The world’s largest automaker, Toyota (TM-US), announced on Thursday, the 19th, that its North American division has reached an agreement with Tesla (TSLA-US). Starting in 2025, Toyota’s electric vehicles will adopt Tesla’s North American Charging Standard (NACS).

Prior to Toyota’s announcement, companies like Ford, General Motors, and BMW had already joined the Tesla NACS alliance, providing customers with access to Tesla’s extensive Supercharger network.

In 2025, Toyota will integrate the NACS interface into specific Toyota and Lexus BEVs, including a new three-row electric SUV produced at Toyota’s Kentucky plant.

Vehicle owners can connect to Tesla’s widespread North American charging infrastructure, comprising over 84,000 charging stations, including Level 2 and DC fast chargers, using Toyota and Lexus apps.

Owners or lessees of Toyota and Lexus vehicles using the Combined Charging System (CCS) specification will have the option to purchase NACS charging connectors starting in 2025.

Notably, we have anticipated that by 2026, the global tally of public charging stations will soar to 16 million, marking an impressive threefold increase from 2023 figures. As this unfolds, the global ownership of NEVs—which includes both PHEVs and BEVs—will surge to 96 million.

Infineon, Hyundai, and Kia announced on October 18 that they have signed a multi-year agreement for the supply of SiC (Silicon Carbide) and Si (Silicon) power semiconductor modules and chips.

Under this agreement, Infineon will supply SiC and Si power components to Hyundai and Kia until 2030, and in return, Hyundai and Kia will support Infineon’s production capacity and reserves.

The demand for SiC power devices has surged with the growing popularity of new energy vehicles, and as a prominent industry leader, Infineon has embarked on numerous collaborations this year.

• Infineon and Resonac

In January, Infineon declared a new multi-year supply and cooperation agreement with Resonac Co., Ltd. (formerly Showa Denko K.K.). According to this agreement, Resonac will provide Infineon with SiC materials for producing SiC semiconductor components, including 6-inch and 8-inch wafers. Initially focused on 6-inch wafers, Resonac will later supply 8-inch SiC wafers to support Infineon’s transition to 8-inch wafers. As part of the agreement, Infineon will also provide Resonac with SiC material technology-related intellectual property.

• Infineon and TanKeBlue, SICC

In May, Infineon signed long-term agreements with TanKeBlue and SICC to ensure a more competitive and substantial supply of silicon carbide materials. These two suppliers will primarily provide Infineon with 6-inch silicon carbide substrates and offer 8-inch silicon carbide materials, aiding Infineon in transitioning to 8-inch SiC wafers. The agreements also encompass silicon carbide ingots, as Infineon had previously invested nearly 1 billion RMB in acquiring a laser-based wafer technology enterprise, aiming to enhance the utilization of silicon carbide substrates and device cost competitiveness.

Notably, both TanKeBlue and SICC will account for a double-digit percentage of Infineon’s long-term demand volume.

• Infineon and Foxconn

In the same month, according to the Foxconn’s official website, Infineon and Foxconn have signed a memorandum of cooperation to establish a long-term partnership in the field of electric vehicles. Under this agreement, the two companies will focus on the adoption of silicon carbide technology in high-power applications for electric vehicles, such as traction inverters, on-board chargers, and DC converters. They also plan to jointly establish a system application center in Taiwan to expand their collaboration further.

• Infineon and Schweizer Electronic

Additionally, Infineon is collaborating with Schweizer Electronic to develop an innovative solution aimed at directly embedding Infineon’s 1200V CoolSiC™ chips into PCB boards. This move seeks to significantly enhance the driving range of electric vehicles while reducing the overall system cost.

• Infineon and Infypower

In September, Infineon announced a partnership with Shenzhen Infypower (INFY) to provide the industry-leading 1200V CoolSiC™ MOSFET power semiconductor devices, boosting the efficiency of electric vehicle charging stations.

In line with their goal of capturing a 30% share of the global SiC market by 2030, Infineon revealed plans to invest up to 5 billion euros over the next five years to construct the world’s largest 8-inch SiC power semiconductor facility in Malaysia.

(Photo credit: Infineon)

Foxconn, during its 2023 Foxconn Tech Day, has introduced the MODEL N electric logistics vehicle and the mass-production version of the MODEL B crossover SUV. These offerings cater to different segments of the electric vehicle market, showcasing Foxconn’s versatile electric vehicle solutions. Additionally, they presented several models in the MODEL C lineup.

Foxconn’s Chairman, Young Liu, highlighted the company’s strategic transformation, stating, “Foxconn is turning from a manufacturing service company into a platform solution company. Foxconn’s CDMS (Commissioned Design and Manufacturing Service) service model is total solutions and bespoke solutions in the automotive space.”

MODEL C has successfully passed multiple testing and validation phases. Foxconn announced plans for performance and extended-range versions of MODEL C in the near future, with more robust powertrains, faster 0-100 km/h acceleration, and longer endurance. These options offer brand customers a range of choices. The vehicle is already in use by brand customers in Taiwan, with official sales now underway. Foxconn is set to begin mass production and deliveries starting in November, allowing consumers to hit the road in the first quarter of the coming year.

Liu also disclosed that LUXGEN n7 pre-orders have exceeded 5,000 units. Through CDMS, LUXGEN can focus on marketing and service, while Foxconn concentrates on design and manufacturing. This division of labor allows for faster time-to-cost and time-to-market, a strategy expected to yield more success stories in the future.

Liu emphasized that as with PCs and smartphones, automotive manufacturing is also shifting toward an outsourcing model. As competition intensifies, Foxconn’s role becomes more prominent, and the demand for specialized manufacturing services increases. Foxconn completes 80% of the operations, while customers handle the remaining 20%, thereby creating added value.

When asked about the growing proportion of OEM development in mainland China, Liu explained that CDMS has not yet been opened in China. However, with the increasing competitiveness of the Chinese electric vehicle market, cost-saving trends will likely emerge. When the time is right, Foxconn will establish electric vehicle manufacturing capabilities in China.

Regarding the three electric systems, electric motors, electronic control, and batteries, Liu stated that these systems will undergo local production in regions of relevance, with major research and development efforts carried out in Taiwan. A portion of production will remain in Taiwan, while another portion will be localized. The proportion of these three systems will depend on the electric vehicle production volume in other countries and collaborations with local brand companies. In Taiwan, the plan is to achieve an annual production scale of 50,000 to 100,000 electric vehicles, with the goal of securing a 10% market share.

Explore more 

• [News] Foxconn Aims to Create AI Factory for Smart Cities and EVs with NVIDIA
• [News] Foxconn’s Tech Day Showcases New Electric Vehicle Model and Vertical Integration Capabilities
• [News] Foxconn Chairman Discusses Competitive Strategy in EV Industry

(Photo credit: Foxconn’s Stream)

In March 2023, Xiaomi Chairman Lei Jun reiterated that Xiaomi’s new energy vehicles (NEVs) would enter mass production in the first half of 2024. Fast forward to October 4, 2023, and reports indicate that Xiaomi’s EV, codenamed MS11, has received certification from the Bluetooth Special Interest Group (SIG). Furthermore, with ongoing news about hiring, site selection, and trial production, though the exact mass production date is yet to be confirmed, it is likely not far from Chairman Lei Jun’s commitment, potentially positioning Xiaomi ahead of Apple and Sony in launching new energy vehicles.

TrendForce’s Insights:

1. Extensive Preparation: Xiaomi’s Years of Investment in Automotive Components

With the transition to the era of new energy vehicles, there is a shift from traditional gasoline to electric power as the primary energy source. Additionally, the increasing demand for advanced driver-assistance systems has attracted numerous electronics and technology companies to enter the new energy vehicle industry. For instance, smartphone brands such as Xiaomi, Apple, and Sony have all announced plans to manufacture EV. Based on the progress reported by the media, Xiaomi may take the lead in commencing mass production of new energy vehicles in 2024, while Apple and Sony, the latter in collaboration with Honda, are likely to introduce their new energy vehicles after 2025.

To ensure adequate self-sufficiency and competitiveness, Xiaomi began laying the foundation early. Starting as far back as 2016, the company ventured into the field of LiDAR. Over the years, Xiaomi, along with its affiliated funds and investment entities, has made extensive investments in crucial components such as power batteries, electric propulsion systems, and electronic controls. These investments have covered more than 50 companies in the industry. Notably, in 2021, Xiaomi acquired DeepMotion, a startup specializing in autonomous driving solutions. Xiaomi’s investment strategy indicates it possesses the necessary tools to enter the new energy vehicle industry, including mastery of essential components and substantial capital resources.

2. New Energy Vehicles: High Costs, Low Profit Margins

The automotive industry is characterized by substantial capital investments, with a significant portion of revenue stemming from post-sale maintenance and services. Pioneering startups in the field of new energy vehicles, such as NIO and Li Auto, continue to grapple with financial losses. Although NIO’s President, Lihong Qin, expressed that “when a company does a series of things right, profitability will come naturally,” it remains to be seen whether Xiaomi, accustomed to the consumer electronics sector, shares the same level of patience.

Despite Xiaomi’s focus on profitability through smart driving software-related subscription services, the challenges are significant. Current limitations lie in the complexities associated with the responsibility for advanced autonomous driving systems beyond Level 3. The automotive industry currently prioritizes Level 2 automation, and according to data from the Chinese Ministry of Industry and Information Technology reveals that, by 2022, the penetration rate of Level 2 (L2) vehicles had already reached 34.5%. This high level of adoption indicates a highly competitive landscape, which may present challenges for Xiaomi’s business model. Xiaomi’s typical approach involves leveraging low-margin hardware to acquire users and generate traffic, with profits coming from its ecosystem of services, including advertising and internet-related offerings.

Moreover, new energy vehicles tend to have longer product lifecycles compared to smartphones. As a result, consumers with budget constraints tend to prioritize the tangible value of hardware. This implies that building acceptance for software subscription services may require a significant amount of time.

Xiaomi might have crossed the initial hurdles of entering the automotive industry. However, the challenges post-entry, as outlined above, will genuinely test whether the Xiaomi model can be as effective in the new energy vehicle sector as it has been in its traditional domains.

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Foxconn held its Tech Day on October 18, 2023, where Chairman Young Liu addressed the company’s stance and strategy in response to the high growth of the EV market in mainland China, which significantly impacts the global EV industry.

Liu began by discussing the prevailing trend of electric vehicles in China, emphasizing that while the focus has primarily been on the development of EVs, the business model has received limited attention. Foxconn’s approach in the EV industry centers on its Commissioned Design and Manufacturing Service (CDMS) business model, but Liu stressed that in China, CDMS alone is not permitted. Automakers in mainland China must engage in both manufacturing and sales.

Liu explained that the CDMS model doesn’t involve the creation of Foxconn’s own brand, a practice currently disallowed in mainland China. However, the competitive landscape is shifting, with fierce competition, particularly among domestic automakers. With an estimated 100 to 200 automakers in China, the market has become increasingly intense, prompting a focus on minimizing costs and investments. In this context, Foxconn’s CDMS model emerges as a viable solution, as investing in 100 automakers would be prohibitively expensive. Liu anticipates that China will eventually open up to the outsourcing model. While Foxconn isn’t currently engaged in EV manufacturing in mainland China, it’s gradually building relevant capabilities, preparing for the moment when outsourcing becomes permissible, enabling Foxconn to take a leading position.

Regarding the interest of Japanese automotive giants in Foxconn’s electric vehicles, Liu noted that their stance is clear. They consider themselves partners to established auto brands. Traditional automakers have traditionally covered all aspects, transitioning from internal combustion engines to batteries. However, in the age of electric vehicles, the shift can no longer be about the engine as a barrier to entry into the industry. Traditional automakers must now contemplate how to create value, which represents their most significant challenge.

Manufacturing, Liu noted, is no longer the source of value that traditional automakers can create. Instead, they should focus on marketing and services. It involves understanding how to leverage apps and scenarios to offer consumers unique experiences. Traditionally, brands like Mercedes-Benz stood for luxury, while BMW represented driving performance. In the era of electric vehicles, positioning needs to shift toward services rather than engine definitions.

Liu offered the analogy of televisions to illustrate his point. Sony was a leader during the cathode-ray tube era, but as the market transitioned to liquid crystal displays, the focus shifted to panels, and every brand became indistinguishable. Liu’s advice to potential Japanese automotive partners is to delve deeper into understanding the users, emphasizing that this will be critical in the age of electric vehicles.

Explore more 

• [News] Foxconn Aims to Create AI Factory for Smart Cities and EVs with NVIDIA
• [News] Foxconn’s Tech Day Showcases New Electric Vehicle Model and Vertical Integration Capabilities 

(Photo credit: Foxconn)