Navigant Research Blog

E-Bikes Gear Up in North America

— August 20, 2014

While Tesla, Nissan, and BMW get most of the headlines around electric transportation, the electric bicycle (e-bike) market is quietly gaining momentum in North America.  E-bikes are simply traditional pedal bikes with a battery pack and electric motor for propulsion.  Usually a throttle or user control module is attached to the handlebars to allow the user to adjust the power levels of electric assistance.  E-bikes offer a unique market solution for the transportation problems many cities in North America currently face: traffic congestion, fatalities from road accidents, local air quality, climate change, and the economic burdens associated with car ownership.

While the e-bike market has historically been strongest in China and Western Europe, emerging trends have helped position the industry for increased growth in North America.  Combined throttle-control and pedal-assist models, electric cargo bikes, all-in-one retrofit kits and wheels, an aging baby boomer population, and the use of e-bikes in police patrol and various security industries have all contributed to a growing market with strong potential.

Battery Prices Fall

As is the case with the broader electric vehicle market, the increasing quality and affordability of lithium ion (Li-ion) batteries is attracting new customers.  Most Li-ion e-bikes in North America range from $1,500 to $3,000.  While not as cheap as traditional bicycles, this is a relatively small upfront cost to adopt electric transportation.  If the plan is to reduce car trips or ditch your car altogether, your investment will be recouped within a few years of reduced trips to the pump and avoided insurance, parking, and vehicle maintenance costs.  Not to mention the health benefits that come with increased exercise and the avoidance of traffic jams.

Automakers Climb On

Several automotive manufacturers are joining the e-bike party.  In the United States, Ford recently partnered with Pedego Electric Bikes to design a throttle-controlled e-bike, the Ford Super Cruiser.  Daimler AG’s smart unit is one of the most aggressive automotive brands in e-bikes, partnering with GRACE GmbH to deliver an e-bike sold through dealers in Europe.  BMW recently released its pedal-assist Cruise e-bike 2014, which features a Bosch 250 W motor and 400 Wh battery.  Audi, Opel, and Volkswagen have also shown e-bike concepts, though these vehicles have not yet been announced for production.

Navigant Research’s upcoming report on e-bikes, scheduled for publication in the third quarter of 2014, will contain a detailed analysis of global market opportunities, barriers, and technology issues, along with market forecasts for e-bikes, e-bike batteries, and overall sales revenue by region.

 

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.

 

Helsinki’s Plan to Make Private Cars Obsolete

— August 12, 2014

Helsinki, Finland, has proposed a strikingly ambitious mobility on demand system that presents the logical extension of current innovations in passenger travel.  The city plans to create a subscriber service that would let users choose from, and pay for, a range of transportation options through their smartphones.  The options will include conventional public transit, carsharing, bikesharing, ferries, and an on-demand minibus service that the city’s transit authority launched in 2013.

The major innovation that makes this work will be an integrated payment system.  This part of the scheme may prove the most complicated to implement, but it is the final piece of the puzzle that makes this scheme truly transformative.  No longer forced to choose between the on-demand capability of private car ownership versus the eco-friendliness of shared transit, Helsinki residents will be able to easily get where they want to go, when they want to get there, without needing a car.

I’ve been using the phrase mobility as a service for this phenomenon, but it looks like the mobile phone companies may have claimed that moniker already.  Whatever the name, the concept is the transportation version of other businesses that are moving from selling a product to selling the service or utility the consumer wants from that product.  Planned obsolescence no longer makes good business sense, and consumers can benefit from constant improvements in technology.  This is most common in information technology (in cloud computing and storage, for instance), but it’s also happening in the energy sector – especially for clean technologies like solar, where leasing programs offer a way to overcome the upfront price premium barrier.

Share, Don’t Buy

Globally, carsharing membership has grown around 28% since 2010, with Europe as the leader in this sector.  Navigant Research’s report, Carsharing Programs, forecasts that global carsharing members will surpass 12 million in 2020.  The rise of on-demand ride services, such as Uber, Lyft, and Sidecar, are also transforming the way city dwellers use taxi services.  Taking on the highly regulated taxi business, these companies face considerable opposition, but at this point, it will be hard to put the genie back into the bottle. Bikesharing and even scooter share services are also spreading.  Today’s young urban dwellers expect to be able to use an array of transportation options to suit an array of needs, at the touch of an app.

Helsinki’s program has the potential to tie into other transportation innovations, such as the rise of electric vehicles (EVs) – more carsharing programs are deploying EVs as a selling point for their service – and autonomous vehicle technology.  Wireless charging would also support schemes like Helsinki’s by ensuring that shared EVs are recharging when parked, rather than relying on the driver to remember to plug in.

Faced with dwindling demand in mature markets like North America and Western Europe, automakers are exploring a range of new services to offset lower demand and to gain a competitive edge.  Farsighted companies will look to begin selling mobility as well as vehicles, changing transportation as much as the IT and energy sectors have changed.

 

In California, High-Speed Rail Takes Its Time Arriving

— August 5, 2014

California’s proposed high-speed rail (HSR) line between Los Angeles and San Francisco is stirring controversy – not surprisingly – for a $68 billion infrastructure project that will take until 2029 to complete.  The concerns over the project’s cost-to-benefit ratio cross party lines.  While California Republicans have lined up against Democratic Governor Jerry Brown’s proposal, so has his own lieutenant governor, Gavin Newsom.  The state successfully beat back a legal challenge to the project’s funding plan, but more legal challenges loom.

The HSR debate also ties into the broader question of whether the United States can accomplish big things anymore. Congress’ inability to find a serious, long-term solution to the dwindling Highway Trust Fund is just one example of this problem – one that also results in less money to support any state’s big idea.

Writing in support of the HSR, James Fallows of The Atlantic makes a key point: “Big infrastructure investments are usually under-valued and over-criticized while in the planning stage.”  One obvious comparison is Boston’s Big Dig. That was also enormously ambitious project with a huge price tag that took more than a decade to complete.  It had massive cost overruns, becoming the subject of constant complaints in Massachusetts.  Today, visiting Boston since the Big Dig’s completion, it’s clear why the expense and hassle was worth it.  The city was knit back together after having been split apart by a major road running through its heart.  In place of the old elevated highway is a greenway that invites pedestrians and connects with bike-sharing stations.

Easier Than Flying

It’s worth noting that the Big Dig was a huge infrastructure project designed to undo the effects of another ambitious infrastructure project, one that had unforeseen, and disastrous, consequences.  Moreover, the Big Dig plan was based on known demand, since it essentially took traffic from above ground and moved it into tunnels.  This central purpose removed much of the uncertainty about new infrastructure projects that can keep politicians and planners up at night.

That uncertainty lies at the heart of the debate over high-speed rail. A major new passenger rail project, in a country that has largely abandoned rail travel for cars and planes, is a leap of faith.  The most apt comparison for the California HSR is Amtrak’s Boston-New York-Washington corridor.  In 2012, Amtrak reported that it had captured 75% of commercial passenger travel between New York and Washington, D.C.  The success of the train is not due to its being cheaper – tickets can be as much as $145 one way – but more to the convenience and ease of trains compared to air travel.

HSR Plus Autonomous Vehicles

A key factor in that convenience is that, unlike airlines, the trains deposit passengers into the downtown of each city and connect to local transit services. This multimodal connectivity will be key to the success of the California HSR, whether it means connecting to public transit or to nearby carsharing services like City CarShare and DriveNow in downtown San Francisco.

The rise of autonomous vehicles is frequently cited by key opponents as evidence that the HSR is a 20th century idea whose time has passed.  While Navigant Research’s 2014 Autonomous Vehicles report suggests that long-distance, inter-city travel is a possible model for self-driving cars, it projects they’re most likely to be used for passenger travel in carsharing services as well as in fleets as an alternative to taxis for local travel within the city.  In this scenario, autonomous vehicles will actually support the high-speed rail line by making carsharing easier and ubiquitous in urban centers while the HSR meets city-to-city travel needs.

 

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