Navigant Research Blog

PEV Sales Grow Everywhere … Except Where They Started

— August 20, 2015

When the Nissan LEAF and the Chevrolet Volt were introduced in late 2010, plug-in electric vehicle (PEV) sales were concentrated on the respective automakers’ domestic markets, Japan and the United States. Japan was the largest PEV market in 2010, was quickly overtaken by the United States in 2011, fell behind Western Europe in 2012, and then behind China in 2014. Meanwhile, the United States has maintained a lead on China and Western Europe, but it’s possible that like Japan, it too will fall behind China and Western Europe this year.

In the first 7 months of 2015, PEV sales in the United States are down 6.3%. Many of the compliance PEVs made by Toyota and Honda have been phased out, while production of higher-volume PEVs has slowed before the introductions of the next-generation updates scheduled to be released before the end of the year. Similarly, only one new PEV has been introduced this year, the Mercedes S550 PHV, which is a high-end luxury vehicle likely to be sold at low volumes. The limited amount of new vehicle introductions is a stark transition from 2012, 2013, and 2014, where over the course of each year, around six new PEV models were deployed.

Meanwhile, in China and Western Europe, PEV sales in the first 6 months of 2015 are estimated to be up 175%, and 77%, respectively. The surge in China and Western Europe can be attributed to PEV introductions from an influx of domestic automaker platforms alongside significant government incentives in select Chinese cities and European countries. Volkswagen, Mitsubishi, and BYD have been particularly aggressive in these markets. In addition, the oil price dive has been less impactful on retail fuel prices in these markets than in North America due to higher taxes on retail fuels in these markets.

Though the North American market is slowing relative to China and Western Europe, annual growth is likely achievable by the end of the year. Despite some delays, a number of new PEV models are set to be introduced in the next few months. Among the introductions are three SUVs: the Volvo XC90 T8, the Tesla Model X, and the BMW X5 eDrive, which will help break PEVs into new high-volume markets. Similarly, the redesign of the Chevrolet Volt, which increases the vehicle’s all-electric range and internal combustion engine fuel efficiency at a lower purchase cost, is set to go into production this month.

However, for Japan, growth is likely negative in 2015; the market has contracted over 20% over the first half of the year. This puts Japan in line to fall behind Norway, the United Kingdom, and France, with Germany closing in. Most of Japan’s PEV sales come from domestic automakers Nissan and Mitsubishi. Toyota and Honda have been reluctant to sell PEVs, favoring fuel cell technologies instead. With BMW and Tesla being the only foreign PEV automakers making sales in the country, PEV availability in Japan is severely limited.


High-Strength Steel or Aluminum for Vehicle Body Parts: That Is the Question

— August 10, 2015

In a presentation to the 2015 CAR Management Briefing Seminars, Eric Petersen, the vice president of research and innovation at AK Steel, outlined his plans to produce the next generation of high-strength steel. He was confident that new innovations from steel suppliers will prevent the loss of more market share to aluminum. As Petersen demonstrates, Ford’s decision to convert its F-150 to all-aluminum has prompted steel suppliers to get creative.

However, there are a lot of things to consider when choosing a material for manufacture of vehicle components. Current vehicle bodies and closures are made primarily of sheet metal, although carbon and glass fiber-reinforced plastic are also used. Original equipment manufacturer (OEM) designers and engineers have to consider both the requirements of the finished vehicle and the ability to manufacture it efficiently.

Modern production lines depend on assembly techniques that can be automated, and fixing parts together must use a process that can be done by robots both for speed and repetition. Depending on the material, this may involve spot welding, seam welding, rivets, bolts, glue, etc. If production facilities are already equipped with a certain capability, changing to a material that needs a different joining process might require a major investment, which may only be practical when the existing equipment is reaching the end of its useful life.

Part manufacture is another consideration. Many body parts have complex shapes. If they are stamped and need a deep draw, then there may be a limit on how thin the material can be. Steel that is developed to have high strength has a higher yield stress than ordinary mild steel, which is a benefit in the finished article to absorb loads, but makes it harder to form during manufacture. Other lightweight materials such as magnesium have poor formability for body panels but can be cast for uses such as the instrument panel beam in the 2015 Ford Mustang. Some materials are treated after shaping to make them harder, but that also adds cost. Different materials also require different post-manufacture treatments to prevent corrosion.

Once a part is manufactured and assembled, it has to meet various performance specifications. A vehicle body structure has to be stiff in torsion and bending, cope with fatigue loading at load points, handle rollover and side impact loads, and absorb crash energy while keeping occupants safe. In addition to meeting these structural goals, overall vehicle fuel efficiency targets mean that keeping the weight low is now critical. And, as always, there is the ever-present need to keep costs as low as possible.

No Silver Bullet

Just as with powertrains, there is no silver bullet material that is ideal for every application. Material suppliers should recognize the big-picture approach of the automotive manufacturers, which involves reducing the number of platforms to increase volume of many parts and to streamline manufacturing processes. OEMs are increasingly using multi-disciplinary optimization for part design, which considers a wide range of factors including manufacturability, assembly, structural performance, weight, functionality, and overall cost.

Future vehicles are more likely to be made from a variety of materials than to stick with one or shift entirely to another. Material suppliers should consider how to make parts with their products that not only perform better than the competition at lower cost, but also integrate easily into existing platforms.


Government Accelerates Autonomous Vehicle R&D in the United Kingdom

— August 14, 2014

At the end of July, the British government made a commitment to support the development of self-driving vehicles in the United Kingdom.  Up to three cities will be selected to host trial projects beginning in 2015, and they can apply for a share of a £10 million ($16.8 million) fund established to kick-start new investment in automotive technology.  The press release said that “Ministers have also launched a review to look at current road regulations to establish how the UK can remain at the forefront of driverless car technology and ensure there is an appropriate regime for testing driverless cars in the UK.”

The United Kingdom already has one of the world’s first autonomous vehicle shuttle services, which went into operation in 2011 serving Heathrow Airport’s Terminal 5.  A pilot scheme for fully autonomous pods in Milton Keynes was announced in November 2013.  And the Mobile Robotics Group at Oxford University is building its reputation as an advanced research organization in driverless vehicle technology.   Having the government working on legislation and helping to fund pilot programs is an important step forward in promoting the technology and attracting business to the country.

Unfortunately for the United Kingdom, though, the majority of engineering development work at the major European automakers takes place in Germany and France.  Ford still has an engineering center in Essex, but it’s much smaller than its sibling near Cologne, Germany.  Revised legislation and multiple testing areas in the United Kingdom may well inspire some companies to establish new satellite development centers in the country in the same way that they did in California when Google’s pioneering work began to get headlines a few years ago.  On the other hand, it may also spur governments on the European continent to introduce similar efforts in their countries.

Multiple Routes

One thing to bear in mind with this technology is that there are multiple streams of applications.  In the short term, there is the task of developing a more integrated approach to the individual advanced driver assistance systems functions that are already in production to be able to offer drivers help in well-defined situations such as cruising on a motorway or shuffling along in congested traffic jams.  Mercedes has already begun offering its Intelligent Drive on the new S-Class, and its competitors are not far behind.  Most promise something similar in the next couple of model years.  More fully automated systems that can follow instructions from a navigation system under limited circumstances are expected from about 2020 on, with full automation coming to market after 2025.  The United Kingdom could become a popular place for manufacturers to test such vehicle systems.

The other route is to go directly to small self-driving vehicles that operate at low speed (<25 mph) and with a limited range.  In the early days, these will only operate on roads or paths where conventional vehicles are prohibited.  These projects will have to be initiated by local governments rather than the automakers, and they will provide valuable practical experience of the benefits and challenges that autonomous vehicles can bring to a city or community.


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