The Fisker Ocean will be manufactured by Magna in Europe leveraging Magna’s aluminum-intensive EV architecture. (Fisker)

Magna charging ahead on contract EV production

Electric-vehicle contract production could speed new electrified models to market, as Magna eyes a North American manufacturing footprint.

Magna isn’t waiting around for the electrified world to come to the company. As one of the few Tier-1 suppliers with full-vehicle manufacturing capabilities, the Ontario, Canada-based “mobility technology” company already is involved in production of three OEM electric vehicles (EVs) and hopes to apply that skillset for additional manufacturers, perhaps in North America. Magna recently announced that Fisker will use its EV platform to underpin the upcoming Ocean SUV (top).

Magna was heavily involved in the engineering of the Fisker Ocean and also will manufacture the all-new EV, with production slated to begin at a Magna-Steyr facility in Europe in the fourth quarter of 2022. Beyond the contract-manufacturing arrangement with Fisker, Magna also will purchase shares representing 6% of Fisker’s equity. The Ocean is one of four EVs for which Magna has a production connection, including the Jaguar I-Pace, Sony’s Vision-S and the ArcFox Alpha-T.

Magna’s specialties as a supplier include chassis, seating, powertrain and lighting, which it provides in large volumes to many of the globe’s OEMs. But thanks to its purchase and absorption of the Steyr-Daimler-Puch assembly facilities near Graz, Austria around the turn of the millennia, Magna also provides complete vehicle engineering and manufacturing capabilities This is becoming an in-demand skill as OEMs seek less investment-intensive entry options to the initially lower-volume EV market, and Magna claims it can continue to scale to meet future volume demands.

“This is a great example of our strategy to leverage our strong portfolio to scale for future mobility needs and utilize our full vehicle engineering and manufacturing capabilities,” said Swamy Kotagiri, president of Magna. “This is a unique competitive position for us, particularly with new mobility players and OEMs seeking to expand their electrified offerings.”

One-stop shop
With nearly 350 manufacturing operations in 27 countries, Magna already has produced 3.7 million vehicles representing more than 30 different models from 10 OEMs. That experience, along with its longstanding vehicle production facilities near Graz, put Magna in a unique position for OEMs looking to insert an EV offering into the market with minimal infrastructure investment.

“We are positioning ourselves at the forefront of future-oriented automotive production,” said Frank Klein, president of Magna Steyr. “With our complete vehicle expertise and more than 100 years of automotive experience, Magna Steyr is the leading multi-OEM complete vehicle manufacturer, and a preferred partner for both traditional OEMs and new entrants. A true one-stop shop.”

According to Klein, Magna’s one-stop solution allows it to transform customer ideas into reality, from the integration of a new propulsion system, up to development of a new platform and acting as manufacturing partner to produce it. “We all know our industry is going through a major transition towards clean mobility,” Klein said. “Today, as a result, half of our engineering projects and about 15% of our production projects are related to the growing EV market. Those projects cover electrified powertrain engineering including integration, validation and EV testing as well as production.”

With its production of the Jaguar I-Pace and E-Pace in Graz, Magna claims it’s the first contract manufacturer to jointly produce EVs and conventional vehicles on the same assembly line. The Sony Vision-S concept, which debuted at the 2020 CES in Las Vegas, was developed in close cooperation with Sony and Magna built the prototype. The ArcFox Alpha-T compact SUV is based on Magna’s EV platform, and was developed with JV partner BJEV, a subsidiary of China's BAIC Group.

North American expansion?
With Magna already a contract manufacturer in two of the world’s three largest automotive markets, North America is plainly in its sights. “We have a clear strategy to not only expand our production in China, [but] to also offer our service in North America,” Stein explained. “It all depends on the awarding situation. As soon as we have a firm contract, we would be able to offer that in North America.”

If Magna expands its contract manufacturing into North America, Klein noted that he expected it to be for an electrified product – and they would prefer to work with several OEMs to justify investment. “The goal would be to have at least two different customers wanting to work with us,” Klein said. “We could offer high flexibility and high quality for a lower cost versus OEMs doing it in-house. We are able to produce low-volume vehicles all the way to mass production. This is the flexibility we would also like to have in North America.”

The shift in vehicle-ownership sentiment, particularly for EVs as more of a commodity versus a passion, could favor contract manufacturing. “When I grew up, it mattered to drive either a 4-, a 6- or an 8-cylinder engine. It was all about the speed I could go into and out of a corner,” Klein said. “These things are not as important anymore. All EVs have very good driving performance, so the differentiating factors for the OEMs and for the new entrants will be the driver experience, and how well the product is integrated into the overall ecosystem of a customer. That's why I think we will see more and more platform sharing. This brings us in a very, very unique position.”

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