The Race for Market Leadership in the Electric Vehicle Business

Bruno Ahrens General Manager Business Unit Electric Vehicle & Hybrid Systems at United Automotive Electronic Systems Co Ltd (UAES)

The Race for Market Leadership in the Electric Vehicle BusinessBruno Ahrens General Manager Business Unit Electric Vehicle & Hybrid Systems at United Automotive Electronic Systems Co Ltd (UAES)

The NEV market is booming in China. The pace of growth of the new energy vehicle (NEV) market is taking unprecedented level in China this year. By the end of July 2021, the cumulated passenger NEV sales totalized 1.3 million vehicles, the same amount sold in the entire 2020. The market penetration rate has reached 19.5 percent nationwide in September 2021, which is far higher than the 5.6 percent in 2020. Not to mention that, in tier-1 cities, like Shanghai, the share of NEV of new vehicle sales is stable above 20 percent for months now. The NEV market is clearly following an exponential growth—booming—in China.

Disruptive NEV makers change rules of the game.

Significant portion of the growth comes from new players like NIO, XPeng, and Li Auto, just to name a few. These OEMs are focused on the so-called “Smart EVs”, which are fully connected, with high level of automated driving functions, and attractive designs to the affluent middle-class in China. Their customer journey is focused on direct sales through boutiques at strategic malls in top tier cities across the country. The reason for their success goes far beyond the pure electric powertrain. It has much more to do with the focus on creating unique value to the customers,

while reacting fast to new technological market demands. While some traditional OEMs struggle to pick up the pace of the market and adapt their own product line-up, innovation is driven very fast in the NEV market

 

The development cycles are typically reduced from traditional 3 to 4 years, down to 1.5 to 2 years. If technology advancement happens fast, industry investments must follow the same pace, while market uncertainties must be managed along the way.

“Ultimately, fast customer-oriented technology advancement, along with proficient automotive mass-production capability will determine the market leaders in electrified powertrain business”.

Big challenges are imposed to supplier industry.

Established powertrain technology corporations are confronted with new market conditions. Those players willing to participate in the NEV industry growth must match the fast pace imposed by the leading NEV players. Not only the customer side becomes more dynamic, but also new competitors flourish every day coming from other industries attracted by the growth perspectives, as well as the apparent lower entry barriers of e-powertrain technology. Furthermore, some OEMs are still evolving in their make-or-buy strategies, which represent another challenge to suppliers, who must keep flexibility in terms of delivery scope – from supplying parts to entire systems, like the electric axle drives.

Customer-centric technology and value chain excellence are key.

The transition to electromobility opens up new fronts in technology development, beyond the typical horsepower competition from the past. If on one side, scalable electrical power (kW) and instant torque are given by design for an electric vehicle, on the other, energy efficiency and charging performance become key differentiation factors from the eyes of the consumer. Therefore, both points must be at the center of e-powertrain product development. In face of all current supply chain constraints (e.g., chips, raw materials), the production ramp-up of e-powertrain technology at the expected pace and automotive quality standard is determinant to support the OEMs in their expansion plans.

Furthermore, only an efficient value chain management along with manufacturing excellence can secure long-term economic value to customers. Ultimately, fast customer-oriented technology advancement, along with proficient automotive mass-production capability will determine the market leaders in electrified powertrain business.

We are on the way to turn NEV business into our core business.

UAES has been the technology leader and manufacturing powerhouse of powertrain technology in the Chinese market for more than 25 years. The electric vehicle & hybrid systems business unit was founded in 2009 and has been shaping the NEV market ever since. Meanwhile, UAES has delivered e-powertrain components and systems to more than one million electrified vehicles in China to local and global OEMs. The product portfolio covers a wide range of applications, from hybrids to full battery electric vehicles; from electric drive to power management solutions. With extensive expertise built over the last decade, UAES has full engineering and testing capability to handle local projects in China close to our customers, especially fulfilling the expected NEV short time-to-market. The engineering capabilities cover entire systems, like electric axles up to vehicle level integration aspects, incl. E/E architecture and vehicle control unit functionalities. Moreover, UAES has deep expertise in areas like power modules, magnets, noise-vibration-harshness, and transmission technology. Backed up by the global tech giant and innovation leader Bosch, along with the deep understanding of the leading e-mobility market – China, UAES is on the way to turn the NEV business into its future core business, while sustaining the leading position in driving technology in China.

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