As the White House continues its push for electric vehicles, the demand for semiconductors – a key component in electric vehicles – is about to surge. That spike will mean big business for German semiconductor producer Infineon Technologies, which has its 300-person U.S. headquarters in El Segundo.
Microchips and semiconductors have established vital roles in everyday devices. While laptops, phones and other mobile devices might be the first things to come to mind, transportation—in particular cars—takes a sizable portion of the demand.
Infineon is a significant semiconductor supplier to the automotive and transportation industry, in particular to the Volkswagen Group, which is beginning to deliver on its promises of many electric vehicle launches throughout the decade. Infineon has more than 50 of its semiconductors in the VW ID.4, a compact electric SUV that went on sale in the U.S. earlier this year. It also supplies semiconductors to Electrify America, an EV charging company owned by VW Group of America.
VW's push has come in a year when a global microchip shortage caused by production curtailing in last year's onset of the Covid-19 pandemic. Automakers, in particular, have scrambled to continue building new cars. Dealership lots across the country are running out of inventory and used car prices remain high. At the same time, President Biden has called for a massive increase in electric, hybrid and fuel cell vehicles production. He aims to have half of all vehicles sold by 2030 be non-gas powered.
"It's an industry problem," said Shawn Slusser, Infineon senior vice president for marketing and distribution in El Segundo. "The industry overall is in a situation where production and demand are not matched."
A typical car has about $450 worth of power semiconductors to operate features that go from the radio and navigation system to the automatic headlights and windshield wipers, said Slusser. However, that number roughly doubles for EVs when factoring the microchips needed for Infineon's power module to power the car.
The company also supplies semiconductors to Electrify America, an EV charging company owned by VW Group of America. Infineon has more than 50 of its semiconductors in the VW ID.4, a compact electric SUV that went on sale in the U.S. earlier this year.
Auto industry analysis firm IHS Markit predicted in the Wall Street Journal last week that microchip and semiconductor production will allow auto production to get closer to normal by the end of 2022, although some of the problems are likely to stretch into 2023.
And it's a problem that's been brewing long before stay-at-home orders.
"There's a misconception that chips have only been going into EVs recently, but it's been happening since the '80s," IHS Markit analyst Phil Amsrud told dot.LA. "But what it used to be was that there was automotive and everything else. Now there's much more commonality."
Slusser said Infineon has seen demand for semiconductors steadily rising over the last several years. In 2018, the company decided to add capacity with a facility in Austria. But doing so takes between two to three years and billions of dollars — even in a well-functioning climate. And at the time, there were fewer government pushes and mandates to get consumers to buy EVs.
"The timing of how much capacity we need is also dependent on EV adoption," Slusser said. "Is [demand] going to look like a steady incline or a sharp curve?"
Amsrud said EV production may be helped because the semiconductors going into EV power modules don't go into consumer electronics.
"In this case, it may end up being a benefit," he said. "Those are fairly specialized and won't be competing with consumer products or as many markets for the silicon carbide components."
Correction: An earlier version of this post mischaracterized the number of semiconductors in a typical car and the cost of upgrading a semiconductor facility.
As the nation waits for electric vehicle charging stations to be as accessible as gas stations, Atwater Village-based Xos Inc. thinks it can get big rig operators charged up quickly.
The company introduced one of the first portable charging stations for fleet operators on Thursday. The station, which looks like a large metal truck trailer, can charge up to five vehicles at a time in a parking lot or fleet yard that doesn't yet have permanent charging facilities.
Big rigs are among the state's largest polluters. Last year, the state enacted a zero-emissions truck and delivery van mandate beginning in 2024, with the goal that all heavy duty trucks sold in California are electric by 2045.
Known as Xos Hub, the stations allow for a movable charging infrastructure in parking lots being used temporarily or without existing vehicle chargers. The company hopes that the mobile stations can be distributed widely and persuade more fleets to adopt battery electric technology. The units may also offset operators' concerns that electric commercial vehicles have a short range and few charging options.
"Everything from individual state regulations, to commitments by large fleet operators to convert to zero-emission electric vehicles, to President Biden's infrastructure plan, is pointing to electric vehicles as our future," CEO and co-founder Dakota Semler said in the announcement. He said fleet customers shouldn't have to wait for traditional fixed charging stations.
The Hub is part of a new subsidiary, Xos Energy Solutions, which will also offer Xos Serve, which will perform site evaluations, installations and other services related to the infrastructure.
Some infrastructure investments are starting to appear around ports. In May, Electrify America and the ports of Los Angeles and Long Beach announced a $25 million investment for commercial vehicle chargers. Electrify America is a subsidiary of Volkswagen Group of America.
The push for zero-emission fleets at the ports of Los Angeles and Long Beach is even more pressing after Los Angeles Mayor Eric Garcetti and Long Beach Mayor Robert Garcia called for the elimination of diesel trucks at the port by 2035. The two ports are the nation's busiest seaport hub where thousands of diesel trucks haul billions of dollars worth of cargo but there is still little electric vehicle infrastructure.
There are more than 100 zero-emissions vehicles being tested with various partners, such as Toyota, using battery electric or hydrogen power at the port, said Phillip Sanfield, a spokesperson for the Los Angeles port. But more infrastructure will be needed down the line.
"Right now, our focus is to help identify a variety of different options the market may determine for zero-emissions vehicles," he said.
A focus on charging comes as Xos is putting more of its commercial vehicles on the road.
The company said earlier this week it will provide FedEx with 120 electric vehicles for use as FedEx Ground delivery trucks. These vehicles will be operated by the parcel delivery company's Independent Service Provider arm in California, Massachusetts, New Jersey, New York and Texas beginning at the end of this year. Xos says more trucks will be put into service into 2022, with ongoing discussions with FedEx on additional vehicle deliveries in other states next year and in 2023.
In March, FedEx announced a $2 billion initiative to go carbon-neutral by 2040, including purchasing only electric parcel pickup and delivery vehicles from 2030 on.
Xos is preparing an SPAC merger with Florida-based NextGen Acquisition Corp. and a $2 billion valuation. A shareholder meeting is scheduled for Aug. 18.
Correction: An earlier version stated Xos Inc. is located in North Hollywood. It recently moved to Atwater Village.
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The way Kameale C. Terry sees it, her startup ChargerHelp! has two goals: to help encourage drivers to adopt electric vehicles by providing on-demand technical support for charging stations, and to create more full-time jobs that pay a living wage. By hitting both targets, the company can not only get places outside of California interested in plug-in vehicles, but can help make the technology an economic engine in its own right.
"EV gets a lot of attention in our industry, and that's great," she said. "But it also brings in a lot of people who don't understand the benefits or what we do."
ChargerHelp! CEO Kameale C. Terry
Launched by Terry and co-founder Evette Ellis in January 2020, ChargerHelp! markets itself as the first and only app that supports electric vehicle charging repairs. Its technicians troubleshoot issues preventing drivers from being able to charge their cars, as well diagnose and repair the problem at stations run by their partners.
In March, the downtown L.A.-based startup announced a $2.75 million investment round that included partners Trucks VC, Kapor Capital, JFF, Energy Impact Partners and The Fund. The company currently contracts with such clients as ABB, SparkCharge, EnelX, Xeal and EV Connect, with plans to sign with nine additional firms by the end of this quarter, and is operational in California, but Arizona, Florida, Colorado, New York, Oregon, Texas and Washington.
In order to keep pace with the company's rapid growth, ChargerHelp! Has gone on a hiring spree, bringing on 20 new technicians in the last few weeks, swelling its ranks to 32 employees.
On paper, ChargerHelp! looks like a company that's set to grow rapidly with the significant push behind plug-in electric vehicles made at various levels of government as well as by automakers. Just last month, President Biden unveiled plans to create 500,000 charging stations across the country.
Car manufacturers are also building up nationwide charging networks to support the electric vehicles (EVs) they sell or plan to build in the near future as states such as California phase out sales of gasoline-powered new cars in the next decade. Tesla already has its Supercharger stations, while Volkswagen Group of America operates
its Electrify America subsidiary. General Motors announced last week its Ultium Charge 360 network that partners with several charging companies, including L.A-based EVgo, for future EV customers of Cadillac, Chevrolet, and GMC.
But Terry still sees a long road ahead for electric vehicles, and believes more people from across geographies and income brackets need to embrace the tech for her company to really grow. And part of people's hesitation, she believes, is their skepticism of the batteries and public charging stations.
While utility companies sponsor charging stations in shopping centers or parking structures, many of the property owners didn't also opt for a labor warranty to cover regular maintenance. The responsibility of maintaining a charging station thus often gets lost between two entities, trapping EV owners — possibly in their car and stranded at a station that won't recognize a credit card or the vehicle's on-board charger — in a customer support runaround.
Little wonder, then, that a study released last month in the journal " Nature Energy" found 18% of battery EV owners decided not to get another one. "It was really easy to find contractors to install stations, but when the stations started having issues, they weren't there," Terry said. "We can't invest all this money and just expect these stations to work without repair."
Here is where ChargerHelp!'s technicians set the company apart. In many cases, non-functioning charging stations don't have an electrical problem, Terry said, and sending out an electrical contractor more equipped to install the stations doesn't resolve what's actually a software issue.
That's where ChargerHelp! comes in. "Because every station is different, our app is like a decision tree. The rapid report immediately goes back to our customer. We do a lot of swap-outs, fix vandalism and removal of snow for owner-operated properties."
Such work requires a wide-ranging skill set, and Terry decided from the start that, in order to ensure high-quality technical assistance (and to deliver on the company's mission of adding well-paid jobs to the economy), ChargerHelp! would make its technicians employees, rather than contractors. "The technology changes too quickly to rely on contractors," she said.
Once hired on, ChargerHelp! technicians start off at $30 per hour in a full-time, 40 hours per week position and receive benefits and shares in the company. Terry also sees the technicians as informal evangelists for EV—especially in less tech-forward parts of the country.
"A lot of our techs had never been in an electric car before they came to training," she said. "We let them test drive a car, and they went back to their friends to talk them up."
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