Of the many buzzwords and acronyms of the new automotive evolution, CASE is one of several that is showing some staying power. It started out as Connectivity-Autonomous-Shared (mobility)-Electrification. With the premature debate of Shared-Vs-Ownership receding somewhat to the background, “S” is now often associated with “Services”. Personally, I like to encapsulate ‘Software & Services” into this “S” to be relevant with the current initiatives by all OEM to rearchitect the new vehicles to be software-defined.
Let me come to the point!
A staple in the contemporary media is to discuss and analyze who is ahead or a likely winner in any of the CASE topics, but especially in electrification. While we are at an early stage of this electrification journey, China, at a minimum has already locked-in its status as a ‘top seed’, whereas ‘team Japan’ appears to be largely huddling around its strategy table, still striving to carve a path ahead.
On the topic of battery technology, the heart of an EV, China seems to be significantly ahead, both in manufacturing scale and supply chain dominance – from raw material mining to processing, and everything in between. According to estimates from Benchmark Minerals, as cited in the New York Times, battery leaders such as CATL, BYD etc. will make twice as many batteries as all other markets combined, even by 2030, in spite of the growing new investments in North America, Japan and the EU. Even if we assume that the supply chain of raw materials such as Lithium, Nickel, Cobalt etc. will eventually somehow mature in all regions, their processing and refining into battery grade materials will largely happen in China. Today, 95% of manganese, 73% of Cobalt, 70% of graphite, 63% of lithium and 63% of EV-grade Nickel is processed in China (Source- CRU group, via New York Times), a lead unlikely to shrink in the coming years.
None of this is of course new, but the outcome of a decade-old consistent combination of mandates, infrastructure development, incentives and supply chain acquisition – domestic or abroad.
What is relatively new is the coming of age of not just materials or manufacturing, but the development of CASE-related technologies, especially the third letter S or software and services, coming from the new breed of Tesla-inspired EV startups such as Xpeng, Nio or Leapmotors.
A case in point is the recent VW story by Reuters. After dabbling for many months with its in-house EV architecture and software subsidiary, VW went looking for technology from these EV newbies and made a deal for software with XPeng (an EV company founded just about nine years back in 2014) and is reportedly in talks with Leapmotors (founded in 2015) to incorporate an EV platform. It is a noteworthy evolution for a legacy OEM that started its CASE-journey with specific goals of in-house technology and software.
While the details of these deals remain to be confirmed, the unmistakable point is that these young EV manufacturers have come far enough that they are ready to license technology to international OEMs. Only time will tell how the jigsaw puzzle pieces of the winners and future leaders of CASE technology will move around. But this, I believe, is an important milestone in the transformation of the global automotive industry – something we all should be watching!
Disclaimer: The opinions and observations described above are strictly personal thoughts of the author and do not represent those of any other individual, group or business