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Playing around with P equals VI Ohms law

Tesla Cybertruck: first to transition from 12V to 48V architecture

Tesla (TSLA US, CMP: USD 237, Not Rated) Cybertruck is first vehicle globally to replace the entire 12-volt (V) electrical system with 48V electric & electronic (E&E) architecture. This is basically playing with the power equal to voltage multiplied by current equation (P = VI). As the amount of power needed with more features increases in a vehicle, for a constant 12V architecture the current needed increases significantly; hence, thicker wiring harness and copper content were the need of the hour. TSLA replaced the entire 12V architecture with 48V, reducing the current needed for the same power output, thereby sharply lowering the wiring harness content. The company claims the wiring harness content and weight fell ~75%. We shared the detailed specifications and features in our note, Cybertruck launch on 1 December 2023.

What’s in it: advantages of the 48V architecture

A 48V architecture will reduce weight and thickness of cables by ~75%, and copper requirement by 50% while increasing efficiency and cost savings. The system change further embraces the removal of hardware component control systems, such as relays and fuses and replaces them with software control over ethernet. It will reduce current by a factor of 4x compared to 12V systems, bringing the current to safer levels.

Our view: technological risks exist; reiterate Reduce on MSWIL

While mass-scale adoption of 48V architecture replacing the 12V one is still some time away, TSLA is able to make a breakthrough, meaning it is about time that global firms start to evaluate this option seriously. Elon Musk has sent the 48V architecture implementation documents to all major CEOs which Ford’s CEO Jim Farley has acknowledged on X.com.

Our industry interactions indicate the EV wiring harness content globally is ~1.5x the ICE wiring harness content (in India, it is ~2x owing to import content). Our back of the envelope calculations along with industry participants interactions indicate in 48V architecture the wiring harness content could come off closer to 1.0x of ICE from 1.5x that it is currently (the high voltage wiring from battery to motor etc remains intact while the 12V wiring harness sees a significant reduction). However, the number of players entering this electrical distribution system (EDS, which wiring harness is part of) could significantly increase as wiring harness becomes a part of the entire EDS. This can have long-term market share implications for existing players.

The replacement of 12V with 48V also eliminates the lead acid battery. However, large part of de-rating of lead acid battery players like Amara Raja Energy and Exide Industries had played out when TSLA replaced the 12V lead acid battery with a 12V Li-ion battery in Model 3 and Y.

For MSWIL, we believe such technological evolution globally and it being a single product, single geography company will keep multiples under check, which is currently at 37x/32x FY25E/26E P/E, even as it has potential of market share gains and content per vehicle increase in the short term. We reiterate our Reduce rating on MSWIL with a TP of INR 57 based on 30x December 2025E EPS of INR 1.9.

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