E-mobility: E for electronic

Electric drives, digitalization, networking and autonomous driving are making up more and more of the electronics in cars. As soon as 2025, electronic components are expected to account for 35 percent of all material costs.

“The year ahead looks bleak for the automotive industry,” said Ferdinand Dudenhöffer, automotive expert from the University of St. Gallen in an interview with MDR at the start of March. At that point in time, nobody could have foreseen the impact of the coronavirus. Was this followed by standstills in factories and staggering in the global economy?

In contrast, last year 3.6 million automobiles were registered, five percent more than in 2018. However the automotive industry was already under pressure for a variety of reasons: dropping sales in the U.S. and China, the diesel scandal, tightened CO2 limits for fleet emissions of new vehicles sold in the EU, uncertainty surrounding Brexit and changes in the mobility habits of younger generations. Not to mention the drastic technological changes brought about by digitalization, electric drive technologies, autonomous driving and increased networking.

The challenge to electric mobility

The “compulsory” switchover to electric mobility is particularly time-sensitive, since the tightened CO2 limits for fleet emissions of new vehicles sold in the EU introduced in April 2019 are pushing manufacturers to quickly increase their amount of electric vehicles in order to avoid paying billions in penalties.

After a fairly moderate development with a slight increase in the portion of electric vehicles in the EU from 0.5 percent in 2014 and 2.5 percent in 2019, this means that manufacturers now have to pick up the pace. All the while, customers remain hesitant, put off by the high prices and insufficient charging infrastructure. Budgets for large purchases have also shrunk during the pandemic.

Nonetheless, on January 1 this year there were 136,600 all electric battery-driven cars (53,000 more than last year) and 539,400 plug-in hybrids (HEV) on German streets.

In July 2020 the electric mobility report from the Center of Automotive Management (CAM) recorded that, among new vehicle registrations, battery-operated vehicles held a market share of 11.4 percent in Germany. Of these, 6,798 (5.3 percent) were all-electric vehicles (BEV) and 19,119 (6.1 percent) were plug-in hybrids (HEV). With this, 129,500 electric vehicles have been sold already this year, with that number expected to reach 250,000 by the end of the year.

However, despite its high growth rate, electric mobility continues to play only a small role in Germany’s powertrain mix. According to the Kraftfahrt-Bundesamt (Federal Motor Transport Authority), all-electric vehicles and plug-in hybrids made up only 0.5 percent of Germany’s total vehicle fleet (240,000 vehicles).

Beneficiaries of automobile electronics

In future, however, electric mobility, along with digitalization, networking and autonomous driving, will drive the number of electronic components up significantly. Electronics and software already account for most of the innovations in the vehicle sector. According to the study “Computer on Wheels / Disruption in Automotive Electronics and Semiconductors” by Roland Berger, in the coming years the portion of electronic components in the bill of materials is expected to increase from the current 16 percent in partially electrified luxury cars to 35 percent in fully electrified premium cars.

For a premium combustor, the bill of materials (BOM) currently sits at around $3,145. The Berger study claims that by 2025 this price could more than double to $7,030 in semi-autonomous electric vehicles if the share of semiconductors increases from the current 25 to 35 percent.

Around a quarter of this cost can be traced back to digitalization. And the electrification of the powertrain is the cause of more than half of the cost increases. For autonomous driving, computing power and sensors account for the increased automobile electronics cost.

These “computers on wheels” are having a dramatic effect along the entire value chain, leading to a redistribution of the roles of all parties involved. Manufacturers (OEMs) will need to commit significant resources to module integration, semiconductor companies will increasingly develop into software providers and software suppliers will participate in the entire value chain.

In light of these and other drastic changes in the automotive industry, the study indicates a significant need for action from all parties. This starts with working out possible competitive advantages arising from the changed distribution of roles, continues with the search for new partnerships and ends with innovative approaches to the procurement of electronics and semiconductors.

Knowledge base

Roland Berger: “Computer on Wheels / Disruption in Automotive Electronics and Semiconductors”
www.rolandberger.com/publications/publication_pdf/roland_berger_computer_on_wheels.pdf

PwC: Automotive 2020 trend indicator
www.pwc.de/de/automobilindustrie/stimmungsbarometer-automotive-2020.html

Bain & Company: Endgame of the automotive industry
www.bain.com/contentassets/21199d777c4549229a3396f3ede2794e/bain-studie_endspiel-autoindustrie-entscheidend-ist-der-tipping-point_final.pdf

electronica virtual – Online conference program in planning

electronica 2020 takes place as a virtual event. In addition to virtual trade fair booths of the exhibitors, a digital conference and supporting program complements the online trade fair. Individual lectures and discussion rounds, such as on the trend topic of automotive, will be available online.