Inflation Reduction Act and U.S. Investments
My thoughts:
Recent legislation providing incentives for localizing supply chains in the US is affecting more than assembly plant investment. Companies are also establishing EV battery plants in the US. Recent announcements by Ford, GM, VW, Toyota, and others show that OEMs are moving beyond the planning stages and are executing plans for new EV-dominated portfolios. China currently dominates EV battery supply chains for assembly and raw material mining and processing. US legislation aims to shift this balance, and global OEMs are responding with investments and partnerships. Look for this type of investment to continue and dovetail with infrastructure legislation that will seed states with a total of $5B for deploying EV chargers.
For more on this, CAR recently published a Whitepaper, “Inflation Reduction Act: Clean Vehicle Credits.” Read the full report HERE>>>.
Battery Raw Materials
My thoughts:
GM’s investment in an Australian company to secure access to nickel and cobalt showcases a growing trend of OEMs reaching deeper into the supply chain to avoid material shortages. This investment is just GM’s most recent announcement of raw materials partnerships, following similar arrangements with other lithium, nickel, and cobalt suppliers. Stellantis recently signed a memorandum of understanding with a firm in western Australia for nickel and cobalt supply.
Cobalt, another key raw material used in EV batteries, is considered a critical mineral by the US government. A new cobalt mine is opening in Idaho this week, the first cobalt production in the US since 1994.
OEMs and industry analysts have targeted battery costs of $100/kWh as the point at which EVs achieve cost parity with ICE vehicles. Many expected this price point to occur sometime in the next couple of years. However, much higher raw material / critical minerals costs have recently raised battery prices, likely leading to a delay in cost parity.
Vehicle Software
My thoughts:
Hyundai is investing $12.6B in software development through 2030, keeping pace with VW, Toyota, and GM. VW’s $8B software subsidiary, Cariad, is developing an operating system to run on all its vehicles. Toyota’s spinoff, Woven Planet, aims to deploy its operating system, Arene, by mid-decade. And GM’s Ultifi platform is enabling for-subscription services.
Stellantis, not to be outdone, has announced the opening of a new software hub in Bengaluru, India. The hub will develop Ai software for ADAS and autonomous vehicles. The hub expects to employ up to 500 people.
Toyota and Google Cloud have partnered to provide speech recognition services in Toyota and Lexus vehicles. Google’s AI-based speech services will enable embedded devices with the same speech recognition and synthesis available in the cloud. Consumers have long been frustrated with the performance of voice recognition systems. Perhaps this will advance the state of the art of in-vehicle voice commands.
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