Chinese EV maker XPeng is making a battery decision it hopes will give it a leg up on the competition.
2 min
Batteries and battery- management systems are to an electric vehicle what a high-quality internal combustion engine is to a gasoline-powered car, so battery decisions can make or break an EV maker. Chinese EV maker XPeng is making a battery decision it hopes will give it a leg up on the competition.
XPeng (ticker: XPEV) is going to start selling LFP-battery-powered electric vehicles soon. China’s Ministry of Industrial Information & Technology recently announced that XPeng was using LFP batteries in vehicles.
LFP is short for lithium-iron-phosphate. Iron is the “F” in that acronym because its elemental symbol is “Fe.” Lithium-iron-phosphate batteries are a little cheaper than top-of-the line lithium-ion batteries, which contain elements such as cobalt and nickel.
LFP batteries are more cost-effective, but with a trade-off. They don’t pack quite as much punch as their more expensive cousins, so the range of the cars that use them is affected.
XPeng, in this case, probably doesn’t mind because most drivers don’t need 482 kilometres, or even 320 kilometres, of daily range. The benefit of a lower purchase cost, for many car buyers, far exceeds the downside of a lower per-charge range. The company will continue to offer vehicles with top-of-the line lithium-ion batteries as well.
It’s an interesting decision for investors to ponder. Offering different batteries in an EV is a little like offering different engines in traditional automobiles. In traditional cars, however, engine options are usually tied to horsepower and speed. In the case of EVs, battery options are more about range.
Billions of dollars are being invested in the EV industry to come up with more powerful, longer-lasting batteries. QuantumScape (QS), for instance, is working on revolutionary solid-state battery technology. QuantumScape doesn’t have sales yet, but it is one of the most valuable automotive suppliers in the world. That’s how important batteries are to the EV industry.
QuantumScape’s batteries will, holders of the stock hope, be less expensive for the same range as existing technology. Commercial offerings are years down the road, though. XPeng’s move is another way to offer less expensive EVs today.
A lower- end XPeng model P7 costs about 230,000 yuan, or about $35,000. With LFP batteries, that price might drop 20,000 to 30,000 yuan, or perhaps $3,000 to $5,000. XPeng declined to comment on new pricing for EVs with the less expensive batteries, but noted that the information will come out soon.
It feels like a sound strategic move and one that investors can expect other EV makers to copy. Car buyers are still learning how to buy EVs. Range and cost, compared with traditional cars, can be a mystery. As options such as LFP batteries proliferate, buyers will begin to feel more comfortable comparing EV models, just like they do when selecting what engine they want in their automobile.
XPeng stock was up 3.3% in premarket trading. S&P 500 and Dow Jones Industrial Average futures were up about 0.5%.
The rise might not be due to the batteries, though. XPeng stock has been on a wild ride lately. Shares dropped 11% Tuesday after investors digested news that deliveries in February were lower than in January. February, however, was affected by the Lunar New Year holiday. Monthly deliveries at Li Auto (LI) and NIO (NIO) dipped as well.
Year to date, XPeng share are down about 26% after finishing 2020 up almost 200% from the stock’s $15 initial public offering price.
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CIOs can take steps now to reduce risks associated with today’s IT landscape
3 min
As tech leaders race to bring Windows systems back online after Friday’s software update by cybersecurity company CrowdStrike crashed around 8.5 million machines worldwide, experts share with CIO Journal their takeaways for preparing for the next major information technology outage.
IT leaders should hold vendors deeply integrated within IT systems, such as CrowdStrike , to a “very high standard” of development, release quality and assurance, said Neil MacDonald , a Gartner vice president.
“Any security vendor has a responsibility to do extensive regression testing on all versions of Windows before an update is rolled out,” he said.
That involves asking existing vendors to explain how they write software, what testing they do and whether customers may choose how quickly to roll out an update.
“Incidents like this remind all of us in the CIO community of the importance of ensuring availability, reliability and security by prioritizing guardrails such as deployment and testing procedures and practices,” said Amy Farrow, chief information officer of IT automation and security company Infoblox.
While automatically accepting software updates has become the norm—and a recommended security practice—the CrowdStrike outage is a reminder to take a pause, some CIOs said.
“We still should be doing the full testing of packages and upgrades and new features,” said Paul Davis, a field chief information security officer at software development platform maker JFrog . undefined undefined Though it’s not feasible to test every update, especially for as many as hundreds of software vendors, Davis said he makes it a priority to test software patches according to their potential severity and size.
Automation, and maybe even artificial intelligence-based IT tools, can help.
“Humans are not very good at catching errors in thousands of lines of code,” said Jack Hidary, chief executive of AI and quantum company SandboxAQ. “We need AI trained to look for the interdependence of new software updates with the existing stack of software.”
An incident rendering Windows computers unusable is similar to a natural disaster with systems knocked offline, said Gartner’s MacDonald. That’s why businesses should consider natural disaster recovery plans for maintaining the resiliency of their operations.
One way to do that is to set up a “clean room,” or an environment isolated from other systems, to use to bring critical systems back online, according to Chirag Mehta, a cybersecurity analyst at Constellation Research.
Businesses should also hold tabletop exercises to simulate risk scenarios, including IT outages and potential cyber threats, Mehta said.
Companies that back up data regularly were likely less impacted by the CrowdStrike outage, according to Victor Zyamzin, chief business officer of security company Qrator Labs. “Another suggestion for companies, and we’ve been saying that again and again for decades, is that you should have some backup procedure applied, running and regularly tested,” he said.
For any vendor with a significant impact on company operations , MacDonald said companies can review their contracts and look for clauses indicating the vendors must provide reliable and stable software.
“That’s where you may have an advantage to say, if an update causes an outage, is there a clause in the contract that would cover that?” he said.
If it doesn’t, tech leaders can aim to negotiate a discount serving as a form of compensation at renewal time, MacDonald added.
The outage also highlights the importance of insurance in providing companies with bottom-line protection against cyber risks, said Peter Halprin, a partner with law firm Haynes Boone focused on cyber insurance.
This coverage can include protection against business income losses, such as those associated with an outage, whether caused by the insured company or a service provider, Halprin said.
The CrowdStrike update affected only devices running Microsoft Windows-based systems , prompting fresh questions over whether enterprises should rely on Windows computers.
CrowdStrike runs on Windows devices through access to the kernel, the part of an operating system containing a computer’s core functions. That’s not the same for Apple ’s Mac operating system and Linux, which don’t allow the same level of access, said Mehta.
Some businesses have converted to Chromebooks , simple laptops developed by Alphabet -owned Google that run on the Chrome operating system . “Not all of them require deeper access to things,” Mehta said. “What are you doing on your laptop that actually requires Windows?”
