IHS Markit's Auto Tech 2021 Trends

Earlier this month, IHS Markit released its report on the Top 10 auto tech trends to watch for in 2021, which provides an overview of the key developments happening this year.

First, EV charging speeds keep increasing. It is estimated that during FY21, 3 million vehicles will be produced capable of DC charging with 100kW or more, which is 103 percent higher than in FY20. Today EVs charge DC at below 100kW. This has been the most adopted solution in the first EV generations and will continue to play a role in entry-level EVs.

Second, automotive 5G deployment continues. IHS Markit estimates that there will be 57 million vehicles on the road supporting 5G by 2026. BMW is expected to become the first to launch 5G-compatible cars outside of China. Meanwhile, 2023 is expected to be the inflection point for this technology. The first five vehicles to be launched with 5G will be fully electric.

Third, automated driving releases continue within Levels 2 and 3. Regulation and liability will remain major factors to drive the adoption of greater levels of automation. There are widely available products with Level 2 systems and even though Level 3 launches are expected in 2021, challenges remain.

Fourth, software becomes critical for CASE vehicles as they build on mobility and ride-hailing needs. It is estimated that vehicle sales for MaaS applications will grow at an 18 percent rate through 2030.

Fifth, Europe will boost battery manufacturing. IHS Markit estimates that 30 percent of battery capacity will be produced in Europe by 2026. This is driven by OEMs pushing to improve battery EV sales, COVID-19’s stress on the supply chain, as well as European government incentives. During FY21, Europe will increase its battery manufacturing to 75GWh.

Sixth, over the air software updates (OTA) proliferate. OTA is the wireless delivery of new software, which has become increasingly relevant to avoid recalls and reduce maintenance costs while addressing bug fixes, cybersecurity updates, and increasing the vehicle lifecycle. The firm estimates that one-third of vehicles produced in 2025 will have the capability to remotely update key software domains, including powertrain, battery management, chassis, and safety programs.

Seventh, automotive chip shortages will remain. The automotive sector has faced delays regarding semiconductors sourcing. Waiting times increased from between 12 and 16 weeks to more than 26. There was a spike in chip demand across several sectors which caused delays. Constraints are expected to be solved by 2H21.

Eighth, 3D printing grows in vehicle production. Additive manufacturing stands to disrupt large polymer components such as bumpers, rocker panel covers, and dash cover structures. 3D printed parts are evolving to represent almost 700 unique produced parts per hour by 2026. Today, on-demand 3D printing enables restoration when replacement parts are no longer available.

Ninth, matrix lighting expands beyond the premium segment. Adaptive beam headlamps will be adopted by 46 automakers. This system is not only for premium vehicles anymore, as it has shifted to other segments. In the US, regulations still play an important role in the adoption of this technology.

Finally, LIDAR sensors will enable Level 3 and Level 4 automation. New and diverse sensors will allow the strengthening of automated driving features. It is expected that sales of lidar units will expand over the next years going from around 1 million in 2020 to more than 3 million by 2026.

Where Does Mexico Stand?

As a major supplier to the US market, the more than 10 light-vehicle OEMs based in the country will have to adapt to the market’s new demands. Just recently, BMW announced its plan to produce one of their hybrid models in San Luis Potosi, while Ford also announced the fully electric Mach-E will be produced in the country. Even though the Mexican market is still green in terms of these technologies, auto part manufacturers need to pay close attention to the trends customers are embracing.