GM’s Chevy Volt is the best thing to happen to electric vehicles since the Prius hybrid. In fact, it would be even bigger than the Prius if more than 10,000 were being made next year. The car represents revolutionary technology. It makes electric vehicles palatable to the mass consumer – at least conceptually if not based on the $41,000 price tag. The electric vehicle business was in desperate need of a car like the Volt that could take the worry out of driving electric. By adding the internal combustion engine (ICE) to drive the electric motors when the vehicle’s on-board battery is exhausted the Volt offers an acceptable range for any kind of driving requirement.

The car also features cutting edge componentry with a low-weight, low-energy stereo system from Bose, an OnStar telematics system (with five years of free service) with an iPhone app, and a multiple-screen vehicle diagnostic experience. The car looks and feels and drives like the future. But the simplicity of the Volt concept belies the complexity of the electric vehicle business and therein lies some long-term concern for the viability of any alternative fuel vehicles. A big contributor to the complexity of the EV picture has been the Regulatory Authorities.

My kingdom for a PZEV

The regulatory authorities are well-meaning bureaucrats who are trying to stimulate demand with financial incentives for specific types of cars while providing guidance to the auto maker community regarding which kinds of vehicles will be acceptable to meet fleet emission standards. These efforts have produced an alphabet soup of vehicle categories and a maze of definitions that have been further confounded by the automotive press. From the regulatory authorities we were originally given (see Strategy Analytics reports referenced below for detailed definitions and history):

·        TLEV – Transitional Low Emission Vehicle

·        LEV – Low Emission Vehicle

·        ULEV – Ultra-Low Emission Vehicle

·        SULEV – Super-Ultra Low Emission Vehicle

·        ZEV – Zero Emission Vehicle

These categories would be humorous in and of themselves but they have already been superseded by:

·        ILEV – Inherently Low-Emission Vehicle

·        PZEV – Partial Zero Emission Vehicle

·        AT-PZEV – Advanced Technology Partial Zero Emission Vehicle

·        NLEV – National Low Emission Vehicle

Again, it is tempting to chuckle, but these categories have very real and very specific definitions that can mean the difference between a $7,500 vehicle incentive and a combined $12,500 vehicle incentive. The Volt is a case in point. Because the car was introduced with an 8-year/100,000 warranty on the battery instead of a 10-year/150,000-mile warranty it did not qualify as an AT-PZEV according to the California Air Resources Board (CARB) requirements and missed out on the additional $5,000 incentive in California for which the Nissan Leaf does qualify. (This was in spite of the fact that GM reportedly tested and validated the car for the 10-year warranty and expects to boost the warranty for the current Volt or on a new version of the car by 2012.)

EVs not EZ

To make matters worse, the automotive press and industry trade associations have their own roster of EV categories – presumably reflecting their assessment of consumer perceptions. The Electric Drive Trade Association lists the following categories:

·        HEV - Hybrid Electric Vehicles

·        BEV - Battery Electric Vehicles

·        EREV - Extended Range Electric Vehicles

·        Plug-in Hybrid Vehicles

·        Fuel Cell Electric Vehicles

The Volt is sui generis! It is the only EREV, according to the EDTA. This is something that bothers industry types. This would be a minor point if it were the end of the conversation regarding the definition and categorization of the Volt, but it is not. According to some sources the Volt operates as a “plug-in series hybrid” or as a “power-split or series-parallel hybrid” depending on speed or driving mode. By the way, in California, the Volt is considered a ULEV and not a SULEV based on emissions testing.

When is a Volt not a Volt?

Few cars in the history of the automotive industry have been subjected to as much scrutiny as the Chevy Volt – suggesting some strange American instinct toward eating its own young. The Chevy Volt is unquestionably the nastiest, most clever move the automotive industry has pulled in decades. It just seems to frustrate the heck out of regulators and journalists and analysts. GM pulled a fast one out of its hat – one just wishes the company had plans to pull more than 10,000 out of its hat this year. (One might argue that Subaru of America has been a good deal more clever than GM. The company has sold a combined total of hundreds of thousands of PZEV designated Foresters, Legacies and Outbacks that are “sometimes even cleaner than some hybrid or alternative fuel vehicles,” according to the company.)

“I’ll ask my manager.”

Which is where the Chevy dealers come into this story. Having recently attended a Chevy Volt launch event I visited my local Chevrolet dealer. There was a single Volt on the showroom floor, as promised by the Website. (There are four or five Chevy Volt dealers in the area. Not all Chevrolet dealers qualified to sell Volts.) The car in the showroom had a “Do not touch” sign on it with a message that the car was already sold. Of course, that meant that the car was also locked so that the dealer was not able to give test drives, could not demonstrate the clever on-board and OnStar systems, and could not allow a customer the experience of simply sitting in the car. A salesperson indicated that he did not know when they would get any more vehicles and he was not sure what other dealers in the area had any Volts. I returned home and entered my name on the dealer’s waiting list and was called almost immediately. The salesperson on the phone said four cars were due to be shipped in January and one, a white one, was not spoken for. To reserve this incoming Volt, the salesperson said, I would have to put $5,000 down. I asked about the widely reported $350 lease on the car – an attractive option considering the limited life of the battery. The salesperson said there was no lease available and then he suddenly added that to get the Volt that was coming in January I would have to pay $5,000 over MSRP. There is little that will kill enthusiasm for a new car faster than a dealer charging $5,000 over MSRP. It wasn’t bad enough that I could not drive the car, could not sit in it, could not see it do its sexy technology stuff right there in the showroom.

Whether you want a ULEV, an EREV or a serial-parallel hybrid, you will still need to be prepared to do battle with a dealer who will use your enthusiasm against you. Who knew changing the automotive industry would be so difficult. (For the record, GM and Chevrolet representatives say they have specifically asked dealers NOT to charge above MSRP for the cars and there definitely IS a $350 lease offer on the Volt.)

Further insights: http://bit.ly/gtyxic - EV/HEV Technologies Supply & Fitment Database - Kevin Mak - Automotive Electronics Service http://bit.ly/devMOq - Hybrid Technologies Legislation/Support - Kevin Mak - Automotive Electronics Service http://bit.ly/eC7kFy - Impact of Volt, Leaf Transcends Modest Sales Expectations - Roger C. Lanctot - Insight – Automotive Multimedia & Communications Service

Nuance’s Automotive Summit, which took place in Detroit last week, highlighted the leadership position Nuance and one of its most prominent customers, Ford Motor Company, now command in the area of automotive interfaces. While battles may continue to be fought over voice, touch, haptic, and other in-vehicle interfaces, these two companies are positioned at the vortex of the debate leading the charge to develop and deliver safe vehicle interfaces and redefining the automotive branding process. The assumption of this leadership mantle occurs at a time when car makers and their suppliers have been running for cover under heavy fire from regulatory powers in Washington, DC. And the Feds have taken on the added support of lobbying groups and some research organizations. The Federal government’s regulatory arm has stepped into the roadway seeking – like a speed-gun wielding traffic officer – to impede the industry’s headlong advance toward connectivity and smartphone integration in cars. Car makers and the supplier community, by and large, have taken one of two courses. Most have remained silent on the issue of the day – driver distraction – hoping it will either go away or that some white knight, such as the Alliance for Automobile Manufacturers or some other group will calm the waters for them. Others, such as General Motors’ OnStar division, Volkswagen, and QNX have chosen to hit the accelerator. In recent weeks, OnStar has announced its plans to enable Facebook connectivity in the car. Volkswagen and QNX have posted YouTube videos showing early executions of terminal mode smartphone connectivity. These videos show all forms of smartphone images displayed in-dash with no context – ie. no discrimination between what will and won’t be accessible when the vehicle is in motion. In contrast, Ford has been reaching out to regulatory authorities on multiple fronts. The very same week OnStar was announcing Facebook connectivity, Ford representatives – together with Nuance executives – were meeting on Capitol Hill in Washington with legislators explaining the state of the art in voice-based in-vehicle interfaces. Prior to this outreach effort, which is ongoing for both legislators and regulators within the Department of Transportation’s National Highway Traffic Safety Administration, Ford also responded to complaints from the DOT’s now-famous director, Ray LaHood, and altered some of its advertising imaging and messaging. This was LaHood’s first missile fired across the bow of Ford’s Sync interface. The advertising messages are critical. Both Ford and OnStar are running some of the most highly visible television ad campaigns in the U.S. showing off their in-vehicle systems – at a time when both firms are fighting their way out of the steep sales decline of 2009. It is absolutely essential that both companies communicate effectively with so much unwanted attention being focused on these systems and with important sales and market share on the line. OnStar bears the added burden of embedded telematics industry leadership. No other auto maker has taken the embedded telematics approach as far as OnStar which now, after 15 years, has nearly six million subscribers. But with diminished vehicle sales and a virtually unchanged renewal rate, OnStar is facing a potential erosion of its subscriber base. In spite of all it has done to offer compelling solutions to consumers, the company now feels pressure to do more to boost its subscription renewal rates. The company is also swimming against a strong demographic current as GM’s historical customer base has aged. The company is clearly looking to OnStar to not only maintain its previous status as a profitable division by maintaining and adding to its existing subscriber base, but also as a potential source of demographic stimulus to reach out to younger car buyers. GM is not alone in reaching out to younger buyers. Almost every car maker is in a perennial campaign to tap into the next generation of car buyers. And with smartphone purchasing demographics corresponding with this target market, the smartphone connectivity proposition has become essential. (GM and OnStar are somewhat limited by the current vehicle offering which lacks for a robust line-up of small cars targeted toward a younger demographic.) The advertising targets can hardly be missed in the existing television spots which show young people interacting with OnStar systems to obtain location or vehicle information. (A minor pet peeve of this analyst is that it seems that not all these young people, even when they are in the front seat, are seatbelted in the ads – but company executives insist they are all safely secured.) The OnStar television campaign dovetails nicely with GM’s parallel social networking marketing initiatives on Facebook, Twitter and other Web-based communication channels. The smartphone application for controlling vehicle functions and accessing vehicle data on the Chevrolet Volt is another manifestation of these efforts. What is lost in this campaign, though, is the rock solid safety and security message that brought OnStar to this industry leadership position in the first place. Ford has also been youth-oriented in its embrace of connectivity technology. Ford’s ads emphasize the safe use of technology in cars using voice interfacing technology. Watching these ads as a participant in the industry is mesmerizing given the degree of focus on the human machine interface in the car. (While this analyst would prefer the driver not touch the display while the vehicle is in motion, Ford has made clear its adherence to AAM guidelines and the limitations of this functionality in a moving vehicle.) What OnStar and Ford both realize is the need to reach out to younger car buyers. The key motivator here is the need to provide for smartphone connectivity, both for safety and functionality. Younger smartphone, and car, buyers are primary targets for location-aware applications ranging from traffic and navigation to social networking, according to Strategy Analytics research. The drive to connect smartphones is behind the enthusiasm for Nokia’s Terminal Mode initiative along with Apple’s iPod Out, Delphi’s D-Connect, Ford’s AppLink and similar solutions. But only Ford has stepped to the forefront with a vision and implementation of a walled garden-type approach to application deployment. There is a recognition in the industry of the appeal of both smartphone connectivity and application deployment. Ford talks about the beamed in, brought in and built-in strategies for delivering content, applications and services, but the underlying philosophy is control. The power of the Ford solution lies in five value propositions: Distraction mitigation: The voice-based interface minimizes eyes-off-the road time. Demographic targeting: The smartphone interface appeals to social networking young people. Future proofing: The Microsoft-based platform allows for application development and deployment thereby enhancing the value of the solution over the life of the vehicle. Subscription anxiety: The connectivity solution allows the consumer to defer the subscription decision and places the burden of data transport on the consumer’s existing wireless subscription. Branded HMI statement: Ford IS Sync. Ford IS MyFord Touch. The interface has become the brand. A new era in the automotive industry has arrived. At last week’s Automotive Summit, Nuance emphasized all of these points. Whether the solution being shown was the company’s touchpad character recognition, hybrid on-board/off-board speech recognition, enhanced echo cancellation/noise reduction, or focused search all were targeted at reducing distraction while providing a branding pallet for car makers and their suppliers. Presenters at the event, including Nuance executives and partners, pointed to research demonstrating the efficacy of voice and touch interfaces for specific types of tasks. Presenters raised questions regarding interfaces such as BMW’s i-Drive and touch screens generally, favoring voice and console-mounted touchpads (ie. the Audi A8). The consensus opinion appeared to be that touchscreens will survive, thanks in part to Ford’s success in proving the value of the solution. On the other hand, i-Drive-like interfaces will likely continue to come under fire as what one executive described as a “linear keyboard.” Now more than ever, though, rigorous research is being applied to weigh critical HMI decisions and eyes off the road time is more than ever a deciding factor. Conclusions: The next step in the process of realizing the potential of smartphone integration is enabling application downloads. Several solutions have been proposed including: Direct handset display: Nokia Terminal Mode approach. Walled garden: Ford application deployment approach. Application validation: Delphi et. al. provide application validation. Single application: Handset application controlling access to all apps. App store validation: Apple, Blackberry et. al. provide application validation. Carrier validation: See above. What is likely to emerge is a hybrid of on-board/off-board application control shared between the vehicle and the mobile device within the context of an OEM’s walled garden. When available, server resources will assist with application functionality such as search or streaming data or content. But regardless of the source of data or service, the entire solution on-board and off-board will be encompassed by the OEM’s walled garden. The vehicle and data security associated with OEM control will increasingly be non-negotiable. Challenges to this ecosystem are already emerging as application developer candidates for the Ford platform are expressing frustration with the process of putting the Ford software developer kit to work. Ford is seen as slow to respond to developer needs, a problem that is not expected to be resolved soon. OEMs will never be able to move at developer speeds especially where vehicle safety, security and integrity are at stake. So, new voice-based interfaces and Bluetooth wireless connections have enabled a new branding proposition in the industry coinciding with growing demand for safe mobile phone connections, a youth-oriented demographic outreach (particularly in compact car segments), and the need to future proof cars to keep up with consumer electronics market advances. More than ever cars are defined by their human machine connections. Ford and Nuance have much for which to be thankful and many of those thanks ought to be directed to Ray LaHood in the Department of Transportation. Much as most industry executives are want to complain and criticize the DOT for its single-minded anti-distracted driving campaign (when drunk drivers are actually responsible for more damage), the effort has focused consumers on their risky behaviors, opened the door to creative solutions, and stimulated demand following the industry’s worst ever downturn. Additional insight: http://bit.ly/c0OLhT - Consumer Implications for Smartphone-Vehicle Connectivity  - Chris Schreiner - Automotive Consumer Insights http://tinyurl.com/34hidb5 - Smartphone Market Evolution and the Automotive Opportunity Implications - Mark Fitzgerald - Automotive Multimedia and Communications Service http://tinyurl.com/2qx88eo - Automotive Connectivity: Beyond Bluetooth Solutions - Mark Fitzgerald - Automotive Multimedia and Communications Service http://bit.ly/c1nvTq - Consumer Interest High for Connected Safety and Security Services - Chris Schreiner - Automotive Consumer Insights http://bit.ly/aGJHDj - Smartphone Market Evolution and the Automotive Opportunity Implications -Fitzgerald - Automotive Multimedia & Communications

The transition to digital radio has been slow, but no one should have any doubt about its inevitability. One of the greatest challenges in ushering digital radio into the market, aside from differing standards (in Europe) and analog radio shut off issues, is the user interface. Digital radio opens up a new world of location-relevant information including both data and content all of which means opportunity for system designers to compete and differentiate. Digital radio is forcing designers to change the way they think about broadcast content and how consumers will access and “discover” new sources and types of content – from traffic and weather information to podcasts and enhancements such as slideshow functionality and conditional access. While the fundamentals of frequencies (in the U.S.) and station names (Europe) remain unchanged, the ability to search for specific content or location information is transforming the radio experience. Digital radio is ideally suited to the emerging cloud-based content and service delivery world confronting the automotive industry. This convergence of radio and the cloud is manifested most obviously in so-called hybrid radio (promoted by RadioDNS www.radiodns.org) which brings together broadcast signals with online content enhancements such as album art. Of course, hybrid radio is still just an idea today, although broadcasters and content providers are building the necessary databases to support the technology. (Strategy Analytics data shows FM radio technology forecasted to be available on 60% of handsets sold in the U.S. by 2014.) Meanwhile, electronic programming guides – such as RadioTime – have already made search and location relevance a reality. The unspoken facilitating technology is the smartphone. The growing popularity of smartphones and the corresponding rise of automotive smartphone connectivity and application stores have facilitated the introduction of Internet radio and music services into cars. The integration of this access with on-board systems will add yet another layer of added value for the consumer. Even more significant is the emergence of interactivity and conditional access to radio content. The proliferation of music services is turning music consumption into a thumbs-up/thumbs-down proposition allowing consumers to customize their experience..Among the music services enabling this customized experience are Pandora (streaming), Slacker (cached), Mog, Rhapsody and Thumbplay. But unlike digital radio, none of these services are completely free for a commercial-free experience. Digital radio stands alone as a ubiquitous, free-over-the-air offering increasingly built into OEM and aftermarket solutions. Of greatest importance, from a user interface perspective, is the fact that the OEM can control, leverage or drive the digital radio experience, unlike Internet radio, which is connectivity based. The march toward digital radio was manifest at last week’s WorldDMB conference in the form of software defined radios capable of supporting DAB, DAB+, DMB and HD Radio systems. Companies showing such solutions included ST Microelectronics, Maxim and EtherWaves. Frontier Silicon laid claim to market leadership in digital radio implementations in its comments at the event. Frontier made a distinction between higher cost software defined radio solutions that provide for flexibility and upgradability and hardware radios that are lower cost and less flexible, while offering a third path of hybrid radio (not to be confused with the RadioDNS technology) offering an optimal mix of lower cost and flexibility. Panasonic Electronic Devices also showed multiple-format modules at the conference. The overall tenor of the WorldDMB gathering was oriented toward overcoming transition issues for the implementation of digital radio throughout Europe. Of course, the industry can only progress as quickly as the systems can reach the market. Hardware and software companies are still scrambling to bring all of the capabilities of digital radio into being. This is most clear from the progress of iBiquity Digital in the U.S., key sponsor of HD Radio technology. This week the company reported that 18% of aftermarket systems sold in the U.S. this year came with HD Radio. The company also reports steady progress in recruiting OEMs to implement HD Radio, which is increasingly standard. But none of the implementations currently on the market are able to take advantage of the complete range of available digital radio applications. So, the content is available in the form of hundreds of broadcasters and the receivers are in place in line-fit and aftermarket solutions, but complete technology deployment is still in progress at the silicon level. Nevertheless, governmental authorities are aggressively pursuing awareness campaigns and contests intended to drive digital radio adoption. The numbers are still modest, typically in the hundreds of thousands of units, but at least these representatives recognize that digital radio will require active efforts to stimulate consumer interest. At the same time, new capabilities will mean new business models and new user interfaces. One of the essential reasons for the introduction of digital radio is to open up congested airwaves to more broadcasters and more broadcast content. This will stimulate additional advertising and revenue opportunities and confusion. But these are early days for digital radio. The inevitability of digital radio was clear at the WorldDMB conference where country rollout status reports were shared including some hard digital switchover dates, such as the U.K.’s 2015 deadline. (France was notable by its absence at the event - due to logistical issues. But France’s mandate for DMB leaves no room for doubt regarding its transition to digital radio.) Whether or not digital radio replaces analog radio over the long run, the automotive industry is in the forefront of the movement and stands to reap the greatest rewards. It remains to be seen which OEMs or suppliers will lead the way but the race is on to deliver a new level of value to consumers. Further insight: http://bit.ly/8Z8HZh - Automotive Connectivity: Beyond Bluetooth Solutions - Automtive Multimedia Communications - Mark Fitzgerald http://bit.ly/b5W8ZS - Nokia and RIM Push Into Automotive as 'Apps' Competition Mounts - Automotive Multimedia & Communications - Joanne Blight http://bit.ly/blAHUC - Handset Sales by Type: Smartphone, Feature Phone and Basic Phone - Wireless Device Strategies - Alex Spektor http://bit.ly/9jANwu - Global Smartphone Sales Forecast by Country Western Europe and North America - Wireless Smartphone Strategies - Thomas Kang

Among the many untold stories in the telematics industry, the tale of Volvo OnCall and Orbcomm stands out, especially in the context of this week’s SISTER workshop on satellite communications and intelligent transport technologies, which took place in Brussels. What might, for Volvo, have become a visionary hybrid implementation of satellite and cellular technology for a telematics system for the U.S. market was undone by Orbcomm’s bankruptcy filing in 2000.   In retrospect, it is both understandable and deeply disappointing that no other automotive telematics planner chose to follow the Volvo path. Maybe decision makers saw the Volvo experience as a cautionary tale instead of as the inspiration that it actually represented.   Maybe if the European Union had taken a closer look at what Volvo was dreaming up they might have included satellite technology in their eCall plans. Alas, the EU did not include satellite technology in eCall which may be why the SISTER initiative was founded as the first association with the mandate to evaluate the possibility of integrating satellite technology to enhance the complete range of ITS technologies including eCall, road user charging, map updating, dangerous goods monitoring and enhanced Galileo services. SISTER concludes its research activities and will publish its recommendations next month.   Back in the mid-1990’s, Volvo was considering the inclusion of Orbcomm’s low-earth orbit satellites as a backup communication channel to cellular TDMA and Amps technologies. The company was willing to include satellite in spite of the obtrusiveness of the required antenna technology of the time.   Today, Volvo offers cellular-only telematics throughout Europe with short-term plans for a U.S. launch of a similar system. Orbcomm, meanwhile, has recovered and is a supplier of telematics technology to Volvo Trucks under the Dynafleet brand. Orbcomm is in fact a leader in the modest but growing hybrid – satellite-cellular - connectivity business.   The absence of satellite technology from existing automotive telematics solutions, especially for emergency applications, is extraordinary given the purpose of such systems. The EU regularly makes inflated claims of the life-saving ability of eCall systems to summon assistance from emergency responders. Chief critics of eCall are quick to point out that passing motorists frequently make the first reports of accidents rendering eCall messages redundant.   Where eCall could have an impact, though, is in the event of accidents occurring in rural areas, where cellular coverage is wanting. In fact, some say that the most severe accidents and injuries often occur in these circumstances. This is obviously where satellite technology could make a difference.   The good news is that the EU is finally looking at the integration of satellite technology at least as an idea, if not as part of the existing eCall specification. Even better news lies in the fact that this consideration is taking place after the demise of Worldspace and following the allocation of spectrum for DVB-SH satellite technology. The SISTER program is also taking place at the very onset of the European Galileo system which has direct application for all location-related ITS applications. In fact, satellite navigation is the most widespread of current satellite applications and is expected to lead the way in satellite integration into a wider range of services. The arrival of Galileo promises to deliver better than 10cm location accuracy potentially suitable for road pricing and lane keeping applications and possibly for map updating. SISTER workshop representatives foresee $43B in cumulative financial benefits - combined revenue and savings - from the integration of enhanced satellite navigation technology. Potential sources of these gains include: fuel consumption reduction, travel time reduction, air pollution reduction, CO2 emission reduction, cost savings due to congestion reduction and cost savings from decreased injuries. Current satellite technologies available in Europe, and elsewhere around the world, offer both superior location information delivery but also the ability to deliver audio and video content. Outside of Volvo, the only other company to foresee the arrival of this value proposition was Hughes Telematics.   Hughes proposed a hybrid satellite-cellular telematics system nearly five years ago that not-coincidentally included a DVB-SH component originally to be provided by Ico Global Communications. These plans were interrupted, at least in part, by Ico’s filing for bankruptcy. (Sound familiar?)   Nevertheless, the Hughes vision called for a consumer-targeted telematics system integrating emergency response, roadside assistance and concierge services along with entertainment content delivery. In fact, Ico was making its own plans to introduce aftermarket and portable devices for audio and video content. Ico has two DVB-SH competitors in the U.S., TerreStar and SkyTerra, both of whom will eventually be in position to offer the same telematics and infotainment solutions envisioned by Ico. Like Ico, TerreStar has a satellite deployed and in its final phase of testing. The large TerreStar satellite - which allows for smaller footprint device antennas - is capable of spot-beam coverage of the U.S. for two-way voice and data. The TerreStar satellite is suitable to eCall and commercial applications or for rural areas that lose terrestrial cellular networks during natural disasters. Sirius XM's satellite network has also been put to use for telematics applications including traffic and weather. Sirius XM also recently acquired the assets of Worldspace, meaning the European satellite radio provider could some day participate in telematics opportunities. Worldspace competitor Ondas has deals in place with several European OEMs, but no satellites. It’s been a long road, but the reality has finally caught up with the vision. The so-called S-band DVB-SH spectrum allocation for Europe was awarded to Eutelsat and a joint venture partner SES Astra. (Ico was one of the other bidders and is still mounting a legal challenge to the award.)   DVB-SH offers the ability for bi-directional communications for low-bandwidth ITS applications – available by the end of 2010 – along with some limited two-way communications to be launched in 2011. But DVB-SH expects to realize the prospect of entertainment content delivery for embedded, aftermarket and portable devices. This capability is important given that several SISTER participants expect that telematics services will have to be bundled with entertainment content to be attractive to consumers.   The recommendation of at least one presenter at the SISTER workshop was that all vehicles operated by public authorities should be connected via satellite, that all commercial fleet vehicles should be similarly connected and that, ultimately, all consumer vehicles should be linked via satellite. Some combination of public and private funding will surely be necessary, but the anticipated benefits to road safety and traffic management have already been proven by SISTER’s experiments.

As Hyundai Motor America has surged to the top or near the top of ratings and sales rankings, the company has also been preparing a unique launch strategy for its Equus luxury sedan while simultaneously laying the groundwork for a January 2011 launch of a telematics system comparable to General Motor’s OnStar - a launch that is likely to take place in conjuction with the 2011 Consumer Electronics Show. Hyundai’s goal is nothing less than to become the most loved, most trusted and highest satisfaction mass market automotive brand. That is the word from U.S. president John Krafcik, whose background includes tenures with Ford Motor Company and Toyota Motor Sales. Krafcik says digilence, frugality and harmony are the internal principals that have guided Hyundai Motors to a remarkably competitive stance in the market. He proceeded to share the roster of recent company achievements this week at the monthly Washington Automotive Press Association luncheon: -> Projected 4.4% share of 2010 global unit vehicle sales -> 7^th largest brand in the U.S. – expects to surpass Dodge for 6^th place by the end of 2010 -> 4^th largest OEM globally 2010 -> 4th in J.D. Power’s IQS (Initial Quality Survey) in 2009 behind Lexus, Porsche and Cadillac -> 4^th in Consumer Reports reliability report card for 2010, up from #9 in 2009 -> Genesis: 2009 Car of the Year -> Automotive Lease Guide residual values: Sonata tops Honda Accord, Tucson tops Toyota Rav4, Veracruz tops Toyota Highlander, Genesis tops Lexus GS350 -> #1 in EPA’s average fuel economy rating: 30.9 – 2008, 30.1 – 2009 (projected), 31.9 – 2010 (forecast) -> Overall transaction prices up 11% relative to 2008 – now 97% of Toyota transaction prices -> Sonata most shopped on Edmunds.com for past straight eight weeks -> Hyundai included in the shopping lists of 28% of light vehicle purchase intenders – company survey -> Sales up 51% year-to-date vs. 2009 Key elements to Hyundai’s strategy include rapid deployment of marketing programs such as Cash for Clunkers (deployed July 2 – ahead of the July 24^th completion of the policy announcement) and the assurance program for customers that might lose their job after their vehicle purchase. Perhaps most important was the company’s 10-year/100,000 mile warranty, which internal surveys showed to be the primary reason customers chose Hyundai. Hyundai also implemented free roadside assistance for five years, which surveys showed was the third highest reason for brand selection. A strategic decision that reduced cost and weight on the company’s highest profile vehicle, the Sonata, helped the company achieve category leading fuel efficiency. Hyundai chose to offer the Sonata with only four cylinders, including direct injected and turbo versions. By offering only 4-cylinder engines on the Sonata, the company saved 50-100 lbs. in weight from not needing the hardware on board to support optional 6-cylinder engines. Hyundai was thereby able to achieve both category-leading 274 horsepower and 37 mpg fuel efficiency. The next step for Hyundai is the launch of the Equus. The company is limiting distribution to a select group of exclusive Hyundai dealers (ie. that sell only Hyundai-brand vehicles) capable of supporting a program characterized by test drive requests fulfilled at the customer’s home or office, pick-up of vehicles for service calls with the drop off of a loaner at their home or office and the inclusion of an Apple iPad pre-loaded with the vehicle’s owner’s manual and a service scheduling application. In fact, after a recent meeting with its dealer council, Krafcik says Hyundai is considering the possibility of offering Equus-like customer service across its fleet. He noted that the Equus is expected to arrive in September with extraordinary luxury appointments (ie. heated rear seats and refrigerator) yet priced between the mid-50’s and mid-60’s. Other calendar year 2011 introductions detailed by Krafcik include new versions of the Elantra, Accent and Santa Fe and a hybrid "sporty coupe" to compete with Honda's CRZ. Of course, the icing on the cake for Hyundai will be the launch of its telematics service in January of 2011. Krafcik offered no details except to suggest that the company will opt for an embedded solution a la OnStar. Hyundai is no-doubt envious of the kind of customer loyalty a well-executed telematics strategy can deliver. Hyundai clearly thinks telematics will only get them closer to fostering the love and trust they are seeking. The timing of the telematics launch suggests Hyundai will seek to make a Ford Sync/Microsoft-like splash at the Consumer Electronics Show in January. The 2011 CES is shaping up as a significant automotive technology launch pad as rumors of Apple- and Google-branded cars are swirling in the industry seven months in advance of the event. Additional Insight: http://tinyurl.com/249ajt7 - Tier 1 Vendor Regional Design Center Database – Kevin Mak – Automotive Electronics Service http://tinyurl.com/27jt7bt - EV/HEV Technologies Supply & Fitment Database - Kevin Mak – Automotive Electronics Service

The pressure to reduce vehicle carbon emissions is exacting an influence on the automotive industry beyond the handful of ultra-compact and EV/HEV announcements around the world. The calendar year 2009 installation rate for gas hungry V-6 and V-8 engines, for example, fell to 57.1% from 63.9% in 2008 in the U.S., according to Ward’s Automotive, continuing a five-year decline from a peak of 76.2% in 2004.

 

But the impacts are more wide ranging, as detailed by the president of the Association of International Automobile Manufacturers at a luncheon of the Washington Automotive Press Association this week. AIAM quotes U.S. government estimates that automobiles are responsible for 20% of carbon emissions.

 

Most governments around the world seek to discourage driving and thereby reduce carbon emissions with taxes on gasoline or via road charging – a solution being pursued most recently in The Netherlands. The U.S. is unique in the world in mandating Corporate Average Fuel Efficiency standards – known as CAFÉ.

 

With the ultimate goal in mind of reducing vehicle emissions to near zero carbon, the CAFÉ standards were recently updated (May 9, 2009) by the Obama administration in the U.S. to a 2016 target of 35.5 miles per gallon. The mandate became law April 1 and partially harmonized ruled from the Department of Transportation, the National Highway Traffic Safety Administration and the Environmental Protection Administration.

 

One of the more unusual elements of CAFÉ is the different goals for each OEM as well as its basis in vehicle footprint – originally defined and codified in 2007. The vehicle footprint is defined as the vehicle’s wheelbase multiplied by its track width – or the area enclosed by the points at which the wheels meet the ground. The new guidelines will show Porsche needing to improve its overall efficiency by 9.9 miles per gallon by 2016 while the overall average improvement per OEM will be 7.4 miles per gallon, based on existing forecasts of production and sales.

 

Using this footprint attribute, the government has been able to define targets by vehicle type as a way to get around the need for OEMs to offset sales of larger cars with sales of smaller cars. Each vehicle footprint has its own efficiency targets under the current guidelines and all face their own requirements to improve between 2012 and 2016.

 

Complete harmonization of all government green house gas (GHG) reduction policies has not yet been achieved. CAFÉ is defined by the Energy Policy and Conservation Act while CO2 emissions are also governed by the Clear Air Act. The EPCA concerns itself with vehicles as they are produced, for example, while the CAA concerns itself with the emissions of vehicles during their entire operating life.

 

The impact of these efforts are, in fact, pushing car makers to improve efficiency and technologies that respond to that need will benefit from these initiatives. Everything from stop/start to clean diesels and EVs are expected to see wider deployment and consumer acceptance. Strategy Analytics research shows consumers in Europe and the U.S. are more interested in electric vehicles than they are in shifting to smaller vehicles.

 

With that goal in mind, AIAM described the range of fuel efficiency initiatives reflected in the government guidelines as including:

 

Types of Engine Technology:

-         Low friction lubricants

-         Reduction of engine friction losses

-         Cylinder deactivation

-         Variable valve timing

-         Discreete variable valve lift

-         Stoichiometric gasoline direct-injection technology

-         Combustion restart

-         Turbocharging and downsizing

-         Exhaust-gas recirculation boost

-         Clean diesel engines

Types of Transmission Techology:

-         Improved automatic transmission controls

-         Six-, seven-, eight-speed automatic transmissions

-         Dual clutch or automated shift manual transmission

-         Continuously variable transmission

-         Manual 6-speed transmission

Vehicle Technologies Considered:

-         Low rolling resistance tires

-         Low drag brakes

-         Front or secondary axle disconnect for four wheel drive systems

-         Aerodynamic drag reduction

-         Mass reduction and material substitution

Electrification/Accessory and Hybrid Technologies:

-         Electric power steering

-         Improved accessories

-         Air conditioner systems

-         12-Vole micro-hybrid (MHEV)

-         Higher Voltage stop-start/belt integrated starter generator (BISG)

-         Integrated motor assist (IMA)/Crank integrated starter generator (CISG)

-         2-Mode hybrid (2MHEV)

-         Power-split hybrid (PSHEV)

-         Plug-in hybrid electric vehicle (PHEV)

-         Electric vehicles

 

Longer-Term Technology Solutions Include:

 

Plug-In Hybrids:

-         Battery R&D is still critical

-         Cost and durability are factors

-         Plug-in HEVs need about 5-8 times the battery capacity of a current HEV

-         Current goal is up to a 40 mile all-electric range

Battery EVs:

-         Remain an attractive target

-         Need battery capacity of 12-15 times a current HEV to provide adequate range

-         Same battery issues (cost, durability) plus operation in extreme weather (hot and cold temperatures)

-         Nissan has announced having BEVs in California market in 2010. White House regarding removing barriers

Fuel Cells:

-         Use hydrogen to generate electricity to run the vehicle, so they are a type of EV

-         Internal combustion engines can also be designed to use hydrogen

-         There are major hydrogen infrastructure issues – where do we get it; hot to distribute it?

Alternate Fuels:

-         Compressed natural gas

-         Ethanol – CAFÉ credit

 

Further Strategy Analytics insights:

 

http://bit.ly/cP39II - Hybrid Technologies Legislation/Support - Kevin Mak

http://bit.ly/bplBqV - EV/HEV Technologies Supply & Fitment Database - Kevin Mak

http://bit.ly/bv3Q0B - Hybrid and Electric Vehicles: OEM Strategies Reviewed - Kevin Mak

While people are using mobile phones for a wider range of functions than just making phone calls, such as remote vehicle access and microtransactions, it is not likely that anyone will ever replace their vehicle key fob entirely with a smartphone application. With that in mind, Delphi has introduced a Smart Key Fob that uses near-field communication (NFC) - for systems intended to be used in Europe or Asia where NFC is more widely implemented, Bluetooth and UHF technology to provide drivers with remote access to vehicle information while helping to ensure the security of the data exchange.

The “key” advantage of the Delphi solution is that it provides for application to vehicle data and vehicle control and status access without the need for a cellular subscription. For this reason, the company has positioned the Smart Key Fob as a low cost solution to vehicle connectivity. The Delphi-implemented NFC solution and Bluetooth connectivity offers, secure information transfer from the fob to the phone with a low power consumption mode and a low-range communication profile – only 2 inches (5 cm) for NFC – that helps prevent hacking. The company says the data exchange is made possible with modules integrated in the vehicle. The UHF system antenna enables data transfer from the vehicle to the key fob with a range of more than 650 feet, and the transferred information can be accessed by the driver via any NFC-compatible portable device that has an active display such as a smartphone. Data that can be accessed and managed includes mileage and fuel level, safety and security information (such as tire pressure, door or window open or closed status, etc.), maintenance warnings and alerts, personalization features (seat, steering wheel, A/C configuration), vehicle location (via GPS), driver identity, in-case-of-emergency (ICE) contacts and vehicle type. Of course, the onset of electric and hybrid vehicles only intensifies the potential interest in Delphi’s low-cost solution as drivers will need to remotely assess vehicle charge. The complete roster of accessible applications for the fob-to-smartphone system includes: Enhanced command/control of all vehicle functions Notification of vehicle security and diagnostic alerts Vehicle finder Pre-trip remote vehicle setup Diagnostics Eco-scores Driving history/patterns Linkage to OEM Web portals Automatic opt-in marketing data on vehicle usage and driver preferences Control of vehicle functions remotely with graphical confirmation (e.g. doors, windows, engine start, HVAC, seat, navigation, audio) Reconfiguration of vehicle preference settings easily and remotely Delphi says the marketing propositions for the system include branding opportunities through the phone app and connected Internet portal and the opportunity to establish opt-in marketing programs to automatically collect driver usage data. Delphi has shown the solution to some OEMs, but has yet to announce a platform win. Further Insight: http://bit.ly/cPilqP - Advanced Entry and Start System Supply and Fitment Database – Mak – Strategy Analytics http://bit.ly/prpYX - Vehicle Entry and Go: Passive Systems Set to Challenge RKE – Mak – Strategy Analytics

Amid the hybrid hype and horsepower hoopla at the New York Auto Show this week Ford Motor company presented a unique vision of the future of efficient driving in its partnership with Microsoft’s Hohm power management initiative. Launched in June of last year, Hohm is an energy management application developed in cooperation with U.S. energy suppliers and intended to manage and conserve home energy consumption.

Ford president and CEO Alan Mulally acknowledged what few car makers have addressed, which is the potential doubling of home energy consumption for home owners who choose electric vehicles. Ford is working with Microsoft to help mitigate that added cost of ownership. Hohm is an Internet-based application that will help owners of electric and plug-in hybrid vehicles determine when and how to most efficiently and affordably recharge their batteries.

Microsoft says Hohm is available for free to all U.S. residential energy consumers and has multiple partnerships with utilities and other relevant partners. Ford is the first auto maker partner in the program. Ford also announced its plan to offer a smartphone-based application to remotely assess vehicle charge status and find charging locations, not unlike the application shown earlier this year by OnStar in connection with its Volt EV launch.

Ford’s electric vehicle and hybrid plans announced at the New York show include five vehicles in North America and Europe by 2013. For North America, Ford has planned the launch of the Transit Connect Electric later this year, the Focus Electric in 2011, a plug-in hybrid and two next-generation hybrids in 2012, joining four Ford and Mercury hybrids already on the road and a new Lincoln MKZ Hybrid coming this fall.

Other major EV and HEV announcements at the New York Auto Show included:

Kia said it will offer a 2.4L hybrid version of the Optima late in 2011.

Lincoln introduced its first hybrid – the 2011 MKZ Hybrid premium midsize car. The car is expected to deliver 41mpg in city driving when it arrives in the fall.

Think announced plans to begin selling the Think City EV in New York and other select cities later this year.

Hyundai showed its first hybrid, the new Sonata Hybrid based on lithium polymer technology offering what it claimed as more horsepower (169hp), more torque (156 lb. ft.) and better gas mileage (52mpg) than competing hybrids and using Hyundai’s Hybrid Blue Drive architecture with its 2.4L Theta II engine.

Volkswagen showed its first hybrid at the show – a Touareg with a nickel-metal hydride battery due later this year. The hybrid drive is paired with a 3L supercharged, direct injection V6 and VW claims a 40% reduction in CO2 emissions and 25/21mpg in highway/city driving.

Porsche showed its first production hybrid, the 2011 Cayenne S Hybrid due this fall, which will sell for $4,000 more than the $63,700 Cayenne S with a 400hp V8.

 

For further insights into global EV/HEV programs:

http://bit.ly/bv3Q0B - Hybrid and Electric Vehicles: OEM Strategies Reviewed – Kevin Mak

BMW’s wholistic EfficientDynamics campaign is the latest and clearest manifestation of an industry movement that is propelling telematics technology adoption. In a recent presentation to the International Motor Press Association (IMPA), BMW executives clearly defined an integral role within the EfficientDynamics agenda for navigation, embedded vehicle connectivity and even smartphone integration. The company has already made impressive gains in fuel efficiency and CO2 reductions while preserving or enhancing performance via mechanical means, such as optimizing transmissions and adopting brake energy regeneration and auto start-stop functions. Now, BMW foresees even greater gains coming from the integration of on-board sensor inputs. BMW seeks to extend efficiency gains from the fusion of data inputs from navigation systems, adaptive cruise control and parking distance control systems, cameras and light/rain sensors, DME and DSC systems and V2X communication. The output of this data fusion will lead to the prediction of upcoming driving situations and optimized vehicle conditioning (ie. charging or discharging of the battery). These system enhancements will help optimize operating strategy and determine optimal driving distance for available consumption. The integration of navigation and safety system inputs means that in the future both the navigation set-up and the portfolio of safety systems will increasingly be standard equipment. They will be integral to the efficient operation of the vehicle. And connectivity will be necessary so that the very latest information on road conditions (including traffic) is available. While a growing proportion of cars will have embedded connectivity, smartphones will still play a vital role in the drive for more fuel efficienct cars. The company has already learned from its Mini E field trial that smartphone applications have a key role to play. Drivers will use smartphone applications to remotely check the state of vehicle charge as well as to signal the car to begin heating or cooling batteries while still connected to the grid. OnStar has foreseen this as well, showing just such an application at the recent Consumer Electronics Show. It is true that range anxiety is a very real customer concern with electric vehicles. In fact, it is yet another reason for such vehicles to be equipped with standard navigation systems. But BMW executives told the IMPA delegates that customers in the Mini E trial found that “charging (was) not a big issue even without (an) extensive network of public charging stations.” According to the results of the trial, the range of the Mini E was sufficient for most trips. This finding corroborates GM’s finding that 78% of people drive 40 miles or fewer per day. In the end, therefore, the role of the on-board map and navigation will likely have more to do with maximizing vehicle range as opposed to easing driver anxiety. And road elevation data will no doubt play a greater role as well in route planning. The drive for fuel efficiency and electrification will combine to bring cars to market that are not only more efficient and emitting less carbon dioxide, but that are also safer with the additional sensor content and map data. Further insights are available: http://bit.ly/bv3Q0B - Hybrid and Electric Vehicles: OEM Strategies Reviewed – Kevin Mak http://bit.ly/alm4vK - Global Automotive OE Telematics Market 2008-2016 – Joanne Blight

Intermap Technologies continues its steady advance on the automotive market, though many of its latest successful initiatives are focused in the consumer electronics market. The big payoff for Intermap will likely derive from the gathering enthusiasm for electric vehicles - and related green navigation and routing applications - and the emerging opportunity within advanced safety systems. In the meantime, the emergence of advanced safety and EV-related applications are creating an industry debate over whether vehicles will have one or more maps on board. The latest win for Intermap is an agreement to furnish Garmin with 3D elevation data for the United States and Western Europe for consumer electronic devices set to arrive in the market in the first half of 2010. The objective of the integration of Intermap's NEXTmap elevation data is to allow Garmin to create elevation sensitive content and applications across the company's product line. Intermap struck a similar deal with Tele Atlas to allow the company to integrate Intermap's 3D elevation data for its range of navigation products and services. Tele Atlas says the Intermap data provides a geospatial base layer enabling TA to conflate other visual assets such as building models, roads and landmarks to create a realistic visualization  product. Targeted launch into equipped automobiles is set for late 2010, the company says. Intermap's initial steps in advanced safety systems are focused on predictive lighting and partners include Visteon and Hella KGaA Hueck & Co. Intermap's concept is to combine its 3D elevation data, derived from its airplane overflight capture methodology, with map data for lighting systems that will conform to the twists, turns and changes in elevation of different roadways. The strategy puts Intermap in direct conflict with Navteq which has its own elevation data and is working with STMicroelectronics and Magneti Marelli to offer a similar solution. Intermap points out that its approach provides comprehensive coverage of road elevation data including secondary and tertiary roads, which Navteq's vehicle-based elevation data capture approach means it is focused on major roadways. No system has yet made it to market, but both systems are being closely watched by car makers and their suppliers. Most existing adaptive lighting systems are tied to steering wheel operation, which the map-and-elevation-based solutions integrate elevation and curvature and anticipate road conditions. Intermap has an equivalent development activity with Visteon and has demonstrated the solution at recent trade events. The real brass ring for Intermap, though, is efficient vehicle operation in the context of emerging hybrid and fully electric vehicle executions. Knowledge of road geometry, ie. elevation, is more critical than ever in a world of range anxiety, energy management and regenerative braking. Intermap has yet to claim any OEM design wins, but the proliferation of interest in efficient vehicle operation both for the large volume passenger vehicle market and commercial applications promise ample opportunity. Intermap and Navteq will no doubt engage on this battle ground as well. As a side note: With map data being applied to multiple vehicle solutions there are two camps emerging around the question of whether vehicles will have a single or multiple maps on board. Navteq's original offering for advanced safety applications was in the form of a module with its own on-board map. Some questioned the ability to easily update this map, while others wondered whether each vehicle can get by with a single map for multiple functions. Recent conversations with tier ones suggest a concensus of opinion around the single-map approach. But only time will tell how the industry resolves this debate. Of course, if there will be a single map in the car and it will be shared by safety systems, higher speed networking technology may be required such as Ethernet, MOST or Flex-Ray. And, of course, attach rates for safety systems will not correlate directly with on-board navigation attach rates. Let's hope the latter issue is sorted out by lower cost navigation systems and the growing variety of location-related applications in the vehicle.