Navigant Research Blog

Transit Agencies Are Positioned to Shape the Commercial EV Market

— July 5, 2018

Commercial EVs (CEVs) have received a lot of attention recently and are a topic of great interest for many fleet owners and managers who are looking to meet sustainability and emissions standards, as well as the reduced costs. Traditional truck manufacturers like Daimler and Navistar, and newcomers Tesla and Thor all have plans for commercial electric trucks. In addition, electric bus manufacturers such as Proterra, Volvo, and BYD are getting more and more new orders as the demand rises for cleaner, sustainable, and lower total cost of ownership transportation options.

CEVs face similar challenges of the passenger EV—the classic chicken and egg of whether vehicles or charging infrastructure will come first? To make the matter more complicated, charging infrastructure for CEVs will be critical for their use case. Since many CEVs will require substantially larger capacity battery packs, new charging infrastructure will be required to provide charging at significantly higher energy levels. The downtime spent charging must be minimized if CEVs are to be a viable alternative over their internal combustion engine counterparts. That being said, what might the future of CEV charging look like?

Charging Standards Key to Unlocking CEV Potential

The commercial vehicle market has lower production volumes than the consumer market. Because of this, proprietary charging infrastructure systems in use today may prove economically challenging for growing the market of CEVs. While proprietary charging standards like Tesla’s Supercharger network, which limits use to only Tesla vehicles, may be feasible, they are not desirable to anyone but the manufacturer. In addition, the use case for CEVs already faces an uphill battle to justify the costs for a higher capacity fast charging infrastructure for use by a vastly smaller quantity of vehicles—even more so if this fleet is divided by requiring different charging hardware.

It’s not hard to imagine a fleet owner evaluating the electric bus market and deciding they would rather wait rather than potentially buy new buses and charging infrastructure that may prove to be incompatible with future purchases. A unified charging standard will unite the overall fleet and strengthen the business case for all CEVs.

Transit Agencies Are Large Enough to Influence the Developing Market

Transit agencies find themselves with a unique opportunity. Having large fleet sizes and motivations to be some of the earliest adopters of CEVs, transit agencies can throw their weight around and direct the evolution of the CEV market through demand for industrywide charging standards.

Bus manufacturers are beginning to move in the right direction. Last year, Proterra announced that all new buses would use open standards moving forward—J3105 for overhead fast charging and CCS for depot charging. Other bus manufacturers have made similar announcements, with Volvo committing to OppCharge, the European alliance for standardized overhead charging.

Josipa Petrunic, CEO of the Canadian Urban Transit & Innovation Consortium (CUTRIC), highlighted the importance of charging standardization at the TU Detroit conference in early June, as well as CUTRIC’s projects to unite competing manufacturers for the success of the CEV market. As transit agencies develop strategies to electrify their fleets, they should be cognizant that they are shaping the future of CEVs. By demanding their new fleets and charging infrastructure be compatible across multiple manufacturers, agencies are protecting themselves from being abandoned by manufacturers leaving the market and insuring their products are more future-proof as technologies develop and charging capacity inevitably increases.


Steady Improvements Crucial to Building Better Batteries

— June 28, 2018

As the quest for creating a better battery looms, advanced battery research firms and manufacturers are looking for the best ways to optimize their technologies to meet the energy storage applications of the future. Navigant Research believes that focusing on incremental improvements to advanced batteries will be the best path forward in the near term. Doing so presents a logical roadmap that allows companies and research agencies to achieve realistic results.

Pack Configuration Doesn’t Get Enough Attention

While much research has gone into the active components of the battery (i.e., the electrode and electrolyte materials), an important feature of the cell that is often overlooked is the pack configuration. Having an optimized cell design based on the desired use case of the battery can increase the cell’s efficiency by up to 23% that utilizes the same chemistry. As lithium has the tendency to swell during charge/discharge cycles, the enclosure must be robust enough to endure mechanical strain and maintain structural integrity. There are currently three main cell configurations:

  • Cylindrical: Components are encased tightly in a can. Often used in smaller electronic applications, but can be manufactured more quickly relative to other cells.
  • Prismatic: Electrodes are flat, and require slightly thicker walls compared to cylindrical cells to compensate for decreased mechanical stability. These cells are great to maximize space utilization.
  • Pouch: Has the most efficient packing structure of all cell designs and can achieve up to 95% space utilization. The pouch’s tendency to swell discourages use in certain applications and environments.

All three battery cell formats have strengths and weaknesses. The choice between pouch and cylindrical cells is still a matter in progress; Navigant Research expects cylindrical cells and pouch cells to be the most economically feasible with respect to energy density. This consideration is important, particularly in motive applications.

Stability Is Crucial for Continuing Battery Innovation

Advanced battery OEMs are taking competing strategies to tackle EV battery pack related issues. While Tesla has reported high power and energy density of its cylindrical NCM batteries, Korean battery giant SK Innovations is working on its enhanced NCM 811 battery cells in prismatic form. The industry standard for NCM batteries has been 622 (i.e., 60% nickel, 20% cobalt, and 20% manganese); NCM 811 cells are achieving higher densities, translating to up to 700 km on a full charge (~75% increase over NCM 622 cell stacks), but they fall short in terms of thermal stability and safety. SK Innovation plans to integrate its NCM 811 battery in the Kia Niro EV by 2020; it is advertised to have approximately 500 km of range and battery of over 70 kWh.

Other Battery Development Goals

LG Chem is working to deliver a cylindrical NCM 811 battery before SK Innovation, saying that it will have these cells deployed in electric buses in 2018. The company upgraded the Renault Zoe’s battery capacity up 76% while maintaining the same volume and slightly increasing the weight of the pack.

Panasonic also made improvements to its prismatic cells through construction changes. The 2019 Ford Fusion Energi PHEV received a 18% boost in energy capacity from 7.6 to 9.0 kWh. The pack is the same size with the same number of cells and unchanged chemistry, but the separator thickness inside the cell has been reduced. This allows more electrode layers inside each can, and consequently more capacity.

Remember the Big Picture

As companies continue to execute on their technology roadmaps, Navigant Research urges them to look not only at the battery chemistry, but the implications of the cell and pack design on the performance of the system. Doing so will reduce costs, help achieve higher power and energy, and allow for faster innovation across all technology product offerings.


E-Bike Sales Climbing in Major European Markets, US Lags Behind

— June 26, 2018

Increasing urbanization and the rising costs of personal vehicle ownership are creating opportunities for alternative mobility options. Electric bicycles (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 or the associated hassles of parking, and can take advantage of existing bicycling infrastructure.

The European Market Is Rapidly Expanding

Over the past 2 years, e-bikes sales have grown considerably across major markets in Europe as commuters ditch their cars for electrified two-wheelers. A combination of government policy, urbanization, improved product offerings, and expanded bicycling infrastructure has led to e-bikes regularly replacing bicycle purchases in Western Europe. E-bikes are evolving from a specialty commuting or recreation device to a standard bicycle form that is accessible to nearly all bike consumers.

E-Bike Unit Sales, Select European Markets: 2016-2017

(Source: Navigant Research, Bike Europe)

As shown in the table above, Germany continues to be the largest e-bike market in Europe. Navigant Research expects the country to top 1 million annual sales within the next 2-3 years. France achieved by far the highest year-over-year growth of the four countries. E-bikes sales expanded by a whopping 90% in the country in 2017, largely due to the government’s introduction of a €200 ($230) e-bike purchase subsidy. Italy’s e-bike sales surged 25% on the back of increased electric mountain bike sales (estimated to account for 65% of total e-bike sales in the country). Historically a laggard in the region, the UK saw solid growth of 22% for 2017 e-bike sales.

US Still Lags behind Europe, but Potential Remains

North America continues to trail Europe considerably in e-bike sales, largely due to lower gasoline prices and consumer awareness, combined with relatively poor bicycling infrastructure. Nevertheless, market conditions are improving, and the Light Electric Vehicle Association estimates that about 260,000 e-bikes were imported to the US in 2017—a modest gain (10%-15%) from 2016 import figures. Of course, imports are different than sales; after conducting interviews with the major e-bike manufacturers in the region, Navigant Research found that slightly over 150,000 e-bikes are expected to be sold in the US in 2016. For more information, reference Navigant Research’s 2Q 2016 Electric Bicycles report.

Lessons from across the Pond

The global e-bike market is expected to be a strong area for investment. The US still has substantial long-term potential due to its enormous bicycle market (roughly 16 million sold per year); however, the country’s current e-bike penetration rate of 1%-1.5% is quite low. There is much the US can learn from countries like Germany, where e-bikes already have a market share of roughly 20% of the total bicycle market. Much of Germany’s success can be attributed to the comprehensive and dedicated bicycling infrastructure in the country. For example, bicycle highways under construction in Germany will eventually span 62 miles of roadway, connecting 10 cities and 4 universities. It is estimated that this will remove 50,000 cars from the road every day. The highways in Germany are 4 meters (13 feet) wide, have several bike lanes, are well lit, and are cleared of snow in the winter. The construction of bicycle highways in North America would go a long way toward increased commuting by bike and e-bike sales. E-bikes help commuters travel longer distances and easily conquer hilly terrain, advantages that work in unison with expansions in bicycling infrastructure to help more commuters make the switch from cars to cycling.


The Rise of Connected Vehicles Is Changing the Approach to Vehicle Maintenance

— June 14, 2018

In late April, I attended the Advanced Clean Transportation Expo in Long Beach, California. One of the main themes at the Expo was how the penetration of Internet of Things (IoT) technologies enhances commercial vehicles. Currently, commercial vehicle maintenance is preventative; meaning maintenance is scheduled to occur after some interval of mileage or time, and whenever an engine light notifies a driver that maintenance is needed. However, with the increasing application and prevalence of connected sensors throughout vehicles, fleet owners are shifting away from the traditional approach to maintenance.

From Interval Maintenance to Maintenance On-Demand 

As more vehicles become connected and as more sensors are added to track more parts, there is a shift away from preventative maintenance toward new models.

Vehicles equipped with connected sensors are already enabling changes to the maintenance chain. OEMs have begun using telemetry data to offer remote diagnostics services for fleet managers who own vehicles with connected sensors. Remote diagnostics can enhance vehicle maintenance by providing real-time analysis of engine fault codes and other component issues to enable faster, more informed maintenance. However, these remote diagnostics tools are often reactionary in nature, and work alongside preventative maintenance strategies. And for fleet managers, the holy grail of connected vehicles is predictive maintenance.

Using connected vehicle sensors, predictive maintenance would enable fleet managers to stay on top of maintenance requests and fix parts before they fail. By aggregating telemetry data collected from a vehicle fleet and correlating it with component failure history, predictive models can be built that project the service life of components. As the real-time data of components, such as the starter battery or brakes, begins to resemble what happens leading up to a failure, the vehicle can be serviced before it needs unscheduled downtime. This enables fleets to reduce their vehicle downtime and reduce costs by avoiding catastrophic maintenance events. As fleets become more reliant on predictive maintenance and vehicles come equipped with more sensors to track most—if not all of—a vehicle’s components, there will be less need for preventative and scheduled maintenance to take place.

The Future of Predictive Maintenance and IoT

IoT technologies are also expanding into the connected vehicle space. Edge analytics of vehicle components, in particular, will be hugely impactful on fleet management. Currently, most of the telemetry data gathered for remote maintenance is not analyzed at the point of data collection (also known as the edge). Rather, much of the remote diagnostics data analysis happens in the cloud. As vehicle component sensors become more advanced and IoT-enabled, more of the data analysis used for remote diagnostics and predictive maintenance will occur at the edge by embedding the lifecycle models that were developed in the cloud from aggregate data. As the number of sensors on each vehicle grows and becomes more sophisticated in collecting data, so too will the volume of data grow. Moving large amounts of data will become a consideration in the costs of real-time analysis. A shift toward edge maintenance, where the analysis used to make maintenance decisions happens at the sensor, will reduce the amount of data needing to be sent to the cloud.

These changes will require the status quo of vehicle maintenance to change over the next 5-10 years as the technology continues to penetrate the vehicle population and as fleet managers realize the added value in such services. Stakeholders on the maintenance side and those upstream will need to adapt to new business models where predictive and edge maintenance replace current business models that revolve around scheduled and catastrophic maintenance. These new maintenance models may have to become more integrated with other platforms to remain competitive with their service delivery and parts availability.


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