The drive for greener vehicles has engendered a shift in vehicle ownership over the past decade as motorists turn in droves to electric and hybrid and electric vehicles (EVs).
But it’s not just the landscape of ownership that is changing beyond all recognition: The tech needed to power and control the next generation of vehicles has prompted automakers to engage with a whole spectrum of new technologies and business models to keep pace.
In this article, we’ll look at some of the emerging megatrends in automotive manufacturing set to shape the sector over the next decade and beyond.
Advanced manufacturing—3D printing
Although the market is yet to see its first fully 3D-printed vehicle, 3D printing has become steadily more widespread throughout the auto manufacturing process. The technology has undergone a revolution in affordability, accessibility and reliability to match the consumer EV market over the past decade, with more manufacturers now turning to 3D printing to rapid-prototype high-precision and custom parts.
The growth in available materials means 3D automakers can use the tech to develop proof-of-concept parts for everything from lightweight dashboards and interiors to hard-wearing functional engine parts.
3D printing is also beginning to solve an age-old problem for automakers, allowing them to quickly print spare components without holding stock of legacy parts. And it’s not just vehicles that have been transformed by the ability to engineer new parts: 3D printing can be used on the factory floor to produce new tools and machine parts to speed up production and keep assembly lines running efficiently.
Efforts to decarbonise transport are as much a question of what goes into vehicles as what comes out. This report by McKinsey suggests that as cars become more efficient over the next decade, as much as 60% of their life-cycle emissions could come from material production by 2040.
So, increasing efforts to decarbonise production by shifting to more sustainable, circular resources will be critical over the coming decade. Manufacturers are looking towards more exotic materials to improve their carbon footprint at production.
Cork was Mazda’s material of choice for the floating console of Mazda’s 2021 flagship MX-30 SUV, and Ford’s new Mondeo and Kuga models use a mixture of plastics and ultra-lightweight kenaf plant fibre. In addition, Ford is currently working with food producer Heinz to explore using sustainable tomato fibre-based plastic in its vehicles’ wiring brackets and storage bins. Renault, Ford, Volkswagen and Mercedes are all manufacturers offering vegan-friendly interiors, which can also be sourced from a variety of natural resources.
The CASE for Digitalisation
Technologies revolutionising the automotive sector are referred to as CASE (connectivity, autonomy, shared mobility and electrification). Connectivity begins on the factory floor. The fourth industrial revolution— Industry 4.0—has seen artificial intelligence, robotics, cloud computing, and the internet of things (IoT) converge to streamline manufacturing.
Vehicles are also increasingly connected to each other, their users, and the world around them via a vast array of sensors, processors and systems. There are seven ways in which vehicles can communicate with the world at large, which fall broadly under the category of vehicle-to-everything (V2X) connectivity:
- Vehicle to Infrastructure (V2I)
- Vehicle to Vehicle (V2V)
- Vehicle to Cloud (V2C)
- Vehicle to Pedestrian (V2P)
- Vehicle to Device (V2D)
- Vehicle to Network (V2N)
- Vehicle to Grid (V2G)
Connectivity profoundly changes the game for automotive manufacturers, who must now step outside their long-established areas of expertise in physical engineering to compete in the digital realm.
Developing the complex code, algorithms and operating systems required for reliable hazard avoidance, for example, means automakers will find themselves up against hi-tech Silicon Valley companies in the competition for connectivity and automation.
New Mobility Business Models
Increased connectivity has already kickstarted a paradigm shift in how motorists view vehicle ownership and empowered manufacturers and dealers to explore radically new business models. Shared vehicle ownership and subscription services already allow drivers to share the cost (and benefits) of ownership with others and try out new models with little commitment.
Mobility as a service (MaaS) —sometimes referred to as transport as a service (TaaS) — saw an expected global market growth of 17% over 2021-22, primarily powered by improved connectivity and tech. The growth looks set to continue. Forecasters estimate the market could be valued at USD 815.2bn by 2050, making MaaS one of the industry’s fastest-growing sectors.
Globalisation vs protectionism
Manufacturers have reaped the rewards of globalisation over the past half a century by tapping into cost-effective global chains of supply and labour. But the model is threatened by increased geopolitical instability, protectionist policies and rising labour costs.
In 2020, COVID lockdowns in China’s manufacturing centres caused global supply chain chaos, causing a surge in demand for many of the semiconductors, chips, and microcontrollers integral to automotive production.
A lifting of the long-term lockdown in China’s production hubs hasn’t ended the shortage— or the accompanying rising costs. To make matters worse, China is increasingly headed for auto manufacturing self-sufficiency, and labour costs are rising due to minimum wage rises in its manufacturing centres and a strong yuan.
In August this year, US president Joe Biden signed the CHIPS and Science Act to shore the US semiconductor supply chain and promote domestic tech development to reduce reliance on China.
Automakers are also beginning to move—with Honda and Mazda among the companies considering relocation due to concerns about the geopolitical risks inherent in the Chinese supply chain.
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