Navigant Research Blog

Ford Goes All-In on Trucks, Utilities, and Hybrids

— March 16, 2018

At January’s North American International Auto Show, almost all of the significant product announcements were about new pickup trucks and SUVs from Ford, General Motors, and Fiat Chrysler Automobiles (FCA). Maintaining sales of those high margin vehicles will be crucial to funding the development and introduction of new and often pricey electrified propulsion and automation technologies. This week, Ford executives led a briefing at the company’s product development center where they provided more details on how they plan to handle that transition.

Core to Ford’s revamped product lineup is a range of new SUV nameplates as the company shifts away from passenger cars. The subcompact Fiesta will likely be discontinued from the North American lineup and Focus sales have dropped to a level where the next model for North America will imported from China. By 2020, Ford expects 86% of its sales in North America to come from trucks and utilities.

That doesn’t mean Ford is giving up on fuel efficiency. Quite the contrary. Ford intends to become the hybrid market leader in North America by 2021, overtaking Toyota. While Toyota is most associated with hybrid technology, Ford introduced the first hybrid SUV in 2004 and plans to leverage this position to offer hybrid or plug-in hybrid powertrain options on every utility model from the Ford and Lincoln brands. That’s in addition to the 300-mile range battery electric crossover it will launch in 2020.

Selling Performance and Power

FCA is branding its mild-hybrid system as eTorque on Jeeps and Ram pickups and marketing based on performance enhancement. Since most North American customers show little interest in green vehicles, Ford wants to appeal to them by using electrification to boost capability and speed. While most details aren’t yet available to the public, previous announcements give a clue as to where Ford is going. The automaker has talked repeatedly about its new F-150 hybrid having a power take-off capability that will enable contractors to get power for their tools without needing to carry a generator. Similarly, the upcoming Mustang hybrid will use electrification to enhance performance and efficiency.

Ford is not sharing many technical details of its next-generation hybrids yet, but most are expected to be high voltage systems that can also support plug-in capability. The automaker is already one of the top purveyors of plug-in hybrid systems; it has sold nearly 100,000 Fusions and C-Maxes with a plug since they were introduced in 2012.

Even the electric crossover will be targeting a more premium customer than something like today’s Escape or Edge. With hints of its 300-mile range and performance at the auto show, Ford President of Global Markets Jim Farley positioned this vehicle as a melding of the desire for crossovers with the passion the Mustang inspires in some customers.

So Why the Massive Shift from Cars to Trucks?

It’s all about the money. Farley explained that since the current-generation F-150 debuted in 2014, average transaction prices have jumped $6,700 while the new Expedition SUV that debuted last year is getting $11,000 more per sale. The F-150 alone generates $41 billion a year in revenue and a significant chunk of Ford’s profits.

In 2015, when Farley was still president of Ford of Europe, he discussed the burgeoning market there for crossover utilities, with many of the offerings being less truck-like. While details of the seven new Ford and Lincoln utilities are still under wraps, a similar segmentation is expected in North America, replacing many of the soon-to-be outgoing car models. It’s too early to tell if the automaker can overtake Toyota in total hybrid sales, but Ford is making a strong push.


A Humble Pickup Bed May Point to the Future of Mobility as a Service

— March 13, 2018

The US auto market is no longer the largest in the world, having been surpassed by China. However, it does lead the world in one thing: pickup trucks—no one loves a large pickup truck the way Americans do. While many may consider the pickup truck a crude, agricultural implement, over the past two decades it has become anything but. The debut of the redesigned 2019 GMC Sierra brings with it a fascinating new bit of tech that may well play a key role in the future of mobility as a service applications.

The humble pickup bed would seem like one of the last places you would look for cutting edge technology, after all, it’s just a box, right? At January 2018’s Detroit Auto Show, Chevrolet introduced the new 2019 Silverado pickup with a reconfigured bed that gave it a 20% cargo volume advantage over its competitors. In March, General Motors’ (GM’s) premium truck brand, GMC, launched its version of the Sierra with an optional carbon fiber cargo box.

Breaking the Mold

Carbon fiber has been used in many high performance vehicles for its combination of high strength and low weight, but its cost and manufacturing challenges have largely kept it out of mainstream vehicles. The highest volume applications to date for carbon fiber have been on the BMW i3 and i8 plug-in EVs. However, while BMW and its carbon supplier SGL have made advances in bringing down cost and improving reparability, they continue to use the same fundamental process that has always been used for making parts. That process lies down a woven carbon fiber matte in a mold infused with plastic resin and is then cured in a large autoclave to produce rigid thermoset components. This process has a cycle time of 45 minutes or more.

GMC and supplier Continental Structural Plastics are breaking the mold by using a sheet molding compound (SMC) process that replaces the glass fibers that have long been used with carbon fibers. Rather than a large woven matte that requires long, costly strands of fiber, SMC infuses the plastic resin with millions of short strands that are about 1-inch long. An SMC carbon fiber panel can be also be produced in about 1 minute and requires no autoclave curing. GMC showed a video of a carbon fiber pickup box being subjected to the sort of abuse a work truck goes through and it survived with no issue.

Thinking Outside of the Box—Environmental Impacts from SMCs

While it is great that GMC has a pickup box that saves 62 pounds over the steel equivalent and should be more durable, there are perhaps more important long-term implications of this new material technology. For instance, SMC could be incorporated into GM’s aggressive commitment to both zero emissions and automated vehicles. Automated vehicles are expected to be primarily utilized in mobility as a service (MaaS) applications, where vehicles will have much higher utilization and potentially shorter service life. Rather than scrapping MaaS vehicles every 3-4 years and expending energy to build replacements, a new vehicle architecture that utilizes carbon SMC structures with replaceable and upgradable components could prove to be far more efficient.

Navigant Research’s Mobility as a Service report projects 7.8 million automated MaaS vehicles could be deployed in 2026. If these vehicles can utilize a lower cost from a durable carbon fiber SMC structure, they could potentially remain in service for 2-3 decades with regular updates to propulsion, battery, sensing, and computing systems. When the SMCs eventually have outlived their usefulness, they can be ground up and remanufactured into something new.

Today’s trucks are test beds for new technology and the profits from their sales fund the development of tomorrow’s advanced vehicles.


Urban Automated Vehicle Deployment Needs Coordination

— March 8, 2018

There’s little doubt that ride-hailing as a means of urban transportation is on the rise, and that trend is expected to continue unless something dramatic changes. Urban congestion is also on the increase globally. While there is a clear correlation, causation is still open to some debate—although studies seem to indicate that ride-hailing is at least partly to blame.

As of early 2018, there are probably no more than 1,000 highly automated vehicles (HAVs) being tested on the public in cities around the world. Those tests are going to start turning into commercial applications for ride-hailing possibly as soon as later this year, and before these vehicles proliferate, we need to have the conversation about how to integrate these vehicles without exacerbating the congestion problem.

What Will Entrepreneurs Do?

Left to their own devices, we already know how entrepreneurs, especially those backed by mountains of Silicon Valley cash, are likely to deal with this. They will rush as many vehicles as possible into the marketplace (primarily, in densely populated cities) in order to establish a dominant position early. This has happened in many areas of the technology sector, and it certainly has been the strategy of Uber and Lyft.

Is Ride-Hailing the Future?

Navigant Research’s Mobility as a Service report projects that, by 2026, ride-hailing services will be providing more than 160 billion rides annually and with nearly 1 trillion vehicle miles traveled.

From a consumer perspective so far, ride-hailing has been a huge boon, providing convenient access to rides at reasonable prices (except during rush hour and inclement weather). While I don’t use ride-hailing at home, I haven’t rented a car during a trip in many years and I rarely take traditional cabs. The convenience factor often makes it a great alternative to traditional transit.

Ride-hailing companies claim that for each of the vehicles deployed on their platforms, they replace multiple individually owned vehicles, which should reduce congestion. However, often these vehicles are without passengers as drivers wait for a ride request. To provide short wait times for customers, the companies entice more drivers with higher fares via surge pricing. While this makes sense economically, it also puts more cars on the road at times of high demand, increasing congestion. Also, the platforms have no control over where drivers choose to deploy themselves.

What Is the Potential for HAVs?

HAVs provide an opportunity to address the problem of urban congestion, but only if they are deployed in a coordinated fashion that is probably anathema to those of a more libertarian bent in the tech industry. Nonetheless, cities are going to need to step up and play an active role in shaping deployment plans for HAVs, and companies involved in the sector are going to need to cooperate.

Any regulatory frameworks need to allow for enough flexibility for multiple companies to compete with services and retain the potential to be profitable. At the same time, service providers need to be prepared to share enough data to enable the optimization of the mobility ecosystem so that excess vehicles are kept to a minimum while still meeting the needs of residents.

However, not every resident is going to be able to afford to take an HAV for every trip. A multimodal ecosystem with a range of vehicle types and operational models from point-to-point to fixed-route mass transit will persist. To the degree possible, trips should be optimized with the use of whatever mode makes the most sense. The HAVs should also be optimized to keep empty trips to a minimum, which will benefit everyone by reducing congestion and maximizing profitability.


Gas-Sipping Nissan Makes Argument for Driving Electric

— February 27, 2018

Built for the Japanese market, a Nissan car with a gasoline engine is unwittingly making one of the best arguments for driving electric. The Nissan Note e-Power, which uses an electric motor to drive the wheels 100% of the time, has received high praise from consumers for its “exhilarating acceleration.”

According to Automotive News, 65% of Japanese customers paid for the premium feature of an electric drivetrain, which also yields a fuel economy rating of 77 mpg based on the Japanese test cycle. Based on the highly positive response, Nissan will bring the e-Power electric drive system to the US in the near future, potentially showing up first in the luxury Infiniti brand.

The e-Power system is effectively a range extender, with similarities to the BMW i3 or Chevrolet Volt architecture, using a small three-cylinder, 1.2 L gasoline engine as a generator to charge a 1.5 kWh battery that powers the 80 kW electric motor. The electric drivetrain of the Note is not as robust as the battery-electric LEAF (40 kWh battery and 110 kW motor), but it is well ahead of the Nissan Rogue hybrid (0.8 kWh/30 kW). The Note is more akin to operating like a hybrid diesel locomotive than a plug-in EV.

Nissan e-Power System Architecture

(Source: Nissan)

Smooth acceleration and immediately available high torque are among the hallmarks of electric driving performance, which lead to an experience that is “…emotional and fun to drive,” according to Philippe Klein, Nissan’s chief planning officer. EV drivers are happily familiar with these performance benefits, which have also led to industry-leading customer satisfaction scores for Tesla and high marks for many EVs.

Yet in the same issue of Automotive News, Editor Keith Crain wrote an opinion piece questioning the viability of electric cars. Automakers’ plans to release massive numbers of EV models “…must be based on research that none of us have seen up to now. Just look at the number of EVs that have been sold to date and you wonder who is going to buy all these newly powered cars, trucks, and SUVs,” wrote Crain.

Although there are many factors that are holding back sales of EVs (e.g., limited model availability, reduced driving range, access to charging infrastructure), according to consumer surveys from Navigant Research and others apathy about the driving experience is clearly not one.

Charging Ahead

Nissan is electrifying most of the Infiniti lineup starting in 2021, as are several other automakers—such as Volvo with the Polestar brand—to both meet government regulations and address the growing audience for zero emissions vehicles.

Using a gas engine as a range extender is not a novelty, but doing so in a car with such a small battery as Nissan has is. The original Chevrolet Volt was supposed to only use the electric motor to drive the wheels, but when the first production vehicles debuted, it could also be partially powered by the gas engine. BMW’s i3 plug-in has a two-cylinder gas engine range-extending option, and the plug-in hybrid Karma Revero was recently lauded as the luxury green car of the year. Both vehicles exclusively drive the wheels with the electric motors, albeit using much higher capacity batteries.

Though it doesn’t have a plug to charge the batteries, if Nissan is successful with e-Power in the US, it would lead to greater awareness and interest in electric locomotion. And if other automakers follow suit, a whole new audience could become hooked on driving electric and someday give up the gas engine for good.


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