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Global Telematics Control Unit Shipments Grew 13% YoY in 2021

LG led the global TCU market in 2021, followed by Continental and Harman.
US, China and Germany were the top three geographies in the global TCU market.
5G is still a niche segment, capturing less than 1% of global TCU volumes.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – April 7, 2022

Global telematics control unit (TCU) shipments grew 13% YoY in 2021, according to the latest research from Counterpoint’s Global Telematics Control Unit Tracker. This growth came despite the COVID-19 outbreak and supply chain shortages, and was driven by the rising penetration of connected cars and the consumer preference for digital features. Moreover, favourable government policies such as eCall mandates are also helping this market to grow. The global ASP (average selling price) of TCUs increased slightly in 2021 due to the rising cost of 4G chipsets. We expect the supply situation to remain constrained through much of 2022.

Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said, “LG leads the global TCU market, followed by Continental and Harman. These top three players account for nearly three-quarters of the market.

LG’s TCU shipments grew 19% YoY in 2021. Its close relationships with GM and Volkswagen in the Chinese and US markets are helping LG maintain its leadership position. LG is leading across all major regions except Europe.

Continental, the second-largest TCU player, has a good hold on the European market, especially Germany, France and UK. However, it lost around 2% market share in 2021 compared to 2020. Continental launched 5G TCUs in early 2022 to target 5G opportunities in the automotive sector. We expect this to help Continental regain share in the coming quarters.

Harman, the third-largest player, is mainly focused on the luxury car market. It is already offering 5G TCUs with leading premium brands. Harman’s expertise in the automotive industry and its strong distribution channels via Samsung will likely help it to win more deals and improve its position.

Among other brands, Denso and Visteon made big improvements in the TCU brand ranking list for 2021. The partnerships between Denso and Toyota, and Visteon and Ford are proving beneficial for these brands.”

Source: Counterpoint Global Telematics Control Unit Tracker, Q4 2021

With technology transitions, 2G and 3G are unable to meet the data demands of cars. And with especially 3G being phased out, 4G and 5G are becoming the only viable options. Currently, more than 90% of connected cars are using 4G TCUs. However, 4G is reaching maturity. We have already seen a few 5G chipsets, NAD modules and TCU launches in 2021. We expect more cars will be equipped with 5G connectivity this year. Moreover, increasing penetration of autonomous vehicles and C-V2X deployment will help in 5G adoption as well.

Looking at connectivity trends, Research Analyst Mohit Sharma said, “As we move to higher levels of autonomy, the amount of data generated by ADAS sensors will surpass 400MB/s. To process all this data, high processing power will be required. In addition, more sophisticated AI algorithms will be required along with large volumes of data storage. The industry has to shift to 5G for cloud computing. 5G will provide more than 30 times faster data speeds and promises to reduce latency by 10 times.”

Autonomous vehicles, connected cars and electrification are the main trends shaping the future of mobility. Connectivity will be the backbone of these systems. OEMs are enhancing existing connectivity services like infotainment and OTA software updates while adding newer services like custom entertainment packages and insurance. Automakers are pushing connected services to diversify their revenue streams and more closely understand the overall customer behaviour to improve their car’s performance and services.

Source: Counterpoint Global Telematics Control Unit Tracker, Q4 2021

On future perspective, Associate Director Brady Wang said, “Global TCU shipments are expected to grow at a CAGR of 15% during 2020-2025. In terms of value, the TCU market will grow more than twofold to reach $7 billion by 2025. The rising penetration of higher-priced 5G TCUs is one of the major reasons for this huge growth. In terms of shipments, 5G will be the fastest (206%) growing technology during the forecast period.”

For detailed research, refer to the following reports available for subscribing clients and also for individual subscription:

Counterpoint tracks and forecasts on a quarterly basis 10+ TCU brands’ shipments, revenues and ASP performance across 4 cellular technologies and 10 major geographies.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Soumen Mandal

Brady Wang

Mohit Sharma

Counterpoint Research

press(at)counterpointresearch.com

Related Reports:

Top 10 Automotive Announcements in CES 2021

Like the past few years, automotive players used the 2021 edition of the Consumer Electronics Show (CES), organized from January 11 to 14, to showcase new technologies, launch products and announce partnerships. This year’s CES, which went all-digital due to the COVID-19 pandemic, was majorly focussed on electric vehicles (EVs), 5G connectivity, digital cockpit, artificial intelligence (AI) and autonomous vehicles (AVs). Moreover, COVID-19 has failed to dent the OEMs’ (original equipment manufacturers’) plans.

Here are Counterpoint analysts’ top 10 automotive announcements from this year’s CES:

1. Mercedes-Benz unveils a 56-inch ‘Hyperscreen’

As the cars are becoming smart, the need for a bigger screen is increasing for communicating and checking all the real-time vehicle data. Moreover, this 56-inch OLED Hyperscreen provides various functions like infotainment and personalized display. The screen is supported by eight CPU cores, 24GB RAM and 46.4GB/sec RAM bandwidth which helps reduce screen response times. In the era of the digital cockpit, MBUX (Mercedes-Benz User Experience) will slowly become the backbone of Mercedes-Benz vehicles, making the car more intelligent.

2. GM reveals an ambitious EV plan and a flying car concept

With the concept of flying Cadillac eVTOL, GM has joined the race for capturing the flying car market with other automakers like Hyundai, Toyota and FCA Group. Flying car testing projects have just started around the world and we will have to wait till after 2025 to get a good perspective on the topic.

GM launched BrightDrop, a new business unit for commercial EVs, aiming to build a first-to-last-mile EV ecosystem for logistics companies. This concept is not new, but there is huge potential for this market. GM may face stiff competition from other players working in this segment, like BYD, Rivian and Workhorse Group.

After a poor performance in the past few years, GM is repositioning itself and just changed its logo to reflect its EV focus. The company is spending $27 billion on EVs and AVs, targeting to launch 30 EV models by 2025. GM is also working on a battery technology called Ultium. These moves show GM’s seriousness towards its electrification goal and signal its strong comeback in the automotive market.

3. Panasonic unveils augmented reality (AR)-based heads-up display (HUD)

Panasonic unveiled an AR-based HUD which utilizes PRISM (positioning, reflection, intuitive, zonal UX and mission control) process to provide accurate situational awareness. A 3D imaging radar captures full 180° forward vision up to 90 metres while the 4K resolution provides a crystal-clear video of highways. Eye-tracking technology and AI-driven positioning accuracy are the key features of this HUD, which is expected to enter the market in 2024.

4. Mobileye showcases plan for AV rollout

As a part of its plan to commercialize AVs, Intel subsidiary Mobileye is expanding its testing of AV fleets to Shanghai, Paris, Tokyo and New York (pending regulatory approval) after a successful run in Tel Aviv, Munich and Detroit. Mobileye is also working on new Lidar silicon chips (SoC), which are expected to enter the market by 2025. This SoC can simplify computing and reduce cost by a significant amount.

5. Here Technologies brings a new mapping-as-a-service offering and 3D city models for vehicles

Here Technologies introduced a unique mapping-as-a-service offering where enterprises will be able to create their own maps. EV players can personalize their route maps through this service to reduce the range anxiety problem among stakeholders.

Here also launched 3D city models for vehicles while announcing a partnership with Leia and Continental to bring cutting-edge experience to automotive players. 3D maps with AR/VR applications will increase accuracy in location mapping, will be more engaging and help in taking better decisions while driving.

6. Harman redefines in-car experience in the 5G era

Harman is aiming to put a gaming console, a recording studio, or even a concert hall experience into the vehicle to provide the best user experience. High-resolution OLED or QLED displays, 5G enabled TCU and TBOT, Harman’s audio technology and advanced haptics will come together to give the user an immersive experience.

Harman is also offering a creator studio experience inside a car. Automatic background noise cancellation, virtual assistant, user-friendly video set-up, interactive lighting and publishing tools are leveraged here to create content even while driving.

With the help of 5G, premium audio quality, cloud service and partnerships with concert organisers, Harman is bringing live concerts to the car. More partnerships are expected with content creators, service providers, app developers, OEMs and module players to improve the experience.

7. Gentex reveals full display rearview smart mirror

Gentex demonstrated an LCD-based industry-leading Full Display Mirror (FDM) with the bimodal functionality of acting as a mirror and display. FDM is a rearview mirror which can capture surroundings with better angle and stream on display. It can be easily integrated with a camera monitoring system (CMS). In the smart mirror mode, it can record video, which helps in avoiding accidents and in finding the reason for an accident in case it happens. FDM is still a key feature for premium vehicles. However, with the rising awareness of advanced driver-assistance systems (ADAS), we will witness more penetration of FDM into mid-priced vehicles.

Gentex also exhibited a dimmable glass system, HomeLink car connectivity, Integrated Toll Module (ITM), an in-cabin sensing unit, and a smart lighting system. HomeLink is an embedded connectivity solution for vehicles which can perform functions like door lock, garage door opening, security, smart outlets, smart lighting and appliances. A vehicle integrated ITM helps users manage toll bills through a single solution, thus reducing traffic and improving efficiency in toll management. It has already entered partnerships with automakers and technology service providers for creating innovative solutions for customers. Gentex, one of the leading connectivity providers to automakers, is trying to bring a new concept to the digital cockpit and the coming autonomous age.

8. NXP announces BlueBox 3.0 AHPC development platform

NXP announced a new BlueBox 3.0 Automotive High-Performance Compute (AHPC) development platform which supports Level 2+ autonomous driving. NXP’s Layerscape LX2160A processor helps improve processing performance two times the previous generation of the platform while the S32G processor provides secured vehicle networking. As automakers will incrementally reach the full AV stage, this platform will help find near-term applications in Level 2+ and Level 3 automated vehicles. Since this platform is flexible and scalable, it can be updated with rising levels of autonomy.

9. Magna firms up EV and AV plan with a series of strategic pacts

Magna launched the LED-based Mezzo Panel for the Fisker ADAS panel. Mezzo Panel is a micro-LED and sensor-based polycarbonate panel which can be integrated into a vehicle body without affecting body aesthetics. Magna is also working on the Magna Vision Panel which is set to be showcased at the 2022 CES. Magna and Fisker are collaborating on building unique ADAS features and EV-sharing platforms.

LG Electronics and Magna have created a joint venture to concentrate on the electric powertrain market. In the CES last year, Sony surprised us by unveiling an EV prototype, Vision-S. In this year’s CES, Sony showed new videos of the Vision-S. Magna is one of the major partners for the Vision-S.

10. John Deere showcases VR technology for tractors

John Deere highlighted seed planting with the help of virtual reality (VR), AI and a camera system. A VR-based tractor will help improve precision during planting and work seamlessly in different environments. With the rising applications of 5G and IoT in the agricultural field, John Deere is attending the CES for the past few years. Besides showcasing major products and services in the passenger and commercial vehicle segments, the CES is also becoming a stage for unveiling products for small segments of the automotive industry, like farm equipment.

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Why is Toyota Partnering with Panasonic to Make EV Batteries?

Background

In January 2019, Toyota and Panasonic announced they were forming a joint venture (JV), to manufacture prismatic batteries for electric vehicles (EVs). The new company, Planet Energy & Solutions Inc is now active.

The company, headquartered in Tokyo, will commence operations from April 2020 with 5,100 employees, including 2,400 at a subsidiary in China. Toyota owns a 51% stake in the JV, with Panasonic the rest. The aim of the JV is to mass-produce solid-state lithium batteries with much higher capacities compared to those used today. This insight looks at why Toyota is forming the JV and the benefits for both companies.

Exhibit 1: Win-Win Situation

Toyota

The JV syncs well with Toyota’s plans for developing and launching its future range of fully battery operated EVs. While Toyota ranks well globally in terms of fuel efficiency with a relatively high share of hybrid vehicles in its product mix, the company lags competitors in battery or pure electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEVs). In the last couple of years however, Toyota has become more aggressive with its BEV plans, primarily to comply with stringent emission regulations, and more specifically to qualify for NEV credits in China, which requires automakers to manufacture a mandated share of EVs in its total production.

With Toyota having announced plans to sell 5.5 million EVs by 2030, the high cost of batteries, which accounts for around 40% of the vehicle cost, remains a pain point. In partnering with Panasonic, Toyota will not only share in the R&D investment to develop advanced solid-state batteries, but also secure competitive pricing and steady supply for its future EV models. Batteries also open a new revenue opportunity for Toyota, supplying to partners, like Suzuki and Mazda among others.

It can also pitch to other global auto OEMs through Denso, the leading Tier1 supplier, in which Toyota has around a 25% share.

Panasonic

While Panasonic is currently among the world’s leading EV battery manufacturers, it is seeing tough competition from South Korean players – Samsung SDI and LG Chem, and Chinese players, especially CATL which has won supply contracts with key automakers including BMW, Daimler, Volkswagen, and Volvo. With its assured long-term supply contract to Toyota, Panasonic can further diversify its revenues from consumer durables to the fast-changing automotive sector.

Panasonic Reducing Dependency on Tesla

Until recently Tesla had been the key customer of Panasonic batteries. Having relied solely on Panasonic to source its batteries since 2014, Tesla has been broadening its battery suppliers to include LG Chem and CATL. It is also considering developing and producing its own batteries, acquiring Hibar Systems, a high-speed battery manufacturing company, and Maxwell, best known for ultracapacitors. The JV supports Panasonic’s strategy to reduce long term reliance on Tesla and realize future growth opportunities in the global automotive industry.

How Competition is Driving Innovation in the EV Battery Market

Electric vehicle (EVs) have emerged as a focal point of realizing eco-friendly policies across the world. Increasingly, automobile OEMs recognize that the future of their products lies outside the ecosystem of internal commercial engines (ICE). As a result, they are tweaking their business models to be future ready.

For EVs, the most crucial component is the battery. No wonder then that competition is getting fiercer among global automobile OEMs and battery manufacturers to get a hegemony over the EV battery market. However, this competition is also yielding technological breakthroughs.

In the automotive paradigm, lithium-ion battery technology stands at the center of innovation. There has been a significant amount of progress in the improvement of lithium-ion battery technology. Here, we provide a brief overview of some of these developments and what the future holds.

NCM 811 just around the corner

Battery cell manufacturers are spending heavily on R&D for improving the energy density of lithium-ion batteries. Although the speed of improvements has been slow, gradually, lithium-ion batteries have helped increase the driving range of EVs by utilizing high-energy source materials and improving the per-unit cell size. There have been considerable efforts to boost the nickel portion of total cathode materials. Most of the top battery players have announced their plans for commercialization/mass production of NCM811 by 2019-2020. NCM811, which contains 80% nickel, 10% cobalt and 10% manganese, has a much longer lifespan and allows EVs to go further on a single charge. In April, CATL mentioned it had begun mass production of the NCM811. Recently AESC, acquired by Envision Group from Nissan, also announced its plan to produce NCM811, which promises more than 300Wh/Kg and 600-650Wh/L in 2020.

Solid-state batteries coming next

Battery companies have been introducing a roadmap for solid-state battery technology as the next-generation technology and exhibited various innovative products as well. In theory, solid-state batteries have a lower risk of electrolyte being exposed or exploding due to physical shock. This is because solid-state batteries adopt a solid electrolyte made of polymer or ceramic materials instead of the liquid electrolyte used in current lithium-ion batteries. Thanks to their high performance at elevated temperatures and high capacity, solid electrolytes are a technology that could further boost energy density. Interestingly, automobile OEMs seem to be taking a more proactive approach towards the R&D of the solid-state batteries. So far, Toyota ranks first in the number of patent applications for solid-state batteries. Last year, Volkswagen announced it would invest US$100 million in solid-state battery maker QuantumScape to mass produce the product by 2025.

Exhibit 1: Battery energy density & EV range on the rise

Falling battery prices

The falling prices of battery cells and packs are also fueling the penetration of EVs. EV battery cell and pack prices were estimated to be US$140-US$150 per kWh and US$170-US$180 per kWh respectively, at the end of 2018. Thanks to economies of scale that battery cell makers will experience with energy density improvements, the price per kWh will keep falling further. By 2025, we predict EV battery cell and pack prices would fall below US$80 per kWh and US$100 per kWh respectively. This implies the cost will decline around 10% per annum. Consequently, the battery pack, which currently accounts for 30-40% of EV manufacturing costs, will make EVs cheaper than equivalent internal combustion engine (ICE) vehicles after 2025. With more countries moving to phase out ICE vehicles and more automobile OEMs rolling out EV fleets, the price drops should trigger explosive growth in EV demand. Ultimately, this will form a virtuous cycle.

The massive leap in the market size

According to Counterpoint Research’s Smart Automotive Research, passenger EVs will exceed 11 million units (including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs)), by 2025, and many steps in the new value chain are up for grabs. After 2025, EVs will be expected to cost the same or lower than conventional ICE vehicles, offering new opportunities for automobile OEMs and battery players. Not only is the EV market growing, but sales-weighted average battery capacity per EV is also on the rise. Accordingly, we expect the passenger EV(BEV/PHEV) battery pack market will expand to over 600 GWh by 2025 and generate nearly US$60 billion in revenue.

Ramping up production capacity

Leading battery manufacturers including CATL, Panasonic, LG Chem, Samsung SDI, and SK Innovation are fighting to win orders from global automobile OEMs. In doing so, they are also providing an excellent stimulus to each other. We do not see it as meaningful for battery vendors to line up order backlogs as long-term orders are generally flexible in terms of sales volume and price and depend on the market situation. Instead, it is essential to get a picture of ramp-up plans for the entire industry in order to track supply and demand movements going forward. Capacity expansions have accelerated sharply since the EV portion of global vehicle sales volume began to look significant. The cumulative capacity reached 129GWh at the end of 2018. We expect the cumulative battery production capacity for EVs to increase to nearly 800GWh by 2025, led mainly by the expansion of the top players.

No significant changes in the competitive landscape before 2025

Unlike other technology products, batteries are customized components. EV batteries, especially, need to be precisely optimized for each EV right from the product development stage to get optimum power and safety management. As the EV battery business requires a long history of competitiveness in such product development along with mass production experience, the industry has a high entry barrier. That is why we expect existing top players will continue to lead the market, and there will be no significant change in the competitive landscape for a while.

But, what about automobile OEMs who are willing to take battery cell technology and production into their own hands? At the initial stage, we believe that they will have to depend on long-term battery supply deals from multiple battery vendors. The long-term contracts will help to clear supply bottlenecks at a time of soaring demand and hold out the promise of cheaper batteries over time. Automakers will also have flexibility in supply for potential emergency scenarios and encourage competition among vendors to get better prices. In the meantime, they will attempt to internalize EV battery manufacturing based on the know-how and R&D accumulated through acquisitions or benchmarking a battery vendor in an exclusive partnership. When the time comes for the market focus to shift from the current lithium-ion batteries to solid-state batteries after 2025, the industry could look very different.

Exhibit 2: Global EV battery suppliers and auto OEMs

You can click here to download the full report on “How Competition is Driving Innovation in the EV Battery Market” from our Research portal.

Contenders for Lithium-Ion's Crown

Although most of the hardware in consumer electronics devices such as smartphones has improved beyond recognition over the past twenty years, the pace of technological development in battery technology has sadly lagged. Today’s Lithium-ion (Li-I) batteries, first introduced in the early 1990s, are the limiting technology and hindering the pace of technology innovation. In addition, the need to support the development of 5G technology over the next few years, will likely make the issue more acute.

There are multiple battery chemistries under development – new start-ups frequently emerge claiming to have solved the age-old problems of having high energy density, the ability to withstand multiple charging cycles – including fast charging, all while being safe and cost efficient. So, while many contenders enter the ring to slug it out with Li-I, none have yet floored the champion. And in our view, none are likely to for at least the next five years.

The plethora of pretenders is part of the problem. With so many different chemistries being considered, investors are torn between where to lend muscle. And the costs of development are considerable – the R&D alone can run into many hundreds of millions. Scaling to production requires significant further investment — just take a look at the Tesla/Panasonic Gigafactory in Nevada for an indication of what it takes to create global-scale battery production.

Tesla Gigafactory (picture credit: Matthew Roberts)

Other problems arise because while many of the developing battery technologies are better than Li-I in one or more of the critical criteria referenced above, they are inferior on one or more of the others.

And Li-I is not a stagnant technology, it is evolving, just not as fast as some of the other hardware features that have taken center-stage in consumer electronics. Nevertheless, we think there are some innovations that will likely come to market within the next two years that will enable a much-needed leap forward for Li-I. These innovations include different anode materials such as silicon as well as the introduction of nano-materials like graphene.

Looking beyond the five-year time horizon and especially at applications such as the electric vehicle, we expect to see developments in technologies such as metal-air.

Battery technology may be a limiting factor, but that isn’t to say that there’s not a lot going on. It’s just that no-one has found the holy grail. Not yet, anyway.

Counterpoint has a new research report that analyses the developments in battery technology. Clients can access the report here.

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Insights Tag： Panasonic

Global Telematics Control Unit Shipments Grew 13% YoY in 2021

Top 10 Automotive Announcements in CES 2021

1. Mercedes-Benz unveils a 56-inch ‘Hyperscreen’

2. GM reveals an ambitious EV plan and a flying car concept

3. Panasonic unveils augmented reality (AR)-based heads-up display (HUD)

4. Mobileye showcases plan for AV rollout

5. Here Technologies brings a new mapping-as-a-service offering and 3D city models for vehicles

6. Harman redefines in-car experience in the 5G era

7. Gentex reveals full display rearview smart mirror

8. NXP announces BlueBox 3.0 AHPC development platform

9. Magna firms up EV and AV plan with a series of strategic pacts

10. John Deere showcases VR technology for tractors

Why is Toyota Partnering with Panasonic to Make EV Batteries?

Background

Toyota

Panasonic

Panasonic Reducing Dependency on Tesla

How Competition is Driving Innovation in the EV Battery Market

Contenders for Lithium-Ion's Crown

Coverage

Insights

Social media

Contact us

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1. Mercedes-Benz unveils a 56-inch ‘Hyperscreen’

2. GM reveals an ambitious EV plan and a flying car concept

3. Panasonic unveils augmented reality (AR)-based heads-up display (HUD)

4. Mobileye showcases plan for AV rollout

5. Here Technologies brings a new mapping-as-a-service offering and 3D city models for vehicles

6. Harman redefines in-car experience in the 5G era

7. Gentex reveals full display rearview smart mirror

8. NXP announces BlueBox 3.0 AHPC development platform

9. Magna firms up EV and AV plan with a series of strategic pacts

10. John Deere showcases VR technology for tractors

Background

Toyota

Panasonic

Panasonic Reducing Dependency on Tesla

Coverage

Insights

Social media

Contact us

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