Navigant Research Blog

Ford CEO’s ‘Perfect’ Comments in Context

— December 22, 2016

EV RefuelingThe potential softening of US Corporate Average Fuel Economy (CAFE) standards that has been discussed of late has reignited the debate about consumer acceptance of electric vehicles (EVs). Under current regulation, EVs are crucial to automaker compliance strategies, but not all EVs are the same, nor are they treated similarly under the regulations. It’s an important aspect to clarify here as the debate about CAFE standards questions whether there is enough consumer demand for EVs to enable automakers to meet the standard’s targets. The administrators of CAFE, the Environmental Protection Agency (EPA), suppose it does, but some in the automotive industry disagree.

The most recent commentary provided to the debate was by Ford CEO Mark Fields, which Business Insider claimed “just perfectly summarized the biggest problem for electric cars.” Fields, in arguing there is not enough EV demand stated: “In 2008, there were 12 electrified vehicles offered in the U.S. market and it represented 2.3 percent of the industry … fast forward to 2016, there’s 55 models, and year to date it’s 2.8 percent.”

Hybrids and Plug-Ins

Fields’ data point deserves some deeper analysis. In the automotive industry, the term EV or electric car encompasses hybrids, plug-in hybrids (PHEVs), and battery electric vehicles (BEVs) because all these vehicles use electricity either harvested from vehicle braking and/or from the grid for traction. Within the design of current regulations, PHEVs and BEVs are heavily incentivized and provide far more benefit to automaker CAFE compliance strategies than do hybrids (though hybrids are an important component).

Fields’ statement is accurate when considering the entire pool including hybrids, but it does not address the demand of plug-in vehicles specifically, around which most of the debate has centered. To start, the laggardly market growth for EVs over this time period is specific to hybrids, which have contracted from the 2008 2.3% figure to 2% year to date. Of note, a vast majority of sales come from one automaker (Toyota). Meanwhile, plug-in (BEV and PHEV) sales started in 2011 and now have over 0.8% of the market year to date, and there is no one consistent or dominant market leader. Lumping all EVs together in regards to CAFE compliance is inexact when automakers are generally complaining about the requirements for plug-in EVs, which are in reality gaining market share and increasingly common among automaker portfolios, and are the vehicles which are most critical to automaker compliance.

Reasons for Decline

Given that, there are many reasons hybrid share may be in decline. One that usually gets a lot of attention is oil prices, which not only historically reduces sales of hybrids, but also has prompted a growing percentage of new vehicle sales to be SUVs and trucks (a market nearly devoid of hybrids) and fewer passenger cars. Another factor is the increasingly more fuel efficient non-EVs (due to CAFE standards), but the last and more critical reason is competition from the plug-ins themselves. Before the plug-ins arrived, hybrids were the energy efficiency leaders. Since plug-ins arrived, sales have arguably taken away from hybrids, and the impact to the overall hybrid-inclusive EV market has been relatively marginal in growing sales, which fuels the arguments for those who are critical of consumer demand for EVs.

Ultimately though, the feasibility of automaker compliance with current regulation hinges on consumer acceptance of plug-ins, not hybrids. To that effect, Fields’ data in relation to consumer demand and CAFE compliance is not perfect. Hybrids and other fuel efficiency technologies are certainly helpful but cannot be relied upon in isolation. Consumer response to battery cost and energy density improvements teased by the Tesla Model 3 and represented in the near-term BEV rollout of the Chevrolet Bolt will provide greater clarity here. However, regardless of the success these models may realize or have already realized, it is unlikely to have a significant impact on whether CAFE standards will be softened or not.

 

The New Volt: More Hybrid & More Electric

— March 9, 2015

In a somewhat ironic twist on the original and short-lived advertising tagline for the Chevrolet Volt, when the all-new second-generation Volt goes on sale this summer, it will be both more hybrid and more electric. When the first Volts arrived at dealerships in December 2010, Chevrolet promoted the extended range electric vehicle (EV) with the line “It’s more car than electric.”

That ill-conceived phrase was intended to communicate to consumers that the Volt would function just like any other car, without the range anxiety issues associated with plug-in battery-powered cars. However, the campaign came on the heels of a PR snafu during the media launch, when it became known that under certain operating conditions, the Volt functioned like other hybrid vehicles, sending a blend of torque from the electric motors and the engine directly to the wheels. Throughout the development of the Volt, General Motors (GM) had insisted that Volt wasn’t just a Prius-like hybrid but an electric car with an engine running a generator to provide juice when the battery was depleted. Within a few months, the much-criticized ad campaign was abandoned.

More Alike

When GM CEO Mary Barra revealed the 2016 Volt at the North American International Auto Show in January, she announced that the vehicle’s electric driving range would go up 30% to 50 miles and that range-extending fuel economy was expected to hit 41 mpg, an increase of more than 10% from the 2015 model. Since then, some additional details have been revealed about how the new Volt actually works, and it turns out that part of the mileage boost is achieved by making the electric drive unit work more like other hybrid vehicles.

The original Volt drive unit used two motor-generators, one planetary gearset, and two clutches to provide four different operating modes. In three of those modes, only electric power was sent to the wheels, with the higher-speed, range-extended mode supplemented by engine power, because it actually helped improve overall efficiency. The new drive unit is actually more mechanically complex than the original, although improved integration has enabled GM engineers to reduce the weight by about 100 pounds. In addition to the two motor-generators, the unit now has two planetary gearsets and a third clutch that together enable five operating modes. The new Volt also has three extended-range modes, each of which sends engine torque to the drive wheels in combination with torque from one or both motors.

At the Peak

During its gestation, the original Volt triggered a great deal of controversy among both engineers and the political class. Within months of the debut of the original concept, Toyota proclaimed that the Volt’s series hybrid layout was inferior to the parallel power-split configuration of the Prius. It now appears that GM engineers agree with that assessment. The somewhat more complex mechanism of the new Volt is closer to the way in which Toyota, Ford, and even GM’s discontinued two-mode hybrid systems work. The three hybrid modes provide the controls engineers with greater flexibility to keep the new, more powerful engine in the new Volt operating closer to its peak efficiency at all times while still providing improved performance of the old model.

Until the United States Environmental Protection Agency certifies the results sometime this summer, GM is only able to provide projections of the new Volt’s electric driving range and fuel economy. However, data collected through OnStar indicates that approximately 80% of the trips made with the 73,000 Volts sold in the last 4 years were done on electricity alone. With the electric range projected to go from 38 miles to 50 miles, Volt engineers expect drivers of the new model to complete 90% of trips without burning any gasoline, making it significantly more electric as well as more hybrid when the battery has been run down.

 

Hybrids Need a Refresh

— September 18, 2014

Worldwide sales of hybrids through August were off 9% over sales during the same period in 2013.  The drop contrasts starkly with the last 3 years, which have seen January-August sales rise 65% from 2011 to 2012 and 24% from 2012 to 2013.  While the market for hybrids is certainly not going away – 2014 sales will likely hit 400,000 by year-end – it is becoming significantly more competitive, and expansion outside of the midsize hatchback segments that hybrids crowd is just not happening.

Toyota’s introduction of the Prius family in 2012, alongside a market for plug-ins that was limited to few costly models, signaled a revival of the hybrid market.  Since then, though, plug-in makers have cut costs sharply, and the number of available models has grown considerably.  Only 1/20th the size of hybrid market in 2011, sales of plug-ins are now one-quarter of hybrid sales.  Meanwhile, the difference between hybrids and conventional gas- and diesel-powered vehicles in terms of fuel economy is shrinking.

Weight Loss

Driven by Corporate Average Fuel Economy (CAFE) standards, automakers are introducing vehicles with stop-start systems that are already widely popular in Europe and have significant weight reductions through materials engineering and engine downsizing.  Tracked by the University of Michigan Transportation Research Institute (UMTRI), the average new vehicle sold in the United States hit 25.8 mpg last month ‑ 5 mpg higher than the 2008 average.

All of this means that, for new hybrids to succeed, they must show significant fuel economy savings over conventional competitors ‑ and at a price point significantly lower than plug-in rivals (minus government subsidies).  Or they must be new: they have to fill a segment outside the densely populated small hatchback or offer cutting-edge technologies that can grab some of the spotlight that Tesla, Nissan, BMW, and Chevrolet eat up with each new plug-in electric vehicle (PEV) introduction.

Ford has announced it will introduce a new dedicated hybrid – another small hatchback — to compete with the Prius in late 2018, and industry sources believe that Hyundai may also soon join the fray.  But the wisdom of these introductions is questionable if current trends continue.  Breaking into the cross-over market, as plug-ins are poised to do next year with the Model X and Mitsubishi Outlander PHEV, would do much to keep hybrids relevant.  Bringing a diesel hybrid over from Europe would also help capture car buyers’ imaginations.

 

Improving the Performance of Hybrids

— April 23, 2014

The fundamental goal of a hybrid powertrain is to improve fuel efficiency by recovering kinetic energy from the vehicle as it slows down and storing it to reuse later.  Traditional vehicles convert that energy to heat in the brakes and then let it disperse into the atmosphere.  Hybrid electric vehicles (HEVs) generate electricity via an electric motor and store it in batteries or ultracapacitors.  The resistance of the motor slows the vehicle.

An understanding of how the hybrid powertrain works is helpful for drivers who wish to maximize their efficiency on the road.  Being careful not to accelerate too hard and slowing down steadily without using the foundation brakes are techniques that have been used since HEVs first went into production in the late 1990s.  As they became more popular, some original equipment manufacturers had to deal with complaints from drivers who didn’t achieve the promised fuel economy.  Some of the deficit was due to driving technique – if you hit the brakes hard when driving, then the regeneration cannot take place and energy will not be saved for reuse.

Hills Ahead

The basic hybrid system will deliver more fuel economy benefits to drivers who understand how to get the most out of it.  But there are limits.  Once the battery is fully charged, no more energy can be stored and the vehicle is then no more efficient than its conventional counterpart.  It’s very difficult for a driver to work out how to get around this limitation.

However, Mercedes-Benz has done just that with its latest Intelligent HYBRID operating system, which was introduced in the S-Class in summer 2013 and is now available in the new 2014 C-Class.  These cars use data from their navigation systems to look ahead for hills.  When the vehicle detects a downhill stretch coming up, it knows that the hill presents a good opportunity to capture energy, so it activates the electric motor to start draining the traction battery.  Taking more of the power from the electric drive means that the engine uses less liquid fuel, improving fuel economy.

This advanced technology is a first for the consumer market.  Another application that uses the latest digital map data is Audi’s adaptive headlight system, which can anticipate upcoming curves to better illuminate the road ahead without dazzling oncoming vehicles.  Continental’s eHorizon system optimizes gear shifting to best handle the upcoming terrain.  Mercedes is the first to offer map-based efficiency technology in consumer vehicles.

These innovations will undoubtedly benefit vehicle owners by delivering improved fuel economy in real-world usage.  However, the standardized tests used by government agencies to help consumers compare vehicles are unlikely to register an improvement because they do not include going up and down hills and are typically conducted on a chassis dynamometer, or rolling road.  Another reason to reevaluate how comparison testing is done.

 

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