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Top 10 IoT Announcements at CES 2023

At the first full-fledged CES event after the pandemic, the excitement was palpable. The event did not disappoint in terms of the variety of announcements across the internet of things (IoT) spectrum. Our teams, both on-ground and online, tracked over 260 announcements made by over 240 companies covering a range of segments across consumer, enterprise and industrial.

Devices formed the most popular category, with three out of every five announcements relating to this segment. As expected, the consumer and smart home sectors took center stage, but it was intriguing to see new launches in industry segments such as agriculture. Additionally, smart home, metaverse, augmented reality, healthcare and robotics were among the most talked about segments, attracting large crowds.

Here are the top 10 IoT announcements from this year’s CES, according to Counterpoint analysts:

1. Wi-Fi: MediaTek launches Genio 700, Wi-Fi 7 products

MediaTek introduced the Genio 700 IoT chipset targeting industrial, smart home and smart retail applications. This chipset will be available by Q2 2023. MediaTek also showcased Wi-Fi 7-supported products like gateways, mesh routers, televisions, streaming devices, smartphones, tablets and laptops partnering with TP-Link, Lenovo, Hisense, ASUS, BUFFALO INC, Skyworks, AMD, Qorvo, LitePoint and MAC MLO among others.

MediaTek is slowly diversifying its offerings beyond smartphones. The availability of products with superior capabilities and increased partnerships will help MediaTek increase its footprint in the IoT market.

2. Smart Home: TP-Link expands Tapo smart home products

TP-Link unveiled new products under its Tapo line of smart home devices. These new additions include cameras, a doorbell camera, a smart video door lock, robot vacuums and a smart hub home connection center. Besides, the company also launched its first Matter-certified smart plugs, smart switches, smart outlet extenders and smart bulbs. The launch of these products at CES 2023 highlights TP-Link’s focus on expanding and diversifying its offerings in the smart home market.

The company’s adoption of the Matter protocol for its Tapo and Kasa lines of smart home products shows its commitment to making smart home technology more accessible and user-friendly.

In addition to the smart home products, TP-Link also showcased Wi-Fi 7-supported router and gateway solutions for use in homes, enterprises and ISPs. The integration of Wi-Fi 7 will improve the gaming experience, as well as increase productivity in enterprise applications.

3. Asset Tracking: Pod introduces paper-thin tracker with SODAQ, Lufthansa

Pod Group, in partnership with SODAQ and Lufthansa Industry, has developed a paper-thin smart label tracking device that utilizes low-power cellular connectivity (LTE-M) for a battery life of up to six months. This sustainable, eco-friendly device uses alkaline batteries instead of lithium and has the potential to revolutionize the tracking and logistics industry by improving supply chain efficiency and reducing operational costs.

Similar efforts by SODAQ with Vodafone and Bayer utilizing NB-IoT technology have been observed, but the use of Low Power Wide Area Network (LPWAN) may be more beneficial as it targets a wider range of telecommunications operators.

4. Sensor: Bosch showcases sensor technology

Bosch Group subsidiary Bosch Sensortec presented a variety of new sensors at CES 2023. These offerings include an AI-enabled smart sensor system, magnetometer, barometric pressure sensor, and an air quality sensor. These sensors demonstrate advancements in power efficiency, accuracy and compact size, and aim to enhance the user experience by tracking personal health and fitness, providing accurate data and prolonging battery life.

Bosch has been a leading manufacturer of micro-electromechanical system (MEMS) sensors since 1995 and has produced over 18 billion units to date. It is also investing in quantum sensors, which can provide measurements that are significantly more precise than current MEMS sensors and enable more accurate diagnosis of neurological diseases. Additionally, the company is developing angular rate sensors that use the nuclear magnetic resonance of noble gas atoms and are optically pumped. These could prove to be highly precise and stable for navigation applications. Bosch believes that sensors will play a key role in IoT and continues to make investments in this area.

5. Modules: Quectel enables satellite connectivity, strengthens automotive module portfolio

Quectel is partnering with Skylo to integrate satellite connectivity into its 5G-ready BG95x/BG77x series of LPWA modules. This hybrid connectivity solution improves network coverage and makes it ideal for a variety of applications, such as trackers, wearables, smart cities and smart meters. Low-earth orbit (LEO) satellites are going to be a key for the non-terrestrial networks (NTN) coming up in 3GPP Rel17/18 in addition to the high-altitude platform system (HAPS).

Quectel also launched the AG59X series of automotive-grade 5G modules based on Qualcomm’s SA525M platform to support autonomous driving. The company has strong partnerships with Chinese automakers such as Li Auto, Nio and BYD, and this module will further strengthen its efforts to increase share in the automotive connectivity market.

6. AR/VR: Thundercomm unveils XR2 VR HMD, 5100 AR glasses and smart vending machine

Thundercomm, a joint venture between Thundersoft and Qualcomm, unveiled a VR HMD solution based on the Snapdragon XR2 platform and AR glasses based on the Snapdragon W5 platform. These products will not only provide flagship experience but also offer low power consumption, higher resolution and more wear comfort. The AR/VR space is heating up with the increased participation from leading technology and smartphone players such as Meta, Apple, HTC and Google. However, an early entry can be beneficial for Thundercomm.

The newly launched smart vending machine will help increase operational efficiencies for retailers. Moreover, this solution will improve the shopping experience and further extend retailers’ reach. Thundercomm is expanding its product lines to capture maximum value from both the consumer and enterprise IoT markets.

7. Robotics & Drones: Autel Robotics showcases EVO Max 4T drone

Autel Robotics has unveiled a new drone, the EVO Max 4T, which is capable of a variety of applications such as autonomous navigation, semi-autonomous flight missions, firefighting, and inspections. It is equipped with three high-quality cameras, capable of capturing footage from a distance of 1.2 km. Autel has also released the Dragonfish NEST infrastructure, which supports automated eVTOL systems, and the EVO NEST infrastructure, which can operate in all weather conditions.

Drones and eVTOLs will see higher adoption in the future with better efficiency in power consumption, security improvements and better regulatory compliances. These innovations will help Autel increase its presence in the enterprise market and remain competitive with companies like DJI.

8. Industrial IoT: ZVISION partners NVIDIA to improve industrial sensing

ZVISION, a provider of solid-state MEMS LiDAR solutions, is working with NVIDIA to use its robotics simulation platform Isaac Sim to develop advanced robot sensing capabilities and provide high-performance LiDAR solutions.

In Industry 4.0, robotics and simulation will play a key role. Its partnership with NVIDIA will allow ZVISION to expand its applications beyond vehicles, while also reducing costs and speeding up time-to-market for companies undergoing digital transformation. ZVISION offers both short- and long-range LiDAR options that can be tailored to various applications.

9. Platform: Tuya pushes PaaS 2.0, Cube for digital transformation

Tuya officially launched PaaS 2.0 to develop personalized solutions to fulfill global customers’ demands for “product differentiation and independent control”. For private cloud customers, it also unveiled Cube, an enterprise-level IoT platform deployment solution.

PaaS 2.0 is a unique innovation that can assist customers in reducing R&D costs and increasing product competitiveness. Tuya is focusing on public and enterprise cloud applications which are dominated by big cloud players like Alibaba cloud and Tencent cloud.

10. Healthcare: OMRON launches blood pressure monitor with ECG

OMRON introduced a new upper-arm blood pressure monitor with built-in ECG capabilities. This device aims to facilitate the early detection of heart disease by combining blood pressure monitoring and ECG technology. Utilizing home-monitored data, healthcare professionals will be able to provide early treatment and detect Atrial Fibrillation (AFib) at an early stage.

The company also announced the expansion of its digital healthcare apps with new features, such as the Personal Heart Health Coach and the Care Team within the OMRON Connect app. These new features will utilize AI technology to analyze vital data and provide patients with personalized guidance and exercise advice. OMRON’s innovative solution, leveraging technologies like AI, ML and IoT, will help healthcare professionals to better understand patient data through analysis.

Conclusion

CES 2023 has provided ample food for thought for industry executives. Each of the announcements made at the event has significant implications for the direction of the industry. For example, the satellite-related announcements made by chipset and module players could help IoT companies focus on new use cases. Additionally, with Wi-Fi 7 becoming mainstream and Matter-certified home products being rolled out, we can expect to see a significant uptick in demand for smart home products. These developments and more continue to shape the future of IoT and solidify the role technology plays in our daily lives. With more innovation, the possibilities are endless and we are excited to see how the industry will continue to evolve.

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Good Show in Vehicle Solution, B2B Segments Helps LG Fight Macro Headwinds

Q3 2022 revenue increased 8% YoY to reach ₩16.12 trillion helped by higher sales of vehicle solutions.
Vehicle solutions revenue jumped 46% YoY during the quarter, helped by the improved global semiconductor supply and increased auto production in China.
Operating profit increased 33% YoY to reach ₩0.79 trillion.

LG Electronics (LG) reported an 8% YoY growth in Q3 2022 revenue to reach ₩16.12 trillion despite considerable macro headwinds but helped by higher sales in its vehicle solutions and business-to-business segments. Quarterly gross profit rose 5% YoY to ₩5.05 trillion while operating profit grew sharply by 33% YoY to reach ₩0.79 trillion.

During the quarter, investor sentiment was weak due to a steep devaluation of the South Korean won against the US dollar, hurt by strong economic headwinds. The Korea Composite Stock Price Index (KOSPI) fell 6.5% in Q3 2022, which negatively affected LG’s performance.

Financial highlights:

Revenue from the consumer electronics segment fell 1% YoY to ₩11.19 trillion due to increased logistics costs and lower demand for premium products like TVs. This segment contributed to 69% of total revenue during the quarter.
Among all the segments, vehicle solutions was the best performer. The segment’s revenue jumped 46% YoY to ₩2.35 trillion during the quarter helped by the relative improvement in the global semiconductor supply chain. The segment accounted for 15% of the company’s total revenue. China faced a lot of factory shutdowns in the preceding quarter due to regulations related to the COVID-19 pandemic. As factories reopened in Q3, there was an increase in production which helped meet the heightened demand for electronics components in the automotive industry. This, combined with an improved cost structure, helped LG achieve strong growth figures for the period.
Revenue from other businesses grew 23% YoY reaching ₩2.60 trillion. Despite an increase in sales, the profitability of this segment decreased 63% due to lower demand for IT products and higher raw material costs.
LG’s gross profit increased 5% YoY to reach ₩5.04 While the company’s operating profit grew sharply, gross profit growth was relatively muted because of increased market competition, low consumer demand, increased raw material prices, increased marketing expenses and the energy crisis.

Market outlook:

The current global business environment is quite difficult, burdened by rising inflation, supply chain disruptions, geo-political tensions, increased logistic costs and the energy crisis, which have weighed negatively on consumer sentiment across industries. LG plans to prioritize on the development of new software platforms and adjust its channel inventory to overcome the ongoing crisis. LG will focus on its premium consumer electronics products and will likely maintain maximum margins to secure high profits. The company will also apply cost-saving initiatives to reduce raw material costs.

The vehicle solutions segment has the highest potential to expand as the global semiconductor shortage is easing out and OEMs like Honda, GM and Stellantis are working to jointly produce battery cells. Moreover, LG has secured an order worth ₩1 trillion from Tesla to supply automotive camera modules for the Tesla Model 3, Model Y and Cybertruck. These new deals will drive LG’s vehicle solutions segment to a great future.

LG is also strengthening its focus on new technologies like metaverse and robotics. It recently partnered with KT Corporation to expand its AI robot service business. LG will also establish an R&D centre and develop robots for logistics, education and healthcare services. LG’s strategic partnership with TmaxMetaverse will boost development across metaverse solutions and web-based metaverse services. The company will have the opportunity to capitalize on these technologies by the time they mature at the end of the decade, which will help it boost revenue.

Tesla’s stellar Q3 performance

Tesla delivered nearly 343,900 vehicles during Q3 2022, an increase of 42.4% YoY
Logistics remains a major bottleneck for Tesla deliveries
Tesla can exceed 1.3 million unit deliveries by year end with current trajectory

Tesla rebounded during Q3, after experiencing a relatively weak second quarter. During Q3, Tesla delivered nearly 343,900 vehicles, a 42.4% annual increase and a sequential increase of 35%. The combined deliveries of Model S and Model X grew by more than 100% YoY, reaching 18,670 units, while the combined deliveries of Model 3 and Model Y increased by 40% YoY. China is the leading market for Tesla followed by the USA and Europe.

Tesla’s Shanghai Gigafactory surpassed the previous quarterly production rate and remains the main export hub supplying to most markets outside North America. The gigafactory updated its production ramp in July this year. The Berlin Gigafactory is also producing more than 2,000 units of Model Y, weekly. A lot of work is left to bring the Berlin plant to full capacity as it is only slowly reaching its planned output. As winter approaches, and it is feared that Europe will experience an energy crisis, Musk somehow remains optimistic about vehicle production in the Berlin plant and expects that no production cuts will happen.

Q3 financial summary:

During Q3, Tesla’s total revenue grew by almost 56% YoY, reaching $21.4 billion. Tesla generated $18.6 billion from the vehicle segment, an increase of 55% YoY. This is largely due to increased global deliveries and higher vehicle ASPs.

Although revenue from vehicle leasing during Q3 has increased significantly by 61% YoY, revenue from the sale of automotive credits grew by just 2.5% YoY.

Revenue generated from the company’s other businesses like energy storage, solar panel deployment, charging and vehicle servicing also grew by 62.5% YoY, exceeding $2.7 billion.

Gross profit, was $5.3 billion an increase of 47% YoY. But below expectation due to the high cost of raw materials, upgrading the production ramps (Berlin, Texas and 4680 cell factories) and increased logistic costs.

Tesla has been facing a serious issue with vehicle deliveries. There weren’t enough transport vehicles available with its logistic partners to handle the volume of Tesla deliveries. This increases the logistic cost which, in turn, is affecting the per-vehicle cost.

3.4% of the total revenue has been diverted towards R&D expenditure during Q3 2022. R&D spending stood at $0.73 billion, an increase of 20% YoY and sequentially growth of 10%. This is apparently due to the development of Tesla’s Optimus Robot and full-self driving (FSD) capability. This year Tesla postponed its AI Day to showcase a working prototype of its humanoid Optimus Robot whose software is very similar to the FSD system.

The FSD beta users reached 160,000 in Q3, up from 100,000 in Q2. Tesla is also going for a wider release of its FSD beta during Q4 2022. Hence, new Tesla owners will have the option to avail FSD beta immediately. Currently, there is an eligibility criteria to avail the FSD beta. With the resignation of Andrej Karpathy, Tesla’s AI and Autopilot director, it was perceived that the company’s FSD development is likely to stall, but it seems Tesla has made good progress and is confident of its path toward full autonomy, despite some alarming failures among beta testers.

Outlook:

Despite a weak second quarter, Tesla’s yearly deliveries may cross 1.3 million units by the end of 2022. Tesla is expected to make its first delivery of the Tesla Semi truck to Pepsi on December 1^st this year. The Semi is claimed to have a range of 500 miles with cargo at ground level. We are also expecting to see the company’s long-advertised Cybertrucks becoming available by mid-2023. Alongside these, Tesla has also increased the production of its in-house designed 4680 cells. The constant production ramp upgrade in its gigafactories around the globe is likely to keep Tesla the market leader in the battery electric vehicle segment.

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u-blox Continues Strong Growth in H1 2022

u-blox recorded an excellent H1 2022 with $311.9 million in total revenues, an increase of 47% from H1 2021 despite macroeconomic headwinds. The demand and interest in u-blox products remained strong across all markets and business segments. The strategy of remodeling and redesigning its products has worked for u-blox in dealing with specific shortages. This time, u-blox changed module design a lot to cut component shortages and clear backlogs.

H1 2022 highlights

u-blox’s gross profit increased 53.9% YoY in H1 2022 to reach $152.4 million.
The industrial segment captured 61% of the company’s total revenue and grew 62% YoY due to higher demand for automation and healthcare applications. The automotive segment also grew 62% YoY and its revenue contributed 28% to the total revenue. The consumer segment grew 18% YoY and captured 10% of the total revenue. In this segment, the growth mainly came from consumer telematics applications.
Americas and APAC regions grew more than 50% YoY while EMEA grew 30%. This growth was driven by industry-focused solutions for automation, mobility, healthcare and network applications. APAC’s growth despite China lockdowns was a testament to u-blox’s strong pipeline of design wins.
In the first half of 2022, modules and GNSS chips contributed 81% and 18% of the total revenue respectively. The module volume grew by 34.3% YoY in H1 2022 to reach nearly 27 million.

The ASP of modules and chipsets increased 20% and 46% YoY respectively due to supply chain constraints and product mix-ups.

GNSS modules

u-blox’s GNSS module shipments grew 56% YoY in H1 2022, contributing more than half of the total module revenue. The good quality and position accuracy of its GNSS products helped u-blox grow this market significantly. This year, it launched the smallest GNSS module, MIA-M10, with its latest technology targeting size-constrained applications like asset-tracking devices, pet trackers, livestock trackers and wearables. Xiaoan selected the u-blox M10 product to enhance the positioning performance of shared motorcycles and electric bicycles.

Wi-Fi/BT modules

In H1 2022, u-blox’s Wi-Fi/BT module segment grew 24% YoY to reach a revenue of nearly $30 million. In short-range radio modules (Wi-Fi and Bluetooth), u-blox continued to expand its capabilities. It launched Wi-Fi 6-based modules, which are ideal for industrial, smart home and mass-market applications.

Cellular IoT modules

In recent times, we have seen international module players merging their cellular IoT businesses to become more competitive in this space. u-blox is slowly recovering its cellular IoT module business. In H1 2022, u-blox’s cellular IoT module segment grew 36% compared to H1 2021, according to Counterpoint Research’s Cellular IoT Module Tracker Service. u-blox provided flexibility to its customers by launching new products. However, we expect u-blox will focus more on GNSS products and services compared to cellular IoT modules, considering growth opportunities.

GNSS chips

The quality of u-blox’s GNSS chipsets is far better than other players, which is helping u-blox witness continued growth in this market. With the rising demand for positioning and location-based ecosystems, u-blox will be able to record a multi-fold increase in its revenue by targeting applications like passenger and commercial vehicles, asset tracking, micro-mobility, surveillance, industrial and healthcare.

Market outlook

The steady expansion of u-blox’s production capacity and strong bookings resulted in this record revenue in H1 2022. Within the first half of 2022, its order book value doubled compared to the end of 2021, which makes u-blox well-positioned to continue to grow revenues and improve profitability. It is already managing well the supply constraint situation. We expect u-blox’s revenue will grow nearly 50% YoY in 2022.

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Global Consumer Service Robotics Market Grew 25% in 2021

Global consumer service robotics market is expected to grow at a CAGR of 27% during 2021-2025.
House Cleaning Robots captured over two-thirds of the total market in 2021.
Personal and Education, and Logistics were the fastest growing categories in 2021.
Personal and Education Robots had the lowest ASP of around $279 followed by House Cleaning Robots ($626).

New Delhi, London, Beijing, Hong Kong, Seoul, San Jose, Buenos Aires – August 2, 2022

Global consumer service robotics market posted 25% YoY shipment growth in 2021 and is estimated to grow at a CAGR of 27% over the next four years, according to the latest research from Counterpoint’s IoT service. The growth was driven by the change in consumer preference, advances in technology and the availability of a wide variety of affordable products.

Commenting on the overall market, Senior Research Analyst Anshika Jain said, “House Cleaning Robots, which mainly comprise robot vacuums, is the most dominant category in the robotics industry, capturing over two-thirds of the total consumer service robotics market. COVID-19 has positively impacted the robot vacuum industry, resulting in increased demand from residential users.”

“With advances in AI, the prices of components and software are also coming down, making the robots more affordable. There have also been improvements in technologies like speech recognition and computer vision, which have helped to drive growth. In addition, favorable government policies along with the required funding support are also helping boost the segment,” Jain added.

Talking about market growth, Research VP Peter Richardson said, “The consumer service robotics market’s shipments are expected to grow at a CAGR of 27% over the 2021-2025 period with the Personal and Education category taking the highest share of 54% by 2025. The category offers the best near-term opportunity due to the rising need for elderly care (especially in combatting isolation), social security and new ways of learning for children. The ASP (average selling price) of this segment is also expected to fall further, which will make these devices more accessible to people in the future.”

“We estimate that the market opportunity of Personal and Education robots will exceed $4.5 billion by 2025 with substantial further growth expected beyond 2025 due to the aging population in many countries and increasing focus on STEM (Science, Technology, Engineering and Mathematics)-based learning. Robots developed for these two use cases will likely have a core set of technologies that can be broadly applied to other emergent segments as well,” Richardson added.

Market Segments Summary

In this analysis, the consumer service robots have been broken into House Cleaning, Personal and Education, Hospitality, Logistics, Medical and Others segments.

House Cleaning: Mainly comprising vacuum robots, the House Cleaning segment grew 22% in 2021 and contributed to around 68% of the total consumer service robot shipments. China was the largest market followed by Europe and North America. In this category, the leading players are iRobot, Ecovacs, Roborocks and All the top OEMs in this category offer in-house hardware and software platforms wherein the companies save all the data on the cloud through partnerships with cloud companies.
Personal and Education: This is a very fragmented market that mainly comprises companion and education-related robots. It captured around 31% share of the total consumer service robotics market in 2021 and registered 33% YoY growth. Out of all the categories, this segment had the lowest ASP in 2021 at around $279. The main drivers for this category include elderly care, fight against social isolation, personal entertainment and child education.
Hospitality: This category mainly includes robot front desk attendants used in the hotel service industry to help guests with basic tasks, and disinfection-related robots. Although this segment captured less than 1% share in the total market in 2021, it was one of the fastest growing segments, especially during COVID-19 as guests were looking for new contactless experiences and hotel chains were struggling to find labor due to shortages in the job market. The hotel robot market is in a nascent phase and the low penetration is attributed to high implementation and maintenance costs.
Logistics: This segment covers delivery robots, mainly used for doorstep food delivery by grocery chains, restaurants and hospitality businesses. The shipments for the delivery robots have remained low as they are expensive to deploy and require massive upfront investments. Starship Technologies, Nuro and Piaggio Fast Forward (a subsidiary of Piaggio) are the key players in this segment. These robots are mainly deployed in the North American market. The average price range for such robots is $2,500-$10,000.
Medical: This segment comprises surgical, exoskeleton and hospital delivery robots with 61%, 23% and 11% share respectively in the overall Medical category. In terms of regional share, North America is one of the biggest markets and captures almost half of the total segment.

The consumer service robots market holds tremendous potential in the coming years due to evolving use cases. The robot vacuum cleaner market is the most mature, but there is still significant growth potential. The Personal and Education segment is set to drive market growth in the coming period. Logistics (delivery robots) is another major area that has good potential to grow in the medium term due to further technological advances. Medical robots still seem a risky proposition as they need a lot of upfront capital expenditure, and the R&D outcomes are unpredictable.

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:

Anshika Jain

Peter Richardson

Counterpoint Research
press(at)counterpointresearch.com

China Cloud on Tesla’s Q2 2022 Numbers; Fundamentals Remain Strong

Tesla sold more than 254,000 vehicles in Q2 2022, an increase of 27% YoY, which was below general expectations.
This was the first time since the COVID-19-hit 2020 that the automaker experienced a sequential decline in sales.

After achieving phenomenal growth in Q1 2022, Tesla’s global sales during Q2 2022 grew by just 27% YoY to over 254,000 units, falling short of expectations. In QoQ terms, the sales fell 18%. Business during Q2 2022 was affected by COIVD-19-related shutdowns in China. Production units in and around Shanghai were closed temporarily due to strict lockdown measures. As a result, Tesla sold just 89,000 cars across China during Q2 2022. Cumulative sales in China during April and May fell by more than 66% YoY. The situation improved only after the production returned to full capacity in June.

It was expected that the Berlin Gigafactory would boost Tesla’s sales in Europe after becoming operational in March 2022. But the production was lower than expected. A few rumored reasons for the low production are litigation with the German government and a shortage of human resources. The Berlin factory is currently focusing on the production and deliveries of the Model Y across Europe.

Tesla bets on in-house battery cell manufacturing

Tesla delivered its first batch of cars equipped with the in-house 4680 battery cells and structural battery packs during this quarter. These cells use a little amount of lithium. With lithium prices soaring worldwide, 4680 cells will help lower the vehicle manufacturing cost. The cells will power the Model Ys coming out of the Berlin Gigafactory. However, Tesla will shut the Berlin Gigafactory for a couple of weeks during autumn to upgrade the production system of 4680 cells.

Other businesses see 33% YoY growth

Although Tesla’s vehicle sales in Q2 2022 failed to meet expectations, its other businesses like energy deployment and storage, charging and other services grew more than its vehicle segment. Energy deployment, energy storage, charging and other services grew by 33% YoY. Tesla deployed 106 MW of solar panels and 1.13 GWh of energy storage during Q2 2022. It installed 247 new superchargers worldwide, bringing its global supercharger number to 3,971 units with more than 36,000 connectors.

Tesla converts 75% of its Bitcoins to fiat currency

During Q2 2022, Tesla also converted 75% of its Bitcoins to fiat currency. This was done to have a better cash position against the backdrop of COIVD-19-related uncertainties. This conversion reduced Tesla’s digital assets to $218 million and added $936 million in cash to Tesla’s balance sheet.

Source: Tesla Q2 2022 Financials and Counterpoint Analysis

Q2 2022 Financial Results

During Q2 2022, Tesla sold more than 254,000 vehicles at 27% YoY growth. The Model 3 and Model Y comprised more than 93% of these sales.
Revenue from vehicle sales stood at $14.6 billion. Total revenue grew by almost 42% YoY, with the COVID-19 impact on China reducing the QoQ number by about 10%. Revenue generated from automotive credit also declined slightly compared to Q2 2021.
The company’s other services, like energy storage, charging and insurance, contributed to 14% of its total revenue. Revenue from insurance and vehicle services saw a 54.2% YoY growth, while the energy storage and charging segment grew by just 8% YoY. The energy storage business was expected to perform better but was restricted due to semiconductor-related supply issues.
Tesla’s gross profit during Q2 2022 reached $4.2 billion and stood at 25%. Though the shutdown in China adversely affected the business, increase in US deliveries along with the higher average vehicle price helped Tesla earn 47% more profit YoY.
R&D costs grew 16% YoY during Q2 2022. Tesla is trying to achieve complete autonomy by 2024 by perfecting Full-Self Driving (FSD) software. But the resignation of Andrej Karpathy, the director of artificial intelligence and autopilot system at Tesla, in mid-July is likely to stall the progress of this project, which is expected to get delayed by a year.

Source: Tesla Q2 2022 Financials and Counterpoint Analysis

Market Outlook

Despite experiencing a dip during the second quarter of 2022, Tesla’s future outlook seems strong and promising with strong fundamentals. Tesla has secured the supply of LFP batteries for its Shanghai Gigafactory by signing a deal with BYD. Transitioning to LFP batteries and 4680 battery cells will help Tesla reduce vehicle manufacturing costs. Moreover, Tesla expects the Berlin Gigafactory production capacity to cross 100,000 units by the end of 2022. With all these developments, Tesla is expected to cross more than 1.2 million units of vehicle deliveries by the end of 2022.

Industry 4.0 Offers a Silver Lining to the Pandemic Cloud

COVID-19 has brought forth the power of digital transformation. To sustain and quicken the pace of this transformation after the pandemic ends, Industry 4.0 (or the Fourth Industrial Revolution) can be of much help. It has the potential to retool and rebuild economies in the post-pandemic world through smart infrastructure, integrated automation and cloud innovation.

Emerging manufacturing and tech economies like China, South Korea, Taiwan and even India have already been coming out with policies to push Industry 4.0. In South Korea, the government has introduced a legislation to promote IT integration with key sectors like automobiles and shipbuilding and develop Centres of Excellence and Innovation. Not only this, the South Korean government is also working towards its vision of Industry 4.0, betting the country’s future on AI, IoT and smart factories.

Similar work is underway in China under the ‘Made in China 2025’ initiative, which seeks to enhance the country’s global competitiveness by reconfiguring its major industrial sectors, especially semiconductors, AI, robotics and next-generation technologies. Moreover, under its New Generation AI Development Plan, China aims to dominate the AI sector by 2030. The country’s AI targets for the years 2020, 2025 and 2030 are already finalized:

2020: To bring China’s AI up to global standards.
2025: To establish AI laws for the intelligent manufacturing, medicine, agriculture and urban planning sectors.
2030: To become the world’s leading AI developer.

What is interesting to see is that most of these developments took place in emerging economies over the past few decades. Supply of cheap labour, rising demand, new market opportunities, growing middle class and greater access for multinationals created a conducive environment to bring about the change in manufacturing supply chain.

At the same time, international trade and the supply chain ecosystem has been affected by the nationalist stance taken by many governments. Some latest examples include the ‘anti-China’ sentiment due to COVID-19 and the ban on Huawei in the US and some European markets. However, Industry 4.0 not only has the potential to remodel manufacturing ecosystems around the world but also influence the complex macroeconomic and geopolitical pressures surrounding them.

How and what will change?

Statistics suggest that by the year 2025, the emerging economies of China, Brazil, India, Indonesia and South Korea will account for more than half of the global growth. Such a shift is capable of giving rise to a newer stratum of economies driving the manufacturing revolution and Industry 4.0 vision. This is particularly becoming true for economies like China which have managed to prosper through the development of their manufacturing sector.

Today, both Indian and Chinese economies form a mere 5% of the global middle class consumption while Japan, US and Europe take almost 60% share. According to projections, these shares are expected to equalize by 2050. Further, the rise in middle class demand will be the driving force and almost 80% of this demand is expected to come from Asia.

Road ahead

It would be interesting to see who takes the lead in Industry 4.0 era. On the one hand, we have the incumbent powers (developed economies) betting hard on their strength in R&D, smart technology and manufacturing ecosystem, while on the other, we have the rising powers (developing economies) betting hard on their ability to provide low-cost labour and favourable regulatory procedures, along with a growing population that can support demand.

While the West may still hold the reins when it comes to the current technological scenario, this may change in coming years. With significant leads in IoT, AI, robotics and smart tech and manufacturing, along with low-cost labour, new market opportunities and evolving bilateral and multilateral trade pacts, the era of Industry 4.0 does not seem very distant for the developing countries of the East.

Webinar: Cybersecurity and Robotics Systems: Vulnerabilities and Solutions

Our Research Analyst, Satyajit Sinha will be speaking at the RoboBusiness Webinar on July 9th 2020 at 2 PM EST. The topic of the webinar is “Cybersecurity and Robotics Systems: Vulnerabilities and Solutions”.

One class of edge products, rarely mentioned in the typical IoT discussions and analyses, also provide for actuation. That is, they are robotic devices. Like other ‘connected’ IoT devices, robotics systems are open to security threats, which can be one roadblock to their widespread deployments. In this session, Counterpoint Research’s Satyajit Sinha will discuss current and future cyber security threats to networked robotics systems, highlighting their vulnerabilities in the process. He will also describe various cyber security solutions and provide a competitive landscape of security solutions for robotics systems.

China Pioneering Disruptive Cobots for Industrial Robotics

Robotics and automation will result in many job losses around the world and could be particularly severe in China, the world’s largest manufacturing hub. Despite a shortage of workers in many Chinese factories today, extensive automation could one day result in massive job losses and unrest in China. To minimise this risk, China is pioneering the development and adoption of collaborative robots (Cobots) which work side-by-side with human workers rather than replacing them.

Since the world’s first commercial cobot was produced by Universal Robots in 2008, cobots have gained recognition from a variety of industries, and more than 50 enterprises worldwide have entered the sector. Although they presently account for around 5% of the industrial robotics market, which is dominated by a few large companies, the robotics industry is ripe for disruptive innovation by small new players. The market is growing rapidly. In 2018, a total of 10,500 cobots were sold worldwide, up 95.5% year/year. One of the key industrial sectors for cobots is the electronics industry and the assembly of small digital devices.

Cobot benefits:

Conventional industrial robots are fenced-off from humans to prevent accidents. Unlike large industrial robots, however, cobots are sensitive to physical contact and operate at lower velocities to ensure workers can operate safely in close proximity to them. They immediately stop when someone touches them and slow down when people approach. Their flexibility and the relative ease of use compared to fully automated robotic systems, makes them an affordable and highly attractive alternative for small and medium size businesses (SMEs) looking to automate certain aspects of their production processes thus enabling SMEs to upgrade production with limited capital. In addition, they can be moved around the factory floor easily and refitted with grippers for new applications.

As their speed, accuracy and ability to carry heavy loads improve, cobots are increasingly being adopted by mainstream companies as well, a surprise for the big incumbent robotics companies such as ABB, Fanuc, Kuka and Yaskawa, which typically focus on industrial robots for large scale manufacturing in the automotive, electronics and food processing industries. Although these big companies have developed cobot product lines, they only have a very small market share in comparison to the new pure cobot players and are now playing catch-up.

Key Players:

Global vendors in cobot manufacturing include market leader Universal Robots (owned by Teradyne), Aubo Robotics, Automata, Doosan Robotics, Franka Emika, Precise Automation, Productive Robotics, Rethink Robotics and Techman Robot. Start-ups include: a16z, Empire Robotics, Fetch Robotics, Grabit, Osaro, Ready Robotics, Soft Robotics, Veo Robotics, Voodoo Manufacturing, etc.

Chinese cobot manufacturers include Aubo Robotics, Elephant Robotics, Han’s Robot, HIT Robot Group, Jaka Robot, Rokae and Siasum. Start-ups include: Elibot, Jaka and Yteam.

Overcoming challenges:

Historically, the robotics industry has been plagued by limitations in vision technologies, gripper dexterity issues as well as low ROI due to low labour costs in some industries such as agriculture. However, robotic companies are now tackling these challenges and the emergence of cobots is changing the economics of many industries, including agriculture, e-commerce, manufacturing and food services. For example:

Machine vision – machine vision hardware such as Lidar has become more effective and less expensive which means that many vision-enabled cobots cam operate cage-free alongside humans
Dexterity – start-ups are developing alternative end effectors based on soft robotics using flexible materials and fluid or air pressure instead of mechanics.
One-shot learning – where cobots can recognise new objects without requiring vast quantities of training data. Future cobots may only need to watch a human once to learn a task or could be programmed using VR gesture control.
Edge AI interfaces – AI voice interfaces are already commonplace in consumer technology interaction. However, factories have very different requirements, i.e. low latency and data security. Edge-based AI voice interfaces now enable cobots to be controlled by voice.

Prospects:

Counterpoint Research believes that cobots will play a pivotal role in factory disruption over the next few years, and as technology improves and demand increases, the cobot market is poised for a watershed moment. Improved automaton will have a powerful ripple effect and bring about major changes in many manufacturing industries. For example, companies will be less reliant on cheap labour and will be able to relocate.

As their speed, accuracy and ability to carry heavy loads improve, cobots they will increasingly be able to compete with traditional industrial robots and are perhaps are more likely to replace traditional robots rather than human workers.

China is well-placed to benefit from cobots. Although international robot manufacturers are well-entrenched and expected to maintain their market position, the cobot market is more of a level playing field, and coupled with China’s market leading position in AI, Chinese companies such as Aubo Robotics, Elephant Robotics and Han’s Robot are well-placed to dominate the domestic smart cobot market in the coming years.

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Insights Tag： Robotics

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