Navigant Research Blog

The Race to Control the Automated Vehicle

— June 14, 2017

Since the birth of the automobile, manufacturers have raced to claim the most power and best performance. The continuing evolution of the internal combustion engine has been a key component in that competition. That’s all about to change. As we begin the transition to automated and electrified vehicles that are programmed to obey speed limits and play nice with other road users, the performance benchmark for satisfying those in the vehicle shifts from the propulsion system to the computing platform, with both old and new players trying to grab a slice of the prize.

The situational awareness needed by highly automated vehicles (HAVs) requires data from sensors and communications links to be fused into a coherent, real-time 3D image of the space around the vehicle. Current semi-independent systems such as stability control, adaptive cruise control, and lane keeping assist each use discrete sensors, electronic control units (ECUs), and related software. More limited feature set and sensor inputs allow them to work with relatively low powered processors by modern computing standards.

Old Processors Aren’t Good Enough

Those aging, low power processors simply aren’t up to the task of managing HAVs. Thus, we have the integration of these systems under a single umbrella computing platform with more input signals than ever. During early development of automated driving, vehicles were packed full of server racks to handle the necessary processing. Production viability requires that to be condensed down to a much smaller package that consumes far less electrical power than the kilowatts used by those servers with reduced heat generation.

Best known for its graphics processors used in video games and editing, Nvidia has grabbed headlines with its Drive PX2 development platform. At just $10,000, this is an ECU for automated driving development utilized by many of the companies working in this space. It is currently too expensive for mass production. At the 2017 CES, supplier ZF announced that it would commercialize this platform as the ProAI ECU in 2018. Bosch made a similar announcement in March, but it will use a repackaged version that combines the graphics processing unit (GPU) and CPU into a single unit. Toyota recently announced that it too would use the Nvidia platform.

Intel Is Continually Making Strategic Acquisitions

Meanwhile, Intel is moving aggressively to expand its footprint in the HAV space. In 2016, BMW announced that it was building its automated driving technology using Intel CPUs and chips from Mobileye for sensor processing. Supplier Delphi is using the same combination with its own software in its multi-domain controller ECU. The current market leader in vision systems for lane keeping assist and collision warning, Mobileye’s next-generation chips are considered so capable that Intel decided to acquire the company for $15 billion. This follows Intel’s 2015 acquisition of Altera for its powerful field programmable gate array (FPGA) processors. Combinations of Intel CPUs, Altera FPGAs, and Mobileye sensor processors are now being made available to manufacturers as the Intel Go platform.

The traditional automotive chip suppliers don’t intend to be left out of the competition either. NXP, which was spun off from consumer electronics giant Philips, acquired Motorola spinoff Freescale in 2015 and is currently in the process of being acquired by Qualcomm as part of a larger effort to power HAVs. Japanese supplier Renesas already provides processing power for many driver assist systems and wants in on the HAV action as well.

With performance, reliability, and thermal management more important than ever in HAVs and the market projected to grow into the tens of millions of vehicles annually by the late 2020s, don’t expect to see any slowdown in the evolution of these computing platforms anytime soon.

 

Cities Taking Steps to Charge Up EV Sales

— June 9, 2017

Urban areas with air quality concerns are promoting the use of plug-in EVs (PEVs) as a way to reduce greenhouse gas emissions. By investing in EV charging infrastructure, cities such as New York City, Seattle, and Boulder are hoping to allay residents’ fears of not having a place to recharge their vehicles.

New York City is emphasizing fully emissions-free driving by installing charging stations that get their energy from the sun. The city recently ordered more than 30 solar-powered charging stations from Envision Solar, the manufacturer of EV ARC units that fit within the footprint of a typical parking spot. The parking-constrained city is ordering the charging stations to provide power to New York City’s fleet of PEVs, which will likely grow by 1,000 vehicles in 2017.

Seattle to Add Light and Charge

The city of Seattle is leveraging its street light infrastructure for expanding EV charging. The city will install 100 of BMW’s innovative Light and Charge systems, which tap into the power of street lights. The Light and Charge system is part of BMW’s ReachNow mobility service that was initially piloted in Munich and is being brought to the United States for the first time.

The system will include both direct current (DC) fast chargers and Level 2 charging and will be placed at up to 20 locations, including the Woodland Park Zoo, where the first Light and Charge systems are now up and running. The smart street lighting Light and Charge technology also includes upgrades to more energy efficient LED lights, as well as sensors for monitoring the environment and a connection to the cloud for sharing data.

Big Charge in a Little City

The much smaller city of Boulder, Colorado is more than doubling its EV charging station capacity to 46 units in 2017. The city is using a $100,000 grant from the Regional Air Quality Council to upgrade its existing charging stations at recreational centers and other locations, as well as to add new stations.

Boulder is awash in Nissan LEAFs thanks to the progressive actions at the Boulder Nissan dealership, which is one of Nissan’s largest sellers of PEVs despite the city’s smaller population (about 100,000). The city is helping to educate residents about the economics and operational benefits of owning a PEV through the EnergySmart program. The unique EV advising service provides an advisor to talk residents through understanding the ins and outs of tax rebates, accessing charging infrastructure, and integrating EVs with home solar charging.

PEVs Charging Ahead

As seen in the chart generated by Navigant Research’s new Electric Vehicle Forecasts data service, the efforts that these cities are taking today will pay off in coming years and contribute to greater sales of PEVs. Annual sales of PEVs in Boulder, New York City, and Seattle are expected to grow by more than 800% to nearly 148,000 units between 2016 and 2025, according to Navigant Research.

Total Sales by Powertrain, Scenario, and Year: 2016-2025

(Source: Navigant Research)

Speakers from all three of these cities (myself included) will be discussing EVs and urban mobility solutions at the upcoming EVRoadmap Conference in Portland, Oregon. The annual event, which will be held June 19-21, has become the most important EV conference in the United States. EVRoadmap will feature speakers from across the globe and program tracks on cars, charging, and community.

 

Beyond Ultra-Fast Charging: Part 2

— June 1, 2017

The potential of automated drive has produced many a report theorizing about the likely impacts of automated drive technologies on the transportation system, the built environment, and more generally, society. Navigant Research is no stranger here; however, our tack is far more conservative than some others. The basic theory most of these reports (including ours) supports is that automation adopted primarily in passenger mobility schemes will drastically reduce transportation costs and increase passenger convenience. This leads to more transportation overall with higher dependency on automated light duty vehicles, but also less use (proportionally) of alternative transportation modes (bike, bus, rail, air, etc.).

The above means that automated vehicles are likely to be highly utilized and therefore automated mobility fleet managers are likely to desire durable vehicles with limited downtime for maintenance or refueling. To be competitive for automated services, battery EVs (BEVs) would have to rely on ultra-fast charging, which would make batteries less durable. Otherwise, they would require more advanced battery systems or significant increases in battery size (to bring charge rate [kW] and battery capacity [kWh] closer to a 1:1 ratio), either of which makes them more expensive.

More Pollution Regulations Are in the Future

At the same time, cities (where automated mobility services are likely to emerge) will probably adopt regulations limiting polluting vehicles within certain geographic boundaries. If they don’t, the ultimate impact of automation is likely more fossil fuel consumption. In such an environment, plug-in hybrids (like those employed by Waymo) may have the upper hand. Alternatively, this could be an opportunity for battery swapping.

Battery swapping notably has a poor record, but many of the barriers to battery swapping as a solution for the passenger BEV market don’t apply with automated mobility fleets. Battery swapping in part failed as a global strategy because it depended on OEMs agreeing on a common battery pack. In a managed fleet with vehicles from a single OEM, this is no longer a problem.

Is Battery Swapping the Answer?

Battery swapping solves reliability concerns, as the charge rate can be managed to optimize life and the battery can be enrolled in revenue generating grid services when off the vehicle. This would also make transportation electrification’s impact on the grid gentler. Additionally, swapping is a faster solution than the fastest wired or wireless charging solution and (as Tesla showcased) faster than liquid or gaseous refueling.

The last advantage is that in fully automated services, range is not as big of an issue as it is when there is a human driver. Theoretically, battery swap packs could be built smaller and added to the vehicle in increments to satisfy certain uses. As an example, instead of having two or more 200-mile battery packs per vehicle, managers could instead employ three or more 100-mile battery packs, which would further reduce overall system costs and risk.

It will be some time before such a solution might be employed. It is a later consideration in the evolution of mobility automation business models. The priority considerations are the development of the automated drive technology itself and the regulations to permit driverless vehicles. It is likely that initial services will leverage conventional refueling and/or recharging infrastructure until reliable business models have been produced. After that development, then competition within mobility services will drive such innovations.

 

Ford’s Big Management Shuffle Is About Changing Perceptions

— May 23, 2017

It is often harder to be a century-old company with a record of profitability than it is to be a young one with potential. This sums up the difference between legacy automakers like Ford and Tesla. With only two profitable quarters in its 14-year history, Tesla’s most recent resulted from strategic timing of paying bills and delivering cars. Meanwhile, Ford—despite periods of losses over its 114-year history—has generated immense profits, including records in the past 2 years. Nonetheless, Tesla is the darling of Wall St., while now former Ford CEO Mark Fields and communications VP Ray Day lost their jobs over the weekend.

In the 3 years since Fields succeeded Alan Mulally, the company’s stock price has dropped more than 35% despite record profits. Pre-tax 2017 profits are projected at $9 billion, which is more than Tesla’s total 2016 revenue of $7 billion. Yet, Tesla’s market cap recently topped that of both Ford and General Motors (GM). Clearly, the markets are placing their bets on the perception of where these companies are going in the coming years rather than on the fundamentals of each business.

Fields has been on point in Ford’s effort to be perceived as a forward-thinking technology company since his 2007 CES debut with Microsoft founder Bill Gates to announce SYNC. Even with repeated Las Vegas keynotes by Fields and Mulally and countless investments in developing automated driving and mobility services, investors perceive Ford and other companies that manufacture and sell physical objects as laggards compared to software startups.

Ford isn’t alone in this perception battle. Most automakers are making the pilgrimage to CES to woo the tech community. While few have been hit as hard as Ford, none of the incumbents are getting the love shown to Tesla.

In our Navigant Research Leaderboard Report: Automated Driving, Ford, GM, Renault-Nissan, and Daimler scored highest and ahead of several technology companies. Waymo is arguably somewhat ahead on the pure technology front, but automakers have necessary pieces such as manufacturing, service, distribution, and support infrastructure to make viable mobility businesses. Additionally, automakers have a proven ability to deliver physical products—not just the components and software that control them.

Ford’s leadership team, including Executive Chairman Bill Ford, EVP Joe Hinrichs, CTO Raj Nair, and many others, all supported the direction the company was heading under Fields. However, investors didn’t seem to believe in it.

During a press conference with new CEO Jim Hackett, Ford and Hackett both emphasized that the overall strategy of transformation into a mobility services company is moving full steam ahead. Hackett, who comes to the role from being chairman of Ford Smart Mobility LLC, aims to reinforce the strategy and focus on executing the plans. The elevation of Marcy Klevorn from CIO to EVP and the newly created role of President, Mobility highlights this ongoing commitment.

While Hackett’s success or failure won’t be evident for several years, Ford still needs to change investor and public perceptions to boost its stock price and the sales of vehicles it has today. That challenging near-term task falls to Mark Truby, who moves over from Ford of Europe to replace longtime PR chief Ray Day. Day and his team have had successes on the product communications front, but changing the overall perception of the company among investors who have favored high flying tech stocks has been elusive. Whether Truby or anyone else can succeed will be crucial.

 

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