How a cheap component could help kill combustion cars

The auto part’s supply has been stifled by war in Ukraine, home to a large share of global production, with wire harnesses made there installed in hundreds of thousands of new vehicles each year.

These low-tech, low-margin parts – made from wire, plastic and rubber with lots of low-cost manual labor – may not deserve the kudos of microchips and motors, but cars can’t. be built without them.

According to interviews with more than a dozen industry players and experts, the supply shortage could accelerate plans by some traditional auto companies to switch to a new generation of machine-made and lighter harnesses. designed for electric vehicles.

“This is just one more reason for the industry to accelerate the transition to electric,” said Sam Fiorani, head of production forecasting firm AutoForecast Solutions.

Gas-powered cars still account for the bulk of new car sales worldwide; Electric vehicles doubled to 4 million last year, but still accounted for only 6% of vehicle sales, according to data from JATO Dynamics.

Nissan CEO Makoto Uchida told Reuters that supply chain disruptions such as the Ukraine crisis prompted his company to talk to suppliers about abandoning the labor-intensive cable harness model. cheap.

In the immediate term, however, automakers and suppliers moved harness production to other countries at lower cost.

Mercedes-Benz was able to fly harnesses from Mexico to fill a brief supply shortfall, according to a person familiar with its operations. Some Japanese suppliers are adding capacity in Morocco, while others have sought new production lines in countries such as Tunisia, Poland, Serbia and Romania.

THE TESLA MODEL

Fossil fuel car harnesses bundle cables that extend up to 5 km (3.1 miles) in an average vehicle, connecting everything from heated seats to windows. They are very labor intensive to manufacture and almost every model is unique. It is therefore difficult to move production quickly.

Supply disruptions in Ukraine were a wake-up call for the auto industry. Automakers and suppliers said that at the start of the war, factories only remained open thanks to the determination of workers there, who maintained a reduced flow of moving parts in the face of power cuts, air raid warnings and curfews.

Adrian Hallmark, CEO of Bentley, said the British luxury carmaker initially feared it could lose 30-40% of its car production for 2022 due to a shortage of harnesses.

“The Ukraine crisis threatened to completely shut down our factory for several months, much longer than we did for COVID.”

Hallmark said finding alternative production sources was complicated by the fact that the conventional harnesses themselves had 10 different parts from 10 different suppliers in Ukraine.

He added that supply issues had sharpened Bentley’s focus and investment in developing a simple harness for electric vehicles that will be managed by a central computer. The automaker, a division of Volkswagen, is planning an all-electric lineup by 2030.

“The Tesla model, which is a completely different wiring concept, we couldn’t change there overnight,” Hallmark added. “It’s a fundamental change in the way we design cars.”

The new generation of wire harnesses, used by electric natives like Tesla, can be made in sections on automated production lines and are lighter, a key factor because reducing the weight of an electric vehicle is crucial to extend autonomy.

Many executives and experts interviewed said fossil-fuel cars, which face impending bans in Europe and China, would not be long enough to warrant redesigns to allow them to use next-generation harnesses.

“I wouldn’t put a dime into internal combustion engines now,” said Sandy Munro, a Michigan-based automotive consultant who estimates electric vehicles will account for half of global new car sales by 2028.

“The future is coming at a terrific speed.”

‘PARADIGM SHIFT’

Walter Glück, head of Leoni’s harness business, said the supplier was working with automakers on new automated solutions for wiring harnesses in electric vehicles.

Leoni focuses on zonal or modular harnesses, which would be divided into six to eight parts, short enough to automate assembly and reduce complexity.

“It’s a paradigm shift,” Glück said. “If you want to reduce production time in your car factory, a modular wiring harness helps you.”

Among automakers, BMW is also considering using modular wiring harnesses, requiring fewer semiconductors and fewer cables, which would save space and make them lighter, according to a person familiar with the matter.

The person, who declined to be named because he is not authorized to speak publicly, said the new harnesses would also make it easier to upgrade vehicles wirelessly – an area Tesla now dominates.

CelLink, a California-based startup, has developed a fully automated, flat, and easy-to-install “flexible harness,” and raised $250 million earlier this year from companies including BMW and automotive suppliers Lear Corp and Robert Bosch.

CEO Kevin Coakley wouldn’t identify the customers, but said CelLink’s harnesses have been installed in nearly one million electric vehicles.

Only Tesla has this scale, but the automaker did not respond to a request for comment.

Coakley said CelLink’s new $125 million factory under construction in Texas will have 25 automated production lines that can change designs in about 10 minutes because components are produced from digital files.

The company is working on electric vehicles with a number of automakers and plans to build another plant in Europe, he said.

While the turnaround time for a conventional wire harness can take up to 26 weeks, Coakley said his company could ship redesigned products in two weeks.

That speed is what traditional automakers are looking for when they go electric, said Dan Ratliff, director of Detroit-based venture capital firm Fontinalis Partners, which was founded by Ford Chairman Bill Ford, and invested in CellLink.

For decades, the industry didn’t need to act quickly to redesign a part like the wiring harness, but Tesla changed that, Ratliff added.

“On the EV side, it’s just go, go, go.”

(Reporting by Nick Carey in London and Christina Amann in Berlin; Additional reporting by Satoshi Sugiyama in Tokyo; Editing by Pravin Char)

By Nick Carey and Christina Amann

Kevin A. Perras