Navigant Research Blog

Chevy Bolt Could Break Open the EV Market

— February 27, 2015

With GM’s announcement at the Chicago Auto Show that the Chevrolet Bolt battery electric vehicle (BEV) design concept would go into production, one of the biggest surprises of January’s North American International Auto Show became a reality just 1 month later. Although GM officials declined to comment on specific production timing, it’s now certain that the Bolt will be the automaker’s next BEV.

What makes the Bolt so important to GM and the auto industry as a whole is the targeted specification and price point. GM CEO Mary Barra quoted an electric driving range of at least 200 miles for the Bolt and a price of $30,000 after federal tax incentives. According to Navigant Research’s report, Automotive Fuel Efficiency Technologies, non-gasoline and diesel vehicles (including BEVs) are expected to account for less than 4% of light duty vehicle sales in 2024. If GM can execute on its goals, this car could break the market open and become a truly mainstream-acceptable BEV, with a price tag right in the heart of the market and battery capacity that should alleviate virtually all range anxiety.

Room for Five

According to, at the end of 2014, the average transaction price of new vehicles in the United States reached $34,367. Recent media reports have indicated that production of the Bolt could start at GM’s Orion assembly plant north of Detroit by the end of 2016 or early 2017. By that time, the Bolt’s projected $38,000 sticker price won’t be much more than the average. Combined with the low operating costs of a BEV, that makes the Bolt a very attractive consumer financial package.

Another potentially critical argument in favor of the Bolt is its form factor. In recent years, American consumers have increasingly been migrating away from cars to crossover utility vehicles (CUV), particularly compact and midsize models such as the Chevrolet Equinox, Honda CR-V, and Ford Escape. With its taller CUV-style body and underfloor battery pack, the Bolt concept appears to offer ample room for five people—something that cannot be legitimately claimed for the Volt.

Rival Rides

The second-generation Nissan LEAF and the Tesla Model 3 are likely to be the primary competitors to the Bolt. With more than 150,000 sales to date, the LEAF is the best-selling plug-in electric vehicle (PEV) of all time. A new model is expected in 2016 with a projected range of about 150 miles. Meanwhile, Tesla CEO Elon Musk has promised the Model 3 by 2017 with a price of $35,000 before incentives and a 200-mile range. But the company’s new $5 billion Gigafactory battery plant, which will supply the Model 3, is not scheduled for completion until the end of 2017. It seems unlikely that the new car will arrive much before then. Tesla also has a history of mixing and matching numbers, claiming range specifications for high-end models along with entry-level prices. The $35,000 Model 3 is likely to deliver significantly less than the 200-mile range claimed by Musk.

GM has a major opportunity with the Bolt to make an impact in the EV market that the Volt has so far failed to achieve. Navigant Research will be watching the development of this car very closely over the next several years.


Performance Dominates Detroit Auto Show, Even for Hybrids

— February 2, 2015

With gasoline prices hitting near inflation-adjusted all-time lows, performance and design once again came to the forefront at the January 2015 North American International Auto Show in Detroit – even for what once would be considered green vehicles.  From the second-generation Acura NSX and Chevrolet Volt to the Volkswagen Cross Coupe GTE concept, performance was touted nearly as much, and in some cases more, than fuel efficiency.

Navigant Research’s report, Automotive Fuel Efficiency Technologies, projects that hybrid electric vehicles will continue to be a niche, accounting for significantly less than 10% of global light duty vehicle sales by 2025.  Targeting the combination of improved performance while at the same time reducing energy consumption and emissions may be the best way to grow consumer acceptance.

Almost exactly 8 years after the debut of the original Chevrolet Volt concept in this same venue, the second-generation production model was revealed at this year’s show.  The redesigned, extended-range electric vehicle (EV) boasts a 200-lb weight reduction, a higher-capacity battery, a more compact electric drive unit, and a new, more powerful engine.  While General Motors (GM) CEO Mary Barra promoted the extended 50-mile electric range and 41 mpg combined fuel economy in hybrid mode, she also highlighted the Volt’s quicker acceleration compared to the original model.

Meanwhile, all of the new plug-in hybrid electric vehicle (PHEV) models introduced to date by Volkswagen have been given a GTE badge, indicating that these are performance-oriented PHEVs, just as GTI and GTD identify gasoline and diesel-fueled performance variants.  Each of these models, including the new crossover utility concept shown in Detroit, feature larger, more powerful internal-combustion engines than those typically found in hybrids optimized for efficiency, such as the Toyota Prius.

A Cost to Pay

“We very much want to maximize the efficiency of all of our models, but there is a cost premium involved with adding batteries and electric motors,” said Volkswagen spokesman Mark Gillies.  “So far we have found that customers are more willing to pay the price premium if we provide the technology in combination with the other capabilities they expect at that level, although as we increase production, we expect to bring plug-in hybrids to more affordable trims.”

The Cross Coupe GTE concept previews the styling direction for an upcoming seven passenger crossover utility vehicle.   The concept car is powered by a 276 hp V6 engine, along with an electric motor at each axle for on-demand all-wheel-drive.  The combined output of the propulsion system is 355 hp, for 0-60 mph acceleration of just 6.0 seconds, while the 14.1 kWh lithium ion battery provides an estimated 20 miles of emissions-free driving.

Lighter, Faster

Volkwagen’s premium sibling brand, Audi, introduced a redesigned Q7 SUV that is 700 lbs lighter than the model it replaces.  In addition to traditional gasoline and diesel engines, the Q7 will be the first production vehicle offered with a diesel-hybrid electric propulsion system.  Rather than one of the four-cylinder diesels that Audi has in its lineup, the Q7 e-tron Quattro gets a 3.0-liter V6 that combines with two electric motors for 373 hp and 516 lb-ft. of torque that should yield swift acceleration and a claimed 35 miles of electric driving range.

Honda launched the idea of a performance hybrid when it added the original Integrated Motor Assist system to the V6-powered Accord sedan a decade ago.   At that time, consumers were not yet willing to accept the idea of hybrid power as a performance enhancer, and the first Accord hybrid was a commercial flop.  Since then, we have seen the introduction of $1 million supercars, like the LaFerrari, McLaren P1, and Porsche 918 with plug-in hybrid power, and the idea has come full circle.

The all-new second-generation Acura NSX debuted in production form this year.   Acura won’t reveal full specs for the new NSX until closer to production this summer, but did tell the media in attendance that a new twin-turbocharged V6 engine and three electric motors will produce more than 550 hp for the lightweight two-seat sports car.

After debuting in fuel economy specials, like the original Toyota Prius and Honda Insight in the 1990s, hybrid power has jumped to the opposite end of the automotive spectrum – and will hopefully soon converge on the heart of the mainstream market.


‘Not Invented Here’ is Good for Automakers

— February 1, 2015

Not so many years ago, the auto industry was afflicted by a phenomenon known as “Not Invented Here,” or NIH.  As one of the less desirable relics of the massive vertical integration that provided tremendous economies of scale and profits, NIH also led to technological stagnation.  Fortunately, the drive to reduce fatalities, fuel consumption, and emissions has helped push automakers to look beyond their proprietary engineering labs to adopt and fund innovations from both established suppliers and more recently tiny startups.

“Four decades ago, 90% of the intellectual property [IP] in the auto industry originated from inside the OEMs,” said Dr. David Cole, chairman and co-founder of the AutoHarvest Foundation and an engineering professor at the University of Michigan.  “In those days, suppliers would basically build to print, but today they generate more than half of the IP that goes into new vehicles.”

OK to Fail

As Cole observes, as manufacturers have grappled with integrating state-of-the-art electronics, automated driving systems, and electrified powertrains, they have expanded the scope of their collaboration beyond traditional suppliers that are equally inexperienced in these areas.  In 2005, Ford began a development partnership with Microsoft that led to the SYNC in-vehicle connectivity system.

In 2011, General Motors (GM) and BMW took inspiration from Silicon Valley and established GM Ventures and i Ventures.  Both of these venture capital (VC) funds make relatively modest investments in startup companies that have promising ideas that could enhance future mobility.

For example, GM Ventures put $5 million each into Powermat and Bright Automotive and $4.2 million into Sakti3.  Like all VC investments, a certain percentage are expected to fail, while others will catch on.  Electric van builder Bright went bankrupt in 2012, while GM introduced wireless phone charging mats based on Powermat technology into several vehicle lines in 2014.  Sakti3 is still developing a new type of solid-state battery that shows tremendous promise for reducing the cost and improving the range of future electric vehicles (EVs).  Companies that have received funding from BMW i Ventures include and Coulomb Technologies, the company behind the ChargePoint EV charging network.

Opening Up

Ford doesn’t have a separate venture funding arm, but has made strategic investments in companies like Michigan-based software firm Livio.  Ford bought the startup in 2013 and has incorporated its technology for connecting smartphone apps to the vehicle into its new third-generation SYNC system, scheduled to debut later this year.  In 2013, Ford also contributed the code for its SYNC AppLink system to the open-source GENIVI project, so that any automaker can use the system in its vehicles.  In December 2014, Ford announced a partnership with Techstars to launch a mobility startup incubator in Detroit that will also get funding from Verizon Telematics and Magna International.

From newcomers like Tesla Motors to century-old companies like GM and Ford, everyone has recognized that NIH inhibits innovation, and that no one knows where the next great idea that revolutionizes mobility will come from.


Cloud Connections Bolster In-Vehicle Systems

— January 26, 2015

With the average transaction prices of new vehicles in the United States hitting nearly $35,000 at the end of 2014, drivers can be grateful that the cars they purchase are also more durable and reliable than ever before. The average age of the more than 200 million vehicles on the road in the United States today is now nearly 11.5 years.  However, that longevity has a big potential downside: as computing and communications technology marches on to improve safety, efficiency, and reliability, many of those existing cars will be incapable of participating in these advances.  Luckily, cloud computing could come to the rescue.

According to Navigant Research’s report, Autonomous Vehicles, full-function self-driving vehicles aren’t expected to be available in significant volumes until late in the 2020s.  Until the fully self-driving car arrives, we’ll have a steady stream of incremental improvements in advanced driver assistance systems.  Thanks to increasing connectivity in vehicles, we’re also less likely to be stuck with the capability that was built-in when the vehicle rolled off the assembly line.

No Car Left Behind

General Motors (GM) and Audi are among the manufacturers that are already building 4G LTE radios into many of their new vehicles.  When this capability is combined with advanced new microprocessors from companies like NVIDIA and Qualcomm, vehicles will be able to leverage cloud computing infrastructure to get smarter as they age, rather than being left behind.

At the 2015 Consumer Electronics Show in Las Vegas, NVIDIA unveiled a new generation 256-core processor, called the Tegra X1, along with electronic control units powered by this advanced chip.  One of the problems that driver assistance and autonomous systems have to solve is being able to recognize and distinguish the objects detected by all of the sensors on new vehicles.  The human brain is remarkably adept at distinguishing the nuances between an animal and pedestrian or an ambulance and a delivery van.

Detection before Failure

This sort of image recognition is far more difficult for a computer, so the Tegra X1 is designed to collect image data from its 12 camera inputs and transmit it back to data centers where it can be aggregated with information from other vehicles.  By combining data from many vehicles, the object recognition can be dramatically improved, and updated image libraries can be fed back to vehicles for improved onboard sensing ‑ even without changing hardware.

GM is also harnessing the power of the cloud to provide drivers with predictive diagnostic information for their vehicles using OnStar.  Available for more than a decade, OnStar provides subscribers with vehicle health reports when faults are detected.  Now, by monitoring critical systems such as the battery, starter, and fuel pump and sending this information back to the cloud, OnStar is able to detect subtle changes in performance that have previously been shown to be precursors to component failures.  The OnStar Driver Assurance system can then notify the driver so that an impending problem can be corrected before the driver is left stranded on the side of the road.  This predictive diagnostic system will be available on several of GM’s 2016 model year vehicles.

As automakers roll out new infotainment interfaces, such as Apple CarPlay and Google’s Android Auto, drivers will also benefit from improved voice recognition that leverages massive data centers run by these technology companies.  More robust and reliable voice control will help reduce driver frustration and keep their attention on the road ‑ at least until the car can take over completely.


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