Threat to Charging Infrastructures – Emergence of New Super-Efficient, Conventionally-Powered Compact Models

The global banking crisis of 2008/9 resulted in many governments transferring debt from the banking sector to the private sector. This has resulted in widespread cuts in public spending, including investment plans for charging infrastructures for electric vehicles, especially in Europe.  As a result of the ongoing financial crisis, consumer demand for pure electric vehicles in certain European countries could potentially be dampened by the lack of charging points.

• The Republic of Ireland is one example of a recent slow-down in implementation.  According to the government plan, some 1,500 charging points and 40 fast-chargers were to be in place by the end of 2011 – but by October 2012, some 860 charging points (around 57 percent of the plan) and 30 fast-chargers were installed.  As one of the European governments under pressure to limit public spending, it is unlikely that further funds would be made available to complete the plan, especially when electric vehicle sales have not met expectations – at just 192 units since 2009.  The cost to Electric Ireland in installing the current network has estimated to be around €3.9m (US$5m).
• Better Place has responded to the lack of demand for electric vehicles by curtailing its infrastructure operations in countries such as Australia and the US and concentrate efforts in Denmark and Israel.
• The only recent announcement to build new infrastructure has been from the UK government.  However, such an investment is limited to covering 75 percent of the total cost of construction by private vehicle purchasers at their homes, local governments for use by apartment residents and at railway stations and government facilities. 
• Very few European countries have announced a charging infrastructure plan.  Major public infrastructure investments are limited to just France and Germany.

The resulting recession from the crisis has also made European consumers even more aware of fuel efficiency in vehicle purchases, but it has also lowered tax revenues among European governments.

• As a means of meeting greenhouse gas emission targets, European governments encourage consumers to purchase vehicles that emit less CO2, by way of purchasing subsidies and taxes (called bonus-malus in France for example) or from a varying annual road tax system (as in the UK for example).
• Other incentives, such as free entry to congestion charge zones, are also offered to low CO2 emitting vehicles, to limit congestion and air pollution in city centers.
• As European consumers try to save money by running vehicles that emit less CO2, then the level of purchase subsidies increase and the receipts from annual road taxes decrease.  Fuel sales are also decreasing in some countries, as drivers seek more efficient vehicles.  For example, in the UK, fuel stations sold 37.67 billion liters of fuel in 2007 but only 34.16 billion liters in 2012.
• As European governments try to limit public spending, then the offering of purchase subsidies and annual road tax discounts are changed to models emitting even less CO2.

Consumers’ desires for more efficient vehicles have yet to benefit EV sales in any large-scale way.  A lack of charging infrastructure and relatively higher costs over conventionally-powered models of the same segment has limited the market.  In addition, a new generation of super-efficient compact models are now entering the European market, which offer consumers many of the benefits of an EV without the drawbacks of high purchasing cost, patchy recharge infrastructure and limited range.

• Since August 2012, the French bonus-malus system now offers a €400 bonus (US$516) to vehicles emitting less than 90 g/km.
• The London Congestion Charge Zone offers free entry for vehicles emitting less than 100 g/km.  Future plans to amend the system are being discussed, which include the lowering of the exemption limit to 80 g/km, adding a group of models for congestion charging that are currently entering the Zone for free.
• The current UK annual road tax exempts vehicles emitting less than 100 g/km.  It is also likely that the tax exemption level will also be lowered to 80 g/km, as receipts from the annual road tax decrease further as British consumers turn to more efficient models that are taxed less.
• While plug-in hybrids, such as the Opel Ampera (Chevrolet Volt) and Toyota Prius PHEV emit less CO2 (27 and 49 g/km respectively), they are costly vehicles that essentially use two powertrains.
• Models benefiting from a change in government policy would be those sub-compact or compact hatchbacks that can be modified by adding stop-start systems, adjusting compact diesel engines with reduced torque and variable vane turbochargers, using manual transmissions with longer gearing (but could also use re-programmed automated transmissions, as on the Peugeot 208), modifying the accelerator pedal mapping, reducing weight, use low rolling resistance tires and better aerodynamic features, such as grille shutters, extended tailgate spoilers and wheel deflectors.
• Included amongst these models are the new Toyota mini-hybrids, with the Hybrid Synergy Drive powertrain modified to suit the smaller model.
• But such modifications must not be at the expense of comfort and convenience features, such as power windows and air conditioning, nor mandated safety features, such as airbags.
• Retail prices for these models are still at an affordable level, of between US$15,000 and US$20,000 (with sales taxes), and compare well against used cars that are more costly to run, as fuel economy of the efficient models reaches 60-67 mpg (US).
• Examples include the Toyota Yaris Hybrid (79 g/km, T-Sprint 85 g/km), the Renault Clio dCi 90 Stop & Start ECO (83 g/km), the Hyundai i20 1.1 CRDi Blue (84 g/km), the Kia Rio 1 1.1 CRDi EcoDynamics (85 g/km), the Peugeot 208 Access+ 1.4 e-HDi Stop and Start EGC 70 (87 g/km), the Ford Fiesta Style ECOnetic 1.6 TDCi Start Stop (87 g/km), the Citroen C3 1.4 e-HDi (87 g/km), the Ford Focus ECOnetic 1.6 TDCi (88 g/km), the Opel Corsa 1.3 CDTi ecoFLEX (88 g/km) and the Skoda Fabia 1.2 TDI CR Greenline II (89 g/km).

The Strategy Analytics System Demand Forecast, to be updated later in April already includes this increased demand for stop-start systems and for full hybrid systems among Toyota’s compact segments.  But should the European Sovereign Debt Crisis end, likely to be some time in 2014, this growing demand is unlikely to fall away – it is more likely to accelerate deployment of stop-start and other fuel savings features in other regions and in other model segments in greater volumes.  The OEM Hybrid and Electric Vehicle Strategies Report will be updated in September 2013.

This analysis was conducted following recent updates to the EV/HEV Technologies Supply & Fitment Database and the Hybrid Technologies Legislation/Support Database.

Participants in and observers of the automotive industry are familiar with the normally glacial pace of change in the business. But change sometimes comes rapidly as a result of unexpected events such as fatal accidents or the subsequent accident investigations.

The most recent example of this phenomenon lies in the final report and recommendations of the National Academy of Sciences (NAS) panel reviewing the findings of the National Highway Traffic Safety Administration (NHTSA) from the investigation of Toyota’s year-old sudden acceleration problems.

The NAS report has revealed the vulnerabilities of both the automotive industry and its regulatory body, NHTSA.  The fallout from the NAS recommendations are likely to quietly rattle the board rooms of car makers around the world.

Those recommendations are:

1.      That NHTSA become more familiar with and engaged in standard-setting and other efforts involving industry that are aimed at strengthening the means by which manufacturers ensure the safe performance of their automotive electronics systems.

2.      That NHTSA convene a standing technical advisory panel comprising individuals with backgrounds in the disciplines central to the design, development, and safety assurance of automotive electronics systems, including software and systems engineering, human factors, and electronics hardware. The panel should be consulted on relevant technical matters that

arise with respect to all of the agency’s vehicle safety programs, including regulatory reviews, defect investigation processes, and research needs assessments.

3.      That NHTSA undertake a comprehensive review of the capabilities that ODI (Office of Defect Investigation) will need in monitoring for and investigating safety deficiencies in electronics-intensive vehicles. A regular channel of communication should be established between NHTSA’s research program and ODI to ensure that (a) recurrent vehicle- and driver-related safety problems observed in the field are the subjects of research and (b) research is committed to furthering ODI’s surveillance and investigation capabilities, particularly the detail, timeliness, and analyzability of the consumer complaint and early warning data central to these capabilities.

4.      The committee concurs with NHTSA’s intent to ensure that EDRs be commonplace in new vehicles and recommends that the agency pursue this outcome, recognizing that the utility of more extensive and capable EDRs will depend in large part on the extent to which the stored data can be retrieved for safety investigations

5.      The committee also endorses NHTSA’s stated plan to conduct research on pedal design and placement and keyless ignition

design requirements but recommends that this research be a precursor to a broader human factors research initiative in collaboration with industry and that the research be aimed at informing manufacturers’ system design decisions.

6.      The committee believes that strategic planning is fundamental to sound decision

making and thus recommends that NHTSA initiate a strategic planning effort that gives explicit consideration to the safety challenges resulting from vehicle electronics and that gives rise to an agenda for meeting them. The agenda should spell out the near- and longer-term changes that will be needed in the scope, direction, and capabilities of the agency’s regulatory, research, and defect investigation programs.

7.      The committee further recommends that NHTSA place development and completion of the strategic plan as a top goal in its coming 3-year priority plan. NHTSA should communicate the purpose of the planning effort, define how it will be developed and implemented commensurate with advice in this report, and give a definite time frame for its completion. The plan should be made public so as to guide key policy decisions—from budgetary to legislative—that will determine the scope and direction of the agency’s vehicle safety programs.

The recommendations touch on the functioning of several vehicle systems including brake pedals, event data recorders and keyless ignition systems.  While the investigation resulted from several sudden acceleration incidents, one in particular, involving the Saylor family and Mark Saylor, a California Highway Patrol officer and former pilot, helped to bring the issue to the attention of regulators.

The Saylor crash was unique in the fact that it  involved a highly skilled driver and a live 911 call from the vehicle seeking help while the incident was in progress.  The vehicle involved, a Lexus, featured a keyless ignition system requiring a three-second depress of the ignition button to turn the car’s engine off.  The vehicle's floormats were implicated in the Saylor incident and an earlier mishap.  Mark Saylor and three family members died in the spectacular crash that resulted from the vehicle’s uncontrolled acceleration.

While mechanical failure was not completely ruled out, and Toyota endured a recall to replace brake pedal mechanisms, regulators focused on software issues.  NHTSA was unable to identify any specific software failure, a finding which was affirmed by NAS.

But NAS’s half-endorsement and half-critique of NHTSA is both unsatisfying and forboding.  (It is also a not-so-subtle request for additional research funding.)  NAS is in effect saying NHTSA was correct in finding no error, but that NHTSA is not and was not equipped to be successful in its quest in the first place.  NAS was only reviewing NHTSA’s findings and not conducting its own independent inquiry, so it is unclear whether NAS has the expertise, the lack of which it notes at NHTSA.

Two directions may emerge from the NAS report.  NHTSA may pursue additional research and regulatory actions or it may do nothing.  The likelihood is that NHTSA won’t do much as indicated by its comments on the report suggesting that it has already taken steps to beef up its capabilities.

In an ideal world, the following steps might be taken:

è Convene a panel to review the existing EDR standard (not currently a mandate though widely adopted on a voluntary basis) to determine what, if any, additional data ought to be collected;

è Consider a recommendation requiring greater sharing of EDR data voluntarily, on-demand or automatically in all accident cases;

è Review current OEM policies and procedures for vehicle data collection and distribution – ie. via embedded modems – what data is currently collected and processed, under what circumstances and for what purposes, and with whom and how it is shared;

è Develop a process for defining voluntary minimum standards for connected vehicle systems regarding safety-related data gathering and sharing;

è Convene a panel to assess the implications for remote vehicle control and real-time vehicle monitoring in circumstances impacting the safety of drivers or the public.

A review of the physical and electronic functioning of brake systems and keyless ignition systems implicated in the Toyota sudden acceleration incidents is inevitable and is likely ongoing.  And there are some in the regulatory community that have called for the implementation of a brake override capability.  Meanwhile, Toyota’s massive post-review investments in safety systems and safety research are noteworthy.

But the proliferation of connected vehicle technologies, particularly embedded systems, has wider implications in this context.  A live real-time connection to a car creates expectations from the consumer and obligations for the manufacturer.  OnStar’s remote vehicle slowdown capability for stopping vehicle thefts is but one example, but it is notable given its embrace in Brazil’s Contran 245 vehicle tracking and immobilization mandate.

If a car company has the capability to stop a car in danger of getting into an accident or the subject of criminal activity, does it have an obligation to do so?  Given the circumstances of the Saylor crash, such questions need to be asked and their implications explored.  The events are not dissimilar from the 2009 crash of Air France Flight 447, that regulators said might have been prevented by existing pilot monitoring technologies.

Implications:

NAS’s lukewarm endorsement of NHTSA’s findings brought the Toyota investigation to an unsatisfying conclusion.  Observers are left with the powerful implications of the multiple fatal incidents that caused the review.

Software and electronics are playing an increasingly important role in automotive systems.  Connectivity, too, is emerging and creating new demands on OEMs even as the technology enables new functions for consumers.

OEMs will do well to get ahead of the issues by improving transparency regarding the operation of their systems.  Car makers will benefit from enhanced consumer awareness of their systems and regulators clearly need to be educated regarding system capabilities and long term industry direction.

In this context it is important to note that OnStar emerged from General Motors’ own initiative and not from a government mandate.  It will be best for consumers, the industry and the marketplace if the automotive industry can maintain its firm grasp of this initiative.

The day has already arrived that a vehicle connectivity system can be used to stop a thief.  The day may not be far off when a telematics system can prevent a crash – especially with V2X technology arriving before the end of the decade.

Car makers should do all in their power to demonstrate that telematics systems are the solution to the problem and not just another driver distraction.  Perhaps this communication is already taking place.

The North American International Auto Show was opened in Detroit on January 9th, 2012.  In comparison to earlier shows, Detroit revealed greater optimism in the automotive industry, following the crippling recession of 2008-2009.  LMC Automotive (formerly JD Power Automotive Forecasting) released its Q4 2011 sales forecast, showing US light vehicle sales rebounding for 2010 and 2011.  However, with the arrival of Volkswagen at Chattanooga, Tennessee, and the growth of Hyundai in the US, such as the Elantra winning the 2012 North American Car of the Year Award, the Detroit-based auto makers face stiffer competition to regain their market shares in their home markets. 

Compact Luxury – The New Battleground
While light truck sales have recovered, the North American market is seeing a particularly faster growth in compact models.  This will result in higher production volumes for them.  According to LMC Automotive, the C-Segment will see the largest unit increase in production from 2011 to 2018, followed by the D-Segment, while the A- and B-Segments will see fastest percentage rise.

• The Show’s top launches were the Cadillac ATS sedan, the Dodge Dart sedan and the Buick Encore compact crossover. 

Not only do the above models come from the compact segments, two of them come from luxury brands.  As many North American consumers downsize, in order to lower their fuel consumption, they still demand a high level of comfort and convenience in their future vehicle purchases – and with this, electronics demand in the North American market will continue to grow.

• The Cadillac ATS aims to compete against more successful German branded sedans, in particular the BMW 3-Series.

Fuel Economy
Growing demand for fuel economy will also result in the adoption of direct injected gasoline engines across the industry, as on the Buick Encore and the Cadillac ATS.  The Dodge Dart, however, will come equipped with the new Tigershark gasoline engine, developed with FIAT’s MultiAir exhaust gas recirculation (EGR) and variable valve timing (VVT) technology, although MultiAir is expected to be deployed on gasoline direct injected engines in the future. 

Ford has made major strides in electrifying the powertrain with the announcement of its roll-out of stop-start systems, starting with the 2013 Ford Fusion.  Ford’s common platforms will also enable its customers to opt for electric, hybrid and plug-in hybrid versions of various models, such as the Ford Focus compact and C-MAX compact minivan.  The GM eAssist mild hybrid system has already been offered on the 2012 Chevrolet Malibu, so perhaps the Buick Encore will follow suit? 

And there may be the possibility that Honda and Toyota may assemble hybrid models in the US – following the unveiling of the Acura NSX sports car equipped with new all-wheel drive hybrid powertrain technology, the auto maker announced that development and future production will occur at its Marysville, Ohio, facility.  The Acura ILX compact sedan also featured a hybrid concept.

• Should tensions in the Arabian Gulf escalate, then demand for hybrids will rise rapidly in the short term.  However, auto makers must bear in mind the revisions to the CAFE mandate, such as proposals by the Obama Administration to raise the level to 54.5 mpg (4.3 l/100 km) by 2025, a level that will certainly require more powertrains to be electrified in the long term, especially if the model segment mix remains unchanged.  An an example of making hybrids more affordable for wider consumer adoption is the Toyota Prius C compact ('Aqua' in Japan).

Comfort and Convenience
Despite their size, the new or recently-launched compact models have many features that would only be offered to larger segments.  Examples of these luxury features include passive keyless entry and start systems (PKE), dual-zone automatic HVAC (heating-ventilation-air conditioning) systems as standard, electric parking brakes (EPB), RLT (rain-light-tunnel) sensing for automated lights and windshield wipers and electrically-adjustable, heated and ventilated seats. 

• Examples of compact models with PKE that are assembled (or will be assembled) in North America include the Acura ILX, the Cadillac ATS, the Chevrolet Cruze, the Dodge Dart, the Hyundai Elantra and the Nissan Tiida.

Infotainment
Consumer demand for connectable systems for smartphones and the use of the Internet as a gateway to various features has led to the development of new all-encompassing, software-based infotainment systems.  The launches at Detroit are no exception, which will further lead to growing electronics demand for Bluetooth, voice control systems and HMI systems controlled by color displays and touch screens. 

• Examples of new infotainment systems include Cadillac CUE, Chrysler UConnect, Ford SYNC, Hyundai Blue Link and Toyota EnTune.  The Cadillac ATS and Dodge Dart are equipped with large color touch screens.

Safety
As side airbags become mandated in North America, the focus for safety applications in new models has been advanced driver assistance systems (ADAS). 

Blind spot detection (BSD) and rear cross traffic assist (RCTA) have been key additions in the North American market, as consumers there tend to drive into perpendicular parking spaces and need assistance when backing out of them – the new Cadillac ATS and Dodge Dart will offer radar-based systems. 

Front windshield camera-based systems offer greater value-for-money, offering both distance warning and lane departure warning (LDWS) from the same module – the Cadillac ATS and the Buick Encore are likely to offer the same Magna-supplied system, as already being offered on some GM crossovers. 

Other features making a greater appearance in North America will be adaptive front-lighting systems (AFS) and high intensity discharge (HID) headlamps, as well as head-up displays, as on the Cadillac ATS.  In line with the Kids & Cars mandate, the HMI displays enable the Cadillac ATS and the Dodge Dart to play back park assist cameras.

Implications
According to the latest (January 2012) edition of Strategy Analytics’ Automotive Electronics System Demand Forecast (2009 to 2018), North American demand for the above applications will grow the fastest, mirroring the trends seen at the Detroit Show.

• Among the fastest growing applications were Collision Warning (+26.9 percent CAAGR by $M value), Passive Keyless Entry (+15.8 percent) and Engine Control (+14.9 percent).

Despite vehicle downsizing, demand for automotive electronics in the North American industry remains strong.

The Automotive Electronics System Demand Forecast 2009 to 2018 – January 2012 Update, can be downloaded at: http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=6985.

Updates on the following databases will be published in February / March 2012:
- ADAS Supply & Fitment
- Advanced Entry and Start System Supply and Fitment
- EV/HEV Technologies Supply & Fitment
- Hybrid Technologies Legislation/Support

Electric vehicle studies seem more prevalent that electric vehicles themselves at present. One of the more recent ones to cross my desk was from Boston Consulting Group (BCG), entitled "Powering Autos to 2020: The Era of the Electric Car?".

A Reuters article covering the report was titled “Consultant cuts growth outlook for electric cars”, highlighting the fact that the EV market is incredibly easy to over-forecast.  As detailed in my Insight of December last year “Electric Vehicles: What Is Different This Time?”, we have been here before.  The mid-1990s saw a huge hype-cycle, with EV concepts dominating car shows.  GM’s EV1 was gaining the sort of media coverage that most PR managers only get to dream about.  And then everything went quiet.

I’ve yet to find a single EV study authored in the last 20 years which proved to be too pessimistic.  It would seem that the statistics are not on the side of EV-optimists.

The BCG study sets its stake in the ground at a global penetration for pure, plug-in and range-extended EVs at around 6-8% of global passenger car sales in 2020, depending upon oil prices.  This equates, by my calculations, to likely volumes of 6 to 7 million vehicles.  One of the assumptions behind their data is that battery pack costs fall to around $400/kWh by 2020.  This would mean that a typical 20kW electric vehicle battery would STILL cost around $8000 in 2020.  And therein lies the problem.  All of the consumer research that we have carried out shows that car buyers have significant interest in EVs right up until the point that you ask them to pay more than they would for a conventional car.  Sure, there are some eco-motivated buyers who are willing to pay more for an EV, but I’m yet to be convinced that 7% of global car buyers fall into this category.

Strategy Analytics projections for 2020 would suggest that a pure/plug-in/range extended market of 2 to 3 million units would seem more likely.  Costs aren’t coming down fast enough and government budgets (and thus the subsidies that they can offer) are under pressure in many parts of the world.  In addition, as the BCG study rightly points out, conventional gasoline and diesel cars will become ever more fuel efficient, thus continually raising the bar for EV cost-effectiveness.

It’s at this point that you need your two heads to understand the EV market.

• Head #1 needs to see the fast growth rates.  My latest forecasts show compound average annual growth rates for pure EVs of almost 80% over the period 2010 to 2018.  That’s amazing growth.
• However, head #2 needs to understand that even these fantastic growth rates lead us to only 1 million pure EVs manufactured in 2018.

If you only have head #1, you’ll be sorely disappointed at the time it takes you to recoup your EV market investments.  If you only have head #2, you risk missing the fact that, even though we are towards the pessimistic end of the forecasting range, Strategy Analytics does believe that increased electrification of the vehicle fleet is inevitable.  It’s not a question “if”, but rather one of “how fast”.  

Remember, as the saying goes: two heads are always better than one.

Recent reports suggest that fuel economy mandates, such as Corporate Average Fuel Economy (CAFE), may soon be implemented in more emerging markets, while the US is to impose tougher mandates for the long term.

• There have been conflicting reports on how China will set future fuel economy standards, but at present, minimum fuel economy standards are set for 16 different weight categories.  Plans for the next phase are to set tougher minimum levels for an averaged equivalent of 42.2 mpg (5.6 l/100 km) by 2015 (an 18 percent improvement), with reports suggesting an averaged equivalent of 52.3 mpg (4.5 l/100 km) by 2020.
• India will also be planning a fuel economy mandate on car makers, also with varying limits depending on the weight of the vehicle.  This will replace the current Vehicle Excise Duty that varies on the size and engine capacity of the vehicle.  The change marks a shift in government policy, to persuade car makers to use technology to raise efficiency than merely to force consumers to buy smaller vehicles.
• The US Department of Transportation and the Environmental Protection Agency are planning to raise US CAFE levels to 62 mpg by 2025, having recently implemented the 35.5 mpg level for 2012.  Consultations are under way for a possible, additional carbon dioxide (CO2) emission mandate.
• Japan and Korea have also implemented fuel economy mandates based on vehicle footprint, while Europe has corporate average mandates on CO2 emissions.

Should more fuel economy mandates be implemented in emerging markets, this will mean that vendors have to quickly prepare to offer fuel efficiency systems at a lower cost and in greater volumes than is presently been offered to mature markets.

• Stop-start is now being featured on almost every new model launched in Europe, since the summer of 2010, realizing greater volumes and cost reductions through economies of scale.  According to the Strategy Analytics System Demand Forecast (Q3 2010), penetration rates for these systems are rising rapidly.
• As a result of these and other improvements, OEMs, such as FIAT and Toyota, are likely to lead the way in meeting the first European CO2 target of 130 g/km by 2012.  This is according to a report on new cars manufactured in 2009 by the European Federation for Transport and Environment. 
• The recently-launched tandem starter-alternator from Denso promises a more compact solution over current belt-driven systems.  Denso’s new stop-start starter motor is also lighter than its predecessor.
• Johnson Controls and its subsidiary, VARTA, are offering a more cost effective Enhanced Flooded Battery (EFB) as well as their current Absorbent Glass Mat (AGM) battery for stop-start applications.
• In North America, the General Motors eAssist mild hybrid system was previewed on the Buick LaCrosse. It uses a smaller battery pack and electric motor to realize a 25 percent fuel saving over the conventional four-cylinder version.  As more unit sales come from China than from the US for GM, then eAssist may see wider deployment there.
• At the same time, more hybrid and electric concepts are being previewed.  Chinese domestic car makers, such as Jianghuai (JAC), have launched EV models on the back of the Chinese government’s US$15bn plan to promote EV technology.  As consumers have less disposal income to purchase vehicles in China than elsewhere, then developments in hybrid and electric vehicles will be more cost driven.  For further details, go to the Strategy Analytics report, China Aims High For Plug-In Electric Vehicles.

This analysis is drawn from the latest Strategy Analytics EV/HEV Technologies Supply & Fitment Database and Hybrid Technologies Legislation/Support database.

As electric vehicles attempt to move into the mainstream, as I identified in my recent Insight (Electric Vehicles: What Is Different This Time?) the one key limitation remaining for EVs is range.  Sixty to a hundred miles may be more than most people need on most days – but it is not enough for everyone, every day.  I wouldn't want to trust most current EVs to get me to Heathrow airport and back, and a weekend trip to visit my parents is well into the realms of the impossible.

IBM's research into lithium-air batteries - with the specific and stated aim of developing a 500 mile (800 km) range battery - is thus of huge potential significance.  

As IBM itself points out, this is "a very high risk/very high reward, long horizon project".  There's little or no chance of seeing a lithium-air powered EV before 2020 at the earliest. Although the technology looks promising, there are still real issues in recharging the batteries.  

I had the opportunity recently to speak with Dr. Winfried Wilcke, Senior Manager, Nanoscale Science & Technology and Program Director, Silicon Valley Projects at IBM's Almaden Research Center in California.  He was clearly enthusiastic about the research - but also realistic about its limitations.  The whole project, he told me, is about reducing oil dependence.  There is, he claims, enough electrical generating capacity in the USA for all light vehicles to be electric - assuming they are charged off-peak at night.  He shares my scepticism that sufficient infrastructure can be put in place to overcome EV range anxiety for the mass-market consumer, and thus the only answer to mass EV adoption is to radically extend the range of EVs.

The key attraction of lithium-air over lithium ion - at least in terms of making a 500 mile battery - is the energy density that the technology offers.  I've seen estimates that it is up to ten times better in terms of mass density (Wh/kg) and twice as good as lithium ion in terms of volume density (Wh/l).  Fitting a 500 mile battery into the 300 litre volume limit the car makers will allow for such a battery is not seen as an insurmountable problem.  The air handling system may need additional packaging space however: a lithium-air battery is as hungry for air as a gasoline engine is for comparable power outputs.

So far, so good.

However - one key limitation of lithium-air is likely to remain.  It is inherently slow to charge and discharge.  Peak energy flows of the order of 30 kW were mentioned. This means that to have competitive acceleration, a smaller lithium ion battery and/or ultra-capacitor will need to be used.  This will enable much higher peak power outputs/inputs for acceleration and regenerative braking, in much the same way as high-speed cache RAM enhances your computer's performance.  It will also, of course, make the final system a bit more expensive.

The relatively low peak power output will also mean that high-speed sustained autobahn-style (> 90 mph / 145 km/h) cruising will not be possible.  Sorry to any Germans reading this!

The limited power output of lithium-air is not to my mind the biggest issue, however. It's the limited charge rates possible.  A 500 mile battery may well prove achievable using lithium-air.  What looks unlikely, however, is a 500 mile battery that you can use to drive 500 miles, recharge easily overnight, and then drive another 500 miles the next morning.  It can do it once, but asking for a repeat performance in short measure is likely to leave you disappointed.  Even with a fast charger, an eight hour full recharge is still a target, not a certainty: it’s not easy to put energy into a lithium-air battery that quickly.  

On a domestic 4kW supply, recovering the full 500 miles of range could take in the region of 30 hours or more.  That’s not a limitation of the lithium air battery – just a simple matter of mathematics and limited domestic supplies.  Electric vehicles face a huge challenge when compared to gasoline vehicles in this regard.  A level III 50kW fast charge may sound impressive – but whenever you fill your gas tank the equivalent energy flow is in the order of 6 MW, more than 100 times greater.  

As Dr. Wilcke admitted, even if the technology works well, the lithium-air powered EV will not be the vehicle for your 2000 mile vacation road trip.

All sorts of questions fire off on this realisation.  Will consumers accept such a limitation?  And, perhaps more fundamentally, will car makers ever manufacture such a vehicle? Given that even the 500 mile EV still cannot match what a conventional gasoline or diesel car can do, is there any point?

Lithium-air appears to offer a bright promise for smaller, lighter batteries that store more energy.  Whether they'll ever be used to make a 500 mile EV is another question altogether.  I can't help wondering if they'll end up powering EVs with, say, a 200 mile range that can be recovered on a domestic outlet in 12 hours or so overnight.  That would make sense to me, and would broaden the EV’s appeal considerably.  

For those who need a family vehicle to do more than 200 miles or so in one go, my crystal ball says that range extenders and hybrids are the future.

Back in 2007, I did an analysis of the then-new BMW 5-Series sedan, which showed the class-leading efficiency of its 6-cylinder gasoline engines. It can be seen in full here. This showed the significant lead that BMW enjoyed over many of its competitors. Over three years on, I’ve just repeated the analysis of fuel efficiency in automatic transmission E-Segment sedans, which also include the Mercedes E-Class and Audi A6. To compare apples-with-apples, only models on sale in Europe, and thus with a European drive cycle fuel economy figure published, were looked at. The results were perhaps surprising. Gasoline powered models have seen a very modest increase in efficiency, but have seen outputs rise more sharply. The overall unweighted average fuel economy of the models surveyed improved by around 5% from 10.1 to 9.6 l/100km, while power output rose by over 13% from 193 to 219 kW. The story for diesel was somewhat different: the overall average economy of the models surveyed rose improved by over 15%, from 7.3 to 6.2 l/100km. Power outputs were up by less than 8%, from 140 to 150 kW. This is arguably because manufacturers have focused their economy efforts on the models which buyers who care about economy purchase – which are typically the diesels. Gasoline models are more popular in non-European markets, such as the USA, where fuel is cheaper, and where E-Segment sedan buyers have traditionally been far less concerned with fuel economy than performance. My prediction will be that the next 3-4 years will see significant increases in overall gasoline engine efficiency in this segment, with many more 4-cylinder DI forced induction units being used, along with a much wider penetration of stop-start. This will be to meet the demand of those buyers in Europe in this segment who still choose gasoline - but also as a recognition that fuel economy is now firmly on the agenda in the USA and Asia, even for luxury sedan buyers. There's still room for improvement.

On June 4th, KPIT Cummins and Bharat Forge announced the formation of a joint venture to offer the REVOLO hybrid powertrain system to the Indian aftermarket.  Strategy Analytics has analyzed the sales potential of this system.

• KPIT Cummins are specialists in product engineering design and is one of the world’s leading automotive software developers.
• Bharat Forge is a division of the Kalyani Group, a leading manufacturer of engine and chassis components. 
• Both companies are based in India and have considerable operations in both their home and export markets.

The REVOLO system is a parallel hybrid solution that can be installed to the crankshaft of the internal combustion engine by an aftermarket dealer, in a minimum of four hours.  It can even be installed to engines that do not have an Engine Management System (EMS) and engines fuelled by carburetors.  REVOLO is a mild hybrid system with a small 15-22 hp (11-16 kW) AC induction motor-generator and so it cannot propel the vehicle on electric power alone, but offers torque assist, brake regeneration and engine stop-start.  Its simplified design minimizes the need to make modifications to the host vehicle, just requiring the addition of a small battery pack and various sensors.  The battery can either be a low-cost valve-regulated lead acid or a lithium-ion version, both capable of recharging from an external power supply. 

• REVOLO is being retailed at Rs. 65,000-145,000 (US$1,380-3,090) fully fitted.
• Some 11 patents have been filed for this system.
• The system, fitted to vehicles equipped with an 800 cc gasoline engine, an 800 cc diesel engine and a 1.4-liter gasoline engine, was tested by the Automotive Research Association of India (ARAI).  It confirmed that the REVOLO system enhanced fuel efficiency by more than 40 percent. Furthermore, under city driving conditions the increase in efficiency had exceeded 60 percent and that reduction in Greenhouse Gas (GHG) emissions had exceeded 30 percent.
• According to Ravi Pandit, Chiarmand and Group CEO of KPIT Cummins, “it will give vehicle owners the option of upgrading their vehicles to a higher level of fuel efficiency and performance, without the expense of having to buy a new one”.

For its initial launch, the sales potential for REVOLO is mainly positive.  Advantages for Indian deployment include:

• The relative ease in which this system can be retrofitted to any vehicle, with all electronics and software algorithms integrated into the module.
• The relatively low cost (when compared to other hybrid systems), thus lowering barrier to consumer acceptance and possibly enabling a faster return on investment.
• The increased level of efficiency, as confirmed by the ARAI tests.  Most driving by passenger cars in India is conducted on urban roads at low speed that would benefit from a stop-start system.  The same driving conditions may exist in other emerging markets.
• It could target deployment for vehicles that are the least efficient and most polluting currently on Indian roads – namely those not benefitting from electronic powertrain control and fuel injection.
• It negates the need for costlier new vehicle purchases (and thus ties-in with KPIT Cummins’ involvement in supporting used car sales and car servicing with CLICKSERVICESMILE.com).
• For vehicles with larger than 1.2-liters gasoline and 1.5-liters diesel engines, the hybrid system could also bring about a reduction in vehicle excise duty, reduced from 20 to 10 percent.

Concerns for REVOLO include:

• The system’s highest cost level (US$3,090), as the system may have to compete against purchases of entire, new less-polluting vehicles, such as the Tata Nano priced at around US$2,500.
• That in certain emerging markets, governments have stabilized fuel prices and so lengthens the payback period for owning a hybrid vehicle.

Depending on the success in the aftermarket, discussions with OEMs may lead to further success for REVOLO.  To see the latest Strategy Analytics forecast for OEM hybrid powertrain demand, please go to the Automotive Electronics System Demand Forecast 2008 to 2017: Main Data Tables. 

The recent news that Toyota is investing $50M in buying a stake in US electric vehicle maker Tesla is arguably Toyota’s most significant activity in the nascent electric vehicle market to date.  Although it owns some 70% of the hybrid vehicle market, its activities in the pure EV market have been modest compared with many of its competitors. It has been matched in its lack of enthusiasm for pure EVs by Honda, which occupies the #2 slot in the hybrid market, with head of research and development at Honda, Tomohiko Kawanabe, recently being quoted as saying: “We are definitely conducting research on electric cars, but I can’t say I can wholeheartedly recommend them… It’s questionable whether consumers will accept the annoyances of limited driving range and having to spend time charging them.”  However – Honda has made significant investments in fuel cell technology, whereas Toyota has shown reluctance to consider anything other than its “Plan A” for vehicle electrification – the hybrid. However – before getting too excited over the relevance of Toyota’s move in investing in Tesla is – it is worth looking at the sums involved.  $50M may initially sound like a lot of money – but it is way less than the current round of re-calls that Toyota is having to initiate.  These have been estimated as potentially exceeding $2 billion – once lost sales and warranty payments are taken into account.  The Tesla deal – which includes Tesla taking over a recently-closed NUMMI and creating 1,000 jobs, will likely play well with the American – and especially Californian  – public.  The deal has already been warmly welcomed by Governor Schwarzenegger.   This deal certainly has damage-limitation and image-boosting aspects, as well as purely technical ones. Toyota thus seems to be thawing in its attitude to EVs – but a large part of this may just be post re-calls signs of a bit less certainty in its own infallibility emanating from Toyota City.

Strategy Analytics sees high-end automotive electronic control systems driving up on-board MCU data and code storage needs, especially for next-generation designs in powertrain, ADAS (advanced driver assistance) and Infotainment systems.  So this week's STMicroelectronics announcement of its 55 nm embedded Flash (eFlash) process technology, which will be implemented in its next-generation automotive microcontroller (MCU) chips is significant.  The company plans the first 55nm embedded-Flash product to be available for customer sampling in mid-2011, and automotive qualification in 2013. http://www.st.com/stonline/stappl/cms/press/news/year2010/t2482.htm The move should give ST a competitve advantage over its nearest industry rivals:  Strategy Analytics currently ranks ST as #3 global automotive semiconductor supplier.  Infineon (#2) announced in November 2009 an extension of its development and production partnership with TSMC to a 65 nm embedded flash process technology targeting a range of applications including next generation automotive systems.  Its automotive MCU qualification and production start is scheduled for the first half of 2013. http://www.infineon.com/cms/en/corporate/press/news/releases/2009/INFXX200911-005.html Our eyes are on Freescale, #1 automotive vendor overall and # automotive MCU vendor.  Its current 90 nm low power CMOS process for its automotive eFlash Power Architecture MCU products was developed in collaboration with ST, but the Austin-based company has yet to announce a decision on its route to a next generation solution. Strategy Analytics sees powertrain and ADAS are critical future battlegrounds for competing 32-bit MCU vendors, and having products with the right performance levels available on time to match designers needs is critical.  Forecast demand for these systems is provided in SA's Automotive System Demand Forecast: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5073 MCU demand forecasts for powertrain, ADAS and other systems can be found in SA's Automotive Semiconductor Demand Forecast: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5081