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DETROIT, Aug 20 (Reuters) – The funding surge by each new and established automakers within the electric vehicle market is a bonanza for factory gear producers that offer the extremely automated picks and shovels for the prospectors within the EV gold rush.
The good occasions for the makers of robots and different factory gear replicate the broader restoration in U.S. manufacturing. After falling post-COVID to $361.8 million in April 2020, new orders surged to nearly $506 million in June, based on the U.S. Census Bureau.
Here’s a graphic on U.S. manufacturing new orders: https://tmsnrt.rs/3lVyhlM
New electric vehicle factories, funded by buyers who’ve snapped up newly public shares in corporations corresponding to EV start-up Lucid Group Inc (LCID.O) are boosting demand. “I’m not sure it’s reached its climax yet. There’s still more to go,” Andrew Lloyd, electromobility phase chief at Stellantis-owned (STLA.MI) provider Comau, mentioned in an interview. “Over the next 18 to 24 months, there’s going to be a significant demand coming our way.”
Growth within the EV sector, propelled by the success of Tesla Inc (TSLA.O), comes on prime of the conventional work manufacturing gear makers do to assist manufacturing of gasoline-powered autos.
Automakers will make investments over $37 billion in North American vegetation from 2019 to 2025, with 15 of 17 new vegetation within the United States, based on LMC Automotive. Over 77% of that spending can be directed at SUV or EV tasks.
Equipment suppliers are in no rush so as to add to their almost full capability.
“There’s a natural point where we will say ‘No'” to new enterprise, mentioned Comau’s Lloyd. For only one space of a factory, like a paint store or a body store, an automaker can simply spend $200 million to $300 million, trade officers mentioned.
‘WILD, WILD WEST’ “This industry is the Wild, Wild West right now,” John Kacsur, vp of the automotive and tire phase for Rockwell Automation(ROK.N), informed Reuters. “There is a mad race to get these new EV variants to market.” Automakers have signed agreements for suppliers to construct gear for 37 EVs between this yr and 2023 in North America, based on trade advisor Laurie Harbour. That excludes all of the work being accomplished for gasoline-powered autos.
“There’s still a pipeline with projects from new EV manufacturers,” mentioned Mathias Christen, a spokesman for Durr AG (DUEG.DE), which focuses on paint store gear and noticed its EV enterprise surge about 65% final yr. “This is why we don’t see the peak yet.”
Orders acquired by Kuka AG, a producing automation firm owned by China’s Midea Group (000333.SZ), rose 52% within the first half of 2021 to simply underneath 1.9 billion euros ($2.23 billion) – the second-highest degree for a 6-month interval within the firm’s historical past, as a result of robust demand in North America and Asia.
“We ran out of capacity for any additional work about a year and a half ago,” mentioned Mike LaRose, CEO of Kuka’s (KU2G.DE) auto group within the Americas. “Everyone’s so busy, there’s no floor space.”
Kuka is building electric vans for General Motors Co (GM.N) at its plant in Michigan to help meet early demand earlier than the No. 1 U.S. automaker replaces gear in its Ingersoll, Ontario, plant subsequent yr to deal with the common work. Automakers and battery companies have to order most of the robots and different gear they want 18 months prematurely, though Neil Dueweke, vp of automotive at Fanuc Corp’s (6954.T) American operations, mentioned prospects need their gear sooner. He calls that the “Amazon effect” within the trade.
“We built a facility and have like 5,000 robots on shelves stacked 200 feet high, almost as far as the eye can see,” mentioned Dueweke, who famous Fanuc America set gross sales and market share information final yr.
COVID has additionally brought about points and delays for some automakers making an attempt to instrument up.
R.J. Scaringe, CEO of EV startup Rivian, mentioned in a letter to prospects final month that “everything from facility construction, to equipment installation, to vehicle component supply (especially semiconductors) has been impacted by the pandemic.”
However, established, long-time prospects like GM and elements provider and contract producer Magna International (MG.TO) mentioned they haven’t skilled delays in receiving gear.
Another limiting issue for capability has been the persevering with scarcity of labor, trade officers mentioned. To keep away from the stress, startups like Fisker Inc (FSR.N) have turned to contract producers like Magna and Foxconn(2354.TW), whose shopping for energy permits them to keep away from shortages extra simply, CEO Henrik Fisker mentioned. Growing demand, nevertheless, doesn’t imply these gear makers are dashing to develop capability. Having lived by way of downturns wherein they have been compelled to make cuts, gear suppliers wish to make do with what they’ve, or in Comau’s case, simply add short-term capability, based on Lloyd. “Everybody’s afraid they’re going to get hammered,” mentioned Mike Tracy, a principal at consulting firm the Agile Group. “They just don’t have the reserve capacity they used to have.”
Reporting by Ben Klayman in Detroit; extra reporting by Joseph White; Editing by Dan Grebler
Our Standards: The Thomson Reuters Trust Principles.
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