by Nada Welker | Dec 1, 2021 | Market development & Trends
Electric cars are the future, and they will dominate the car market in a few years. Every year, automakers expand their product lineup, setting the stage for new generations of e-cars. Today, every vehicle manufacturer is working on e-vehicles, from established players to new names like Byton, Lordstown and Rivian. The big players are focusing primarily on newly developed platforms. These are expected to contribute to significantly more variability, performance and range compared to previous generations of e-cars. However, the newly developed electric car platforms score points primarily for their increasing flexibility and savings potential, as they can serve as a basis for different types of e-cars. This variable basis will be able to be used for vehicles from the VW Group’s own brand world as well as for vehicles from competitors – similar to the Modular Electric Building Kit (MEB) first introduced in 2016.
Global industry leaders
While COVID-19 has negatively impacted markets for combustion engine vehicles worldwide, sales of electric vehicles (xEVs) have surged, particularly in Europe.
According to Roland Berger’s E-Mobility Index 2021, China is currently the industry leader in the sector, producing the largest number of xEVs and battery cells. It is expected that the total production of BEVs (battery electric vehicles) and PHEVs (plug-in hybrid vehicles) will increase by 13 percent from 2018 to 2023 compared to the previous period of 2017 to 2022. Cumulative domestic battery cell production capacity calculated for the 2018-23 period is expected to account for more than 70 percent of global installed capacity:
China continues to strengthen its leadership role by expanding local production capacity. German OEMs are also achieving strong growth in vehicle production, but have little battery cell production capacity, ranking only third behind the United States.
Europe saw strong market growth in the 2021 E-Mobility Index, led by Germany and Italy. Both markets achieved sales growth of over 200 percent. In Germany, sales of xEVs increased from 112,000 to more than 400,000 vehicles, meaning that Germany now accounts for the second-largest market for xEVs. In terms of BEV/PHEV market share of the overall market, Germany now even takes first place.
Development of new e-vehicles on the rise – and helping the climate
The range of vehicles with electrified powertrains has increased massively in recent years. There is now a choice of xEVs in every segment. Many new or updated BEV and PHEV models were launched in 2020. In addition, OEMs had already increased their xEV production capacity in 2019 in preparation for the introduction of the Worldwide Harmonized Light Vehicle Test Procedure (WLTP) – a uniform standard for calculating pollutant levels, CO2 emissions, fuel consumption and range – and continued to do so during the reporting period. This means they will likely be able to meet the 95g CO2/km target for average fleet emissions in 2021:
Electric base of Renault and Nissan
Renault and Nissan unveiled a new electric base last year: the CMF-EV platform. This is to be used not only across brands but also across manufacturers by alliance partner Mitsubishi. The CMF-EV platform is variable enough to serve as the basis for city vehicles, sedans, or even large SUV models that can travel long distances without stopping to charge. The Renault Mégane eVision is intended to build on the success of the Renault Zoé. With an output of 160 kW/217 hp, a battery capacity of 60 kW, and fast-charging capability, the vehicle guarantees long ranges and a versatile range of uses.
BMW’s “New Class” platforms
Inspired by the successful 1500 and 1800 models of the 1960s, BMW’s new “New Class” architecture brings forth platforms exclusively for e-cars. Scheduled to launch in 2025, the first model will be a sedan in the 3 Series format, dubbed NK1. The new architecture features redefined IT and software amenities, a newly developed electric drive and battery generation, and a whole system of lifecycle sustainability. It is said to be optimized exclusively for electric powertrains.
General Motors: New e-platform called “Ultium Drive”.
General Motors’ “Ultium Drive” multi-purpose electric underpinnings include a skateboard-like base structure with a battery made of pouch cells that sits flat and low to the ground, and drive units on the front and rear axles. Also planned are 400- and 800-volt architectures. Drivetrains consisting of five genset units will be available to represent front-, rear- and all-wheel-drive systems for passenger cars and commercial vehicles in many power levels. Because of the versatility of the new platforms, scaling effects are achievable, bringing the cost of Ultium batteries below $100 per kilowatt-hour, according to a GM forecast.
Those who prefer high performance will be well served by the roughly 1,000-horsepower new edition of the GMC Hummer EV: This one is powerful enough to reach 100 km/h from a standstill within three seconds while offering 560 kilometers of range. Thanks to 800-volt technology, recharging power for 160 kilometers is possible within ten minutes.
This most powerful version of the Hummer is already available on the market. Those who can be patient can look forward to innovations from the future Cadillac electric brand from 2022, along with other GM models: the Lyriq SUV and the Celestiq luxury sedan.
GM plans to launch more than 30 electrically powered models by 2025. So we can be curious.
Mercedes-Benz: Electric Versatility Platform
New e-platforms are also planned for the commercial vehicle sector. The Electric Versatility Platform differs significantly from the eSprinter model already available: instead of relying on front-wheel drive, the original engine compartment accommodates most of the control and charging electronics in a compact package. Instead, the drive is provided by an integrated e-axle with a central electric engine directly in the axle beam.
Would you like to learn more about topics such as e-mobility, smart grids or the Internet of Things? Get to know our colleague Jürgen Schenk – He is our top expert in the fields of electric vehicle and drive development, evaluation and design of complex systems.
We’ll keep you up to date here at magility when exciting new e-platforms appear. Follow us on LinkedIn to never miss any news.
by Nada Welker | Nov 29, 2021 | Market development & Trends
Streaming videos, shopping online or sending funny videos to friends – digital platforms are a natural part of our everyday lives. But there is much more behind these platforms: They embody the marketplaces of today and offer space for a variety of different business models. Digital platforms form the basis for social media providers, search engines, comparison and rating portals, and even online gaming. All these platforms pursue the same goal: they bring together providers and interested parties, or potential customers, in the digital marketplace and promote innovation and exchange. In short, supply and demand effectively meet. Digital platforms create new connections of customer groups, attractive markets, competitive advantages through better market development, and new sources of revenue. The platform economy creates added value and is an important building block for the convergence of industries.
Potential lies in growing market power
Digital platforms are often associated exclusively with social networks, including YouTube, Facebook or Instagram. However, the potential applications of digital platforms go much further. Consumer groups, companies and even government institutions are united there. Consequently, different platform segments established themselves. From business-to-business (B2B) to business-to-customer (B2C) to business-to-government (B2G) platforms, everything can be found on the World-Wide-Web today. Due to the increasingly steep growth figures, a wide variety of manufacturers and retailers are jumping on the platform economy bandwagon – and with good cause: Internet-based platforms take over important functions in business life and everyday life and offer enormous growth opportunities as a digital business model. The potential of digital platforms can be exploited either by setting up one’s own online platform or by simply using an already existing platform, e.g., as a sales channel. In 2020, 6 out of 10 companies in Germany were already using digital platforms or had already set one up by themselves.
Perceived risks of digital platforms
Despite the manifold advantages and opportunities, the platform economy also entails risks. A study on the importance of digital platforms for companies in Germany in 2020 found that some companies are still very reluctant to use digital platforms due to data protection and IT security requirements and a lack of qualified personnel.
There is also a perceived risk of excessive competition among platform users and operators as well as non-users. Due to the ease of market entry, competition among digital platform providers is increasing. Another risk factor is increased price pressure: In order to stand out from the competition, it is essential to offer attractive prices that are as favorable as possible compared with the competition.
The displayed statistics clearly show that it is predominantly non-users who still perceive many risks and disadvantages in the area of digital platforms.
“The winner takes it all”: One winner – many losers?
As already mentioned, the intensity of competition between digital platforms is enormous. Thus, it is not uncommon that in certain markets there can be a strong market concentration up to a monopoly position. This is also referred to as “the winner takes it all” markets. If one platform alone dominates a market, there is no longer any fair competition. Basically, 3 factors are responsible for the centralization of platform markets:
- The network effects characteristic of platforms: Platforms that already have many customers attract more and more new users due to their broad customer base. The value and also the attractiveness of a product or service therefore depends on how many other users also perceive the offer. Consequently, this platform dominates the market and can, for example, increase prices or turn previously free functions into paid ones.
- The scale effect: It describes the reduction in production costs due to a company’s economy of scale, which is reflected in falling unit costs of products or services. In terms of digital platforms, it is about collecting and analyzing data. Basically, providers who have a lot of data at their disposal have a decisive competitive advantage.
- Is the effort of a platform change worth it? – The lock-in effect: The time or financial effort required to switch from one platform to another is often perceived as an obstacle. For this reason, many users avoid switching.
These effects have an impact on the centralization of the market and have a negative impact on the intensity of competition. For small and medium-sized enterprises (SMEs), this makes it increasingly difficult to assert themselves in the market.
The basic rule in the world of platforms is: Grow so fast and strong that no one can compete against you, because size is the most important competitive advantage there.
Data collection and analysis is an essential part of the value chain of platforms. In the process, an almost unlimited amount of data is collected and further processed and made available with the help of algorithms. The more information that emerges from data analysis, the easier it is to determine the interests of the target group and thus develop a suitable advertising strategy. Accordingly, the extensive use of data enables continuous optimization and increased efficiency in product design, manufacturing, sales, marketing and other important areas of the value chain. Data – if it can be stored and meaningfully processed – therefore has an economic value. While individual data records do not yet represent a usable value, large data volumes, so-called Big Data, are becoming a resource. The need to provide usable data has not been a secret for a long time. For this reason, some service offerings are seemingly offered free of charge. In return, the user provides free access to his data. Accordingly, the competition of digital platforms in the product space is becoming less and less important and is increasingly focused on the data space. Consequently, the architecture of platforms is evolving into a data economy infrastructure.
[infobox headline=”Key points in a nutshell”]
- Digital platforms embody the marketplaces of today and provide a basis for the development of a wide variety of business models.
- Digital platforms pursue the goal of bringing providers and potential customers together in the digital marketplace.
- Internet-based platforms perform important functions in business and everyday life and offer enormous growth opportunities for digital business models.
- There are 3 factors responsible for the centralization of platform markets: Network effects, economies of scale and lock-in effects.
- The extensive use of data enables continuous optimization and increased efficiency in product design, manufacturing, sales, marketing and other key areas of the value chain.
[/infobox]
A look into the future of the platform economy
Currently, one can speak of an evolution of the platform economy: Existing platforms continue to develop and attract more and more users, others are being pushed out of the market, and new platforms are being established. Looking to the future, it is still possible and advisable for a company to enter the platform economy. However, it is important to always keep an eye on technological developments, as change is the only constant in the digital world market. Furthermore, 53% of the companies in the aforementioned study state that there should be uniform rules for digital platforms throughout Europe in order to promote their use. In addition, half of the companies would like to see increased legal certainty. Likewise, public funding and support for cooperations with other companies to build digital platforms are perceived as important.
In 2030, it will hardly be possible to do without digital platforms. These will be indispensable mainly in the business sector. However, companies should also act with an eye to the future – if they have not already done so – and jump on the platform economy bandwagon.
We at magility always keep an eye on the latest developments in the platform economy and keep you up to date. If you have any questions, feel free to contact us!
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