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MAJOR AUTO SUPPLIERS BEARISH ON INDUSTRY SHIFT TO ELECTRIC CARS: In the past month, executives from several of the largest auto parts suppliers in North America have warned that the auto industry's shift towards electric vehicles will be slower than many expect, IndustryWeek reports. Tesla's market value has skyrocketed past traditional carmakers, some of whom are now racing to respond with new electric vehicle models of their own. This has stoked speculation that production of electric vehicles will rapidly accelerate in the coming years, putting many more electric cars on the road.
Auto parts suppliers including American Axle & Manufacturing, Magna International, Delphi, and BorgWarner Inc. warn though that this shift toward electric vehicles will take decades, not years, as they aren't seeing demand to justify the current hype on electric cars. Rather than a spike in electric vehicle production, suppliers see automakers gradually shifting production towards a wider range of engine systems, with hybrid playing a bigger role. Delphi CEO Kevin Clark predicted last week that only 5% of new cars will be purely electric in 2025, with about 30% featuring hybrid gas-electric systems.
The adoption of more hybrid and electric vehicles will have significant impact on the penetration of digital technologies into the automotive industry.
- Automakers typically introduce new connected car features in their electric and hybrid models first before expanding them to gas-powered ones, as buyers of electric vehicles skew younger and more tech-savvy.
- Additionally, self-driving car technology is most compatible from an engineering perspective with electric vehicles because they're easier for computers to drive.
The transformation presents a significant revenue opportunity for technology players and automotive startups looking to disrupt the industry. PwC predicted late last year that tech companies and startups providing automotive sensors, networking, and data and analytics capabilities will capture $120 billion - or more than 20% - of the auto industry's profits. That enormous opportunity could be limited if sales of electric and hybrid models featuring these technologies don't flourish. However, as the cost of these technologies gradually declines, their appeal to younger consumers could become an increasingly significant selling point, turning connected and self-driving technologies into a driver of electric car sales.
BII
WAREHOUSE ROBOTICS STARTUP LANDS NEW FUNDING FOR "SWARM" TECHNOLOGY: HDS Global, a warehouse automation startup, scored $10 million in funding from Ingram Micro, a global technology reseller and supply chain solutions provider that has been helping major retailers like Walmart with online delivery, The Wall Street Journal reports. The deal will give Ingram Micro exclusive use of HDS' warehouse automation technology to help lure more retail clients.
HDS' software program, dubbed RoBoFS, allows different robots to "swarm," or coordinate their actions to perform complex tasks in unison. For instance, the system could coordinate actions between different types of robots responsible for moving goods around a warehouse, packing them into boxes for shipment, and loading the packages on to trucks. The company will test the technology later this year with more than 100 different robots working together in a single warehouse facility. Ingram Micro hopes to install the software in one of its own warehouses in 2019.
This type of "swarming" capability is critical for warehouses to become increasingly automated with a wider array of mobile and stationary robots, drones, and autonomous forklifts and other vehicles. With all of these different types of robots presumably coming from different startups andmanufcaturers, warehouse operators will need programs that let the machines communicate with each other and work together. As warehouse facilities add more of these systems, this software can help cut down on the labor and resources required to integrate them, allowing facilities to more easily install and upgrade robotics systems. That could help cut the cost of fulfilling orders by up to 40%, HDS' founder Louis Borders told the WSJ.
Systems like DHS' will be in increasingly high-demand as warehouse operators face growing cost pressures and new types of robots are developed. The rise of e-commerce is fueling warehouse expansion, and the cost of warehouse labor is also rising, pushing companies to automate more warehouse tasks. New types of warehouse automation, such as robots that use sensors to pick out individual items for packaging, are also coming closer to fruition. So any tools that can smooth the transition to further automation will be highly attractive to warehouse operators.
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TARGET TO ACQUIRE GRAND JUNCTION TO SPEED UP DELIVERIES AND FEND OFF AMAZON: Target announced this week that it plans to acquire Grand Junction, which provides a software platform to help companies coordinate last-mile delivery, the final and most expensive part of the delivery process when an order reaches the customer's doorstep. The deal will give Target access to Grand Junction's platform and network of more than 700 regional and local shipping carriers to help the retailer expand its same-day delivery capabilities.
Grand Junction's platform leverages algorithms that choose the fastest and most efficient delivery method for an order from among its network of carriers. Target plans to use this capability to expand a same-day delivery test pilot it has been running at a store location in New York City's Tribeca neighborhood. The pilot, which Target is running in partnership with Grand Junction, allows in-store customers to have their shopping bags delivered to their apartment, rather than carrying them home themselves. With the acquisition, the big-box retailer said that it plans to expand the same-day delivery program to other New York City stores later this year, and then to other cities in 2018.
Amazon is pushing Target and other big-box retailers to expand their same-day delivery offerings. While Target already provides same-day grocery delivery in San Francisco, Chicago, and the Twin Cities area through a partnership with Instacart, Amazon will likely use some locations of recently acquired Whole Foods to expand its own grocery delivery program. That, in turn, would put pressure on retailers like Target with significant business in the grocery and Consumer Packaged Goods (CPG) categories to offer speedy online delivery. That's because consumers are not willing to wait long for these goods when they order them online, making speeding up last-mile deliveries a more significant priority for these retailers and their logistics partners.