Counterpoint: In the future, car demand will decline significantly, and digital services will become a huge business opportunity

Jiwei Network News, on December 24, the first Jiwei Automotive Semiconductor Ecological Summit was held in Shanghai. Richard Windsor, Research Director at Counterpoint, delivered a speech entitled "Future Automotive Electronics Market Trends and Ecology".

Richard Windsor said the auto industry could face a doubling of the chip content per car over the next two decades. This is emphasized because Counterpoint predicts that the most extreme scenario over the next two decades will be a 65% drop in global automotive demand.

So what can the auto industry do to offset this impact? Richard Windsor pointed out that given that the profitability of the automotive industry is so low, the end result will be a large-scale merger of companies, and the twenty-six car companies worldwide may become three or four. The price of electric and fuel vehicles is likely to be gradually equalized, and an important competitiveness of electric vehicles is the ability to travel longer distances before being abandoned. Tesla's predictions are in line with Counterpoint' that battery performance drops to 20 percent after traveling about 500,000 miles. This means that consumers don't need to change cars so often. It is also in this way that the cost of buying and maintaining a car has dropped dramatically. Electric vehicles are cheaper to maintain because fewer parts need to be replaced, they don't consume gasoline, etc. From this perspective, Counterpoint believes that the economics of electric vehicles are very attractive to consumers.

With the development of the "four modernizations" of automobiles and autonomous driving, the overall demand for future cars shows a significant downward trend, and the number of cars will be reduced to 44 million by 2047, when autonomous vehicles will cover almost the entire market. Once electrification and automation do begin, and vehicles are fully digitized, digital services for cars will be a huge business opportunity.

Counterpoint predicts that spending on digital services in cars could be as much as $1.6 trillion by 2024. Richard Windsor believes that as long as OEMs and automakers can transform and provide these digital services to consumers, this amount is enough for them to survive. Therefore, there is such a conflict in today's automotive industry. And if car companies are to deliver these digital services to consumers, they need to overcome a number of thorny issues.

For chipmakers, they will need to ensure that they can withstand at least doubling the chip content of each car over the next two decades. (Proofreading/Aaron)