Alastair has over 10 years’ experience leading research activities in scaled, high-growth industrial and technology markets. At Interact Analysis he is responsible for electric trucks and buses, autonomous trucks and off-highway electrification.
- New research from Interact Analysis shows a ramp in hybrid and electric vehicle demand, product launches and strengthening macro factors that are aligning to make 2018 a clear ‘breakout’ year for the industry.
- Significant opportunities for manufacturers and suppliers to capitalise on rapid growth. A holistic approach to emissions technology will benefit companies exposed to multiple applications/industries.
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Strong demand for hybrid and electric trucks and buses
Interact Analysis is tracking globally in excess of 150 confirmed orders and deployments of hybrid and electric buses over the next four years. These orders often represent tens, hundreds and thousands of vehicles.
Although Tesla and Nikola have thousands of confirmed orders between them for class 8 semi-trucks, the timing of when these will enter service is uncertain as both companies need to create production capacity and execute on ‘road ready’ vehicles. Interact Analysis is assuming that limited numbers will enter service in 2019, with the bulk of confirmed orders entering service in 2020 or 2021.
Perhaps surprising is the number of orders for hydrogen fuel cell trucks and buses. Over half of the confirmed orders out to 2021 are for hydrogen powered vehicles. A bulk of these are orders for Nikola semi-trucks, but a substantial number are going to be deployed in China. There is renewed interest in fuel cell vehicles in China and a number of major projects will enter operation in the next 2-3 years. The European Union is supporting the purchase of nearly 300 fuel cell buses across 22 locations with funds totalling nearly €60m through the Joint Initiative for Hydrogen Vehicles across Europe (JIVE1 and 2). South Korea is also aiming to replace all 26,000 CNG powered buses with hydrogen fuel cell equivalents by 2030.
Off-highway Gears Up for Electrification
In the traditionally conservative off-highway sector, multiple manufacturers and suppliers have launched fully electric and hybrid machines and components in recent months.
Underground and urban/indoor applications will prove most successful. Electric machines make sense underground – they produce no harmful emissions, they are quieter, require less maintenance and they produce less heat (which reduces the cost associated with thermal management of the mine). Urban applications also make sense, particularly as urban authorities look to reduce emissions and improve the experience residents have with construction.
Lithium chemistry batteries are the battery type of choice so far for off-road applications. For smaller vehicles or those with less intensive duty cycles, NMC is the chemistry of choice. This is commonly used in automotive and offers two key advantages: it’s widely available and the price is falling as volumes in automotive increase. For larger machines or those with intensive duty cycles then lithium iron phosphate or lithium titanate chemistries are favoured. This may be due to safety concerns, recharge times, or lifetime expectations for the batteries.
Cummins and DEUTZ are developing a hybrid strategy for the off-highway sector. Interact Analysis wrote extensively about Cummins’ strategy here. DEUTZ is making use of IP from its Torqeedo acquisition (marine electrification) and ‘off-the-shelf’ battery technology from BMW. One challenge will be integrating a marine solution into a vehicle; however, the solution is modular and able to be ‘scaled’ to different vehicle sizes and requirements.
Will companies deploy emission technology and strategy holistically?
In discussions about vehicle electrification, manufacturers’ exposure to other applications/industries is often over-looked when discussing strategy. Interact Analysis looked at the leading manufacturers’ exposure to on- and off-highway markets and other applications such as marine to better understand technology use and strategy. Taking the Volvo Group as an example:
Volvo is exposed to on-highway and off-highway markets. It recently announced its first electric on-highway truck – a 16 tonne FL truck with an option for two battery sizes, 100kWh and 300kWh depending upon use case – that will be available from 2019. This technology is directly applicable to the off-highway sector and, there, Volvo has already demoed a concept electric excavator that can use batteries, a fuel cell or a hybrid architecture with diesel engine. Volvo is also exposed to the marine market through its Penta business that supplies marine engines. There is growing interest in marine electrification – to reduce fuel costs and reduce air pollution close to shore – and here Volvo has already been involved in an electric ferry project. The Volvo Group is facing emission and efficiency challenges across its entire business and it’s clear a holistic and shared approach to using technology across its brands will benefit it in the long run.
2018 is proving to be a clear ‘breakout’ year for on- and off-highway electrification. With multiple product announcements, projects, investments and potential legislative impacts; staying in touch with what matters is a real problem. Interact Analysis is overcoming that problem by providing a regularly updated service that will support your business with the insight and information you need to understand this rapidly changing market.
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