Navigant Research Blog

Purchase Incentives More Cost-Effective for E-Bikes Than EVs

— March 24, 2017

Electric bicycles (e-bikes) continue to be the highest selling EV on the planet, with nearly 35 million unit sales forecast for 2017. Increasing urbanization and a desire from consumers and city officials to move away from cars for motorized transportation are opening opportunities for alternative mobility devices. E-bikes are uniquely positioned to be a primary benefactor of this trend since they are low in cost relative to cars, do not require licensing, have no emissions, and can take advantage of existing bicycling infrastructure. The European Cyclists’ Federation (ECF) published a report that shows e-bikes are a particularly cost-effective way to decarbonize the transport system through incentives. However, e-bikes have received little in the way of purchase incentives within most countries’ electric mobility strategies.

Germany has spent an enormous sum of money on electric cars, with unimpressive results. The country spent €1.4 billion ($1.5 billion) through 2014 on R&D and added an additional nearly €1 billion ($1.07 billion) subsidy scheme in 2016. Yet, there are just 25,500 pure EVs on the road in Germany. Meanwhile, e-bike sales exploded in the country during the same period with virtually no subsidies, aside from a few small pilot projects. Over 2.5 million e-bikes are in use in Germany, and Navigant Research expects nearly 650,000 unit sales for 2017. One wonders how much higher this figure could be if e-bikes had the same public financial support as EVs in Germany.

Differences in E-Bike and EV Policy, Germany: 2016

(Source: European Cyclists’ Federation)

New E-Bike Purchase Incentives in Europe

Several new e-bike purchase incentives have popped up across Europe, providing a boost to the industry and demonstrating new confidence in e-bikes as a cost-effective way to reduce traffic congestion and greenhouse gas (GHG) emissions. France announced a $200 subsidy for e-bike purchases in February 2017, and earlier in the year, Oslo, Norway began a $1,200 incentive program for electric cargo (e-cargo) bikes. Austria has offered an e-bike incentive program for numerous years. The ECF estimates roughly 25% of early e-bike purchases in the country’s crucial market uptake phase, around 2010-2011, were supported by financial incentives. Austria has one of the highest sales rates of e-bikes per capita in Europe, third behind the Netherlands and Belgium.

The increasing number of e-bike incentives in Europe demonstrates the growing recognition by European policymakers that e-bikes can be a more cost-effective technology to incentivize over EVs within an electric mobility strategy. On average, e-bikes cost less than 8% of the price of an electric car, according to the ECF. This, coupled with the lack of licensing requirements, make adoption much easier for consumers.

Studies Show

As noted in a previous blog, a consumer survey conducted by the Oregon Transportation Research and Education Consortium (OTREC) showed that the primary reason respondents bought e-bikes was to replace car trips—not bicycle trips. E-bikes offer enormous potential to replace cars. One study by the German Federal Environmental Agency shows that e-bikes are faster than cars for distances of up to 10 km (6.2 miles) in an urban environment. The trends in Europe in conjunction with conclusions from these studies suggest that more countries should incentivize and promote e-bikes if the goal is to reduce GHG emissions and traffic congestion in a cost-effective way.

 

The Unsettled Future of the Electric Powertrain

— March 13, 2017

I recently attended the conference on automotive 48V systems in Berlin organized by BIS Group. My key conclusion is that the electric powertrain is far from a settled science. Many that presented are enthusiastic about 48V technology and its potential for the future. German startup company Volabo even presented the case for a 48V all-electric vehicle. Others see 48V as an interim measure primarily to help OEMs pass the 2020 European Union emissions targets in the short term, with a future going more toward all-electric and full hybrid. Even though production plans have only been made in the last couple of years, powertrain development company AVL told me that testing of 48V systems has been going on for at least 10 years.

Unsurprisingly, Denso has a less enthusiastic opinion of 48V technology than some of the other delegates. The Japanese market has firmly embraced full hybrid drive thanks to Toyota and Honda; the majority of the vehicles on Japanese roads are small cars and trucks with efficient gasoline engines.

A good portion of the engineer audience thinks that an all-electric vehicle future is coming sooner rather than later. However, others are more in line with Navigant Research’s global vehicle forecast that the internal combustion engine still has a long future.

Low Voltage EVs

Volabo is a startup company spun out of a Munich university. Its proposal is a new type of electric motor that uses no copper winding and uses power electronics to control the magnetic fields. High power is made possible by locating the battery close to the motor, connected by thick bars rather than wires to handle the high currents of up to 5,000 amps. Prototype manufacturing for this motor is at the early stage, and there is a lot of interest from other delegates.

Indian OEM Tata’s European Tech Center has examined the market for 48V systems in India and concludes that the market will only be in the C-segment and luxury due to the cost increment. The bulk of the Indian market is very low cost small cars. Typical Indian drivers do not like stop-start systems (and deactivate them if fitted) because fractions of a second delays matter in navigating typical traffic jams. Plug-in EVs are also not likely to be popular in India in the short term because of the unreliability of the local electric grid.

Higher Power Demand

Magna International agrees with one of the key conclusions from my presentation: automated driving systems will support the move toward 48V systems, with demand of up to an additional 10 kW for computing and electric controls that is simply impractical from 12V networks. McLaren Applied Technologies presented some of its development work for racing that is finding its way into volume production. Silicon carbide semiconductors, for example, are prompting performance improvements, and now development work is moving into gallium nitride.

48V Projections

48V automotive systems appear to be an immediate solution to meet upcoming stricter emissions legislation and to provide additional power for automated driving systems. In the short term, these systems will be important in large markets such as Europe, North America, and China, and less so in Japan and India. The longer-term future is somewhat dependent on the growth of high voltage hybrid and all-electric drive, which in turn rely on continued reduction in battery cost. More analysis of the market for 48V systems is available in the Navigant Research report, Low Voltage Vehicle Electrification.

 

Perception vs. Reality: CES and the North American International Auto Show

— January 19, 2017

Connected VehiclesIf there is any one lesson that we should all take away from 2016, it’s the confirmation that perception does not necessarily equal reality. What people perceive to be the truth is often the most important part of their decision-making, a concept now shown in the auto industry’s seemingly increasing participation in the International CES and apparently declining interest in Detroit’s North American International Auto Show (NAIAS).

There has been a lot of consternation in Michigan recently about the impact that CES has had on the Detroit show over the past decade. The two events tend to run back-to-back over the first 2 weeks of January. I was on hand in 2008 when then-General Motors CEO Rick Wagoner was the first major auto executive to keynote at CES after demonstrating the autonomous Chevrolet Tahoe, which won the DARPA urban challenge the prior year. While more automakers and suppliers than ever took part in CES this year, GM actually took a pass for the first time since Wagoner’s speech.

While the Detroit Auto Dealers Association, which organizes the NAIAS, is concerned that manufacturers are increasingly favoring CES, the issues of the auto show are largely unrelated to what’s happening in Vegas. Auto shows are consumer events designed to showcase all of the latest products available for sale, and media previews show what is arriving in the coming months.

With rare exceptions (like 2016, when Chevrolet unveiled the production version of the Bolt EV), new production vehicles are almost never shown at CES. The electronics show is a business-to-business event that isn’t open to the public; instead, the industry flocks to Las Vegas to talk up technology.

NAIAS Is About Reality; CES Is About Perception

For many years, the financial market’s perception of the auto industry has been that of old-school manufacturers of commodity widgets. The view of Silicon Valley and technology companies is that of innovators on the bleeding edge that are poised for explosive growth. Thus, you have investors pouring billions of dollars into startups every year; most of those companies getting all of that investment fail without ever producing anything noteworthy while burning through cash.

Meanwhile, the modern car is one of the most complicated and technologically sophisticated devices ever created and is produced by the latest cutting-edge processes. The industry that produces them employs tens of millions of people globally directly and indirectly, generating trillions of dollars in revenue and tens of billions in profit. Yet the industry gets little respect and low market values.

The presence of the auto industry at CES is designed to reach a group of media that cover companies like Apple, Google, Microsoft, Amazon, and Facebook alongside countless startups, the same media that investors follow. The goal is to change the perception of the auto business from one that looks like it came from the dawn of the industrial revolution to one that innovates on a daily basis.

That’s not a message you can get across by showing off the refreshed Ford F-150, even though it may be packed with far more technology than anything from Silicon Valley. That’s a message you communicate by demonstrating automated cars in Las Vegas traffic jams; partnership announcements with chip designers like Nvidia won’t reach its intended audience in auto shows in Detroit, Frankfurt, or Geneva. These shows have issues to address, but the fault doesn’t lie in Las Vegas. It’s all about perception.

 

Automakers Doing More Rigorous Safety Analysis for Vehicle Automation

— November 23, 2016

Connected VehiclesBack in September 2014 as the ITS World Congress gathered in Detroit, General Motors (GM) CEO Mary Barra announced that in 2016, a new Cadillac model would become available with the semi-autonomous Super Cruise system. With only a handful of weeks left in 2016, we now know that the Super Cruise will debut on Cadillac’s flagship CT6 sedan, but it won’t be arriving until sometime in 2017.

A lot has happened since that announcement, and GM has put a much greater emphasis on ensuring safety as a result of the massive ignition switch recall that began early in 2014. Those process changes have led to some significant upgrades to Super Cruise in an effort to avoid the issues caused by human interactions with Tesla’s similar AutoPilot driver assist system. Navigant Research’s Autonomous Vehicles report projects that by 2020, approximately 13 million vehicles with these so-called Level 2 automation systems will be sold annually.

Geofencing

In the process of evaluating the safety of Super Cruise, one of the key differences that GM has implemented is geofencing. Since Super Cruise is designed primarily as an advanced highway driving assist system for use on limited access roadways, GM is not relying on customers to understand where it does and does not function. Instead, the system will check the navigation map—if the vehicle isn’t on a suitable road, the driver will not be able to activate it. In contrast, Tesla’s operating instructions state that AutoPilot should only be used on divided, limited access roads, but there is nothing in the system to actively prevent a driver from using the system in an urban area or any other roadway that it’s not designed for.

Similarly, Tesla doesn’t really take measures to prevent operators from taking their attention away from the road. Countless videos have been posted by Tesla drivers as they take a nap, read, or even climb in the back seat while using AutoPilot. The research conducted by Bryan Reimer and the Advanced Vehicle Technology Consortium at the Massachusetts Institute of Technology reinforces the idea that even informed drivers will get distracted while using systems like AutoPilot or Volvo’s Pilot Assist.

Improving Safety

Cadillac is installing an active driver monitoring system in the CT6, which will include more prominent alerts if the operator does not remain engaged while using Super Cruise. If the driver does not respond, the car will pull to the side of the road and come to a safe stop.

GM safety engineers have also addressed the issue of the inevitable mechanical failure. When fully autonomous vehicles arrive, they will require systems that can maintain control during a failure mode until the vehicle is safely stopped. One of the key safety failure modes for a system like Super Cruise is the electrically assisted steering.

One of the optional features on the currently available CT6 without Super Cruise is the Active Chassis Package, which includes a rear-wheel steering system to aid low-speed maneuverability and high-speed stability. This rear steering system will be included on the CT6 with Super Cruise. While the rear steering is not designed to provide the same full maneuvering capability of the normal front steering, it will be sufficient to safely steer the car to the side of the road in the event of a front steering failure.

We won’t have an opportunity to fully evaluate the capabilities of Super Cruise until sometime next year, but it does inspire some confidence that GM is at least thinking about and trying to address both human and mechanical failure modes before putting the system into customer hands.

 

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