The Future of ManufacturingCarla Bailo – President and CEO

Center for Automotive Research (CAR)

Mobility, Automated, Connected and ElectricDriving the future

(New) MobilityRide-hailing; Ride-sharing;

Car-sharing, Bike riding

ElectricThe BEV is an enabling

technology for shifting how we view mobility

AutomatedFrom automated driver assist systems to robo-taxis, technology is leading to a change in who is driving

ConnectedVehicle to Vehicle; Vehicle to Infrastructure; and Vehicle to Cloud is coming

Major Trends Driving Manufacturing

Electrified Powertrains

Materials

Industry 4.0

Sustainability

Mobility

Electrified Powertrains

Propulsion Policy PathwaysDifferent Strategies—Different Outcomes?

• Europe: Social, Industrial and Environmental• Clean air, cool winters, and jobs…They want all

• China: Industrial Policy• Develop transformational Technology

• United States: Consumer Policy• A consumer (voter?) focused policy

2019 Electrified Sales in U.S.

4.3 %

2.1 %

Battery Electric Vehicle Pathway:

1.2% Share

• Companies are investing substantial amounts in electrification, but…

• While increased consumer interest, few are buying EVs

• Limited U.S. regulatory pressure (But, ZEV states may provide regulatory push)

• Battery cost and fast charge times continue to be reduced

• Cold weather performance likely remains a challenge

2018 6.0 % Share

• Potential for changes in US regulatory treatment of GHG may influence BEV penetration

• Possible successes of Chinese (and possibly European) industrial policies, may create uneven technology skills and capabilities, with implication for employment

• Battery technology will continue to evolve

2025 10.5% Share

• New battery tech (solid state?) may be in the market

• Fuel cell EVs may begin to provide cost competitive alternative to BEVs

• The viability of automated, connected and shared –especially in urban settings may substantially increase BEV penetration during this period

2030

Market share and adoption trends for U.S. new vehicle sales 2018 to 2030

xEV powertrain impact on Manufacturing

• Fully electric cars don't have multi-speed transmissions, radiators, fuel injectors, gas tanks, valvetrains or exhaust systems. More than 80% reduction in powertrain parts.

• Plants building engines and transmissions will be impacted.

• Skateboards or flexible platforms can substantially change vehicle design and packaging.

• Double whammy of heavy batteries and range anxiety will accelerate lightweighting enabled by advanced manufacturing technologies such as thin-walled aluminum die casting, hot stamping, RTM, etc.

US Powertrain Manufacturing EmploymentIndiana, Michigan and Ohio have much to lose

Source: UAW Research

CENTER FOR AUTOMOTIVE RESEARCH

Materials

Major Trends Driving Material Change

Batteries ADAS Increased Content

Shared Durability Safety Manufacturing

Technologies Cost

Source: Rezaei, Mahdi. (2016). Computer Vision for Road Safety: A System for Simultaneous Monitoring of Driver Behaviour and Road Hazards.

Content

Source: MIT

Mixed-Material Vehicle Body

Source: CAR Research19

Other materials include dampeners, static sealers, adhesives, and glassNote: Not included are powertrain/chassis, interiors, windshield, and dynamic sealers

65%

59%

55%

51%

46%

13%

17%

20%

23%

26%

4%

5%

5%

5%

5%

6%

8%

10%

12%

15%

12%

11%

10%

9%

8%

2020

2025

2030

2035

2040

Steel

AL

Mg

Plastics and Compos.

Other Materials

Aluminum

Magnesium

Material Percentage (by curb weight) per Vehicle: 2020 – 2040 (Cars and Trucks Combined, BIW + Closures only)

Materials Impact on Manufacturing Technology• Use of high-strength aluminum, advanced steels, magnesium, and polymer

composites in the BIW will require innovative manufacturing technologies.

Materials Impact on Manufacturing Technology• Mixed-material design need enabling joining technology

Materials Impact on Manufacturing Technology• Interiors will be design

focus for ACES. Digitization of interiors with embedded electronics can disrupt the traditional supply chain.

• Shared vehicles need easy to repair and replaceable parts

• Also, scratch resistance, anti-microbial

Image Source: Faurecia and ZF

CENTER FOR AUTOMOTIVE RESEARCH

Industry 4.0

Automotive Smart Factory RoadmapCurrent Year to 2030

Current 2020-2025 2025-2030

Investment in Digital Technologies 2.60% 3.70% 4.70%

AI and Data Analysis 34% 38% 43%

Use of Smart Sensors1 35% 52% 76%

Cost Savings with Digital Tech 11% 21% 30%

(as % of total annual revenue)

(as % of digital technology investment)

(as % of all shop floor machines)

Source: CAR Research, PWC, KPMG, Imperial College London, Machine Design, Various Others

1A smart sensor is a device that takes input from the physical environment and uses built-in compute resources to perform predefined functions upon detection of specific input and then process data before passing it on.

Automotive Smart Factory Roadmap Cont.Current Year to 2030

Current 2020-2025

Global Automotive Additive Manufacturing Market 1.4 Billion 5.5 Billion

Internet Connected Devices1 5 Billion 20 BillionAutomotive Augmented Reality

Market Size 1 Billion 3.5 Billion

Source: CAR Research, PWC, KPMG, Imperial College London, Machine Design

1Internet Connected Devices are smart phones and tablets in the field, cameras or pressure sensors on oil rigs or optical sensors in steel mills.

Industry 4.0 impact on Manufacturing

• Internet of Things (IoT) will significantly increase the factory floor data collection.

• Artificial intelligence and machine learning will contextualize the data and flag anomalies or make recommendations.

• Mixed reality (AR/VR) will increase communication and visualization of contextualized data to boost productivity and intelligent decision-making.

• Additive manufacturing can reduce tooling, allow very low-volume production, reduce factory footprint, and enable distributed manufacturing.

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Image source: Euromonitor International

CENTER FOR AUTOMOTIVE RESEARCH

Mobility Transformation

New services

New vehicle concepts

New functionalities

New ownership

models

New business

partnerships

Shared Mobility Services: Opportunities for the Auto Industry

• The rise of shared mobility services is part of a mobility evolution that brings many opportunities for the auto industry.

ACES Vehicle Production Models

Outsourced Production Model

• Auto companies design and engineer the structure and interiors

• Production outsourced• Auto companies operate

their own fleets

Engineering Company Model

• Auto companies design and engineer the structure and interiors

• Production outsourced• Fleet companies like Uber,

Lyft, Ola operate the fleet

Mass Customization Model

Auto companies design, engineer, and manufacture the core structure

Interior design selected by fleet operator

Fleet companies like Uber, Lyft, Ola operate the fleet

Impact of Shared Mobility on Manufacturing

• Fleet operators become the customer• Interior design more important than exterior design and

color. • Powertrain, esp. in BEV, might become a commodity• Faster development and manufacturing readiness• More automation• AI on the factory floor and in the vehicles

CENTER FOR AUTOMOTIVE RESEARCH

Sustainability

Automakers driving sustainability. Examples..

Ford

• Ford will use 100 percent renewable energy for all manufacturing plants globally by 2035.

• Ford will eliminate single-use plastics from operations by 2030.

GM

• GM aims to reduce its carbon emissions by 31 percent by 2030.

• zero crashes, zero emissions, and zero congestion goals

FCA

• Supporting Sustainable Development Goals (SDGs) in the United Nations 2030 Agenda

VW

• Plans on improving its environmental performance by 25%

Nissan

• Decreasing CO2 emissions from new vehicles by 40% by FY2022

• Reducing use of new materials to 70% by FY2022

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Impact of Sustainability Targets on Manufacturing

• Lifecycle emissions of materials and manufacturing processes will be important.

• Suppliers need to reduce their overall emissions to remain competitive.

• Sustainability isn’t cheap. Increased funding for “eco-innovation” • Blockchain technology for more transparency in complex supply

chains• Environmental, social, and governance (ESG) issues becoming

important for long-term investors

THANK YOU