Electric Vehicle-another revisit!

During a surprise visit by my grandnephew last night, we went for a quick bite of Idli-Dosa. He works for Tesla. We, of course, discussed the merits and demerits of the Idli-Dosa one gets in the bay area. As usual, it was concluded that you can’t beat the “original” stuff you get in India (it need not be from Chennai, even Pune Dosa is better!) The main subject of discussion naturally, was about EV’s. The original EV maker is Tesla! In such a debate, there never is any conclusion. What one does is exchange information and knowledge. So here we go!  

The development and now the production of EV’s is gaining momentum for higher and higher volumes. China is leading the pack, and almost 50% of global EV production is done in China. Technology wise Tesla is way ahead of the competitors. Tesla vehicles smoothly go 300 miles and above per charge. In fast charging technology, Tesla is ahead of others; they can do it in 30 minutes. Looking at our Pune Bombay travel on Expressway, if the 30 min/300 miles combination is achieved by our car manufacturers, then it is easily possible to make a round trip, the way we are doing with IC engine cars today. The same is possible with Nashik, Kolhapur, Aurangabad. But our car manufacturers are still lagging behind Tesla in the above combination.  

How fast can the EV’s come in daily use and what could be the limitations for them? What will affect the quick proliferation of EV’s? Other than Tesla all giants like Toyota, Honda, GM, Ford, Volkswagen, Fiat have the knowhow to make cars in large numbers, In fact, they have decades of experience in this field. But they are behind in Electric drive technologies and batteries needed for EV’s.  Tesla will struggle to reach large numbers like other giants. Elon Musk twitted Tesla achievement of producing 6000 in a week for the first time in the history of Tesla; Ford Europe CEO congratulated him on the twitter, “Elon congratulations on the great achievement! For your information, we achieve these numbers in four hours”!  This shows that replacing IC engine cars by EV’s in a significant way is not going to be so easy, yet. 

Except for Tesla, most companies making EV’s are having joint ventures, different joint ventures in different countries. Toyota has joined hands with Suzuki in India. They have jointly come together in India with Toshiba to make battery packs! It is interesting to note that Suzuki will make EV’s in India for Toyota too! For EV’s, Toyota is providing technology to Suzuki. Toyota has joined hands with Mazda for making EV’s in the US. What Google and Apple will come out with, is anybody’s guess. But there is a big drive going on for driverless cars. It is expected that in the US driverless cars or their variants may come faster than EV’s.  

Other than the points mentioned above, what factors will decide the proliferation of EV’s. If we see country wise, smaller countries might be able to handle this better because of geography. Creating charging infrastructure, changing laws, changing insurance policies will be much easier to incorporate. With the same logic, the EV numbers will go up in large countries, states or regions. Like in the USA, proliferation will be quite swift on the west and east coast but will take time in mid-Americas because of low population density and vast distances; add to that mountainous regions. 

One exciting event took place. A couple of weeks back, Tesla has opened up all its patents to the general public for use. Musk declared, “We are aware that Tesla alone can not achieve the car volumes required to improve the environment. We are opening up all our patents to everybody with a hope that this will improve EV production volumes fast.”

Similarly, in India, this will occur around metros like Delhi-NCR, Mumbai-Pune. Chennai-Bangalore, Surat-Vadodara-Ahmedabad. There are more such areas in India. But India has similar problems with long distances in rural areas with less car usage. But it will take some time of coast to coast driving in the US, and Kashmir to Kanyakumari drives in India to happen regularly.

  EV1

The graph above shows the reserves of Lithium in Metric tons in the year 2017. Lithium could be the next oil, and the top four could form the next Cartel, the Lithium Cartel. The battery pack is going to be the most crucial part that is going to limit the production of EV’s. As per current technology available, Lithium is the raw material for batteries. The four nations above are going to be next Arabs for the auto industry. The auto industry is one of the significant consumers of petroleum-based products. As EV production goes up, Arabs and other cartel members will come together and reduce petroleum prices; using IC engine cars will remain more attractive. This will make it attractive to make IC engine cars. So, what will be the product mix in 2030? That will be decided by many factors. 

The product mix in the year 2030 is predicted to be 35:35:30 of EV’s, Hybrids and IC Engine cars. The combination could vary a bit, but the general proportion will be as above. EV’s will be controlled by how car manufacturers other than Tesla adopt and ramp up with the limiting conditions of per charge mileage, least possible charging time and availability of battery packs.   

Hybrids are a combination of Electric drive and IC Engine drive. Hybrids are forced by the requirements of environmental norms; hybrids have a better carbon footprint compared to IC Engine vehicles. The volume of EV ramp-up will not be sufficient to achieve global improvement of environmental standards; hybrid will provide some relief.  

IC engine cars will contain a predictably higher percentage of Petrol cars. Diesel Engine cars are expected to get a major jolt by the year 2022/23 when Euro 7 norms come into existence. These norms will be extremely challenging for diesel engine manufacturers. The cost of development and manufacture of Euro 7 compliant diesel engines can be prohibitive. Volvo has already decided not to manufacture Euro 7 compliant diesel engines for cars.  

It appears that if Electric buses are made available, they will be quite useful and practical. In Pune, about ten Electric buses have started plying on the roads, about ten days back. On the first day, approximately forty thousand people travelled on these buses. Bus application is going to help the improvement of the environment in a big way. Today most of the buses everywhere are run on diesel. They are very polluting, extremely noisy and many times people travel in them because of the lack of other viable options.  

One interesting aspect I must mention. When EV’s are produced in large numbers, industries like casting, forging, heat treatment, furnaces will move towards extinction. Same will be with the car service industry. But as almost 70 % of cars are expected to have IC engines even in 2030, these industries will have more time to handle the life-threatening change.  

My personal experience with EV’s is minimal. I have visited Tesla showrooms a couple of times during my visits to Seattle. In our condo in Pune, a couple of people own Electric Scooters. I drove one of them for a few minutes. The feel was excellent. I have enjoyed a few rides in the Toyota Prius, the Hybrid, and it was a very pleasing experience. 

I am looking forward to owning an Electric Vehicle.  When? It is anybody’s guess!

 

Advertisements

Auto Industry 2040?

WOW! MMG! DISCO! These could be names of some of the leading auto component industries in the year 2040! Why have I selected the year 2040? Simply because everyone is talking of this year for the introduction of electric cars in a big way; from this year onwards, the real downward trend in the manufacture and use of IC engines in the vehicles, as we know them today, will begin. I am merely assuming that the cars will be available, similar to the cars of today. Masses of cars will be driven by humans, they will have a steering wheel and a power plant/train to give them. They will have some form of braking, the electrical system handling various functions, wheels and body with fuel storage area, air conditioning, and so on! Things inside could be fancier with more and more entertainment, superior navigation abilities, drivers may become more stress-free as cars systems will be able to understand many things and may take over some functions from humans. Internet of things (IOT) will allow things that are not even thought of today.

This is part of the evolution of the human race, but this could be the culmination of major change that is taking place currently. The “new” car industry is putting its toddler’s steps today. Evolution is nature, as everything in this world is always evolving! The primary driver for these changes is computers and computer chips. The car industry will be using different chips and will capture lots of data generated by various systems. This data will be in an endless loop and will allow cars to function more and more efficiently.

What will be the difference in the cars of today and those in 2040? Today’s power plant, the Engine & Drive train will be replaced by Batteries and Motors. Today’s drive train, gearboxes etc. will just be not there. The exhaust system, as is known today, will be simply not be needed because there will be no IC engine, both Petrol and Diesel. Gearbox and the whole system is really not needed because their function can easily be handled by Electric Motors. Even today, in electric cars, there is a single gear which reduces the RPM to what is needed to drive the car at allowed speeds!

Many companies are manufacturing the components that are discussed above. These components may become redundant over some time due to the introduction of electric cars. Bosch, Denso, Continental, Valeo, Aisin Seiki are some of the major players that manufacture the cluster of these components. These companies together manufacture products worth US $200/ billions every year.  These products may comprise of 40% to 70% of their current turnover. The giants must be already studying the questions that have come to my mind. How are they handling these questions? I am sure it’s a tough call to all of them though they have the wherewithal and deep pockets to handle difficult situations. Some have started making navigation products, some are building parking assist, camera -related systems. But suddenly new names are being heard in these discussions as vendors. CISCO, NVIDIA are some of them. Some are direct vendors to car makers, and some are vendors to components manufacturers.
Where is the real scope for new development and business? Battery packs, battery charging technology to increase per charge distance that the cars can travel today! All other developments that are computer related can also happen in IC engine cars too! TESLA is already building a giga factory for their Battery Packs! So will the “new” component business be taken over by Car Manufacturers? Suzuki, Toyota and Toshiba are coming together in India for big battery plant! What happens to smaller manufacturers of these components? Will they survive the major change? Will “WOW! MMG! DISCO!” replace them? Only time can tell.

In car making, after a long time, new name TESLA, started coming into prominence. TESLA came mainly for the new product offering. It appears that technology like fashion goes round! Till the first two decades of the last century, IC engine based transportation was not very popular. Trains used steam, cars used electric power plants; but battery technology could not catch with the then needs. Hence IC engine cars and trains became popular. From the existing car manufacturers, some are already manufacturing electric cars more than what TESLA is producing. On top of that, they have a running profitable business producing IC engine cars. But one thing is for sure they have the humility and know where they lack. Look at what Volkswagen Brand CEO Deiss has to say about TESLA! 

VOLKSWAGEN brand CEO Diess has said that VW which manufactured 5,987,800 cars last year has to catch up with Tesla which produced 83922 cars last year. “Tesla belongs among the competitors which has abilities that we currently do not have,” Diess said in the interview with “Inside”, a publication for VW employees. Around half of Tesla’s engineers are software experts, while at VW’s core brand it is a much lower proportion, Diess said. Tesla has good electric motors, a fast charging network, autonomous driving technology, internet connectivity, and a new approach toward vehicle distribution. “This shows that we need to significantly improve. We can do this. We measure ourselves against Tesla quite deliberately. Our goal: Using our abilities not just to catch up, but even to overtake,” Diess drives an electric VW Golf.

 Current giants have ready infrastructure and eco system to make and sell millions of cars. They of course lack the Electric car eco system as mentioned by Diess above. Their main struggle will be recharging stations for electric cars; but TESLA is also going face the same problem! The question arises if TESLA, a loss making company, a start-up, survive? Let’s look at the startups from the Silicon Valley and the west coast, who really made it big in the computer industry sunrise era. Google, Facebook, Microsoft, Apple they all became very big with the products/services that never existed before. TESLA is pitted against the giants for making existing products where the main “driver” is only a different technology! That’s a huge disadvantage. Fighting against giants, who have woken up a bit late, like Mercedes, Honda BMW, Toyota, GM, Ford, Fiat, Hyundai is going to be very very tough for TESLA! Some of these giants are also going to suffer or may merge! My take, ESLA may cease to exist  by 2040 or even earlier as it is known today! Takeover? Maybe!