Andrew Marsh FIMI reflects on the industry’s frenetic pace. Amidst challenges with BEVs and Li-Ion batteries, a tumultuous landscape emerges, shaping the future of ATFs. As manufacturers grapple with transitions and emerging trends, uncertainty looms, suggesting a turbulent journey ahead.
If you think the entire automotive world is running around producing new models like chickens laying eggs, you’d be right. It’s chaos – bigger and stronger than ever.
Challenges with BEVs
In little over six months, several big ideas have been checked—not destroyed but checked. Ford, for example, lost $64,671 (£51,058.63) on every single BEV it sold in 2023. They were not alone—the early adopters have taken BEVs to heart, as have many governments, but the idea that manufacturers and importers must sell 22 percent of all new cars in the UK that are only powered by electricity is for the birds.
That means the type of vehicles arriving at ATFs in the next five years will be similar to now – a mix of older ICE-powered and electrified vehicles.
Challenges with Li-Ion Batteries
The next big idea on the rocks is Li-Ion batteries. Currently, there is no other widely available energy storage device, even with at least 12 combinations of anode, cathode, and electrolyte. The idea that these would be harvested from cars and re-used for domestic/industrial power storage has hit issues related to first-use condition, suitability, and the work of turning a vehicle underfloor package into something that can be neatly racked in a room.
This means the ever-imminent solid-state battery technology has to arrive; it has to avoid the integrity issues of existing Li-Ion batteries and be substantially cheaper before it’s worth using for generated electrical energy storage. This idea, valid on all counts except practicality and cost, is now headed for 2035 or beyond.
Emerging Trends in Battery Usage
Even with a 20 per cent or so new vehicle sales rate for pure electric powertrain vehicles, the parc is steadily growing, and so is the volume of such vehicles arriving in ATFs. In addition to the smaller packs found on PHEV, HEV and even MHEV, there is a steady flow of re-sellable motors, power controllers, heat pumps and more.
Shifting Focus on Battery Repair and Refurbishment
Did I miss batteries? Yes. The thinking is changing. The pace of new model introductions – a madness that is not sustainable – means the battery-centric powertrain is evolving rapidly. Since the vehicles in the parc are not the very latest, but technology snapshots, there is a different demand. Repair or refurbishment of electrical items, especially the battery.
Manufacturer Dynamics and Market Realities
This requires a steady flow of battery packs, which can then be assessed, stripped, repaired and rebuilt by specialists – which is happening now, even among ATFs. The reason is that a vehicle manufacturer and their sub-assembly supplier will not support a snapshot of their technology beyond ten years, and current trends are less than five years. Where the manufacturer has to commission a new build of an older design, there is an even greater price – hence the story of a German customer who asked to consider in 2023, paying €103,764.17 ( £87,600 (approx)) for a replacement 2016 hydrogen fuel cell when the replacement model in its entirety cost less than that. This is a powerful lesson.
Vehicle manufacturers do not want to give away any business any more than an ATF does, but their primary role is to build new vehicles and support those vehicles as best they can. There’s the key. Ford losses on BEVs work through to future model programmes, cash reserves, and more. No manufacturer can ever afford one dud commercial decision in a decade – if there is more than one, oblivion or Government rescue are the only options.
Chinese Influence and Mixed Powertrain Market
Over the next five years, we will see a significant number of Chinese-built vehicles arrive on these shores. If HM Government stops interfering with market dynamics, it could be that these manufacturers will take the majority of the BEV market, at circa 20 per cent of sales.
Long-term Outlook
You can see that the push-back on BEV is transient, and the longer-term prospects are for a mixed powertrain market. In the short term, there will be little difference from 2022 or 2023 for ATFs, apart from a growing number of vehicles with some form of Li-Ion battery.
Impact of Pandemic and Transition Challenges
The plan to roll out mixed powertrains in 2019 was knocked sideways by the pandemic along with immense component supply problems, which, in turn, knocked out the 2025 transition to pure electric powertrains. Aside from the very serious problems of electricity generation, electricity distribution and the cost of pure electric powertrains, BEV is and will remain a consumer choice.
Navigating Through Uncertainty
As usual, take in as much information as possible and prepare for yet more convulsions as we shoot towards the future horizon.
You contact Andrew through WhatsApp using 07376 171075
