Appotronics Expands Production Capacity to Tap into the Growing Smart EV Market
The Shenzhen-based laser display technology developer, Appotronics, is set to increase its production capacity to meet the rising demand for intelligent electric vehicles (EVs). With plans to begin production at a new facility dedicated to the automotive optics business, the company aims to generate up to a third of its total revenue from this sector. Founder and CEO Li Yi believes that the growth of their car-related business will surpass the overall Chinese EV market due to the increasing interest in digital cockpits.
The company, listed on China’s Nasdaq-style Star Market, supplies laser headlights, fusion window display technology, and in-car infotainment screens to EV assemblers. Its technology allows smart EVs to show information on windows, such as the interior temperature and the distance between the car and the owner. Appotronics operates in a niche market and currently has no direct competitors.
Appotronics reported a profit of 74.9 million yuan (US$10.5 million) in the first half of 2023, with revenue falling 15.5%. However, Li Yi remains optimistic about the company’s future growth and expects it to exceed expectations, driven by improved production efficiency and rising demand from clients.
The Rise of Intelligent Electric Vehicles in China
In China, the world’s largest EV and automotive market, there is a growing preference for intelligent electric cars over conventional oil-powered vehicles. With sales of battery-powered cars accounting for about 60% of the global total, young motorists are heeding Beijing’s call to reduce pollution and opting for smart EVs. These vehicles offer built-in features such as voice-activated controls, facial recognition, over-the-air software upgrades, phone-linked features, and panoramic and immersive digital cockpits. This shift in consumer preference is driving the demand for Appotronics’ products in the automotive industry.
Appotronics’ Advanced Laser Phosphor Display Technology
Appotronics, founded in 2006, unveiled its advanced laser phosphor display (ALPD) technology in 2007. This technology claims to be the world’s smallest, brightest, and most efficient laser light source. Apart from automotive applications, ALPD is also used in cinemas, consumer electronics, and home projection systems. The company’s focus on innovation and advanced technology has positioned it as a leader in the market, with its products proving to be unique worldwide.
Expanding Opportunities Abroad
Appotronics is not only looking to meet the growing demand for intelligent EVs in China but is also exploring opportunities abroad. The company is cautiously assessing the feasibility of building plants overseas to cater to the global market. However, Li Yi emphasizes the importance of careful consideration of manufacturing efficiency when localizing production for clients overseas. Chinese automotive suppliers have a competitive advantage in the global market, as their products have proven to be unique and innovative worldwide.
The Dominance of Chinese EV Supply Chain
Chinese vendors play a significant role in the global automotive industry, supplying almost half of the world’s vehicle parts. They contribute a substantial amount to the global total, highlighting the dominance of Chinese car-component makers in the EV supply chain. These manufacturers account for more than three-quarters of the world’s production capacity for batteries, a crucial component of electric vehicles. In 2021, Chinese EV makers delivered 8.9 million units, representing a 37% year-on-year increase. As battery-powered cars continue to gain popularity, Appotronics is well-positioned to benefit from the growth of the Chinese EV market and its dominant supply chain.
Analyst comment
Positive news. Appotronics is expanding production capacity to tap into the growing smart EV market. With increasing demand for intelligent EVs and the rise of digital cockpits, Appotronics expects significant growth in its car-related business. The company’s innovative technology and lack of direct competitors give it a competitive edge. Appotronics also plans to explore international opportunities while leveraging the dominance of the Chinese EV supply chain. Overall, the market is expected to see positive growth with expanding revenue and increased client demand.
