry.

This report was initially revealed by the trade publication “MLex,” which claimed that the EU seeks to establish a fair competitive environment for European electric vehicle manufacturers.

Furthermore, according to the South China Morning Post, despite Tesla shipping more electric cars from China to Europe compared to any other company, it is not among the companies being investigated by the European Union.

Additionally, if the EU’s investigation uncovers “subsidy evidence,” it will result in the calculation of corresponding “average anti-subsidy taxes,” which will apply to all electric vehicles imported from China, including prominent models produced in China such as Volkswagen, Tesla, BMW, and others. The three companies selected through the sampling method mentioned earlier will bear “individual responsibility” based on their respective subsidies.

BYD’s Executive Vice President, Stella Li, recently stated that despite the EU launching an anti-subsidy investigation into Chinese electric vehicles, BYD remains committed to driving strong growth for the company in Europe.

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• [News] BYD and BYD Electronic Expect Profits to More Than Double in the First Three Quarters

(Photo credit: BYD)

Under strong government support, South Korean automakers are making remarkable strides in the global automotive market. Hyundai Motor, the largest car manufacturer in South Korea, reported a significant surge in its third-quarter operating profit, doubling year-on-year, primarily fueled by the robust sales of high-profit SUVs and EVs.

According to reports from news outlets such as Yonhap News Agency, Hyundai Motor announced its financial results on October 26, 2023. In the third quarter of 2023, the company witnessed an 8.7% year-on-year increase in revenue, reaching 41 trillion Korean won. Furthermore, the operating profit soared to 3.8 trillion Korean won (approximately 2.8 billion USD), marking a remarkable 146.3% increase compared to the same period last year. These results exceeded market expectations of 3.62 trillion Korean won and set a historic high for the same period.

In the midst of a semiconductor industry downturn, long-standing economic leader Samsung Electronics has faced operational setbacks. In contrast, Hyundai Motor has thrived as South Korean automakers dominate the global automotive market, securing its position as South Korea’s most profitable company for three consecutive quarters and causing a shift in rankings.

In terms of sales volume, Hyundai Motor sold 1.05 million vehicles globally in the third quarter, marking a 2% year-on-year growth. Notably, the company’s focus on expanding its EV product lineup, including the introduction of the IONIQ, resulted in a significant 33.3% increase in global sales of eco-friendly vehicles, reaching 169,000 units.

The luxury brand under Hyundai Motor, Genesis, achieved a 5.1% share of total sales in the third quarter, an increase from 4.9% in the same period last year. SUVs, known for their profitability, accounted for 54.7% of total sales in the third quarter (excluding Genesis), up from 50.6% in the previous year. When including Genesis SUV models, this figure rises to 57.8%.

Amid growing tensions in the Middle East and globally sustained high-interest rates, notable figures like Elon Musk of Tesla and giants like General Motors have warned of potential weak consumer demand for EVs in 2024. Nevertheless, Hyundai Motor’s Vice President, Seo Gang-hyun, has affirmed that the company’s $5 billion investment plan to establish a factory in Georgia is proceeding as planned and is set to commence production in the first half of 2024, six months ahead of the initial schedule.

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• [News] Ford Shifts EV Investment Focus Amidst Fierce Price Competition
• [News] Volkswagen Group Reports Strong 45% Growth in EV Sales for the First Three Quarters of 2023

(Image credit: Hyundai’s Facebook)

In the wake of ongoing labor strikes affecting the U.S. automotive industry, major players are recalibrating their investment plans. Ford announced today that it will temporarily delay its $12 billion investment in electric vehicles, including the construction of its second battery factory in partnership with SK On.

Ford’s Chief Financial Officer, John Lawler, emphasized during the earnings conference that the company is not retreating from the electric vehicle sector. However, he and CEO Jim Farley acknowledge that as electric vehicle sales increase, consumers’ price elasticity decreases. Most consumers are reluctant to pay higher prices for electric vehicles, resulting in pricing pressures that compress profit margins and hinder the growth of Ford’s electric vehicle business.

Ford’s financial reports for the third quarter of 2023 revealed revenue of $1.8 billion in its electric vehicle division, with total sales of 48,000 pure electric vehicles, marking the best sales performance in over a year and a half. However, the company also reported record losses, highlighting the challenges of scaling production without achieving profitability.

In response to these challenges, Ford is shifting its electric vehicle strategy away from feature-centric development to prioritize cost efficiency. “Tesla actually gave us a huge gift with the laser focus on cost and scaling the Model Y,” said Ford CEO Jim Farley. With Tesla setting an industry standard, Ford’s forthcoming second and third-generation electric vehicles will build upon this foundation.

Under this cost-driven approach, Ford is reviewing its electric vehicle investment portfolio to better align with market demand. This includes scaling back production lines for certain models, suspending the joint battery factory project with SK On in Kentucky, and adjusting other electric vehicle-related investments totaling up to $12 billion.

(Image credit: Ford’s Facebook)