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Business

How a Cheap Component Can Help Kill Incinerators




LONDON / BERLIN, May 30 (Reuters) – The humble wiring harness, an inexpensive component that packs cables, has become an unlikely nuisance for the automotive industry. Some predict that it may accelerate the downfall of incinerators.

Supplies for car parts were suffocated by the war in Ukraine, home to a significant portion of world production, with wiring harnesses fitted there in hundreds of thousands of new vehicles each year.

These low-tech parts and low-margin parts – made of wire, plastic and rubber with a lot of cheap manual labor – may not be praised for microchips and motors, but cars can not be built without them.

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The supply crisis could accelerate plans by some older car companies to switch to a new generation of lighter, machine-made harnesses designed for electric vehicles, according to interviews with more than a dozen industry players and experts.

“This is just another reason why the industry should make the transition to electricity faster,” said Sam Fiorani, head of production forecasting firm AutoForecast Solutions.

Petrol cars still account for the bulk of new car sales globally; Electric cars doubled to 4 million last year, but still accounted for only 6% of vehicle sales, according to data from JATO Dynamics.

Nissan (7201.T) CEO Makoto Uchida told Reuters that supply chain disruptions such as the Ukraine crisis had prompted his company to talk to suppliers about switching away from the model of cheap labor.

In the immediate term, however, car manufacturers and suppliers have moved seat belt production to other low-cost countries.

Mercedes-Benz (MBGn.DE) was able to fly in harnesses from Mexico to close a short supply gap, according to a person familiar with the operation. Some Japanese suppliers are adding capacity in Morocco, while others have sought new production lines in countries such as Tunisia, Poland, Serbia and Romania.

THE TESLA MODEL

Harnesses for fossil fuel cars pack cables that extend up to 5 km (3.1 miles) in an average vehicle, and connect everything from seat heaters to windows. They are labor intensive to make, and almost all models are unique, so it is difficult to change production quickly.

The supply disruptions in Ukraine were a rude awakening for the car industry. Car manufacturers and suppliers said that early in the war, the factories remained open only thanks to the determination of the workers there, who kept a reduced flow of moving parts in the face of power outages, warnings about air strikes and curfews.

Adrian Hallmark, CEO of Bentley, said that the British luxury car manufacturer had initially feared losing 30-40% of car production by 2022 due to a lack of harnesses.

“The Ukraine crisis threatened to close our factory completely for several months, much longer than we did for COVID.”

Hallmark said that finding alternative sources of production was complicated by the fact that the conventional seals themselves had 10 different parts from 10 different suppliers in Ukraine.

He added that the supply problems had sharpened Bentley’s focus and investment on developing a simple harness for electric cars that will be powered by a central computer. The car manufacturer, a division of Volkswagen (VOWG_p.DE), is planning an all-electric series by 2030.

“The Tesla model, which is a completely different concept for cabling, we could not change to it overnight,” Hallmark added. “It’s a fundamental change in the way we design cars.”

The new generation of wiring harnesses, used by electric natives like Tesla, can be made into sections on automated production lines and are lighter, a key factor because reducing the weight of an electric car is crucial to extending the range.

Many of the leaders and experts interviewed said that fossil fuel cars, which face imminent bans in Europe and China, will not be long enough to justify redesign to allow them to use the next generation of harnesses.

“I would not put a penny in internal combustion engines now,” said Michigan-based car consultant Sandy Munro, who estimates that electric cars will account for half of global new car sales by 2028.

“The future is coming terribly fast.”

‘CHANGE OF PARADIGM’

Walter Glück, head of Leonis’ wiring network, said that the supplier worked with car manufacturers on new, automated solutions for wiring in electric cars.

Leoni focuses on zone or modular harnesses, which will be divided into six to eight parts, short enough for automation in assembly and reducing complexity.

“It’s a paradigm shift,” Glück said. “If you want to reduce production time in your car factory, a modular wiring harness helps.”

Among car manufacturers, BMW is also considering using modular wiring harnesses, which require fewer semiconductors and less cable, which will save space and make them lighter, according to a person with knowledge of the case.

The person, who refused to be named because they are not allowed to speak in public, said the new harnesses would also make it easier to upgrade vehicles wirelessly – an area that Tesla now dominates.

Cellink, a California-based startup, has developed a fully automated, flat and easy-to-install “flex harness”, raising $ 250 million earlier this year from companies including BMW and car suppliers Lear Corp (LEA.N) and Robert Bosch ( ROBG.UL). read more

CEO Kevin Coakley did not want to identify customers, but said that Cellink’s harnesses had been installed in close to one million electric cars.

Only Tesla has that scale, but the carmaker did not respond to a request for comment.

Coakley said that Cellink’s new $ 125 million plant under construction in Texas will have 25 automated production lines that will be able to change different designs in about 10 minutes because the components are produced from digital files.

The company works with electric cars with a number of car manufacturers and is looking at building another plant in Europe, he said.

While the lead time to replace a conventional wiring harness can be up to 26 weeks, Coakley said his company could ship redesigned products in two weeks.

That kind of speed is what older automakers look for when they go electric, said Dan Ratliff, principal at Detroit-based venture capital firm Fontinalis Partners, which was founded by Ford (UN) chairman Bill Ford and has invested in Cellink.

For decades, the industry has not had to go fast to reconsider part of the pipeline network, but Tesla has changed that, Ratliff added.

“On the electric car side, it’s just go, go, go.”

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Reporting by Nick Carey in London and Christina Amann in Berlin; Additional reporting from Satoshi Sugiyama in Tokyo; Editing Pravin Char

Our standards: Thomson Reuters Trust Principles.



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