Key minerals in an EV Battery, CARIAD + Qualcomm, Vehicle-to-grid... - Weekly Roundup

1 CARIAD + Qualcomm

This week CARIAD (VW Group’s SW Company) announced their long-term partnership with Qualcomm. To understand what this partnership actually means, we need to understand what exactly is CARIAD.

CARIAD has 3 main pillars on their website, and they are:

1. Futureproof Hardware: The hardware layer, a toolbox of sorts containing sensors, actuators and computing hardware that can be commonly used among the VW brands. The goal is to improve computing performance using as little of units and wiring as possible.
2. Unified Software: The Volkswagen OS, vw.OS is the platform SW that is on all computing units. With standardized interfaces towards their cloud platform. Planned to be released in 2025
3. Innovative Application: The application layer that performs the final business logic for various functions and services.

The ecosystem approach for Electronics and Software is relatively new in the automotive industry. And to achieve this, given the current and future use cases for vehicles, it would require an unprecedented amount of vertical integration among all the above 3 layers. This new partnership helps fulfill that in the following 3 ways

1. Interchangeability: A key benefit of committing to one SoC product line for all needs is that they can be easily interchanged. Qualcomm has a fairly mature BSP package and porting software to multiple versions of a SoC within a family is not something new for Qualcomm, as they already do in the smartphone world.
2. Platform Continuity: Some time in the future, they would jump to the next generation of SoCs, and the goal is to repurpose as little or even no software to be compatible with the newer version. Think of this as, when a new chip like the M1 processor in all the new apple devices came out, most applications were not optimized to make use of all the new features of the M1 chip. And comparing that to previous chip upgrades in Apple devices(A13 → A14 etc.) all the applications worked as they were supposed to. Sticking to one family of SoCs can help improve the experience both for the customers and developers alike.
3. Ability to affect the roadmap: Being an automotive customer to big chip vendors like Qualcomm or Nvidia has bit of a disadvantage. Since they are essentially competing against other Smartphone customers, who usually have much more leverage on these vendors to affect their roadmap both in terms of features and timeline. But this partnership is something that could address that shortcoming.

2 Key Minerals in an EV Battery

An interesting infographic showing a breakdown of an electric battery but from a materials point of view. A few observations:

1. Graphite, aluminum, steel and copper amounts to 70% of the material in a typical EV Battery. China is the leader, by and large, for 3 out of 4 of those materials. The leading producer for copper is chile, followed by Peru and China.
2. Cobalt, an essential element for batteries, are by and large produced the most in Central Africa, where China seems to co-owns/operates an usually large percent of mines. See Dark Side of Electric Cars for more.
3. China is the largest producer of manganese and the third largest producer for both lithium and iron.
4. For one of the most important parts of an era-defining change in the automotive industry, China sure does have a very high control/influence. A monopoly of a massive scale is unfolding. They can play into these strengths and breakdown the market competition by offering a very different price point then any other manufacturer in any other country. At the end of the day, all of them are will still largely be dependent on China for its raw materials, if not for the products they are building and assembling.

3 VW → F1

The CEO of the Volkswagen Group announced this week that they intend to enter Porsche and Audi to Formula 1 for the 2026 Season. By reading the press releases, there are 2 reasons they have cited for this move, increased revenue and better advertising. And here are my observations:

1. Increased revenue. Formula1 is a growing sport and they believe they can earn more money than they spend. Earning can come from the sport itself in the form of sponsorships, prize money etc. But also from the trickle down effect of technological advances into their passenger car businesses. Similar to what rival, Mercedes has done with AMG One Project.
2. Better advertising. Formula 1 is undoubtedly the pinnacle of Motorsport and the exposure that you get from the top step of a podium is quite something for any automotive brand. And for the past 8 years, VW’s rival Mercedes have dominated. Not to forget, Audi and Porsche have racing DNA, it is part of who they are, and now they have finally convinced Wolfsburg.

4 Ford did what Tesla won’t - Right to Repair for EVs

Ford came out with their Mach-E and Mach-E GT. But they also did a concept of a 1978 F-100 Pickup truck, but electrified, using the same motor that is in the latest Mach-E.

Selling crate motors is not something new. The culture and ecosystem around crate engines are already well-established for combustion cars. And here, there are 2 main categories, spare parts for repair purposes, and DIY upgrades and car projects.

This is an interesting move from Ford, they are one of the first EV manufacturers to sell parts on this level. Comparing that to Tesla, they are pretty much following the Apple playbook. Closed ecosystem → Highly controlled user experience → Eventually high switching costs for customers. But this closes down opportunities for customers for the right to repair and forcing them to stick with Tesla authorized workshops. Of course, as with all systems, the market will game the system.

5 Hyundai and Vehicle-to-Grid (V2G) experiments

Electric cars are equipped with an inverter that can convert the AC form the wall into DC to be stored and used. The inverter is also capable of converting it the other way but it is usually limited. Vehicle-to-load and Vehicle-to-home systems stretch that limit so that the battery could actually power larger devices and even homes.

Vehicle-to-grid is similar to the above systems, but with the addition of a critical component that can synchronize the frequency of the AC from the battery to that of the grid.

Hyundai’s flagship EV model the IONIQ 5 has begun to do some experiments with a small fleet in Utrecht, Netherlands. In my opinion this has to be as an exploratory endeavor more than a business endeavor. It is more likely that Hyundai can learn more about the technology, user behavior and characteristic of the electric grid, than to build a feature or a product that can rake up some profits for the company.

6 In vehicle WiFi

In vehicle WiFi is evolving into a new paradigm. Today, Internet connectivity is provided in vehicles these day by either of the two ways.

Most brands have some form of internet connectivity that is enabled through a SIM that has internet capability. Then the vehicle can act as a WiFi hotspot for other devices in the vehicle as well.

Built-in WiFi Modem, which enables the user to connect their vehicle to any WiFi, or even their own phone data connection, via WiFi tethering.

The Next Step

The next step is to use satellite internet directly to a vehicle. In this way, you won't need a SIM card anymore to enable internet in a vehicle. The possibilities are larger, as you have a WiFi connection directly in the vehicle. If you compare the existing models to what we have in our smartphone, where we have some kind of internet connection via the mobile network. This new paradigm is analogous to connecting to your WiFi at home.

Why It Makes Sense?

Cars are becoming more and more software intensive. Maintaining all this software during the lifecycle of the vehicle becomes a lot easier both for the OEM and the customer if they could enable over-the-air features. A key one being updating SW on the go. The notion that the vehicle becomes more valuable over time is impossible without all the software enabled features.

Software is growing, by gigabytes each year. And so is the cost of doing updates. 24-7 internet connectivity is becoming a pre-requisite to realize this. Moreover, the need for connectivity is also growing for the OEM. Each vehicle generates tons of data each day which is relayed back to the OEM in all kinds of verticals, like vehicle health management, autonomous training, swarm features etc.

Overall, it is safe to say the customer experience is drastically better with internet connectivity always available both within the vehicle and for the devices within it.

Tesla’s Advantage

Tesla has an unfair advantage in this matter. Starlink, the satellite based internet service provider is run by SpaceX, another Elon Musk venture. The advantage is that they own both the end product (Tesla Vehicle) and the internet infrastructure. A key benefit is that they can offer integration and subscription services in a much more seamless manner.

This reminds me of AirDrop in the apple ecosystem. By owning all the end devices (in this case iPhones, MacBooks etc.), apple was able to create a very seamless experience of transferring files between devices. They could make a tailor-made solution that "just works". I wouldn't be surprised if Tesla introduces such a Starlink integration in the future.