Automotive Innovation: Chinese OEMs catch up
BYD, Great Wall and Geely (which owns the Volvo brand, among others) join the pantheon of the most innovative vehicle manufacturers. Admittedly, the previous winners among the established OEMs – Volkswagen, BMW and Daimler, as well as the US manufacturer Tesla, which can certainly be considered a challenger – continue to occupy the top spots. But the bosses of these companies should by no means take a resting place on the sofa of honour now. Other Chinese suppliers such as Xpeng and Nio as well as the US newcomers Rivian and Lucid are entering the market and intensifying the competition. Losers are currently to be found above all among the Japanese suppliers: Toyota, the volume manufacturer with the highest sales, is currently only in 13th place in terms of innovation.
These are the results of the annual survey conducted since 2016 by the Center of Automotive Management (CAM), a research institute in Bergisch Gladbach (Germany). The market observers examined the vehicle technology innovations of 30 car manufacturers with over 80 car brands. The basis of the long-term comparison is 2900 innovations that became available in series-produced vehicles between 2016 and the first half of 2021.
Fig 1: Germans maintain leading position, China is coming on strong.
©: Center for Automotive Management.
So far, the German car manufacturers have been able to maintain their strong position even in the transformation phase of the industry since 2015. The Volkswagen Group with its core brands VW, Audi and Porsche is ahead in the innovation ranking with 366 index points despite a slight decline. (see Fig. 1). The innovation performance in 2019-21 is driven in particular by innovations in the technology fields of electric drive and operating and display concepts.
BMW moves up to second place among the most innovative manufacturers with 282 index points (+37%) and displaces Daimler / Mercedes-Benz in a neck-and-neck race to third place. BMW generates 125 world and group innovations ready for series production in this period, such as the active traffic light assistant of the Urban Cruise Control System, which independently detects red traffic lights and comes to a standstill before them. Daimler will present numerous innovations with the new launch of its new Mercedes-Benz S-Class in 2020, such as the MBUX interior assistant or the Digital Light, which can warn of road works by means of symbols projected onto the road, among other things. Overall, the Stuttgart-based company is just behind its Munich-based competitor with 118 identified and individually assessed world and group innovations.
Tesla achieves a strong fourth place despite fewer model series. Thanks to world firsts ready for series production in the technology fields of electric drive (e.g. range optimisation Model S) and driver assistance systems (e.g. Navigate on Autopilot Model 3), Tesla can even increase its innovative strength by around 37 %. Hyundai can hold on to fifth place with innovations such as a power consumption best of the Kia e-Soul in the minivan segment.
Among the biggest winners in the period comparison is surprisingly the US group Ford, which moves up to sixth place and improves by five places. Overall, Ford has been able to produce more than 65 corporate and global innovations since 2019, around twice as many series innovations as in the first period under review. This development is primarily due to innovative models such as the Ford Mustang Mach-E, which sets new standards in the medium-size SUV segment in terms of electric range, or the Ford F-150 (2020), which is the world’s first pick-up truck to receive new or improved assistance systems via over-the-air updates (OTA).
In addition to Ford, Chinese companies in particular are gaining importance in the innovation rankings. With an increase in innovation of more than 300%, BYD has experienced the greatest growth of all car manufacturers considered in the period comparison. This is primarily due to a broad electric offensive, as BYD has already produced a large number of all-electric vehicles (BEV) in various segments (e.g. BYD Song PRO as a medium-size SUV, BYD Han EV in the upper middle class or BYD Song MAX as a minivan) at an early stage. In addition, BYD benefits from the Didi D1, developed in cooperation with the mobility provider Didi Chuxing, a lower mid-size electric vehicle specially designed for ride-hailing purposes, which has special features such as a rainbow-coloured “pick-up light”. Great Wall is now also significantly increasing its innovation power with an increase of more than 160%, launching production-ready world firsts such as a gesture-based autonomous parking function. SAIC increases its innovation strength mainly due to an expanded range of electric vehicles and thanks to the introduction of the Baojun E300, an all-electric subcompact car that can already drive semi-autonomously according to SAE Level 2 as standard.
The losers in the period comparison include General Motors (GM) and Toyota in addition to Geely, which is the only Chinese group to show a decline in innovation strength in the second period under review. Geely, whose innovation strength is significantly influenced by the Swedish subsidiary brands Volvo and Polestar, cannot maintain its very high innovation strength in the previous period and falls from sixth to tenth place. General Motors also fails to match its previous innovation strength and slips from ninth to twelfth place. Despite the introduction of new, innovative models such as the GMC Hummer EV, which sets new standards with a maximum achievable charging power of up to 350 kW, GM misses out on a place in the top 10 with a drop in innovation performance of around 10%.
According to the study authors, the example of Toyota shows that stagnation in a dynamic competitive environment makes it difficult to catch up with the competition. While other corporations were often able to increase their innovative strength in the high double-digit % range, Toyota remains at about the same innovation level as in the first period and thus slips from tenth to thirteenth place. With Nissan and Honda, further Japanese manufacturers deteriorate. While Nissan drops from 14th to 16th place, Honda loses 7 places and only comes in 19th. Tata Motors is also unable to maintain the high level of innovation of its premium brands Jaguar and Land Rover in the previous period and slips from 8th to 17th place.
Fig. 2: CAM Automotive Innovations Newcomer Ranking 2021
© Center of Automotive Management
According to the CAM analysis, the entry of Chinese and American newcomers is fundamentally changing the global automotive market. Against this background, the research institute has compiled a separate newcomer ranking, which compares the innovative strength of the four electric start-ups Xpeng, Lucid, Nio and Rivian in the 2019-21 period under review (see Fig. 2). The Chinese car manufacturer Xpeng secures first place with world firsts in the key innovation field of connectivity (e.g. OTA-enabled operating system Xmart OS in the Xpeng G3). With its only model to date, the Lucid Air, the US start-up Lucid Motors sets new standards in terms of electric range (up to 830 km according to the EPA cycle), convinces with high charging power (up to 300 kW) and ranks second overall.
Nio, another Chinese player, brought a completely new approach to electromobility to the road with its battery swap concept launched in 2018 and thus reaches third place. Amazon-backed EV start-up Rivian Automotive, notwithstanding its stock market valuation of over $80 billion and marginal delivery volume to date, is only fourth in this separate ranking.