Tesla recently announced that its next-generation EV platform will reflect a 75% reduction in SiC components, though this reduction will be made without compromising vehicle performance and safety. This announcement is one of the very few specific details that Tesla has provided to the public about its plan for the development of its future vehicle models. Therefore, it has also trigger a variety of speculations across the automotive industry. According to TrendForce’s investigation, Tesla does not appear to have much confidence in the stability of the supply chain for SiC components. In the past few years, Tesla has been forced to initiate several recalls for the Model 3. One official reason given for the recalls was that the inverters of some of the Model 3 had power semiconductor components with minor manufacturing differences. As a result, these inverters could malfunction after a period of operation and would not able to perform the regular task of current control. This explanation directly points to a quality issue with the SiC components that Tesla has procured for its vehicles.

Additionally, a production capacity crunch for substrates has been the most significant challenge in the development of the market for SiC components. The major suppliers for SiC components and SiC substrates such as Wolfspeed, Infineon, and STMicroelectronics are currently adding a lot more production capacity. At the same time, Tesla is proceeding with the strategy of diversifying its suppliers for SiC components in order to minimize the risk of disruptions in the supply chain.

SiC components are certainly a key category of automotive electronic components that EV manufacturers like Tesla are going to consider when building their future vehicle models. Therefore, in the context of technological advancements, TrendForce believes that Tesla could adopt a hybrid SiC-Si IGBT package for the inverter of its next-generation EV platform. However, switching to such solution will entail disruptive innovations at the engineering and design levels, so this transition will raise many challenges. Also, regarding SiC MOSFETs that have been a critical part of today’s EVs, TrendForce anticipates that their mainstream structural design will transition from planar to trench. Currently, Infineon, ROHM, and BOSCH are the main suppliers for trench SiC MOSFETs.

On the whole, the hybrid SiC-Si IGBT package and trench SiC MOSFETs are technologies that can substantially reduce the total cost of SiC components for a vehicle. They also reduce the complexity and cost of an entire vehicle platform. These benefits, in turn, can help raise the penetration rate of SiC components in the low-end and midrange segments of the EV market. On the other hand, the widening adoption of SiC components could affect the market share of Si IGBTs.

In the market for automotive SiC components, Tesla has been acting as a major indicator of demand and product development trends. Therefore, the semiconductor industry has been paying close attention to this carmaker’s activities. Since Tesla has so far given very few details about its next-generation EV platform, TrendForce says more observations are needed to determine the reasons behind the reduction in SiC content.

Foxconn (Hong Hai Precision Industry) and Saudi Arabia’s Public Investment Fund (PIF) have agreed to jointly establish an electric vehicle (EV) brand named Ceer. PIF is Saudi Arabia’s sovereign wealth fund, and Ceer will operate as a joint venture of the two parties. As the country’s first EV brand, Ceer will target not only the home market but also the wider regional markets of the Middle East and North Africa.

Saudi Arabia represents largest car market in the Middle East. The country’s new car sales totaled 580,000 vehicle units for 2021. This year, however, has seen a decline with the figure for the first three quarters coming to 290,000. Until now, Saudi Arabia has no home-grown car brand, and there is no carmaker indigenous to the Middle East. Presently, Toyota and Hyundai are the two main automotive groups operating in Saudi Arabia. The former’s and latter’s market shares in the country come to 34% and 18% respectively. Also, since Saudi Arabia is one of the world’s major oil producers and has kept gas prices low for its citizens, the conditions of its car market give an absolute advantage to vehicles powered by fossil fuels. Up to recently, Saudis have had no real incentives to invest in the development of electric cars and the build-out of the supporting infrastructure. In terms of “green” offerings, the Saudi car market so far has only received hybrid electric vehicles (HEVs) from a few automotive brands (i.e., Toyota, Lexus, and Hyundai). Among countries in the Middle East, Israel is currently the leader with respect to EV availability.

Even though Saudi Arabia continues to build its wealth primarily through the exportation oil, it is now driven by government policies and the momentum of reform to develop a domestic EV industry. For instance, the Saudi government is promoting electrification for at least 30% of the vehicles operating in the country’s capital Riyadh by 2030. However, this target is not mandatory. Turning to the creation of a home-grown EV brand, this joint venture with Foxconn is also among a series of actions taken by the Saudi government to reduce carbon emissions, adopt green energy, and reform the country’s economy. More measures need to be implemented to support the growth of a domestic EV industry. After all, the Saudi Energy Ministry just completed the regulatory framework for EV charging stations this August.

Among EV brands and startups, the most noticeable ones tend to come from the US and China because these two countries are the world’s major car markets and possess enormous domestic demand. On the other hand, opportunities are also brewing for new entrants in the emerging markets that are promoting vehicle electrification. The UAE, for example, has a local EV startup named Al Damani that begun small-scale production this June. TOGG, which is another newly formed company, commenced production on Turkey’s first EV this October.

Commenting on the formation of Ceer, TrendForce said it is very difficult for EV startups to grow their businesses especially if they are operating in countries without an existing automotive industry. Usually, these new companies will have to poach talents from the more established automotive companies and obtain licenses for certain key technologies. Ultimately, they will have to draw enough support from the automotive supply chain in order to have a chance to push their vehicles to the mass production stage. Additionally, while dealing with the complexity of vehicle assembly, startups will have to quickly scale up production in order to control their costs. All of these challenges have to be overcome by rising EV manufacturers that are located in emerging markets.

Total global sales of NEVs (new energy vehicles) for the first three quarters of 2021 (January-September) reached 4.2 million units, with BEVs in particular accounting for 2.92 million units, a 153% YoY growth, according to TrendForce’s latest investigations. Total sales of PHEVs, on the other hand, reached 1.28 million units, a 135% YoY growth. Compared to the overall automotive market, whose growth has been constrained by the ongoing semiconductor shortage and effects of the COVID-19 pandemic, sales of NEVs still remained relatively strong.

Regarding BEV sales, Tesla comfortably took the leadership position with a 21.5% market share. The automaker’s sales volume for the first three quarters of this year already surpassed its sales volume for 2020. Taking second place on the top 10 list, Wuling Hongguang was able to maintain its high volume of sales due to not only low retail prices, but also a gradual expansion of its target markets from tier-three and tier-four cities to tier-one and tier-two cities in China. This shift would seem to indicate a corresponding expansion of and shift in Wuling Hongguang’s customer base. BYD and Volkswagen took third and fourth places, respectively, with the latter aggressively consolidating its BEV offerings into the ID. Family this year. Vehicles in the ID. Family have accounted for nearly all of Volkswagen’s BEV sales since 3Q21. Despite the rapid growth of the BEV market, competition has been intensifying after traditional automakers began releasing their own BEV models at a faster pace while emerging automakers also began delivering vehicles.

It should be noted that, although the global semiconductor shortage has not damaged the NEV market to the same degree as it did the traditional ICE vehicle market, the NEV market is not entirely immune to the resultant supply-side issues. In addition, China’s power rationing and pandemic-generated transportation/logistics disruptions likewise affected automakers’ manufacturing operations to various degrees. Taken together, these aforementioned factors became some of the underlying causes responsible for the shifts in NEV automakers’ market shares.

Regarding PHEV sales, BYD put up a remarkable performance by leapfrogging to second place in the rankings, and this can primarily be attributed to the release of BYD’s DM-i vehicles, which feature a super hybrid technology aimed at reducing fuel consumption. Thanks to the DM-i vehicles, BYD’s PHEV sales began skyrocketing in 2Q21, and the automaker was able to overtake several European automakers with respect to total PHEV sales for the first nine months of 2021. Much like the BEV market, despite the growths in most automakers’ sales volumes, companies will find it increasingly difficult to raise their PHEV market share.

Looking ahead to the NEV market’s future, TrendForce believes that, as traditional global automakers gradually kick off mass production of vehicles based on the battery electric platform, more and more new BEV models will be released to market at an accelerated pace. Furthermore, the next one to three years will serve as the key timeframe for emerging automakers as well as new entrants that crossed from other industries to achieve mass production. Therefore, there remains much potential for changes to occur within the rankings of NEV automakers’ sales and market shares.

For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insider.trendforce.com/

Various MLCC suppliers’ book-to-bill ratios as well as quarterly shipments for 4Q21 now show signs of decline, according to TrendForce’s latest investigations. Not only has the demand for consumer electronics slowed, but ODMs’ clients have also eased their procurement activities due to issues including the global chip shortage, mismatched component availabilities, and China’s power rationing. Demand in the automotive market, on the other hand, has remained strong since 3Q21. Automotive applications have therefore become an important point of focus in MLCC suppliers’ latest product planning and capacity expansion efforts. Thanks to these in-demand applications, annual MLCC demand from the automotive market for 2021 is expected to reach 449 billion pcs, a 20% YoY increase.

TrendForce further indicates that the growth of the EV market and improvements in ADAS specifications have resulted in a twofold increase in automotive MLCC consumption. While EVs’ electrified drivetrain and high safety requirements represent a high barrier to entry for MLCC suppliers, these hurdles have also in turn raised MLCC products’ ASP and profitability. Hence, the automotive electronics industry has been increasing its annual MLCC demand by double-digits in recent years. In particular, an analysis of different vehicles and their respective MLCC consumption reveals the following: a conventional EV requires 2.2 times the MLCC usage of a conventional gasoline vehicle, an ADAS-equipped EV requires 2.7 times, and an autonomous EV requires as much as 3.3 times.

Regarding MLCC suppliers, Japanese companies including Murata, TDK, and Taiyo Yuden continue to dominate the automotive MLCC market. These suppliers will expand their production capacities for automotive applications in overseas facilities in China, Philippines, and Malaysia next year, with powertrains, ADAS, and connected systems being among the most significant of the aforementioned applications. Korea-based Samsung, on the other hand, specializes in powertrain applications by leveraging its MLCC offerings’ small form factor, high capacitance, and high voltage. Finally, Taiwanese suppliers, such as Yageo and Walsin, are actively invested in developing automotive products and High-Q products for RF applications in an effort to increase their presence in the infotainment system market and EV charging station market.

Looking ahead to 2022, TrendForce expects annual automotive MLCC demand to reach 562 billion pcs, a 25% YoY increase, primarily attributed to the continued electrification of vehicles. While the global implementation of carbon-neutral policies and excellent sales performances of Tesla vehicles bring about widespread adoption of EVs, various countries have successively set concrete dates for the termination of gasoline vehicle sales. Hence, EVs are gradually becoming not only the mainstream option in the automotive market, but also the primary driving force behind the future growth of the MLCC industry.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

As the pace of electrification accelerates in the global automotive market, and various governments worldwide implement subsidy policies that encourage consumer EV purchases, sales of new energy vehicles（NEV, which includes BEV/PHEV/FCV）are continuing to rise as well. NEV sales for 2021 are projected to reach 4.35 million units, a 49% increase YoY.

Due to the vast scale of the Chinese market, as well as domestic policies favorable for the growth of BEV/PHEV/FCV, various NEV brands have quickly emerged in China in recent years, such as BYD Auto, Aion（formerly GAC NE）, and BAIC BJEV. At the market’s peak, NEV manufacturers in China once numbered in the hundreds, although that number has since dwindled somewhat, as the intense competition resulted in declining sales and market shares for many automakers, including BAIC and JAC.

Four rising stars among emerging NEV manufacturers in China include NIO, XPeng, Lixian（or Li Auto）, and Weltmeister, all of which have been shipping tens of thousands of mass production vehicles each year. In particular, while NIO, XPeng, and Lixiang registered significant growths in the past few years, Weltmeister also ranked number two in terms of sales in 2019, though it fell to fourth place in 2020 as it delivered fewer vehicles compared to the top three competitors last year.

In light of the aforementioned four automakers’ current expansions, TrendForce has summarized several key aspects of their growths, including the following:

1. Autonomous Driving Technologies: Autonomous driving is not only part and parcel of these automakers’ core competencies but also a reflection of what consumers and investors expect of the automotive industry. In pursuing advanced autonomous driving technologies, the four automakers have been adopting increasingly powerful processors and computing platforms, with Nvidia being the most common partner among emerging NEV manufacturers. Remarkably, XPeng stands out as the only player making a noticeable effort to develop in-house chips.

2. LiDAR: LiDAR is integrated into an increasing number of vehicles in response to the growing demand for advanced self-driving functionalities. Although LiDAR remains out of reach for vehicles in certain price segments, autonomous driving sensors including LiDAR are no longer limited to flagship models since new NEV models’ E/E architectures are expected to be compatible with OTA updates.

LiDAR sensor demand from NEV manufacturers has significantly increased because only by pre-installing  hardware ahead of time in their vehicles can automakers enable autonomous driving functionalities as a paid subscription service through OTA updates later on.

3. Battery-swapping: Battery-swapping are relatively attractive for the Chinese NEV industry for several reasons: First, battery-swappable vehicles are excluded from China’s NEV subsidy limits*; second, automakers can now afford to lower the retail price of vehicles by turning batteries into a subscription service; finally, it’s much convenience for driver because battery swapping is faster than battery charging.

For instance, NIO’s entire NEV lineup is compatible with both battery charging and battery swapping. NIO has been pushing its BaaS（battery as a service）and  second-gen battery swap stations since 2020. On the other hand, Weltmeister and XPeng are also making their respective battery-swapping strategies.

4. Capacity Expansion and Overseas Strategies: The aforementioned four automakers all place a heavy emphasis on both expanding their production capacities and growing their overseas market shares. Their capacity expansion efforts include building in-house production lines, acquiring other facilities, or jointly funding automotive production with OEMs/ODMs. Regarding overseas expansion, their primary destination is the European market, which is relatively favorable to NEVs.

For instance, NIO and XPeng choose Norway as their first target market in Europe. However, while the European automotive market is conducive to the growth of NEVs in terms of both policies and cultures, competition among automakers is also correspondingly intense. In addition, most European countries prefer either domestic brands or other European brands. Therefore, Chinese automakers must prioritize gaining consumer trust via establishing a trustworthy brand image.

*China’s subsidies for NEV purchases are restricted to NEVs with a retail price of CN¥300,000 and under. However, NEVs with swappable batteries do not fall under this restriction.

（Cover image source: Unsplash）