The boom in electric vehicles is a bonanza for manufacturers of automated machines

0
33

The investment surge in both new and established automakers in the electric vehicle market is a gold mine for factory equipment manufacturers who supply the highly automated pick and shovels for the prospectors in the EV gold rush.

The good times for manufacturers of robots and other factory equipment reflect the broader recovery in US manufacturing. After falling to $ 361.8 million (about Rs.2,690 billion) in April 2020 following COVID, orders rose to nearly $ 506 million in June, according to the US Census Bureau.

New factories for electric vehicles, funded by investors who have recently acquired public shares in companies like EV start-up Lucid Group Inc., are driving demand. “I’m not sure whether it has still reached its peak. There is still more to be done,” said Andrew Lloyd, segment leader for electromobility at Stellantis’ own provider Comau, in an interview. “We will see significant demand in the next 18 to 24 months.”

The growth in the electric vehicle sector, fueled by the success of Tesla Inc., comes on top of the normal work that manufacturing equipment manufacturers do to support the production of gasoline-powered vehicles.

According to LMC Automotive, automakers will invest over $ 37 billion (approximately Rs.275.146 billion) in North American plants from 2019 to 2025, with 15 of 17 new plants in the US. Over 77 percent of this expenditure is used for SUV or EV projects.

Equipment suppliers are in no hurry to use almost full capacity.

“There’s a natural point where we say ‘no’ to new business,” said Lloyd of Comau. An automaker can easily spend $ 200-300 million on just one area of ​​a factory, like a paint shop or body shop, industry officials said.

‘WILD, WILD WEST’
“This industry is the wild, wild west right now,” John Kacsur, vice president of the automotive and tire segment at Rockwell Automation, told Reuters. “There’s a crazy race to get these new EV variants to market.” Industry adviser Laurie Harbor said automakers have signed agreements with suppliers to build equipment for 37 EVs in North America between this year and 2023. This excludes all work for gasoline-powered vehicles.

“There is still a pipeline with projects from new EV manufacturers,” says Mathias Christen, spokesman for Durr AG, which specializes in painting systems and whose EV business increased by around 65% last year. “That’s why we don’t see the summit yet.”

The order intake of Kuka AG, a manufacturing automation company belonging to the Chinese Midea Group, rose in the first half of 2021 by 52 percent to just under 1.9 billion euros (around 16,532 billion rupees) – the second highest value in 6 months in the company’s history, due to the strong demand in North America and Asia.

“About a year and a half ago, the capacity for additional work was exhausted,” said Mike LaRose, CEO of Kuka’s auto company in America. “Everyone is so busy, there is no floor space.”

Kuka is building electric vans for General Motors Co at its Michigan facility to meet early demand before the No. 1 US automaker will replace equipment at its Ingersoll, Ontario facility to do regular work next year. Automakers and battery companies have to order many of the robots and other equipment they need 18 months in advance, though Neil Dueweke, vice president of automotive at Fanuc Corps’ American operation, said customers want their equipment sooner. He calls this the “Amazon effect” in the industry.

“We built a facility and have about 5,000 robots on 60-meter shelves, almost as far as the eye can see,” said Dueweke, who found Fanuc America set records in sales and market share last year.

COVID has also caused problems and delays for some automakers trying to upgrade.

RJ Scaringe, CEO of EV startup Rivian, said in a letter to customers last month that “everything from plant engineering and equipment installation to the delivery of vehicle components (especially semiconductors) is affected by the pandemic”.

However, established long-standing customers like GM and parts supplier and contract manufacturer Magna International said they had not experienced any delays in receiving equipment.

Another limiting factor for capacity was the ongoing labor shortage, said industry representatives.

To avoid the stress, startups like Fisker Inc. have turned to contract manufacturers like Magna and Foxconn, whose purchasing power allows them to more easily avoid bottlenecks, said CEO Henrik Fisker.

However, the increasing demand does not mean that these device manufacturers are rushing to expand their capacities.

After experiencing downturns in which they were forced to cut back, the equipment suppliers want to get by with what they have, according to Lloyd, or, in the case of Comau, only increase their capacities for a short time.

“Everyone’s scared of getting caught,” says Mike Tracy, principal at the consulting firm Agile Group. “They just don’t have the reserve capacity they used to have.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here