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For Today: GM and Ford move the electrification revolution a few steps further

A well-known automotive market analyst last year told me that he expects sales of battery electric and plug-in hybrid vehicles to make up 10% to 15% of U.S. new vehicle sales about a decade from now. That will mean that plug-in vehicle sales will have a real impact on manufacturing, marketing, infrastructure, and aftermarket products and services. The days of early adopters have come to an end, and the next phase is beginning – as made evident yesterday by announcements from General Motors and Ford Motor Co.

GM plans to launch 20 new electric vehicles by 2023. Two new all-electric cars will come out in the next 18 months. Whether that’s coming from upcoming fossil fuel bans in several countries, the popularity of Tesla, China’s new energy vehicle market, launching the Chevy Bolt, the emergence of other long-range all-electric vehicles, and a long list of EVs in manufacturer product pipelines, the future is here now.

“General Motors believes in an all-electric future,” said Mark Reuss, GM Product Development, Purchasing and Supply Chain EVP. “Although that future won’t happen overnight, GM is committed to driving increased usage and acceptance of electric vehicles through no-compromise solutions that meet our customers’ needs.”

The automaker is also developing hydrogen fuel cell technology as part of its zero emission vehicle drive. One of these is the Silent Utility Rover Universal Superstructure (SURUS), a four-wheel drive concept vehicle that runs on fuel cells. These provide power to electric motors, making it an ideal ZEV platform for delivery trucks, ambulances, and other applications. Yet EVs will be gaining most of the automaker’s focus and support.

Ford is on track to deliver 13 electrified vehicles over the next five years. Seven have been announced, including a 300-mile range crossover EV that will come out in 2020.

Sherif Marakby, Ford’s head of electrification and autonomous vehicles, said that the automaker will increase the number of all-electric vehicles it will offer, but did not provide details.

Ford is establishing an internal team its calling “Team Edison” to study and develop battery electric cars.

“We see an inflection point in the major markets toward battery electric vehicles,” Marakby said. “We feel it’s important to have a cross-functional team all the way from defining the strategy plans and implementation to advanced marketing.”

Here’s my take on a few trends and developments to watch for:

Battery electric vehicles will likely win out over plug-in hybrids in the next decade. While the Chevy Volt and Toyota Prius Prime will continue to do well, automakers tend to use plug-in hybrid variations of existing models as a way to transition car owners over to plug-in vehicles. EV range will be getting better, and all-electric vehicles are easier to maintain and keep in operation than internal combustion engine vehicles and plug-in hybrids. They use a lot less parts and components and are easier to maintain. Tires and brakes have to be replaced but there isn’t much else to changeover, given that the electric drive train is well made for EVs that are strong in sales.
Tesla is playing a leading role in public perception and experience with the technology. The Tesla Model 3 is expected to play a leading role in mass adoption, but the upcoming Model Y electric crossover will be built at mass scale, too. There will be other models coming out including the semi truck aimed at buyers of heavy-duty commercial vehicles. Tesla’s stock performance continues to stay strong and validates that institutional and individual backers believe in the business model. (As a side note, GM and Ford stock prices did well after announcing strong September sales and serious electrification campaigns.)
German automakers may be just as important as Tesla in moving the product development and sales trend forward. Volkswagen, Daimler, and BMW made big announcements a year ago in the wake of the “Dieselgate” scandal, and with growing pressure from German regulators and from a few other countries. Tesla was taking the lead in the luxury EV side, but an impressive list of pre-orders on the Model 3 opened up the playing field. The product pipeline is covering the bases from Tesla-competitive automakers – electric sedans, SUVs and crossovers, and luxury vehicles.
Car buyers want to see realistic, real-world numbers on per-charge driving range, charging time, fast charging, option and trim levels, resale value forecasts, top speeds, horsepower, and torque. U.S. Environmental Protection Agency range ratings are gaining more confidence than the New European Driving Cycle (NEDC), with the NEDC using a very different cycle analysis and much longer range.
Hydrogen fuel cell vehicles won’t reach mass adoption, with EVs winning out. They won’t be going away, with automakers such as Toyota, GM, Honda, Hyundai, Daimler, and BMW committed to the technology. They’ll probably stay at a low level in passenger vehicle sales with a few of the automakers going over to military and commercial vehicle applications. But the barriers will be hard to cross – having enough fueling stations, the cost of the technology and sticker prices coming way down, and finding broad support and trust in the technology. The typical pump price for fueling with hydrogen isn’t known yet, and concerns are being expressed on how expensive it will be to collect and extract hydrogen from natural gas and other sources; and to deliver it by truck and pipelines to gas stations. The ZEV aspect makes hydrogen fuel cell vehicles very attractive, but where is the hydrogen coming from? And EVs are getting cheaper and better all the time, along with the charging infrastructure.
Countries adopting fossil-fuel bans will likely have to back off those holistic mandates. It’s much more likely to take several more years (another half century?) before ZEV adoption becomes accepted at that level. It will be tied into radical transformation in how we drive and get around town. An integration of autonomous vehicles, mobility services, and electrification will be behind it, but that is going to take decades to meet thorough testing and safety standards, insurance and liability issues, and to gain enough confidence and trust to reach mass scale. I expect that governments will go back to mandating a certain percentage of new vehicle sales meet their mandates; incentive programs will probably have to be deployed in China and other markets.
There’s also the issue of fleet and commercial vehicles used in transport, delivery, and moving employees and customers from Point A to Point B. Fleets are likely to integrate the fuels and technologies – with trucks and buses powered by renewable natural gas and renewable diesel, electrification, and propane and natural gas; and hybrid, plug-in hybrid, and all-electric passenger vehicles used by law enforcement agencies, administrative vehicles, and other functions. Fleet operators make decisions based on economic and environmental factors, along with functionality and ease of use, as do consumers.

Paris Motor Show reflects paradigm changes in the global auto industry

As previewed last week, the Paris Motor Show has gone through a do-over – what was once the hallmark auto show for high-performance luxury and sports supercars (with many of them powered by diesel engines) is now shifting over to electric cars as the stars of the show. Crossover utility vehicles with battery power is another trend noticed by observers.

Paris Motor Show 2016 has also been marked by the disappearance of several automakers deciding to cut expenses through attending less auto shows and marketing through other channels such as social media. Paris has been the largest auto show in the world, with 1.25 million attending in 2014. Those attending this year are expected to be disappointed by several brands disappearing: Ford, Mazda, Volvo, Cadillac, Rolls-Royce, Aston Martin, Maserati, McLaren, Genesis, Lamborghini, Bentley, Bugatti, and others are skipping the show altogether.

Along with the diesel emissions reporting scandal, the impact of Tesla’s presence in the European market (and the hype and pre-orders for the Model 3) has been stirring up European automakers on the electrification front. Stricter emissions targets in Europe, the U.S., and China, are behind the EV launch as well; falling battery costs with more energy storage capacity is also playing its part.

“Crossovers and vehicle electrification are again expected to be key reveals at the event,” said Ian Fletcher, the principal analyst for IHS Markit, to Bloomberg. “The key trends are being determined by a combination of consumer demand – in terms of the number of crossovers being revealed – and legislative emissions factors, through a focus on electrification.”

Here’s a roundup of interesting announcements during the media days:

EQ electric brand launched: Daimler previewed its new EQ electric car brand through the Generation EQ concept, which is an electric small crossover utility vehicle. The EQ brand unveiling is the first step in launching 10 new battery-electric models by 2025 in Daimler’s strategy to become the global leader in electric vehicle technology; it appears to serve as a sub-brand of Daimler’s Mercedes-Benz division. Daimler expects electric cars to account for 15 to 25 percent of its global sales by 2025, CEO Dieter Zetsche said at the auto show. The German automaker’s chief confirmed what has been rumored lately – that the new electric cars will be launched under the EQ brands. Daimler said that the Generation EQ will have a range up to 500 kilometers (311 miles), which is probably based on Europe’s NEDC standards; that will be lower in U.S. mileage range under EPA measures. The concept car is being moving closer to production, and is being built on an architecture developed specifically for all-electric models. That architecture is adaptable for crossovers, SUVs, sedans, coupes, and other model series, the company said.

Volkswagen I.D. concept: Volkswagen’s chairman, Herbert Diess, was on the stage to unveil the new concept, called I.D., at the show. The Volkswagen I.D. will be rear-motored and rear-wheel-drive, much like the original Beetle, an interesting point that the automaker has emphasized in its press releases. It will be the first new model built on the automaker’s MEB modular electric platform. Its battery in-flat-floor architecture is built within a futuristic exterior design with a glass roof, artistic wheel covers, digital headlamps, and sliding rear doors. It’s expected to hit production level in 2019 for purchase starting in 2020. It’s part of the automaker’s Strategy 25, where the company will be building up to one million EVs by the middle of the next decade. Last week, the automaker announced it will be expanding sales of its e-Golf nationwide in the U.S., beyond a few select states. However, VW also revealed in Paris that the I.D. will eventually replace the e-Golf (but not the Golf).

Porsche Panamera plug-in: VW’s Porsche brand unveiled its Panamera 4 E-Hybrid plug-in hybrid electric vehicle at the Paris Motor Show. The large luxury hatchback will have a range of 31 miles and top battery-powered speed of 86 mph. The company says that the car generates some 340 kW of system power and delivers fuel consumption figures of 2.5 l/100 km in the European NEDC cycle for plug-in hybrid models. That corresponds to CO2 emissions of 56 g/km. “At Porsche, the term ‘hybrid’ is synonymous with not only sustainable mobility, but performance too – a fact proven not least by the victory of the 919 Hybrid in the 24 Hours of Le Mans race in 2015 and 2016,” the company said in its press release.

BMW X3 and new Mini: BMW said on Friday it will offer all electric versions of its next generation BMW X3 compact sport utility vehicle and electric Mini models. The electric Mini is expected to debut in about three years, company officials said. BMW had played a leading role in luxury plug-ins, but slow sales for the i3 and i8 have put plans back on the drawing board. BMW is also showing the new electric i3 and i8 Protonic Dark Silver special edition model. The German automaker said it will begin production of the BMW i8 Protonic models in December and in early 2017, but it will be in limited production; that’s similar to what happened with its previous Protonic Red Edition. BMW is also showing its new 3 Series Gran Turismo four-door, a C evolution e-scooter, and the X2 Concept SUV that is expected to go into full production late next year. The company chose to have its executive leadership stay in Germany to debate the future of its electric vehicle strategy.

Renault Zoe in 200-mile range: During the show, Renault confirmed that the next-generation Zoe all-electric car will come with a 41 kWh battery rated at 400 kilometers (248 miles) on the European NEDC cycle. The company acknowledged that the actual range per charge will vary, from around 186 to 200 miles per charge depending on how and where the electric car is driven. Chevrolet and Tesla have been getting all the attention for the upcoming Chevy Bolt (with 238 miles) and the 200-plus mile Tesla Model 3. Renault may have already crossed the barrier, and is now taking orders in Europe for delivery – and will be ahead of sister company Nissan’s Leaf reaching that range anytime soon. It beats the Bolt and Model 3 in cost, with a starting price of $24,500 before incentives.

Citroen CXPerience: French automaker Citroen is showing the plug-in hybrid CXperience concept car. It’s a low-to-the-ground sedan with rear suicide doors and a short rear deck. It combines a front-mounted gasoline engine with an electric motor, and an eight-speed automatic gearbox. The company claims that the battery range is 37 miles. The five-door hatchback was presented online a month ago, and may be the foundation for future Citroen plug-in models.

Mitsubishi GT-PHEV concept: Mitsubishi will introduce a few hybrid and all-electric vehicles, including a plug-in hybrid SUV concept vehicle. The GT-PHEV SUV has been designed around the automaker’s next-generation plug-in hybrid system. The system uses three electric motors and an internal combustion engine designed specifically for hybrid applications. Mitsubishi’s Executive Vice President of Overseas Operations, Kozo Shiraji, introduced the GT-PHEV concept (which stands for Ground Tourer Plug-In Hybrid Electric Vehicle) as the “possible form for a future large SUV.” The company said that the driving range for its next plug-in vehicle promises to expand on the current Mitsubishi Outlander PHEV’s range. The Outlander PHEV is a strong selling plug-in vehicle in the European market.

Opel Ampera-e: General Motors’ Opel division unveiled the Ampera-e, the European version of the Chevy Bolt. Opel says it will cost less than a Tesla and will go 250 miles on a charge, using NEDC European standards longer than U.S. range. “With the new Ampera-e, we continue the largest model offensive in Opel’s history,” said Opel CEO Dr. Karl-Thomas Neumann. “The Ampera-e with its outstanding range makes electric mobility fully feasible for everyday use and also lots of fun.”

Smart electric cars: The Smart ForTwo has a next-generation platform that will be extended over to the Cabrio and Smart ForFour models for a 2017 launch. Smart says it will be the only automaker to offer its entire lineup with both gasoline engines and all-electric versions. The Smart electric cars will compete with the Renault Zoe and Volkswagen e-Up. Smart says its electric cars will go 100 miles on a charge, and take around 45 minutes to recharge from a fast charger.

LaFerrari Aperta: Ferrari will be attending to represent classic, high-performance luxury brands. Ferrari will show the LaFerrari Aperta (aptera translates to “open” from Italian), which is an open-top version of the $1.1 million, limited-edition LaFerrari hybrid. Ferrari said that the entire production line has already been sold out, for an undisclosed price. Ferrari also unveiled the supercar grabbing most of the attention at the show – the GTC4Lusso T, a rear-wheel-drive, turbocharged V8 version of Ferrari’s rather all-wheel drive V12-engined grand tourer.

Toyota fuel cell and hybrids: Toyota thinks the future of green cars will be built around fuel cell vehicles and hybrids (not plug-ins), as expressed in its latest ad campaign comparing the Toyota Mirai to the historic role the Prius played. The company is showing the Toyota FCV Plus fuel cell car, shown for the first time in Europe after being revealed at the 2015 Tokyo Motor Show. Owners will be able to produce electricity directly from hydrogen coming from an exterior source – to power something else beyond the fuel cell car. Toyota’s Lexus division will show the UX SUV concept. The SUV is expected to have 3D driving and hologram components that would be new for the Toyota-owned brand. Lexus is also showing the LC 500h hybrid, which Toyota says will be getting a brand new Multi Stage Hybrid System engine. It will combine a 3.5 liter V6 engine with a “powerful electric engine,” a lithium-ion battery, and “a revolutionary automatic transmission delivering the sensations of a 10-speed gearbox.”

VW mobility brand: Volkswagen AG announced prior to the show that it has established a new subsidiary to handle carsharing and logistics, which is yet to be named. The so-called 13th brand in the VW family will be based in Berlin, according to VW CEO Matthias Muller. According to the chief of the new brand, Ole Harms, it will focus on on-demand mobility, with the help of Moscow’s number one ride hailing app, Gett, in which VW recently invested $300 million. VW’s recent partnership with the city of Hamburg may be the best market to introduce the service; and Gett’s presence in New York make it a likely market for the new VW service to expand to. European cities will be more of a priority for now. “Our new group brand is to rank among the leading mobility services providers and become the market leader in Europe by 2025,” Muller said.

BMW i electric cars and Greenlots expanding electric transportation in Singapore

BMW Group Asia is working with Greenlots to bring BMW i electric cars and to expand open standards-based technology to Singapore. BMW’s 360º ELECTRIC program is being combined with Greenlots technology solutions to support Singapore’s first home and public charging network and the country’s burgeoning electric vehicle (EV) adoption. The network is based on the Open Charge Point Protocol (OCPP), the global standard for open charger-to-network communications.

BMW’s 360º ELECTRIC program is based on four key pillars that will come standard with the purchase of every BMW i3 or i8 – home charging with the BMW i Wallbox Pure and a basic installation package for the 230 volt wallbox; public charging through BMW i’s ChargeNow that provides BMW i drivers with access to a network of public charging stations located in office buildings, shopping malls, hotels, industrial parks, and buildings in Singapore; customized flexible mobility solutions that cater to occasional long-distance trips outside the city by using the BMW 320i sedan for up to five days during the first year after purchasing a BMW i vehicle; and assistance services offering various solutions to ensure confidence in driving an EV including BMW ConnectedDrive, BMW i Remote App, and BMW Roadside Assistance.

Greenlot’s open standards-based SKY Smart Charging platform will administer ChargeNow, BMW i’s public charging program, in Singapore. That will enable local BMW i customers to access its expansive network of AC charging units by using the BMW ChargeNow card and Greenlots mobile app. Drivers will be give real-time information on the availability and location of these stations.

Greenlots has had a presence in the Singapore market since 2009, says Lin Khoo, senior vice president of Greenlots. The company began working with Bosch on a government-funded infrastructure in 2010 on installations and maintenance. The alliance with BMW assists the automaker in bringing its i3 and i8 luxury electric cars to the market and supports Greenlots in expanding the open-standards charging infrastructure to houses and to shopping malls, universities, workplaces, and other public charging locations, Khoo said.

Greenlots’ global reputation and past experience working together is how BMW chose the open standards-based technology company, said Brett Hauser, CEO of Greenlots. Open standards have been gaining more support in the past few years from several automakers and other stakeholders in electrified transportation, he said.

Hauser said that one example of this support came through the Multi-State ZEV Action Plan recently adopted by California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, and Vermont. One action adopted in the plan is to promote access, compatibility, and interoperability of the EV charging network. This ensures that EV drivers have the information and freedom to use any public charging station by allowing common forms of payment, not requiring subscription or membership status, encouraging open-source protocols, and making fees transparent to customers.

EPA award winning NAFA President Claude Masters on vehicle electrification

By Mike Sheldrick, Senior Editor, Fleet Management Weekly

Fresh from his accepting the Environmental Protection Agency’s 2014 Clean Air Excellence Award for innovative programs on behalf of Florida Power & Light Co., we caught up with Claude Masters, NAFA President and FPL’s Manager of Vehicle Acquisition and Fuel. We found that Claude’s longtime enthusiasm for the potential of electric vehicles to save energy and contribute to our energy independence remains undimmed — in fact, even brighter.

Tell us about some of the electric vehicle initiatives that are in the forefront right now at Florida Power & Light Co.

Our initiatives are also important for the industry as well: helping move along the fleet electrification process for not just our fleet, but for the country and the industry as a whole.

How electricity is produced and used is a large component of the effort we are making to achieve energy independence. I serve on an Edison Electric Institute (EEI) committee that is writing a white paper for the CEOs of investor-owned electric companies across the country that will help them understand what fleet electrification means and why it is important to them.

Vehicle electrification is further along than many think. We already have a generation infrastructure. What is not fully developed yet is the final attachment point. But that distribution network is being worked on very actively. For example, you see a lot of media related articles about what Tesla is doing. Florida Power & Light has actually helped the company with the installation of a “supercharger highway” in Florida, and we look forward to doing more of that.

If you look at the electric vehicles that we have in place today, they have played an important role in helping the whole industry get to where it needs to be. For the OEMs to meet future CAFE standards, electric or plug-in hybrid electric vehicles have to be a major part of the OEMs plans. There is just no other way for them to meet those numbers without it.

There have been substantial improvements in these vehicles. Take hybrids, for example. Some early models didn’t even have electric air conditioning systems. With some of the early offerings, you had to take it out of “economy mode” to run the air conditioner because there wasn’t enough volume in that market space to drive development of a cost effective electric air conditioner. Today that is a standard feature on hybrid vehicles. Moreover, all of the ancillary components — power steering, power brakes, etc., that were formerly driven off the engine are being electrified. Removing that “parasitic loss” saves 40 to 65 horsepower, making the engine that much more fuel-efficient.

In today’s truck market, most of the heavy over-the-road tractors still have belt-driven water pumps, belt-driven air conditioners, power steering, etc. Eventually, electrification of these ancillary components will migrate into the heavy truck market and you will see the same thing happen. Over-the-road trucks and tractors can start downsizing their engines to make them more fuel efficient. Measured over the size of that fleet, it will be a big deal.

It’s true that we need better, lower-cost batteries. Nevertheless, with today’s technology, Tesla has proved that electric cars can be successful. Tesla may not have fully solved the range anxiety issue but they have certainly diminished it greatly. It’s not uncommon in West Palm Beach or Los Angeles to go to an upscale mall or restaurant and see two or three Teslas in the parking lot at the same time. That tells you that the acceptance of those vehicles is here. Granted, not everybody can afford a Tesla today but they are certainly not any more expensive than other premium cars.

Do you think Tesla has significant proprietary technology or are there other advanced battery technologies being developed?

I don’t profess to be an expert on it but what I do know about the military and the defense industry is that every day their reliance on high performance batteries is increasing. There is always going to be a market for some type of advanced battery. They need to get lighter and they need to get more energy dense. It is like a race, much like any other business: whatever chemistry you use to build the battery that provides the highest energy density at the lowest price will be the winner.

If somebody comes up with an inexpensive, relatively high energy-density battery two or three years from now, I think they will continue to work on that and refine it, and keep playing with chemistries until we get the one that is the right one for the industry. Just like cell phones, the technology changes so fast that, four years from now, we will look at it and say, “This thing is archaic. I can’t survive with this version.”

If you are just building batteries for cars you are probably not going to stay in business very long. If you look at a lot of the larger, successful battery manufacturers they are building batteries not only for the automotive industry, but for the aerospace industry, the medical industry, the solar industry, etc. That explains Tesla’s deal with Panasonic to jointly produce batteries.

As fleets become more electrified, what will be the effect on maintenance costs and residuals?

Most people don’t initially grasp the changes in residuals but when you talk about it in detail then it starts to make more sense. The reason why it is hard to set residuals on battery/electric vehicles today is because there’s so much debate about what the true life cycle of a battery is. Most manufacturers warranty their batteries from eight-to-ten years. That has more to do with the charge cycles than it has to do with actual age of the battery.

The battery-life studies that the manufacturers do run like this: They cycle it, and every full discharge and recharge is considered a cycle. Most batteries are approximated to live between 3,000 and 4,000 cycles. If you used your car 300 days a year times ten years that is 3,000 cycles. They feel very confident that that battery will live for that ten year period and they feel comfortable giving you a warranty on that. Most people don’t keep a car ten years.

Let’s say that you bought a ten or eleven year old vehicle and the batteries fail on it at eleven years. What we don’t know is what battery costs are going to be in eleven years. There are a lot of studies that have been done on battery costs by doing forward projections. Almost no one will tell you what the exact number is because it is proprietary information, and nobody wants to give their competitors knowledge of what their costs are. But most of the people that I talk to that do research on this say that today’s prices for a lithium ion battery, which is what most people are using, is about $450.00 per kilowatt hour. The Ford projection for that in five to seven years can vary from $150.00 to $250.00 per kilowatt hour.

After a battery is not suitable for use in a vehicle, it hasn’t reached the end of its useful life. There are many applications, such as solar power, where they can be put to perfectly good use. Beyond that, the battery materials themselves can be recycled. A secondary market in batteries is already beginning to develop. When the Prius first came out over ten years ago, people said the Prius was not going to have any residual value because nobody is going to want to buy one. They don’t know what is going to happen to the batteries. Well, today there is a great secondary market for Prius. Its residuals are typically higher than a comparable vehicle in its class.

The one thing that everybody does agree on is that you do see a reduction in maintenance cost. But most people have not had electric vehicles in operation long enough to do a ten year comparison or comparative analysis, so that part has not been agreed upon. There are some Six Sigma tools that you can use to do projections. But, again, everybody agrees that your typical electric car has about one-third of the components of a conventional internal combustion engine vehicle. Typically you are talking about no transmission, no cooling system, and no exhaust system. On the heavier-truck side of it, the exhaust system profile for a medium- or heavy-duty truck is a big expense — $7,000-$10,000 worth of after-treatment devices on a truck that you didn’t have ten years ago. That is a big cost component.

Summarizing what we’ve talked about, can you give us your predictions for vehicle electrification?

Predictions are always dangerous, but certainly in 30 or 40 years, maybe sooner, we will probably be looking at vehicles that have electric motors to propel the vehicle, in conjunction batteries or with some type of power system such as a hydrogen cell reformer that generates the needed electricity. Electric motors —however they are powered, by batteries, or fuel cells, or even an onboard generator, have a significant edge in efficiency. In a conventional gasoline engine, only 30 to 40 percent of the energy actually makes it to the drive wheels; with an electric motor it is 100 percent. We still need higher-energy-density, lower-cost batteries.

In summary, vehicle electrification is a really big deal to our industry and to the country. I think it is going to play a major role in the transportation industry for the future, and I am going to do everything I can to help support that.