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China tech spending to hit $273B amidst US trade war, slowing economy

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Chinese businesses will focus their technology budget on transforming operations and improving efficiencies as they brace themselves for an uncertain geopolitical climate and slowing local economy. This year, they are expected to spend 1.73 trillion yuan (US$256.61 billion) on technology purchases this year, up 4 percent in terms of the US dollar year-on-year, and another 1.843 trillion yuan (US$272.84 billion) in 2020, according to Forrester. 

The research firm noted that the ongoing trade war with the US and a slowing local economy will drive China’s technology decision makers across the different verticals to accelerate their digital transformation in “pragmatic ways”. The tense geopolitical environment also will lead the Chinese government to reconsider some investments, as well as pushing technology vendors to revisit their research investments and go-to-market strategies, said Charlie Dai, Forrester’s principal analyst for enterprise architecture.


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“The trade clash with the US is pushing China to strategically prioritise domestic R&D innovation and accelerate developments in key areas, such as core chips and software, that provide the foundation for China’s national economic and social development plan,” Dai explained, adding that these initiatives would likely take years to materialise and drive government tech investment in the short to medium term.

Forrester said hardware investments would slow but remain dominant, fuelled by rapid adoption of digital services that has led to an almost doubling of mobile internet data traffic to 26.6 exabytes. This growing consumption will encourage Chinese telcos to continue investing in network infrastructure. China Mobile, for instance, has deployed 7,100 5G base stations in five cities, with plans to add another 12 cities by the end of 2018 and connect 300 million IoT (internet of Things) devices. All three local carriers have also revealed plans to launch commercial 5G networks by 2020. 

In addition, the adoption of cloud services and hardware refresh cycles has been fuelling investments in data centre equipment and computers. The number of racks in large data centres grew 68 percent in 2017 and 463 new facilities had been planned or were under construction. These will drive spending on computer and communications equipment to US$65 billion and US$51 billion, respectively, this year.

Forrester also expects tech outsourcing and consulting services to see continued strong growth, as Chinese organisations lack the skillset to support plans to embrace emerging technologies, including integration and customisation services. 

They also will look to expand their public cloud deployment to their entire tech stack, said the research firm. It noted that all five leading cloud players grew by more than 100 percent last year, with Alibaba Cloud and JD.com launching or expanding their private cloud offerings. 

These activities will drive outsourcing services growth by 12 percent this year, while tech consulting services will climb 8 percent, Forrester said. 

In terms of software, robust spending here will be fuelled by demand for cloud, artificial intelligence (AI), IoT, and e-commerce. These four key areas helped the software sector grow 14 percent last year, according to the research firm. 

“AI development is a national strategy in China, and both the government and digital firms are driving the rapid adoption of AI technologies from machine learning to computer vision,” Dai said. “China [also] is rapidly embracing IoT in industries like telecommunications, manufacturing, and retail. We forecast a compound annual growth rate for of IoT in Asia-Pacific of 24.4 percent over the next five years.”

The analyst added that e-commerce continues to grow exponentially in the country, with China seeing record sales of US$30.8 billion on Alibaba’s Singles Day last year, up another 27 percent year-on-year. 

Dai further noted: “To establish digital ecosystems for customer engagement throughout the lifecycle and accelerate value co-creation, [Chinese] firms will seek partnerships in vertical AI, cloud-native, hybrid cloud management, insight platforms, and security.” 

Forrester said 58 percent of local companies have expressed plans to invest in AI and cognitive technologies this year, while 52 percent said they will look to improve their use of data and analytics, and 50 percent will increase their cloud adoption.  

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Mercedes-Benz unveils T-Class and EQT all-electric concept based on new Renault Kangoo

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We weren’t expecting Mercedes-Benz to unveil an MPV or small van, much less an all-electric microvan, but here it is. First off, the Mercedes EQT concept looks fantastic. It mends the styling attributes of a practical people carrier and a small luxury conveyance. Mercedes-Benz will debut two versions of the T-Class: Internal combustion (gasoline and diesel) and the EQT all-electric version.

“We are expanding our portfolio in the small van segment with the forthcoming T-Class,” said Marcus Breitschwerdt, Head of Mercedes-Benz Vans. “It will appeal to families and all those private customers, whatever their age, who enjoy leisure activities and need a lot of space and maximum variability without forgoing comfort and style.”

Let’s start with the Mercedes T-Class, the one arriving with a slew of gasoline and diesel engines in Europe. Based on the all-new, third-gen Renault Kangoo, the T-Class is riding on Renault’s CMF-B platform, capable of supporting internal combustion and all-electric powertrains.

Measuring 4,945 mm in length, 1,863 mm wide, and 1,866 mm high, the T-Class has seven seats, two sliding doors, and second-row seats that can accommodate up to three child seats. The concept is wearing premium white Nappa leather upholstery, but we’re expecting the production version to get wear-resistant nylon materials in lower-trim models.

Of course, MBUX infotainment will come standard, and Mercedes promises the dashboard and control layouts of the concept will make it to production. It will arrive with a slew of advanced safety features and driving aids like automatic emergency braking, lane assist, adaptive cruise control, trailer stability control, and crosswind assist, to name a few.

Meanwhile, the EQT all-electric version is a hardware clone of the Renault Kangoo E-Tech Electric model, and it’s the ninth member of Mercedes-Benz’s all-electric EQ family. The concept bears tasty exterior bits like a black panel grille with 3D star-effect lighting, futuristic LED taillights, and a full-width LED light bar in the rear. It also has 21-inch aero wheels wrapped in low-profile tires and a unique bottle-shaped panoramic glass roof.

Admittedly, the production EQT will be a toned-down version of the concept seen here. Then again, Mercedes-Benz claims the packaging, body style, and practical features will remain unchanged, and that’s good news. Powertrain options for the EQT remain unannounced, but we have an idea.

Most likely, the EQT will have a single electric motor pumping out 101 horsepower, drawing juice from a 45 kWh battery pack as the Renault Kangoo E-Tech Electric. The driving range is around 165 miles using the WLTP cycle.

The Mercedes-Benz T-Class and EQT will make their official debut later this year. Production is at Renault’s MCA factory in Maubeuge, France, where both the T-Class and EQT are built alongside the Renault Kangoo and Kangoo E-Tech Electric.

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Porsche makes a huge promise for its most important EV

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The Porsche Taycan showed the German sports car company was taking EVs seriously, but it’ll be the arrival of the new Macan EV which really tips the scales toward electrification. Porsche isn’t quite ready to unveil the all-electric Macan quite yet, but it’s already making some big promises about the EV version of its best-seller.

It’s fair to say the Macan has been a huge deal for Porsche. Though the automaker may be best known for its 911 sports car, available as a coupe, a convertible, and a Targa, it’s crossovers and SUVs which have padded the bottom line for some time now.

In Q1 2021, for example, Macan led Porsche sales in North America, closely followed by its bigger Cayenne sibling. Indeed, Porsche sold more examples of the Macan in those three quarters than it did 911 and 718 models combined. In short, if you’re going to make an all-electric version of your most popular nameplate, you need to get it absolutely right.

Porsche’s answer to that challenge is built on the Premium Platform Electric (PPE), an electric-only architecture the automaker co-developed with VW Group stablemate Audi. Indeed, the Macan EV will be the first Porsche product to use PPE. Focused on luxury performance electric vehicles – rather than mainstream EVs as VW Group’s MEB is focused on – there’s plenty of flexibility in how PPE can be configured.

For example, Porsche and Audi have already talked about the capability of rear-wheel drive single motor setups, and all-wheel drive dual motor versions. Body styles, too, can be configured in multiple ways, with up to a 100 kW battery pack nestled into the wheelbase. In the case of the Audi A6 e-tron – a barely-disguised nod to the upcoming luxury electric car the automaker has planned for a few years out – that means a sedan, but PPE can just as easily be adapted for crossovers, SUVs, and other designs. Audi, for example, will use the platform for its Q6 all-electric SUV that’s expected to be unveiled at the end of 2022.

The all-electric Porsche Macan, meanwhile, is being planned for 2023, the automaker says. It’ll use 800-volt architecture – like the Taycan and Taycan Cross Turismo – for faster charging times along with greater performance. Indeed, Porsche isn’t holding back on its speed commitment, promising “the all-electric Macan will be the sportiest model in its segment.”

For the moment, physical prototype Macan EV models are just headed out to the road. Porsche’s development so far has been virtual, using simulations to model the design of the crossover EV more effectively. That includes the aerodynamic work which is so important for electric vehicles, to cut drag and improve range.

In parallel, however, there’ll also be another conventionally-powered version of the Macan – using gas engines still – that will be on sale alongside the Macan EV.

“Demand for electric vehicles continues to rise, but the pace of change varies considerably across the world,” Michael Steiner, Member of the Executive Board at Porsche, explains. “That’s why we’re going to launch another conventionally powered evolution of the current Macan in the course of 2021.”

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Subaru Solterra electric SUV confirmed as brand’s first AWD EV

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Subaru has revealed details on its new, first all-electric model, and if you were worried there wouldn’t be enough EV SUVs around to choose between, the Subaru Solterra should settle those concerns. The new name is a combination of the Latin words for “Sun” and “Earth,” the automaker says, in a nod to its “commitment to deliver traditional SUV capabilities in an environmentally responsible package.”

That is, of course, pretty much what every automaker says about their new electric vehicle. What could make the Subaru Solterra special is the e-SUBARU Global Platform it debuts.

It’s the handiwork of a collaboration between Subaru and Toyota. Subaru contributed its experience with all-wheel drive, while Toyota brought the electrification part to the recipe. We should see the Solterra launch in 2022, across the US, Canada, China, Europe, and Japan.

The automaker is tight-lipped on just what to expect from e-SUBARU, though we do have some prior knowledge. On Toyota’s side, the architecture is known as e-TNGA, and it’s designed from the outset to be especially flexible. Toyota, for example, is talking about using it for front-, rear-, and all-wheel drive configurations.

Only a handful of dimensions are fixed: the length and width of the motors, for example, and the battery pack which is mounted under the cabin. Everywhere else – including front and rear overhangs, overall vehicle width, and wheelbase – there’s flexibility to adjust size, depending on the requirements of segment, cabin space, and room for cargo.

Toyota plans to tap that flexibility for a whole series of EVs, not just the C-segment SUVs that both it and Subaru have already confirmed are on the roadmap. For Subaru, so far only the Solterra has been announced. It also seems likely that – given the brand’s reputation for AWD – it’ll skip any front- or rear-wheel drive versions.

What isn’t uncertain is that Subaru is onboard with the idea that electrification is the future. Back in January 2020, the automaker predicted that by mid-2030 it would be building electric vehicles only.

Still to be confirmed about this first example of Subaru’s EV strategy are details like power and range, not to mention pricing. In the US, Subaru is still at the start of its federal tax credits for EVs, relatively speaking, given currently it only offers PHEVs not full-electric models in its range. That could help take some of the sting out of any price premium that the new electric platform might demand. We’ll know more as the Solterra gets closer to launch.

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