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The Auto and Mining Sectors are Getting Cosier

auto and mining sector

The Auto and Mining Sectors are Getting Cosier

The mining sector is under a microscope. But this is nothing new. The sector powers much of the world, yet there have always been labor and environmental concerns attached to their work. It’s the nature of the business, but in 2023, in addition to mining, the auto industry is making its way under the same watchful lens. You can chalk this up to lithium and similar minerals that go into the fabrication of batteries.   

Lithium is a hot commodity. As electric vehicles (EVs) continue to develop, batteries will need more and more of the “white gold” to keep up with demand. The country with the largest reserves is Chile, while Australia, Argentina, and China round out the top 4. Auto companies have historically not taken an economic stake in their suppliers. There are always instances of a company buying a supplier because it made more sense long-term to manage the production of that product in-house. But for the most part, auto suppliers are the extended family of the principal automaker(s). 

However, with supply chains under pressure, many automakers are seeking ways to avoid current and foreseeable shortages of key materials and components. A clear example of this was the squeeze on semiconductors that continues today. The result has been closer relationships with semiconductor chip manufacturers and automakers. 

The same is now occurring with lithium and similar minerals needed for EV batteries. For example, General Motors was in discussions with Vale SA, a Brazilian mining company that processes nickel. Just last year Tesla began early talks with Glencore PLC about purchasing a stake in the company, one of the world’s leaders in cobalt production. But lithium is perhaps the most sought-after when it comes to battery inputs, and news out of Europe is Volvo Car AB has been engaged in advanced talks with some of the biggest lithium mining players as well as the factories that process lithium. 

Close alignments with mining companies do not come cheap. There is increased pressure on all firms, especially with mining operations that have had issues with labor or environmental conditions. Yet, even for responsible firms, simply operating in mining can bring unfair judgments. Tesla recently ended their talks with Glencore citing potential reputational risks that could arrive via a direct relationship with mining. Just the potential alone led them to scrap the idea.  

Volvo is attempting to become fully electric by 2030. This is going to be challenging considering that just 11% of total 2022 sales were EVs. In addition to flirting with a stake in mining, Volvo has already teamed up with Swedish battery maker Northvolt AB. By the time their joint battery factory is completed, it will be one of the biggest in all of Europe.     


chinese car makers

China Carmakers are Ordering Their Own Ships to Get Export Ready

Two of China’s biggest automakers are so determined to ensure their cars make it from factories on the mainland to anyone who wants to drive them they’ve bought their own ships.

BYD Co., which only makes electric and hybrid cars, is going the extra length to avoid any last mile supply chain snarls, ordering at least six ships in October, each with the capacity to carry 7,700 cars, for 5 billion yuan ($710 million). State-owned SAIC Motor Corp., which already operates the world’s fifth-largest shipping fleet via transport arm SAIC Anji Logistics Co., has a tender out for seven new carriers that can each hold 8,900 vehicles.

Representatives for SAIC and BYD declined to comment.

With the vessels in question not expected to come online for several years yet, it’s a bold bet on lasting global consumer demand for Chinese cars. China recently overtook Germany as the world’s second-largest auto exporter, sending almost 2.6 million vehicles abroad in the first 10 months of 2022, eclipsing 2021’s volumes. Even October’s unexpected drop in demand for Chinese goods didn’t derail that upward trajectory with car and chassis exports growing 60% from a year earlier to 352,000 units in the period, or a record high $7.1 billion.

But while auto exports have surged, “the number of car carriers globally has barely increased,” said Xing Yue, the head of Clarksons Research Services in Shanghai, a unit of the world’s largest shipbroker. Shipping costs have skyrocketed and there’s now “lots of investment pouring into building new ships for vehicle transport because of this demand-supply mismatch.”

The lack of vessels is stretching an auto supply chain already worn thin by a scarcity of semiconductors, pandemic-related labor shortages and months of port congestion intensified by China’s Covid-19 lockdowns. Daily rates for vessels that can carry up to 6,500 cars (commonly known as roll-on/roll-off ships, or ro-ros) have surged to about $100,000 a day as of October, more than tenfold 2020 levels and the highest on record since at least 2000, according to Clarksons.

With all the last leg supply chain disruptions it makes sense for Chinese automakers to strike out on their own, according to Tobias Bartz, chairman and chief executive officer of Rhenus Logistics. Ships have become “such a scarcity,” he said on the sidelines of a conference in Singapore last month.

The shortage has meant that some vessels almost 30 years’ old are still operating instead of being scrapped, raising the risk of accidents. Trying to extinguish any lithium-ion battery fires that occur may also be harder.

Chinese automakers aren’t alone in their desire for more freighters. Tesla Inc., which uses Anji Logistics’ car carriers, has also had trouble transporting vehicles from its factories.

“There weren’t enough boats, there weren’t enough trains, there weren’t enough car carriers to actually support the wave” of vehicle deliveries at the end of the last quarter, CEO Elon Musk said during Tesla’s third-quarter earnings call. “Whether we like it or not, we actually have to smooth out the delivery of cars intra-quarter, because there just aren’t enough transportation objects to move them around.”

This latest pinch point may be new but BYD and SAIC aren’t the first automakers to run their own shipping fleets. Toyota Motor Corp. owns shipping company Toyofuji Shipping Co., while South Korea’s Hyundai Motor Co. has logistics group Hyundai Glovis Co.

It’s also a telling sign of how far Chinese automakers’ export ambitions go.

Just a few years ago, China was mainly selling cars to developing nations in Africa and the Middle East. But the rise in electric-vehicle production has boosted made-in-China cars in Europe, which is now the biggest market for Chinese auto exports. China exported over 852,000 EVs in the first 10 months of this year, up from almost nothing a short while back. Over a fifth of those were Tesla electric cars produced in the US automaker’s Shanghai gigafactory.

To be sure, some aren’t entirely confident that buying ships now is the right decision.

“Car shipping costs are set to come down as the risks shift from backlogs to a glut in the car market,” said Craig Fuller, founder and CEO of supply chain market intelligence provider FreightWaves. With supply chain bottlenecks easing, “the risk is more on the demand side of the equation,” he said.

Until that inflexion point, Chinese automakers appear keen to control as much of the process as they can. Electric vehicle maker Nio Inc. and Chery Automobile Co. are also eying ship orders, local media reported last week.

Among Chinese brands, SAIC is the furthest along overseas. It sold 697,000 vehicles abroad in 2021 — bolstered by the success of MG Motor, the British brand it acquired — and is aiming for 800,000 this year. That’s a way off from meeting its annual shipping capacity, which stands at around 10 million vehicles, but meanwhile SAIC’s ships can and do serve other carmakers too, including Nio.


Top 4 Trends Enhancing Self-Checkout System Market Size through 2027

The higher acceptance of compact kiosks designed with user-friendly interfaces will significantly augment the self-checkout system market. The escalating labor costs, specifically in Europe have stirred the need for automated systems to limit the involvement of staff and let end-users complete the checkout processes. The growing incursion of AI and machine learning techniques into the self-checkout software for enhanced functionalities and effective transaction handling will additionally influence the industry prospects.

In this regard, as per the recent study by Global Market Insights, Inc., the global self-checkout system market will reach a valuation of over USD 6.5 billion by 2027.

Here is a peek into some factors driving the overall market growth in the coming years:

Space benefits of wall-mounted/countertop systems

Industry share of wall-mounted/countertop systems is expected to grow in the forecasted timeline. This is ascribing to their increasing preference by small restaurant owners and medium-sized retailers as they are ideal for places having space constraints. Considering the surging number of retailers and restaurants looking for automated processes, self-checkout machine manufacturers are coming up with various solutions to offer powerful computational features in compact designs.

For instance, Advanced Kiosks introduced a self-checkout system comprising amplified speakers and a 17-inch touch screen LCD monitor to offer enhanced customer comfort.

Higher presence in the travel sector

Demand for self-service checkout systems in travel applications will grow with the increasing international passenger traffic. This has led transportation authorities to deploy advanced solutions for mitigating the checkout time to offer traveler convenience. The International Air Transport Association has estimated that around 80% of the global passengers will employ a complete self-service system produced under the association standards by 2020.

For instance, leading American travel experience provider, Hudson, in January 2021, deployed Amazon’s Just Walk Out technology, Self-service Bag Drop (SSBD) across a few travel convenience stores to limit traveler check-in times.

The retail industry as a big booster

The retail sector will see higher adoption of self-checkout machines through 2027 driven by rising advancements and the assistance to retailers in keeping the stores open in the absence of a workforce. According to a survey that analyzed the shopping habits of U.S. consumers, over 73% of respondents preferred self-service technologies for improved retail shopping experiences and reduced staff interactions.

The growing preference of consumers for fast checkouts with standalone kiosks has encouraged retailers to operate their stores with minimum employees. In addition, the systems help customers to scan as well as pay for their products by themselves, allowing retailers to provide enhanced customer comfort with busted long queues at the payment counters.

Expanding tourism sector in MEA

The Middle East & African self-checkout system industry will gain traction owing to the higher deployment of advanced digital technologies. The mounting economic development through retail, mainly in Saudi Arabia and the UAE has made way for a higher count of large malls in the region for attracting international tourists. The increasing preference for UAE as a shopping hub has led to higher product penetration to offer improved and hassle-free experiences. The growing number of international tourists and the booming hospitality sector are other factors impacting the regional market growth.

Furthermore, the higher incorporation of digital payment techniques, including mobile wallets and smart cards to limit the requirement for handle cash-based financial transactions, will favor the demand for self-checkout kiosks. There are also improving economic conditions across Latin America and the Asia Pacific. The growing usage of smartphones for timesaving and helping customers scan the items and pay through apps will also anchor the market forecast.

quantam computing

GlobalData Discusses Quantam Computing and its Impact on Auto Manufacturing

As artificial intelligence continues making news headlines in a variety of industries, GlobalData experts released statements from Volkswagen’s Data Lab team lead, Dr. Marc Hilbert about the risks and opportunities presented. In his statements, Dr. Hilbert addresses specifics relating to quantam computing in the automobile manufacturing sector.

“Security is definitely necessary. I think it’s very important specifically for Volkswagen because I think if you’re not compliant, if you cannot say that our things are safe, you will lose the trust of the consumer. So compliance is something that we are working on also with machine learning, and anonymization, so hiding your personal data within the car. So there’s nobody who can say that this is you, but we still have enough information to understand.”

Quantam computing is on the radar for many industry players as a potential emerging trend. Technology innovations and game-changers alike pose unique sets of challenges and potential solutions, and of course, associated risks.

“Traffic optimization is one of the use cases we’re looking at in terms of quantum computing. Because we think that quantum computing will be one of the emerging technologies which will have a big step in terms of machine learning, in terms of data analysis, and so on. And there are companies like D wave, IBM and Google, which tried to build the computer. So this is one aspect to actually get closer to a solution,” he adds.

“The Volkswagen group is coming from a different point of view. What we try to do is find problems in the real world. What we have today with our customers is traffic jams. We tried to translate this kind of questions in a way that a quantum computer can understand it. And we try to bring those two things together to identify aspects where we can use quantum computing in the next step. So this is our task in the data lab,” Hilbert concluded.

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