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New suppliers race to plug in to electric car market

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WOKING, England, Jan 23 (Reuters) – The global auto industry has committed $1.2 trillion to developing electric vehicles (EVs), providing a golden opportunity for new suppliers to grab contracts providing everything from battery packs to motors and inverters.

Startups specialising in batteries and coatings to protect EV parts, and suppliers traditionally focused on niche motorsports or Formula One (F1) racing, have been chasing EV contracts. Carmakers design platforms to last a decade, so high-volume models can generate large revenues for years.

The next generation of EVs is due to hit around 2025 and many carmakers have sought help plugging gaps in their expertise, providing a window of opportunity for new suppliers.

“We’ve gone back to the days of Henry Ford where everyone is asking ‘how do you make these things work properly?’,” says Nick Fry, CEO of F1 engineering and technology firm McLaren Applied.

“That’s a huge opportunity for companies like us.”

Bought from McLaren by private equity firm Greybull Capital in 2021, McLaren Applied has adapted an efficient inverter developed for F1 racing for EVs. An inverter helps control the flow of electricity to and from the battery pack.

The silicon carbide IPG5 inverter weighs just 5.5 kg (12 lb) and can extend an EV’s range by over 7%. Fry says McLaren Applied is working with around 20 carmakers and suppliers, and the inverter will appear in high-volume luxury EV models starting January 2025.

Mass-market carmakers often prefer to develop EV components in-house and own the technology themselves. After years of pandemic-related parts shortages, they are wary of over-reliance on suppliers.

“We just can’t afford to be reliant on third parties making those investments for us,” said Tim Slatter, head of Ford (F.N) in Britain.

Traditional suppliers, such as German heavyweights Bosch and Continental (CONG.DE), are also investing heavily in EVs and other technologies to stay ahead in a fast-changing industry.

But smaller companies say there are still opportunities, particularly with low-volume manufacturers that cannot afford huge EV investments, or luxury and high-performance carmakers seeking an edge.

Croatia’s Rimac, an electric hypercar maker part-owned by Germany’s Porsche AG (P911_p.DE) that also supplies battery systems and powertrain components to other automakers, says an undisclosed German carmaker will use a Rimac battery system in a high-performance model – with annual production of around 40,000 units – starting this year, with more signed up.

“We need to be 20%, 30% better than what they can do and then they work with us,” CEO Mate Rimac says. “If they can make a 100-kilowatt hour battery pack, we must make a 130-kilowatt pack in the same dimensions for the same cost.”

NO TIME TO LOSE

Some suppliers like Cambridge, Massachusetts-based Actnano have had long relationships with EV pioneer Tesla (TSLA.O). Actnano has developed a coating that protects EV parts from condensation and its business has spread to advanced driver-assistance systems (ADAS), as well as other carmakers including Volvo (VOLCARb.ST), Ford, BMW (BMWG.DE) and Porsche.

California-based startup CelLink has developed an entirely automated, flat and easy-to-install “flex harness”, instead of a wire harness to group and guide cables in a vehicle. CEO Kevin Coakley would not identify customers but said CelLink’s harnesses had been installed in around a million EVs. Only Tesla has that scale.

Coakley said CelLink was working with U.S. and European carmakers, and with a European battery maker on battery wiring.

Others are focused on low-volume manufacturers, like UK startup Ionetic, which develops battery packs that would be too expensive for smaller companies to make themselves.

“Currently it costs just too much to electrify, which is why you see some manufacturers delaying their electrification launch,” CEO James Eaton said.

Since 1971, Swindon Powertrain has developed powerful motorsports engines. But it has now also developed battery packs, electric powertrains, e-axles and is working with around 20 customers, including carmakers and an electric vertical take-off and landing (eVTOL) aircraft maker.

“I realized if we don’t embrace this, we’re going to end up working for museums,” said managing director Raphael Caille.

But time may be running out.

Mate Rimac says major carmakers scrambled in the last three years to roll out EVs and now have strategies largely in place.

“For those who haven’t signed projects, I’m not sure how long the window of opportunity will remain open,” he said.

($1 = 0.8226 pounds)

Reporting by Nick Carey
Editing by Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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Business

Exclusive: Geely plans to turn maker of London black cabs into EV powerhouse

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COVENTRY, England, Jan 23 (Reuters) – China’s Geely (0175.HK) is planning a big investment to turn the maker of London’s iconic black taxis into a high-volume, all-electric brand with a range of commercial and passenger vehicles, executives at the unit told Reuters.

London Electric Vehicle Company (LEVC) also aims to expand its suite of services, which include cars arranging their own maintenance and recognising their owner’s interests to help them book activities.

“We need a developed product portfolio. We need to make big investments in terms of the technology and infrastructure,” LEVC Chief Executive Alex Nan said at the taxi maker’s headquarters in Coventry, central England. “Geely will make consistent investments into LEVC because this is a very unique project.”

LEVC builds a hybrid taxi model that starts at around 66,000 pounds ($81,500), which has a battery providing 64 miles (103 km) of range and a petrol range-extender giving it a total range of over 300 miles. The company’s business was hit hard by the pandemic and it laid off 140 staff in October.

Nan said LEVC and Geely would seek to attract other investors to its zero-emission portfolio and would look to partner with other carmakers to develop new technology.

Executives said the size of Geely’s investment would be disclosed later. So far the Chinese group, which took full control of LEVC in 2013, has invested 500 million pounds in it.

“Geely fully supports the new transition strategy laid out by LEVC’s board and executive team,” Geely said in a statement.

In 2021, Geely launched a 2 billion pound investment in another unit, niche British luxury sports carmaker Lotus, to massively expand production of its sports cars and build high-end SUVs and sedans in Britain and China. Geely is following a similar path in its plans to grow LEVC, executives said.

Britain’s EV ambitions were dealt a blow last week when startup Britishvolt, which had planned to build a major battery factory in northeast England, filed for administration.

“We need to make sure the UK environment as a whole is competitive and has its position on the world stage,” said LEVC managing director Chris Allen.

READY TO ACCELERATE

Geely owns multiple brands including Volvo (VOLCARb.ST) and – via a joint venture with Volvo – Polestar . Zeekr, another brand in the group, filed for a U.S. initial public offering last month.

As such, Geely faces a complexity that larger EV makers BYD (002594.SZ) and Tesla (TSLA.O) have avoided.

Allen said LEVC was exploring a range of commercial and passenger car models on a common electric platform. It can lean on other group brands that already have EVs to “move forward in a fast, agile way”.

The company already uses an infotainment system and software developed by Volvo and a steering wheel from the Swedish carmaker, allowing it to cut costs, Allen said.

“There’s nothing we couldn’t deliver in a very short time period if we needed to, but it’s just a question of timing,” he said, adding LEVC could easily have a full range of EVs on the road within five years.

“But in two years time, is the industry going to be ready, is the charging infrastructure going to be there, is consumer confidence going to be there?”

LEVC currently has the capacity to build 3,000 taxis a year running on a single shift at its Coventry factory. Allen said that could easily be increased to 20,000 and the plant had room to expand. It could also lean on production in China as Lotus has, Allen said. A major car plant produces on average around 300,000 vehicles per year.

“There’s a huge amount of value in our product that hasn’t ever really been maximised,” Allen said. “This is about growing LEVC into a much more recognizable brand on a global scale and expanding our product offering into as many spaces as we can.”

($1 = 0.8095 pounds)

Reporting by Nick Carey, Additional reporting by Zoey Zhange in Shanghai and Norihiko Shirouzu in Beijing
Editing by Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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