Traverse City, Mich. — The rise of electric vehicles is triggering big changes in the auto industry. But it will also bring about new innovations in how autos are made and how companies think about their operations, Magna International Inc. CEO Swamy Kotagiri told an industry audience Aug. 4.
"We know that mobility is evolving fast and at an exponential pace, faster than ever before," Kotagiri said, kicking off the Center for Automotive Research's annual Management Briefing Seminars in Traverse City.
"It's clear that the next generation of vehicles will be shaped by four simultaneous revolutions happening now: electrification, autonomy, connectivity and mobility as a service, called new mobility," he said.
But he added that getting there will cause automotive manufacturers to begin asking new questions about how they do business.
Kotagiri, a longtime Magna executive, stepped into the role of CEO on Jan. 1. The Aurora, Ontario-based company is North America's largest auto supplier, with 2020 revenue of $32.7 billion. It is also a big user of plastics for parts such as lift gates and fascias, placed at No. 41 in Plastics News' most recent ranking of North American injection molders with an estimated $220 million in sales in the region.
Last month, Magna announced its acquisition of Veoneer in the automated driver-assistance sector, for $3.8 billion in cash. That deal will bring new change to Magna's already diverse portfolio of vehicle products, from body stampings and door hinges to electric drives and complete vehicle assembly.
Chipmaker Qualcomm Inc. just offered more cash for Veoneer, however, which may complicate plans.
But Kotagiri said new technologies will open up new questions in the years ahead.
"Advances in battery technology are transforming the economics of electric vehicles by combining increased driving range, lower purchase price and lower operating cost, and that's really redefining what is possible in the future," he told the audience.
Magna is not in the battery business. But the CEO said the resulting technology shift will "allow us to envision a new future — one that requires us to play a larger role in the auto ecosystem."
He said companies will likely assume that innovations will come in the fields of battery technology, electric motors and charging networks.
"But I think the answer could be a little broader and bigger," he said.
"If the question is, 'How could we reduce the impact of transportation on greenhouse emissions?' you might find yourselves heading down a different road, asking a bunch of different questions," he said. "Because now you're measuring how carbon is emitted during the mining process of minerals that are essential for batteries.
"Now you're starting to realize that it takes a lot more energy in electric cars than in a traditional one," he added. "You might start looking at your energy mix, whether you're getting energy from thermal, hydro, renewable, nuclear and so on. You're looking at the entire footprint, not just the tailpipe emissions.
"And that type of thinking will lead to all kinds of new innovations."