The Integrated die-casting has once again gained tremendous advantages.

Recently, several Chinese ministries have issued guiding opinions on promoting the high-quality development of the foundry and forging industry, aiming to improve the overall level of them and ensure the security and stability of the supply chain in the equipment manufacturing industry.

Developing advanced casting processes and equipment, enhancing supply chain resilience, inevitably relies on the breakthrough of core technologies and key materials.

Integrated die-casting is of paramount importance.

As an innovative casting technology in automotive manufacturing processes, integrated die-casting can help electric vehicles achieve lower manufacturing costs, improve production efficiency, and increase endurance.

Nowadays, the market share of electric vehicles has reached 30% of the entire automobile industry. Electric vehicle companies are starting to compete fiercely in a more crowded market. Will integrated die-casting be the magic weapon for car companies to further reduce costs?

1.Emulating Tesla to embark on the path of cost reduction.

Tesla, which has frequently lowered prices, is promoting its integrated die-casting technology through its invention patents. It is precisely because of the pursuit of ultimate technology and cost reduction that Tesla is able to dominate the entire new energy industry with a gross profit margin of over 20%, and able to lower its products prices when it senses a market supply and demand reversal.

At the 2020 Tesla Battery Day event, Elon Musk announced that the Model Y would adopt an integrated die-cast rear underbody assembly, which would reduce the number of components by 79 compared to the previous design. The number of welds would also decrease from 700-800 to 50.

And, the fully integrated die-cast rear floor assembly of Tesla does not require heat treatment, reducing the entire manufacturing time from 1-2 hours using traditional processes to 3-5 minutes, resulting in a 40% decrease in overall manufacturing costs.

More importantly, by replacing the entire undercarriage assembly consisting of 370 components with 2-3 large castings, the weight will be further reduced by 10%, corresponding to an increase of 14% in endurance.

In terms of material usage, the integrated die casting solution is more cost-effective compared to mainstream vehicle bodies. The main material used in traditional car bodies is steel, and the essence of lightweighting is to replace steel with lighter-density materials such as aluminum alloys.

The integrated die-casting solution reduces processing costs by reducing welding connection points. Additionally, waste materials can be directly melted and re-cast, achieving recycling and reuse.

But the disadvantage is that it is not easy to repair. Due to the integral welding of the vehicle body, the repairability of aluminum bodies is relatively poor, which means if collision occurs, the repair costs are high.

Elon Musk once described the integrated die casting process as follows: "Integrated die casting technology allows Tesla to manufacture new cars as if they were making toy cars." Tesla's progress in integrated die casting is far ahead of other car companies, and the Model Y has already been officially delivered.

The third-generation 4680 battery cells of Model Y adopt a brand-new integrated chassis battery pack, which integrates the front and rear body with the battery pack into a three-in-one chassis. This new structure provides higher structural strength and rigidity.

The use of integrated die-casting and other technologies has helped Tesla achieve several things. Firstly, it has resulted in higher production efficiency, with the factory's production capacity experiencing a qualitative leap in the past few years. Tesla's weekly output has even surpassed that of established companies like Toyota. Secondly, it has contributed to lower manufacturing costs, providing a significant profit margin. In the foreseeable future, with the anticipation of price wars, Tesla has greater capital for price reductions.

The acceleration of the industrial end will give independent brands a competitive advantage. With the development of automobile lightweight and electrification, integrated die-casting technology is being favored by new forces in car manufacturing and the new energy departments of traditional automotive companies.

In mainland China, NIO officially released the integrated cast-aluminum subframe for the ET5 at the end of last year. Xpeng, Li Auto, Gahe, which have deep cooperation with Huawei, have also put integrated castings on their agenda and are expected to be implemented gradually in 2023.

2.Equipment and materials are critical barriers to conquer.

In the background of cost reduction requirements in the automotive industry and technological breakthroughs supported by policies, the next three years will be a period of rapid growth for integrated die-casting. According to Cinda Securities, the newly added scale of integrated die-casting equipment will reach 10.89 billion RMB by 2025, with a compound annual growth rate of 136%. The scale of components will reach 47.64 billion RMB, with a compound annual growth rate of 258%.

The upstream of the industrial chain consists of equipment, materials, and mold manufacturers. The midstream consists of die-casting factories, while the downstream consists of host factories. The host factories purchase die-casting parts from midstream die-casting manufacturers, and some also procure materials for production independently.

The three major barriers to die-casting come from equipment, materials, and processes. The current domestication rate of some so them is still relatively low.

Large-scale die-casting machines are the foundation for integrated die-casting. The clamping force of a die-casting machine generally needs to be above 6000 tons. In mainland China, equipment manufacturers for 6000-ton die-casting machines include Li Jin Technology, Haitian Metal, and Yi Zhi Mi.

If the tonnage of the die-casting machine continues to increase, the size and structure of the die-castings can be further breakthroughs. Integrated die-casting components have larger dimensions, and the ultra-large die-casting machines have always been blanked in the past. Until September of last year, Lijin Technology and Guangdong Hongtu released a 12,000-ton ultra-large intelligent die-casting unit, which is the largest tonnage die-casting machine in the world so far.

The production capacity and cost of die-casting equipment also affect the speed of popularization of these technologies. Large-scale equipment has a higher unit procurement price and requires mass production to lower marginal costs. The growth on the equipment side is expected to be validated first this year.

The materials are divided into mold materials and heat-treatment-free alloy materials. Under the requirements of integrated die casting, the mold needs to meet the characteristics of high precision, low energy consumption, and high consistency in design and material selection. The collaboration between the main automobile manufacturers and mold suppliers for design and improvement can take up to two years or more. Most mid-range die casting companies do not have the ability to develop their own molds, so they need to make exotic purchases.

Large aluminum alloys are prone to dimensional deformation during the heat treatment process. The technology for non-heat-treated materials is complex, and domestically produced materials mostly fail to meet the required material strength. Currently, the only manufacturers capable of mass producing this type of material are American Aluminum, Germany's Rheinfield, and Tesla. Domestic manufacturers are actively involved in research and development efforts.

The mid-range die-casting manufacturers have abundant industry and customer resources. They respectively procure large-scale die-casting machines to integrate into the supply chains of emerging automotive companies. This includes collaborating of WenCan Corporation and NIO and Li Auto, as well as die-casting parts supplier of Xpeng Motors, the Guangdong Hongtu.

With the accelerated lightweight transformation of electric vehicle companies, there is still a cost reduction space of 20%-40% in body manufacturing. The mass production and delivery of new models by various companies this year will drive the promotion of integrated die casting. In conjunction with policies, it will rapidly accelerate the development and application of this technology.

The secondary market had high expectations for this technology in the early stages of industry development, but the results fell short. Whether the launch of new vehicle models by customers this year has brought about demand that exceeds expectations for the industry still needs to be confirmed through performance.