© Reuters. FILE PHOTO: Nick Fry, chief executive of McLaren Applied, holds up the IPG5 inverter that the Formula One engineering and technology firm has developed for luxury carmakers and which will start appearing in premium electric vehicles in January 2025 in Woking , Bri
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By Nick Carey and Paul Lienert
WOKING, England (Reuters) – The global auto industry has committed $1.2 trillion to developing electric vehicles (EVs), providing a golden opportunity for new suppliers to win contracts that supply everything from battery packs to motors and inverters.
Start-ups that specialize in batteries and coatings to protect EV parts, and suppliers traditionally focused on niche motorsports or Formula One (F1) racing, have been chasing EV contracts. Automakers design platforms to last a decade, so high-volume models can bring in big revenue for years.
The next generation of electric vehicles will arrive around 2025 and many automakers have sought help to fill in the gaps in their expertise, providing a window of opportunity for new providers.
“We’re going back to the days of Henry Ford, where everyone was asking ‘how do you get these things to work right?'” says Nick Fry, chief executive of F1 technology and engineering firm McLaren Applied.
“That’s a great opportunity for companies like ours.”
Acquired from McLaren by private equity firm Greybull Capital in 2021, McLaren Applied has adapted an efficient inverter developed for F1 racing for electric vehicles. An inverter helps control the flow of electricity to and from the battery pack.
The silicon carbide IPG5 inverter weighs just 5.5 kg (12 lbs.) and can extend the range of an EV by more than 7%. Fry says that McLaren Applied is working with around 20 car manufacturers and suppliers, and the investor will appear in high-volume luxury EV models from January 2025.
Mass-market automakers often prefer to develop EV components in-house and own the technology themselves. After years of pandemic-related parts shortages, they are wary of an overreliance on suppliers.
“We simply can’t afford to rely on third parties to make those investments for us,” said Tim Slatter, Ford’s UK boss.
Traditional providers such as German heavyweights Bosch and Continental are also investing heavily in electric vehicles and other technologies to stay ahead in a rapidly changing industry.
But smaller companies say there are still opportunities, particularly with low-volume automakers unable to afford large investments in electric vehicles, or high-performance and luxury automakers looking for an edge.
Croatia’s Rimac, an electric hypercar maker partly owned by Germany’s Porsche AG that also supplies battery systems and powertrain components to other automakers, says an undisclosed German automaker will use a Rimac battery system in a High-performance model, with an annual production of around 40,000 units – starting this year, with more registered.
“We need to be 20-30% better than what they can do and then they work with us,” says CEO Mate Rimac. “If they can make a 100-kilowatt-hour battery pack, we should make a 130-kilowatt pack in the same dimensions for the same cost.”
THERE IS NO TIME TO LOSE
Some providers like Cambridge, Massachusetts-based Actnano have had a long relationship with electric vehicle pioneer Tesla (NASDAQ:). Actnano has developed a coating that protects electric vehicle parts from condensation and its business has spread to advanced driver assistance systems (ADAS) as well as other car manufacturers including Volvo, Ford, BMW and Porsche. .
California-based startup CelLink has developed a fully automated, flat, easy-to-install “flex harness” instead of a wire harness to bundle and route wires in a vehicle. Chief executive Kevin Coakley did not identify the customers, but said CelLink’s harnesses had been installed in about a million electric vehicles. Only Tesla has that scale.
Coakley said CelLink was working with US and European automakers and a European battery manufacturer on battery wiring.
Others target low-volume manufacturers, such as UK startup Ionetic, which develops battery packs that would be too expensive for smaller companies to make.
“Electrification currently costs too much, so you see some manufacturers delaying the launch of electrification,” CEO James said. Eaton (NYSE:) he said.
Since 1971, Swindon Powertrain has developed powerful engines for motorsports. But now it has also developed battery packs, electric powertrains, electric axles and is working with around 20 clients, including automakers and a maker of electric vertical takeoff and landing (eVTOL) aircraft.
“I realized that if we don’t accept this, we will end up working for the museums,” said managing director Raphael Caille.
But time may be running out.
Mate Rimac says that major automakers have rushed in the last three years to launch electric vehicles and now have strategies largely in place.
“For those who haven’t signed projects, I’m not sure how long the window of opportunity will stay open,” he said.
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