Automotive Ventures’ Post

Build tech around your process, not process around your tech. Your market will change. Your business will evolve. Your customers’ expectations will push you. Therefore, your process must adapt first and you tech needs to be tailored.

There is no such thing as "future proof"... the very quest to avoid doing hard things and having to eat pain to manage toward excellence is hedonic. It is a clear sign a program is going to fail when their leaders crow about 'future proof.' And we see it in GM's snatching-defeat-from-the jaws-of-victory with batteries. --- "The magic behind the battery: It would rely on a single chemistry, cell design and supplier—South Korea’s LG Group, which the executives said would make it simple to produce and adapt to virtually any EV model—from a work truck to an economy sedan to a luxury vehicle. "We are future proof,” one executive crowed. Four years later, GM appears to have relied too heavily on the Ultium, made of soft, nickel-based, pouchlike battery cells, and is seeking more options. While the battery may have seemed future proof, Kurt Kelty—GM’s vice president of battery—says it was designed during a period when GM was just getting into EVs." --- https://lnkd.in/gNDg3ncV So many government programs invest to irrelevance in being future proof. Most interesting problems in the world can't be solved, they can only be managed. "It doesn't get easier, you just go faster" - Greg LaMond

Ah, do the automakers fall back on the lazy approach of bullying? Probably, if experience is anything to go by. As record profits are being boasted about, CEOs getting huge salaries and a cost of living crisis going on globally, squeezing those down the supply chain will come back to bite you.  Remeber what the suppliers did to Jepp when they demanded a price cut? Head of purchasing lost their job after the backlash.  There are ways to do this, if you think and are clever. Did you learn NOTHING from the semi conductor crisis? It appears so. 

https://lnkd.in/eTCG5raM This is my second post referencing the same research article from Roland Berger. The automotive industry is in the midst of a lengthy period of disruption. Will Asia be calling the shots in 2040, or will Western players manage to stage an effective comeback?  Felix Mogge, Brandon Boyle,Jan-Philipp Hasenberg  Ron Zheng, Isaac Chan, Shuai Shi, Lukas Saller from Roland Berger and a host of contributors have shared their insights and thoughts on the topic. To some extent there is a great unknown in determining what the new balance will look like across the Automotive ecosystem and supporting supply chains.  The impact areas of their research concern:- 1. Follow smart localization strategies 2. Boost customer-centricity 3. Right-size in declining segments  4. Radically rethink business models and organizational structures 5. Limit vertical integration to where it really matters Given the limitations of post size, I offer my thoughts on an aspect of the above topics. Viewed from my own perspective as an individual who has operated at executive level within the automotive sector both in Western and Eastern geographies. Point 4 refers to RADICALLY RETHINK BUSINESS MODELS AND ORGANISATIONAL STRUCTURES.   The launch of the model 3 from Tesla and the intense amount of new vehicle launches from BYD and the Chinese OEM's appear to demonstrate a shift from original automotive thinking where the product is developed as hardware and software with wheels as opposed to a traditional automobile. Leading to shorter development cycles, future upgradability and revenue opportunities. Point 5 refers to LIMIT VERTICAL INTEGRATION TO WHERE IT REALLY MATTERS A fresh assessment of make or buy and a review of what needs to be unique for the brand and what can be more standard will lead to benefits of scale and reduced development costs. We have seen this transition over the last decade or so particularly in the areas of platform sharing and component development. In more recent manufacture we have seen the above further extend into Infotainment embedded into the vehicle architecture. This trend is likely to accelerate. with this progression to further vertical integration. The word of caution centres upon limit. The necessity here centres upon brand identity and differentiation to attract and retain customer loyalty; Is this what we are seeing with Jaguar? Its a dynamic situation and to quote Heraclitus... "The Only Constant in Life is Change". It will be interesting to see how this sector evolves and I look forward to having a small part to play in turning the ship. #automotive #changemanagement #transformation #electricvehicles

A New Wave in the Auto Industry. How Chinese Auto Manufacturers are Reshaping the Global Market 🌍 "The Changing Tide of the Global Auto Industry - China’s Rapid Rise" The automotive world is witnessing a seismic shift as Chinese manufacturers, once considered budget friendly alternatives, are now emerging as formidable leaders. Driven by ambitious tech innovations and unmatched production volumes, Chinese automakers are taking center stage in the global market, edging out the long standing giants that once dominated. 1. What’s Fueling This Takeover? * Technology First Approach - Chinese manufacturers are leading in EV (Electric Vehicle) tech, battery innovation and AI integration, areas where many traditional automakers lag. While established players often struggle to adapt their legacy systems, Chinese firms build agilely from scratch, fueling swift advances. * Cost-Effective Mass Production - With advanced manufacturing hubs and a tightly integrated supply chain, they are delivering high volumes at lower costs, making them formidable competitors globally. *Home Market Advantage - The Chinese domestic market, with aggressive government support and substantial consumer base, acts as a springboard for these brands, setting a robust foundation before global expansion. 2. What is the impact on Established Automakers? A clear revenue dent for established players as consumers increasingly seek affordable, tech-driven alternatives. Traditional giants, who once banked on brand loyalty, are facing hard competition as quality, innovation, and affordability redefine loyalty itself. 3. What are the long term Industry Repercussions? * Accelerated Tech Integration to keep pace. Established brands will have to intensify their R&D spending and embrace radical innovations. * Shift in Global Market Share. We may witness a reallocation of market share towards the East, with Asian companies dominating the EV and tech-driven automobile sector. * Strategic Alliances and Acquisitions. Traditional automakers might turn to mergers or partnerships with tech savvy companies to stay competitive. For automotive professionals, this is a fascinating yet challenging era, one that demands agility, innovation, and a rethinking of established business models. The only constant? Change! Those who embrace it will be part of the future of mobility. #AutomotiveIndustry #Innovation #ElectricVehicles #EVRevolution #ChineseAutomakers #GlobalMarketShift #TechInAutomobiles #FutureOfMobility #AutomotiveTrends #MarketDisruption #SustainableTech #ProductionInnovation #AutoIndustryTransformation

The innovator’s dilemma strikes again: 2 strategic errors that explain why the European automotive industry is becoming the new Kodak. 1/ Market positioning 2/ Technological choice 1/ MARKET POSITIONING European automakers produce high-end EVs (40 - 90 k€), unaffordable for the mass market. Hard to achieve economies of scale only with Early Adopters. China produces EVs of identical quality, 20% cheaper and more accessible. One explanation: the choice of battery technology. 2/ TECHNOLOGICAL CHOICE Europe relies on higher-performance battery technologies, but these are more difficult to make. The chemical manufacturing process is difficult to handle, involving a high number of rejects, which increases manufacturing costs. China has opted for technologies that are less efficient but easier to industrialize at lower cost. The objective is simple: drive prices down to flood the mass market with a product that is accessible to them. BONUS - Innovator’s dilemma strikes hard. The European automotive industry has missed 2 revolutions at the core of this new industrial model: 👉 Digital which automakers have never succeeded in integrating. 👉 EV which they have always tried to postpone. Cars are no longer just vehicles but platforms integrated into something bigger: an energy network supported by a highly digital environement. Is the situation irremediable for European automotive incubants? For more details, see Philippe Méda's fascinating articles on the subject.

Read Fortune's latest story on Volkswagen Group and BYD.

💻 The software market receives a 'B-' from Maitê Alves Bezerra in the Wards Intelligence Q4 Report Card! 💻 While SDV adoption is accelerating rapidly in China, incumbent automakers are facing slowdowns in their transitions, largely due to delays in launching new BEV platforms. Although SDV technology is inherently powertrain-agnostic, many legacy OEMs have tied their SDV strategies — including critical system overhauls and organizational transformations — to the rollout of new BEVs. Consequently, these BEV delays have caused 2–4-year setbacks in adopting zonal architectures and implementing SDV-ready organizational and business practices. This growing disparity underscores the challenges incumbent automakers, particularly European ones, face to match the pace of Chinese OEMs and maintain competitiveness in China — the world’s largest automotive market— and remain globally relevant. Outlook: In 2025, China is poised to undergo an AI-driven revolution in user experience and vehicle lifecycle management, while Chinese OEMs will face the challenge of scaling up, fueling a market consolidation trend. Meanwhile, Western incumbents, including Mercedes and BMW, are set to launch their SDV platforms. However, these efforts continue to be hampered by an overemphasis on engineering perfection, BOM cost optimization, and hardware-centric business models and leadership. The slow response of incumbent OEMs to China’s rapid SDV advancements is increasingly alarming. Should they rely on protectionist policies and tariffs in 2025 to safeguard market share built on legacy vehicles, they risk further diminishing their global relevance, potentially relegating themselves to niche player status. Transformational change is no longer optional — it is essential for survival in this rapidly evolving market. Want deeper insights into the global SDV landscape? Join Maite Bezerra at the virtual Wards Intelligence Q4 Outlook Conference this Thursday at 10 AM ET. Explore how 27 global OEMs are progressing on SDV readiness across key KPIs like platform development and organizational transformation. 👉 Register now to secure your spot: https://lnkd.in/gUnPemeK #Automotive #SDV #Software #MarketTrends #WardsIntelligence

GM is finally seeing the writing on the wall as to what it will take to effectively compete in the Global EV market by building out their vehicle supply chains and vertically integrating at scale! https://lnkd.in/gDqKjhKz Japanese vehicle producers recently assessed how their Chinese competitors ,such as BYD, are able to produce EVs at such low prices. The three primary reasons were due to 1) simplicity of vehicle design and production, 2) vertical integration of their supply chains down to nearly every component in the vehicle, including the batteries and minerals, and 3) the development of massive economies of scale. These are the lessons all vehicle OEMs should be focusing on to succeed in the EV industry: simplicity of design and production, vertical integration of the supply chain, and developing/preparing for massive economies of scale. https://lnkd.in/gH3-Bpui

Software-Defined Vehicles require close collaboration between the OEMs and technology partners to ensure all the pieces come together! I’m excited to discuss what we are doing at Bosch and hear from other experts in our industry at CAR MBS on August 7th. Join my session with Scott Tobin, Laxmi N Rayapudi, Noriko S., and James Buczkowski and hear our answer to "The Software Symphony: Can Automakers & Tech Giants Orchestrate a Collaborative Future?". Register via the link in the comments! Bosch USA Center for Automotive Research