Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.
I’m Steve Greenfield from Automotive Ventures, and I’m glad that you could join us.
Some may accuse me of giving too much airtime to the threat of Chinese automakers. But I think that time will ultimately validate that my concerns are warranted.
This week, a really terrific article out by Chinese industry expert Michael Dunne, who helps underscore just how much of a threat Chinese OEMs are to the auto industry, globally.
Dunne makes an argument that future historians will look back at 2024 as the year that China really shook the global automotive industry. And Dunne doesn’t pull any punches with his analysis.
Never before has America or its allies faced up to a bigger, faster, or stronger competitor.
Never before have we seen the scale – China produces 30 million vehicles a year. That’s twice as many as North America builds.
Never before have we witnessed this much capacity – 48 million units – enough to supply half of global demand.
Never before have we encountered such cost advantages: China makes cars at 25% to 30% lower cost than any other country.
Never before has the production of batteries – the ascendant energy for powertrains – been so highly concentrated in one nation. China accounts for 76% of global EV battery production.
China’s top-down industry subsidies are 4-5 times higher than those in the West. They include low-interest loans, free land, discounts on energy to power plants, cash back to consumers, and much more.
Then there is China’s advantage with operating speed. Their intense focus and relentless and unparalled work ethic means that Chinese automakers develop new cars in half the time of traditional automakers in the West.
So what can be done?
Dunne recognizes that today, China enjoys a massive lead in manufacturing cars: capacity, speed, scale, batteries, supply chains, subsidies, technology and ambition.
But he goes on to make the argument that software is now the new king of differentiation for global automakers. Customers are looking for simpler and more accurate navigation. Safer cars. Fresh entertainment features. Better autonomous driving.
His bottom line is that software innovation may prove to be the powerful counterpunch that legacy automakers need – and need to get right – to compete against the Chinese threat and to live another day.
If you don’t subscribe to Michael Dunne’s newsletter, and you have an interest in tracking the progress of Chinese automakers, please do check him out at www.DunneInsights.com. Highly recommended and relevant content.
So, with that, let’s transition to Our Companies to Watch.
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, we showcase a company to watch, and take the opportunity here on this segment each week to share that company with you.
Today, our new company to watch is BeyondMath.
BeyondMath operates in an area called computational fluid dynamics: the equations that govern how an object moves through air, or how airflow behaves around an object. While we’ve continually improved our ability to predict the way air flows over the aerodynamics of a car design, we’re still nowhere near perfect — and what we can do takes so much computational power that it’s limited to supercomputers and GPU clusters.
The result is that the design process in industries like cars, planes and boats involves a lot of wait time.
How can a designer make a car more fuel efficient? Imagine you’ve got six months to design a part for a car. Given that a simulation takes so long, you might get 20 attempts to try things out. But if a designer thinks of an idea and gets results within seconds or a couple of minutes, in that same six months you might be able to run a million possible changes.
BeyondMath’s goal is to accelerate the digital design side, which means shortening the delay between having an idea and finding out whether it is likely to work.
BeyondMath’s first product is a “digital wind tunnel” that provides near-real-time simulation of airflow over a complex surface at a fidelity that would normally take hundreds of times as long.
As you can imagine, among BeyondMath’s first markets is Formula 1 racing, where some unnamed teams are exploring using the software to speed up their aerodynamics and vehicle design processes.
If you’d like to learn more about BeyondMath you can check them out at www.beyondmath.com
So that’s it for this week’s Future of Automotive segment.
If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our DealerFund.
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Don’t forget to check out my book, The Future of Automotive Retail, which is available on Amazon.com. And keep an eye out for my new book, “The Future of Mobility”, which is almost done, and will be out soon.
Thanks (as always) for your ongoing support and for tuning into CBT News for this week’s Future of Automotive segment. We’ll see you next week!
