New Changes in Vehicle Harness Production, High-Voltage and High-Speed Harness Prices Rise

1. Brief introduction of Vehicle Harness

1.1. Introduction of Vehicle Wire Harness

1.1.1. Overview of Vehicle Wiring Harness

It is the network main body of automotive cable harness automobile circuit, without which there would be no automobile circuit. The Wire Harness refers to the assembly that the contact terminal (Connector) made of copper is crimped with the wire and cable, and then an insulator or a metal shell is pressed on the outside, and the wire harness is bundled to form a connecting circuit. In modern cars, there are many automotive Wiring Harness, and the electronic control system is closely related to the wiring harness. If the functions of microcomputer, sensor and actuator are compared with human body, it can be said that microcomputer is equivalent to human brain, sensor is equivalent to sensory organ and actuator is equivalent to motor organ, then wiring harness is equivalent to nerves and blood vessels.

2. Overview of Industry Development Trend

2.1. The Trend of Electrification-the Penetration Rate of New Energy Vehicles Has Increased Significantly.

New energy vehicles have entered a period of rapid penetration, and domestic automakers are in urgent need of industrial transformation, and the goal of electrification is clear. Domestic automakers have set new energy penetration targets, among which BYD sold 104,338 passenger cars in March, and the electrification rate was 100%. Dongfeng Company strives to fully realize electrification in 2024, and China No.1 Automobile Company strives to fully realize electrification in 2030.

The penetration rate of new energy vehicles depends on the joint action of demand side, supply side and policy side. According to the data of the Association, the penetration rate of new energy vehicles has reached 23.4% from January to May, 2022, and the goal of new energy vehicle sales reaching about 20% of the total new vehicle sales by 2025 put forward by the General Office of the State Council in the New Energy Vehicle Industry Development Plan (2021-2035) has been achieved ahead of schedule. On the whole, the new energy market has maintained a high growth vitality at present, no matter from the purchase intention of consumers, the electrification goal of car enterprises and the pushing ability of new models, and the policy support for the new energy market. In 2021, the penetration rate of new energy vehicles reached 13.4%. In the first five months of 2022, the penetration rate has exceeded 20%. In June, the retail penetration rate of new energy vehicles has reached 27.4%. According to the current high growth trend, the penetration rate of new energy vehicles will reach 30% in 2022 and 40% in 2025. However, the penetration rate of new energy vehicles is still variable due to the pressure of upstream raw material price increase, the shortage of chips, the end of policy subsidies, the reduction of passenger car demand, and the elimination of local car brands caused by technology update iteration.

2.2. Intelligent Trend-The Rapid Development of Intelligent Driving

The development of new energy is not only the replacement of energy supply of automobiles, but also the gradual iteration of intellectualization to non-intellectualization. China's "Intelligent Networked Vehicle Technology Roadmap 2.0" further clarifies the development route: by 2025, the market share of PA (partial automatic driving) and CA (conditional automatic driving) intelligent networked vehicles will exceed 50%, and HA (highly automatic driving) intelligent networked vehicles will be commercialized in limited areas and specific scenes; By 2030, the market share of PA and CA intelligent networked cars will exceed 70%, and the market share of HA intelligent networked cars will reach 20%, and it will be widely used on expressways and on a large scale in some urban roads; By 2035, China's intelligent networked automobile technology and industrial system will be fully completed, the industrial ecology will be sound and perfect, the intelligent level of the whole vehicle will be significantly improved, and HA-class intelligent networked automobiles will be applied on a large scale.

Driven by the policy, the penetration rate of L2 intelligent networked vehicles is expected to increase rapidly. With the upgrade of driving automation level, the number of environmental sensors mounted on bicycles, such as on-board cameras, ultrasonic radar, millimeter wave radar and laser radar, continues to increase. At present, domestic intelligent driving is still in the stage of commercial exploration, and many intelligent driving exploration leaders have sprouted in various fields, injecting vitality into intelligent development. Autopilot chip: Qualcomm launched a new generation of intelligent cockpit chip products in 2019-the world's first mass-produced 7nm process car chip SA8155P, which has been mounted on Xiaopeng P5, Weimar W6, Weilai ET7 and ET5, Nezha UPro, Zero Run C11, Mocha, Macchiato and Latte models owned by Great Wall WEY, Geely Star Yuel, Cadillac Ruige and many other models; In March, 2022, NVIDIA's self-driving chip DRIVEOrin was officially mass-produced. At present, its Xavier and Orin chips have been supplied to most mainstream manufacturers such as Tucki, Weilai, Didi, Volkswagen, Toyota (TMUS) and Daimler (DDAIFUS).

Intelligent driving system solution: Superstar has successfully launched intelligent driving computing platform, automatic model optimization tool, point cloud algorithm optimization acceleration and deployment tool, customized acceleration IP library, high-reliability system software and other products in the future, and has reached tens of millions of business cooperation for OEMs and customers of Tier1 and L4 automatic driving solutions; Baichuan data platform covers the auto-driving labeling requirements of L2-L4 stage, and serves more than 25 auto-driving customers such as Horizon and Baidu. Zongmu Technology has launched Amphiman integrated parking architecture, which supports 17 high-speed ADAS functions such as ICA and TJA-Pro, high-speed NGP functions such as automatic lane change and active lane change overtaking, and parking functions such as auxiliary parking, memory mapping, one-button parking, intelligent calling and remote monitoring. Sensors: Hersai Technology independently developed micro-galvanometer and waveform encryption technology, which has been carried in the ideal; Sagitar Juchuang provides an intelligent lidar system with information understanding ability for the market through the closed loop of the three core technologies of lidar hardware, AI algorithm and chip; Bright Road Intelligent provides lidar mass production solutions, test verification systems and roadside-aware intelligent transportation solutions for Volkswagen and Great Wall Auto.

Travel service: Mushroom Car Union has launched the "Mushroom OS+AI Cloud+Intelligent Terminal+Sensor" car-Lu Yun integration scheme and intelligent transportation AI cloud platform, and has cooperation with automakers such as BYD and jiangling motors (unlisted); Baidu Apollo has been extended to the whole intelligent transportation system. The company provides intelligent car functions such as AVP products for independent parking, intelligent cockpit, and ACE intelligent transportation engine; In 2021, Yuanrong Qihang launched the L4-class automatic driving solution for front loading-DeeprouteDriver 2.0, which reduced the cost to less than USD 10,000, a quarter of the industry average, making it possible to mass-produce automatic driving; Zhixing Company took the lead in creating a bicycle intelligent+car-road coordination scheme, and completed the four-span demonstration of C-V2X, which showed that all three ports of "Car Lu Yun" had industry-leading technical reserves, and it was the first unmanned company in China that could basically reach L5 level; T3 tried to make a breakthrough in technological innovations such as car networking and new energy, and independently built the V.D.R safety protection system, which can realize real-time management of vehicles, and reached a strategic cooperation with L4-class autonomous driving company, Light Boat Zhihang; For example, through the "two-axis drive" strategic layout, the Bank of China launched the first truly open Robotaxi operation platform in China's travel industry, helping the government, vehicle companies and autonomous driving companies to jointly promote the commercialization of autonomous driving, creating a VaaS platform linking the whole industry, and gradually becoming the global leader in autonomous driving operation technology.

2.3.EE Architecture Upgrade Trend

2.3.1. Background of Domain Controller Transformation

In the traditional distributed automobile electronic and electrical architecture, the information transmission and control of sensors and various electronic and electrical systems in the vehicle are all completed by the distributed automobile electronic controller (ECU). With the improvement of automobile electronization and the diversification of functions, the number of electronic control units (ECU) in the vehicle is increasing, thus increasing the difficulty of wiring power and data distribution. The domain controller and intra-domain centralized architecture came into being.

2.3.2. Ways to Upgrade Architecture

The evolution of Bosch automotive electronic and electrical architecture is divided into three stages: distributed architecture, (cross-) domain-set Chinese architecture and vehicle-centralized electronic and electrical architecture. Each stage is subdivided into two small stages. From low order to high order: modularization (each function is realized by an independent ECU), integration (different functions are integrated into one ECU), intra-domain centralization (domain controllers control different domains respectively), cross-domain integration (cross-domain controllers control multiple domains at the same time), vehicle integration (a domain controller controlled by a central computer on board), and vehicle cloud computing (more additional functions of vehicles are realized by cloud computing).

2.4. The Rise of Domestic Independent Brands

The domestic automobile market has developed rapidly in recent years, and a number of excellent national brands such as Geely, Chery, Great Wall and BYD are gradually emerging. According to the statistics of the Federation, in April 2022, the market share of self-owned brand passenger cars in a single month exceeded 58%. Self-owned automobile brands have a high purchasing rate of local parts, and the steady increase of its market share is expected to bring opportunities for the development of local parts enterprises.

3. Analysis of Demand Change of Vehicle Wiring Harness

3.1. Under the Trend of Electrification, the Use Scale of Wire Harness Increases.

3.1.1. Sales of New Energy Vehicles Increased Significantly.

The penetration rate of electrification will increase rapidly and is expected to reach 20-30% in 2025. The "New Energy Automobile Industry Development Plan (2021-2035)" issued by the General Office of the State Council has proposed that by 2025, the sales of new energy vehicles will reach about 20% of the total sales of new cars. According to the current high growth trend, the target of 20% penetration rate of new energy vehicles may be realized ahead of schedule.

3.1.2. The Market Price of Wire Harness Rises with the Increase of Electrification Permeability.

As the main carrier of power output in electric vehicles, high-voltage wire harness is one of the key components for vehicle performance and safety. In-car high-voltage wiring harness is mainly used to provide high-voltage and strong-current power supply for new energy vehicles. It is a high-security part in new energy vehicles, and has the characteristics of large voltage/current and large number of wires with large diameter. Compared with the traditional in-car low-voltage application, in-car high-voltage power transmission has higher requirements for the electrical performance, shielding performance, mechanical performance and durability of wiring harness.

The characteristics of new energy vehicle high-voltage system determine that its wiring harness faces challenges in wiring, shielding, cost, safety, etc. The technical threshold is higher than that of traditional fuel vehicles, and the value of single vehicle has also increased. According to EVWIRE data, the average ASP of new energy automotive wiring harness is about 5,000 yuan, of which the high-voltage harness ASP is about 2,500 yuan. From the perspective of disassembly, the new energy vehicle system includes low-voltage wiring harness and high-voltage wiring harness, in which the high-voltage wiring harness system is a brand-new system under electrification, replacing the Engine Wiring harness of traditional vehicles (ASP with small displacement of engine wiring harness is around 200 yuan, while ASP with large displacement is around 400 yuan), mainly including high-voltage connectors, high-voltage cables, charging sockets, etc.

3.1.3. Incremental Forecast of Wiring Harness Market due to the Increase of Electrification Penetration Rate

3.1.3.1. Prediction of New Energy Penetration Rate

Under the negative, neutral and positive market situation, we predict that the penetration rate of electrification will reach 25%, 30% and 40% in 2025.

The penetration rate of new energy vehicles depends on the joint action of demand side, supply side and policy side. According to the data of the Association, the penetration rate of new energy vehicles has reached 23.4% from January to May, 2022, and the goal of new energy vehicle sales reaching about 20% of the total new vehicle sales by 2025 put forward by the General Office of the State Council in the New Energy Vehicle Industry Development Plan (2021-2035) has been achieved ahead of schedule. On the whole, the new energy market has maintained a high growth vitality at present, no matter from the purchase intention of consumers, the electrification goal of car enterprises and the pushing ability of new models, and the policy support for the new energy market. In 2021, the penetration rate of new energy vehicles reached 13.4%. In the first five months of 2022, the penetration rate has exceeded 20%. In June, the retail penetration rate of new energy vehicles has reached 27.4%. According to the current high growth trend, the penetration rate of new energy vehicles will reach 30% in 2025. However, the penetration rate of new energy vehicles is still variable due to the pressure of upstream raw material price increase, the shortage of chips, the end of policy subsidies, the reduction of passenger car demand, and the elimination of local car brands caused by technology update iteration.

From the perspective of industrial chain, the upper, middle and lower reaches of the industry will give a certain degree of confidence in the growth of the penetration rate of new energy vehicles. First, although the current price of raw materials is still at a high level, from the long-term trend, many manufacturers actively carry out technical iteration, and the cost will be further reduced. Second, there is uncertainty about the extension of subsidies for new energy vehicles, and the industry is worried about whether the cancellation of subsidies will affect market demand. However, with the increase of the scale of the new energy source automobile industry, the enhancement of the profitability of many large enterprises, and the continuous introduction of new models, the market demand will be guaranteed to some extent, and whether subsidies have little impact on the market demand. Third, under the disturbance of local epidemic situation, the production and sales of new energy vehicles will be under pressure, but with the adaptation of epidemic situation control, the impact of epidemic situation on production and sales will gradually decrease. Therefore, considering the current difficulties and market signals, we think that the penetration rate of energy vehicles in 2025 will not be lower than the current 25%, but there are still many foreseeable factors that restrict the rapid growth of the penetration rate to 40%. Therefore, we think that the penetration rate of new energy vehicles in 2025 will be 30% in a neutral scenario.

3.1.3.2. Market Size Forecast of High Voltage Wire Harness

Based on the national automobile sales volume of 27.32 million vehicles in 2025, the single vehicle value of high-voltage wire harness of new energy vehicles is about 2,500 yuan. We, Kable-X, predict that the domestic high-voltage wire harness market will reach 17.08 billion yuan, 20.49 billion yuan and 23.91 billion yuan respectively in negative, neutral and positive situations in 2025.

Based on the neutral forecast, combined with our forecast of the national automobile sales volume and the penetration rate of new energy vehicles in the following years, we estimate that the national high-voltage wiring harness market in 2022-2025 will be 150.0, 167.4, 185.7 and 20.49 billion yuan respectively.

3.2. Under the trend of intelligentization and networking, the requirements of high-speed wiring harness are significantly improved.

The development of electrification will help the automobile industry transform from traditional mechanized terminal to intelligent and networked terminal. With the continuous upgrading and optimization of intelligent networked vehicles, the demand for related parts in the automotive industry will also undergo great changes. Intelligent networked car refers to a new generation of car which is equipped with advanced sensors and other devices, uses new technologies such as artificial intelligence, realizes automatic driving, and gradually becomes an intelligent mobile space and application terminal. Intelligentization refers to the intelligent interaction between people and vehicles and the automation of vehicle driving. Human-vehicle interaction intelligence is to provide drivers with content and services in the driving process, and meet the differentiated needs of users (comfort, convenience, entertainment, etc.). Vehicle driving automation includes auxiliary driving stage and automatic driving stage. Through the prediction of road conditions and vehicle information, the vehicle safety and travel efficiency in the driving process are guaranteed. Networking refers to the organic combination of car networking and intelligent cars. By equipped with advanced on-board sensors, controllers, actuators and other devices, and integrating modern communication and network technologies, intelligent information exchange and sharing between cars and people, roads, rear stations and so on can be realized. Automatic driving intelligence can only detect objects or people in the field of vision, while Internet of Vehicles can detect objects or people outside the field of vision, which can achieve efficient and safe driving to a greater extent.

3.2.1. Automatic driving

3.2.1.1. Automatic driving classification

Following the intelligent driving grades defined by SAE Association, intelligent cars are divided into L0-L5 grades according to the different control requirements of drivers, among which L2 and L4 grades are the watershed of the development stage of automatic driving. L2 is called ADAS (Advanced Driver Assistance System) below, that is, it only provides assistance to drivers in specific scenes. L3 is called conditional automatic driving, that is, while most driving operations are completed by vehicles, drivers still need to keep a high degree of concentration. L4 is the driving mode that completely liberates the driver and is completely dominated by the vehicle.

3.2.1.2. Development progress and penetration rate of intelligent driving in China

China's autonomous driving technology is constantly developing. From 2007 to 2015, L1 level has been commercialized and widely popularized; From 2014 to 2020, the L2 Advanced Driver Assistance System (ADAS) has been mature and widely used; At present, the L3-level technical end has been realized, but it is still in the testing stage. Some local OEMs have launched corresponding models, and it is expected that L3-level automatic driving will be realized in 2025; From 2030 to 2040, it is planned to realize L4/L5 automatic driving. According to PwC data, China's L3 level accounted for 1% in 2025, with a sales volume of 280,000 vehicles, which will increase to 18% in 2035, with a sales volume of 6.19 million vehicles; Level L4 will account for 3% in 2030, with a sales volume of 930,000 vehicles, and will increase to 15% in 2035, with a sales volume of 5.16 million vehicles; Level L5 accounts for 1% in 2035, with a sales volume of 340,000 vehicles.

3.2.2. Intelligentization-the gradual upgrade of automatic driving will increase the price of high-speed wire harness.

3.2.2.1. Automatic driving upgrade, more sensors will significantly increase the amount of harness.

Commonly used data cables for automobiles mainly include twisted pair, differential cable and coaxial cable, which are used in microphones, sensors, high-bandwidth Ethernet, ADAS, cameras, monitors, laser radars, etc. Compared with traditional cars, smart cars with automatic driving or ADAS systems have added high-definition cameras, millimeter-wave radar and other sensors, as well as ECU such as ADAS module and radar control module. And with the continuous upgrading of autonomous driving technology, the number of sensors will gradually increase.

The data transmission of sensors is inseparable from the support of data cables, and sensors such as cameras, lidar and millimeter-wave radar all need different kinds of data cables. Under the trend of automobile intelligence, with the rapid increase of the number of sensors in a single car, the amount of data harness used by the root will also be significantly increased. According to Amberford's estimation, the unoptimized L3 and L4 autopilot systems need to add 2km of vehicle wiring harness.

3.2.2.2. Automatic driving is upgraded, sensor performance is improved, and data transmission requirements are improved.

With the increase of intelligent sensors and the expansion of night vision assistance, fatigue detection and other functions, ADAS system is equipped with higher bandwidth transmission network, and high-speed wire harness emerges as the times require. The laser LiDAR module and camera in the car can generate 70Mbps and 40Mbps data traffic, respectively. The L2-class car needs 100 Mbps and Gigabit data transmission, and the L3-class data level is even increased to 10Gbps, which is expected to drive the demand for high-speed wiring harnesses.

High-definition camera: independent brands such as Weilai, Tucki, Ideality, etc. have upgraded the on-board camera at the same time in order to achieve stronger automatic driving function. Compared with the traditional 1.2-megapixel camera and 2-megapixel camera, the 8-megapixel camera can detect pedestrians in the range of 100-150m, and in the field mode of narrow viewing angle, it can detect about 500m of dynamic vehicles and about 180m of small targets. The higher the pixel, the greater the amount of data to be processed per second, and the greater the computational power. The traditional single-core shielded wire can no longer meet the demand, and it needs to be equipped with high-performance coaxial data cable or Ethernet cable to meet the demand.

Lidar: The data transmission requirement of lidar is also relatively high. Lidar works in optical band, and its frequency is 2 ~ 3 orders of magnitude higher than that of microwave. Therefore, compared with microwave radar, lidar has extremely high range resolution, angular resolution and velocity resolution. The traditional data cable within 100 megabits can't meet the data transmission requirements of laser radar, and the data rate needs to reach gigabit level. Shielded Ethernet is the data cable solution of laser radar.

Networking of vehicles: With the improvement of the intelligence of autonomous driving, the intelligence of bicycles may not fully meet the needs of vehicles to cope with the complexity of the environment and meet their own safety. Therefore, in addition to bicycle intelligence, in order to achieve the goal of fully automatic driving, vehicles will also need the cloud architecture of the Internet of Vehicles as a supplement. Through the communication channels established by "Vehicle to Everything" (V2X), such as car to car, car to base station, and base station to base station, vehicles can obtain a series of traffic information such as real-time road conditions, road information, pedestrian information, etc., so as to improve driving safety, reduce congestion, improve traffic efficiency, and provide on-board entertainment information. As an important supplement to bicycle intelligence, the Internet of Vehicles (Internet of Vehicles) has brought the demand of high transmission rate and low loss tolerance for data transmission, which requires the support of high-performance coaxial cable in the vehicle. With the increasing popularity of Internet of Vehicles, the amount of high-performance coaxial cable will be pulled.

3.2.3. Prediction of the impact of intelligence on the market size of wiring harness

3.2.3.1. Present situation and prospect of intelligent penetration rate

China's autonomous driving technology is still undergoing iterative upgrading. From 2007 to 2015, L1 level has been commercialized and widely popularized; From 2014 to 2020, the L2 Advanced Driver Assistance System (ADAS) has been mature and widely used, and its representative models include Tesla Model3, SAIC Chase D90, etc. In 2025, L3-level automatic driving will be planned. At present, the technology has been realized, and it is still in the testing stage. Representative models include Audi A8, GAC New Energy-Aian Lx, etc. From 2030 to 2040, it is planned to realize L4/L5 automatic driving, which is only used for some models and is still in the testing stage. Representative models include FAW -Apollo Hongqi Electric Vehicle, BYD -xUrban- Qin Pro, etc.

According to pwc's forecast, L3 will account for 1% in 2025, with a sales volume of 280,000 vehicles, which will increase to 18% in 2035, with a sales volume of 6.19 million vehicles; Level L4 will account for 3% in 2030, with a sales volume of 930,000 vehicles, and will increase to 15% in 2035, with a sales volume of 5.16 million vehicles; Level L5 accounts for 1% in 2035, with a sales volume of 340,000 vehicles.

3.2.3.2. Prediction of high-speed wire harness scale

According to the medium-and long-term forecast of the total sales volume of China's automobile market released by China Association of Automobile Manufacturers and China Automotive Strategic Development Research Center of Tianjin University, from the overall market point of view, combined with our judgment on China's automobile market this year, we expect the domestic passenger car sales volume to be about 25 million in 2022. After that, according to the steady growth rate of about 3%, the sales volume of passenger cars in 2023-2025 will be 25.75 million, 26.52 million and 27.32 million respectively. Intelligent high-speed wire harness (high-speed connector): The automobile high-speed connector is mainly used in cameras, sensors, antennas, GPS, Bluetooth, WiFi, navigation and driving assistance systems. According to different configurations, the ASP of all kinds of high-speed connectors configured in intelligent vehicles is around 500-1000 yuan, and the harness used in L1-level automatic driving system basically does not need additional high-speed cables, so the unit price is low.

In addition, the price level of wire harness is mainly restricted by the price changes of downstream vehicle manufacturers. Generally, with the emergence of new models, the price of automobiles is higher, and the price of wire harness is also higher. However, with the passage of time, the appearance of alternative models will force the original models to cut prices. In order to maintain the profit level, the OEMs will ask the suppliers of vehicle wiring harnesses and other parts to cut prices. However, the parts manufacturers with large scale and high market position will keep the profit level by means of automatic production, scale effect, integrated production and technical iteration, and the price of wiring harness will gradually decrease. Therefore, based on the overall expectation of the passenger car market, the penetration rate of the corresponding level of autonomous driving technology, ASP of the required high-speed wire harness at all levels and other factors, we roughly estimate the market size of high-speed wire harness from 2022 to 2025 to be 85.9, 97.0, 108.5 and 12.28 billion yuan respectively, with a compound annual growth rate of about 12.7%.

3.3. The transformation of distributed architecture to centralized architecture changes the demand of wiring harness.

3.3.1. Development background and basic overview of domain controller

The intelligent driving industry is developing from distributed function controller to centralized domain controller, and then to centralized mode. The concept of domain controller has evolved with the development of vehicle electronic and electrical architecture. With the increasing intelligence of automobile, there will be dozens or even hundreds of ECU electronic control units on each automobile, each of which is responsible for a separate function, and then connected by CAN or LIN bus, which leads to the increase of vehicle cost and technical difficulty, thus giving birth to the concept of domain. The so-called "domain" is to divide the automotive electronic system into several functional blocks according to their functions, and the system architecture inside each functional block is led by the domain controller. The CAN communication bus, which is very commonly used nowadays, can still be used for system interconnection within each domain, while the communication between different domains requires Ethernet with higher transmission performance as the backbone network to undertake the task of information exchange. From the mainstream layout of car factories, most of them are divided according to the classic five-domain model. The whole Bosch vehicle is divided into five domains: body domain, cockpit domain, chassis domain, power domain and automatic driving domain.

3.3.2. Influence of Domain Controller Transformation on Harness Transformation

3.3.2.1. Lightweight-the demand for harness quantity is significantly reduced.

As the industry turns from gas-powered vehicles to electric vehicles, most original equipment manufacturers use their traditional internal combustion engine vehicle (ICE) architecture to quickly create battery electric vehicles (BEV) to catch up with the trend. This method is unsustainable. Using the architecture designed for ICE to create BEV leads to problems such as low efficiency and difficult wiring, thus increasing the total cost and weight of the car. For example, according to Amber's research, using the ICE architecture of a typical SUV to create a BEV will result in the wiring system being 13kg heavier than that of an ICE vehicle (in order to adapt to the traction battery and the ICE frame around the drive system, all packages required by the BEV have increased by another 5kg, and the high-voltage cable required by the BEV has increased by about 8kg). The new centralized architecture will greatly reduce the weight and cost of wiring harnesses, especially low-voltage wiring harnesses. The domain structure divides various physical areas in the car, and adds a regional controller as a high-speed data and power concentrator. Up to the regional controller, the physical complexity of the wiring harness in the current state can be reduced, and the number of ecus can be significantly reduced. In a research on a complete vehicle manufacturer, Amber found that the use of regional controllers can integrate 9 ecus and reduce the weight of the vehicle by 8.5 kg by using hundreds of individual wires.

The SVA(SmartVehicleArchitecture) architecture method designed by Ambofur integrates upwards, builds a flat power supply backbone, optimizes low-voltage wiring, and realizes more automatic assembly through Dock&Lock connectors. SVA method not only eliminates the extra wiring weight when converting ICE architecture to BEV architecture, but also saves 8% wiring weight, 600 cutting leads and more than 900 meters of wiring. Tesla's new EEA architecture has reduced the automotive wiring harness from 3km of ModelS to 1.9km of Model3.

3.3.2.2. Cost-saving-the requirements for wire harness production, wiring and installation will change qualitatively.

The transformation from distributed architecture to centralized architecture can not only simplify wiring harness, but also cater to the lightweight trend of electric vehicles. Most importantly, it will reduce the cost of each stage of automobile production life cycle, including development, manufacturing and post-production costs. For wire harness production, the production cost is reduced from the following important aspects. Through upward integration. Integrating the functions distributed on multiple ecus into a smaller set of domain controllers enables the vehicle to get rid of a large number of housings, brackets, relays, fuses, terminals and wires. Through intelligent fusing. As a distribution hub, the regional controller naturally includes the intelligent fuse block. Semiconductor replaces the traditional fuse in relay to realize intelligent fuse. In the past, the diameter of electric wire must be designed to be 30% larger than the actual need, so as to improve the bearing capacity of electric wire under peak load and prevent the fuse from blowing. On the other hand, through intelligent fusing, the vehicle can set the physical limit of the electric wire that can be loaded in a specific period of time. This means that the wire gauge can usually be reduced (for example, from 4mm2 to 2.5mm2), thus reducing the weight and saving the wiring cost.

By directly reducing the labor force. Because the domain controller architecture simplifies the physical complexity of wiring and is directly connected to sensors, the wiring harness is greatly shortened, which means that only 1-2 people need to install it. In contrast, it takes 10 or more people to install today's most complex architecture, and OEMs can save a lot of labor costs. Through automated production. Because the area controller divides the basic electrical structure of the vehicle into components that are easier to manage, it is easier to realize automatic wiring harness assembly. In the wiring cost, labor cost accounts for about half. With the increase of labor costs, Amber expects that in the next five years, the labor costs required for assembly in different countries may increase by 25% to 50%. Automated production will greatly offset the rising labor costs.

3.3.3. Prediction of the influence of domain controller on the market size of wiring harness

Compared with the direct conversion of ICE architecture to BEV architecture, the new electronic and electrical architecture can fundamentally reduce the use of automotive wiring harness. By simplifying the automobile circuit design and reducing the wiring in the car, the weight of the wire harness is directly reduced, and at the same time, the automatic production of the wire harness is facilitated and the production cost is reduced. In addition, with the gradual popularization of intelligent vehicles, the higher requirements of domain controllers for data transmission will drive the next generation of vehicles to achieve full Ethernet, and the wiring harness connection mode will usher in a new revolution.

3.3.3.1. Current Situation and Prospect of Domain Controller Architecture Penetration Rate

At present, the penetration rate of domain controllers is low, but the domain controller industry keeps a high prosperity. At present, the cockpit domain controller has been applied on a large scale, and the penetration rate will increase most rapidly in the future, and the shipment volume will increase greatly in the future. With the introduction of L3 and above functions of subsequent car companies, automatic driving domain controllers will start the era of accelerated penetration in 2022. The vehicle body, chassis domain and power domain controllers are in the early stage, and the penetration rate is expected to continue to increase. According to "2021 Market Demand Research Report of China's Intelligent Car Cabin Development" by Yiou Think Tank, the penetration rate of intelligent cockpit has reached 50.6% in 2021, among which the price range of the highest penetration rate is 200,000-250,000 yuan, up to 58.4%. Among all vehicles with intelligent cockpit, the penetration rate of central control color screen is as high as 97.9%. At the same time, with the development of intelligent cockpit, the function of OTA (Remote Online Upgrade Technology) is becoming more and more popular, and the current penetration rate of OTA has reached 50.9%. Geshi Automobile Research Institute predicts that by 2025, the shipment of intelligent cockpit domain controllers will exceed 5 million, with a compound growth rate of more than 50%. According to the statistics of JOSE Automotive Research Institute, the annual shipment of auto-driving domain controllers for passenger cars in China has reached 539,000 units in 2021, with a penetration rate of 2.7%. It is estimated that the penetration rate will exceed 5% in 2022. By 2025, the annual shipment of auto-driving domain controllers for passenger cars in China will reach 4.523 million units, with a penetration rate of 18.7%. The shipment of L2+ parking integrated domain controllers as the core driving force is growing rapidly.

3.3.3.2. Prediction of the Impact of Domain Controller Transformation on the Market Size of Low Voltage Harness

In the traditional low-voltage wiring harness market, the demand side is generally stable, basically linked to the output of the end vehicle. Among them, the engine wiring harness required by the fuel vehicle will be replaced by the high-voltage wiring harness in the new energy vehicle, while other low-voltage wiring harnesses will be reduced with the penetration of centralized architecture and the strengthening of lightweight demand.

Roughly, the use of SVATM low-voltage wiring harness, the domain controller architecture used by Amber, will be reduced by 22% on the basis of new energy vehicles. According to Bosch's division, the whole vehicle is divided into five domains: body domain, cockpit domain, chassis domain and power domain, and automatic driving domain. At present, the most common domain controllers are cockpit and autopilot domains, and the remaining domains are presented in combination, covering chassis, powertrain and gateway. At present, these three domains have been laid out slowly in some overseas car companies two years ago, and it is expected that they will be applied on a large scale in 2024-2025. The penetration rate of automatic driving domain controllers has only gradually increased in the last year, reaching 2.7% in 2021. According to the forecast of JOSE Automotive Research Institute, the penetration rate of China's passenger car automatic driving domain controller will reach 18.7% in 2025 and 50% in 2030. With the development of automatic production and integrated production, the value of single-vehicle wiring harness will continue to decrease. It is predicted that the single-vehicle value of low-voltage wiring harness will be 2,400 yuan and 2,200 yuan in 2025 and 2030 respectively. Based on the above data, we roughly estimate that the scale of low-voltage wiring harness of domestic automobiles in 2022-2025 will be 618.1, 624.6, 628.4 and 64.28 billion yuan respectively.

3.4. Summary

As for high-voltage wiring harness, with the improvement of motorization of automobiles, the driving mode of vehicles has fundamentally changed. In order to ensure the power output and energy supplement of vehicles, high voltage is one of the inevitable solutions, so the overall market demand for high-voltage wiring harness is also increasing day by day. It is estimated that the market size of high-voltage wiring harness will reach 150.0, 167.4, 185.7 and 20.49 billion yuan respectively from 2022 to 2025. Similarly, the high-speed wire harness market benefits from the improvement of vehicle intelligence, including but not limited to the requirements for data acquisition and transmission of intelligent systems related to automatic driving. As a result, the demand for high-speed wire harness is expected to increase significantly, and this part of the market will also be an incremental market in the wire harness industry. It is estimated that the market size will reach 85.9, 96.9, 108.5 and 12.28 billion yuan in 2022-2025 respectively. As for the traditional low-voltage wiring harness, the vehicle electrical architecture will change from distributed architecture to centralized architecture to central architecture, and the wiring harness connection mode will usher in a new change, and the demand for single-vehicle wiring harness will gradually decrease. Although the sales volume of automobiles in China can still grow to a certain extent, the growth rate of wiring harness market will be lower, and it will basically remain unchanged in general. We expect the market size of low-voltage wiring harness to be 618.1, 624.6, 628.4 and 6625 respectively from 2022 to 2025.