Eyeing opportunities from the transition to electric vehicles, more veterans from international auto groups are leaving their posts and setting up shop on their own, hoping to disrupt the current solutions.
The ongoing auto chip shortage and higher battery costs have galvanized automakers to monitor the supply chain with unprecedented concern. When referring to bills of materials, OEMs prioritize critical items like batteries and chips, and also not neglect other components, for example, chassis-by-wire. According to CITIC Securities, chassis accounts for 10% of total costs in a typical vehicle model. The X-by-wire strategy, which originated from the aircraft industry, is being gradually adopted in auto design, especially on EV chassis. It incorporates the braking, steering, accelerating and shifting systems.
The proliferation of EVs calls for more advanced chassis designs. Braking system experts are fixated on developing products that can meet various demands, such as faster response, safety redundancy, smaller size and weight and energy regeneration. To cater to the market appetite, Chinese startups are coordinating with OEMs to improve car driving experiences.
We interviewed Hui Zhifeng, founder and CEO of Leekr Technology (Chinese: 利氪科技), an innovative auto tech provider that just bagged CNY 200 million (USD30 million) in Series A and A+ funding rounds.
Founded in 2021, the nascent firm is managed by a group of veterans from Bosch and ZF Group. It specializes in developing Chassis-by-Wire and related components. Brake-by-Wire or Electro-Hydraulic Brake (EHB) marks their production debut to the market. Their starting lineup includes DHB (Decoupled Hydraulic Booster), which is a vacuum-independent electro-hydraulic brake force booster (e-booster), and IHB (Integrated Hydraulic Brake) which is a single unit one-box electro-hydraulic solution that combines e-booster and ESC (Electronic Stability Control). The two products help Leekr acquire nine mass production projects from OEMs.
''Applying chassis-by-wire system brings many benefits to electric vehicles. As self-driving technology thrives, practitioners emphasize auto safety more than ever. And EHB offers cars a safety redundancy through independent chips and algorithms, increasing the robustness of the whole autonomous driving system. Based on SAE's self-driving rating, EHB is a standard component for L3 and above level autonomous cars,'' Hui told EqualOcean. ''Other than that, EHB also helps EVs improve power consumption. It functions as a power regenerator so as to boost the range of a pure battery vehicle by 20%.''
Compared with a conventional hydraulic braking system, the biggest advantage of EHB is a shorter time to lock (according to IHS Markit, ''the time with which the braking system can build up to the desired pressure''). ''The response time of DHB or IHB can be shortened to 150 ms, 50% shorter than the traditional braking systems,'' he noted.
''Our DHB decouples the brake pedal and the brake circuits, meaning that OEMs can customize the pedal feel to adapt to different driving modes. This complies with the wish of customers desiring more intelligent products. What's more, DHB can be equipped with any brands' ABS (Antilock Brake System) or ESC modules,'' Hui said. He perceives this attribute as a big difference from the mainstream technology.
To better illustrate, he introduced the status quo of the market. China's brake-by-wire systems market is dominated by German auto parts behemoths such as Bosch, Continental AG and ZF Group. And most OEMs select Global Tier1 as the product has a track record of working safely and reliably, given safety is the bottom line for a braking system. However, taking advantage of a strong market position, Global Tier1 usually bundles the e-booster product with its ESC modules and supplies the package to OEMs, who have no choice but to accept what is being offered to them.
Hui acknowledges the pain points of this solution. ''If a producer of affordable cars wants to equip its cars with regenerative power function through e-booster, it would shy away from considering Global Tier1’s products as they are too expensive. But our solution allows us to meet the needs, we can tailor several functions for them," said he. "So choosing a Chinese supplier means a lot for most domestic OEMs."
Hui also explained to EqualOcean how Leekr collaborates with carmakers. ''OEMs care most about suppliers' ability to deliver at the moment. Adding another supplier enhances OEMs' ability to get enough components and ensures the safety of the supply chain."
Besides, Leekr's founder also believes that companies headquartered in China can deeply team up with OEMs. ''China is leading the world in NEV sales, which means auto brands here will be much more forward-thinking and suppliers will need to work with them together. Suppliers based in other countries may not follow the timeline of local product development,'' he added.
After giving his thoughts on the current market landscape, Hui shared his outlook on the e-booster sector.
''We believe the Brake-by-Wire product development is moving in two directions, a domain-based, centralized brake system design or a diversified, closed-to-the-wheels one,'' Hui said Leekr is researching a system consisting of four units of EMB (Electro-Mechanical Brake) and plans to mount them on four wheels. This will bring better braking efficiency and higher costs.
Leekr's decision to bet on two products indicates their confidence in the E-braking market. According to IHS Markit, the demand for electro-hydraulic brake system is predicted to almost double from 2021 to 2023. And the e-booster market will be in excess of USD 7 billion in 2026. The market is far from saturation. Electro-hydraulic brake system is projected to grow from a 13% market share (out of the total brake actuation system market) in 2021 to around 29% in five years.
Road to Globalization
As a senior executive who once worked in a global company, Hui has ambitious goals. Leekr is scheduled to develop more in-chassis products and hopes to sell them abroad. Despite Leekr's inception just one year ago, the company has a clear roadmap to achieve volume production, and two production lines are planned which is for chassis domain controller and Steer-by-Wire product. It plans to use the proceeds raised from previous financing rounds to build a plant in Shanghai that can produce 300,000 DHB/IHB products annually. From the second half of this year, the company will put the second and third production lines into operation, taking the total capacity then to 0.9 to 1.2 million units per year.
More Chinese component makers are joining the cohort of businesses to sell products globally, most of which are located in Shanghai and surrounding areas.
On the land of the Shanghai Free Trade Zone, workers are busy assembling Tesla vehicles or loading them onto the freighters. These cars are equipped with batteries made by CATL or BYD. Time will tell whether Tesla Shanghai will export cars equipped with more "Made by China" components such as Leekr's braking systems.