All eyes have been on the U.S. since Donald Trump won the election last November. So far, outcomes have been mixed: on one hand, the Dow Jones Index has witnessed a historical surge since his election win, rising from just below 18,000 to above 21,000. The U.S. Dollar Index has seen similar benefits, strengthening from just below 97 to nearly 102 in early April. While these factors play along with Trump’s campaign slogan to “Make America Great Again,” not all policy changes were welcomed and many have seen substantial criticism. Continue reading
Following closely behind the maturing solar market are two technology trends that are beginning to stabilize and present the opportunity for photovoltaic (PV) systems to be about more than just generation: 1) deployment of storage is consolidating around lithium-ion batteries, and 2) software applied to energy systems is delineating measures of control for consumers and grid operators alike. As the market matures, differentiation will be vital for system integrators, as a limited number of opportunities to develop business models alongside utilities arise. Continue reading
The stationary storage landscape is a complex and fragmented one, with battery manufacturers, power electronics providers, software developers, and system integrators all working together to complete projects. In this complex landscape, some partnerships have allowed battery manufacturers better access to the stationary market, while also giving system integrators a more reliable and affordable source of cells. Given this importance, we analyze partnerships in the stationary storage landscape and assess which technology providers have positioned themselves for success – and those that haven’t.
As the automotive industry evolves, two major innovations have emerged almost in parallel – increased electrification, peaking in fully electric vehicles (EVs), and increased driver assist features, peaking in the (not yet achieved) idea of self-driving cars (client registration required for both). A common question we receive is whether these two must be combined: Must self-driving cars be electric? The short answer is no – or, more accurately, not yet. It will be possible to make a competent self-driving car using older internal combustion engine (ICE) technology as the power source that drives the wheels. However, there are six good reasons why it is most likely that self-driving cars will be overwhelmingly electric – that is, six reasons why the two technologies will “merge”: Continue reading
French oil major Total has made a billion-dollar bet on energy storage with its purchase of Saft – complementing its existing stake in solar major Sunpower and other investments in distributed generation. This move is just an opening salvo in a Darwinian competition emerging among energy supermajors to get ahead of the future of the power sector. The remaining energy storage landscape offers oil firms few appealing opportunities to respond – but they should aim to make deals nonetheless, and changes in the energy landscape mean that doing nothing is an even worse option.
By: Cosmin Laslau
The U.S. has always been the world’s leading market for plug-in vehicles. Last quarter, that story changed dramatically: In our Q4 2015 Automotive Battery Tracker (client registration required) update, we found that China sold an astonishing 120,000 plug-in vehicles. This performance means that not only has China leapt to the top of the plug-in sales leaderboard, but also that it quadrupled the U.S.’s volume of units sold. It is a development worth reflecting on: This shake-up has wide-ranging implications for the balance of power in the battery and plug-in vehicle industry, and will profoundly affect how stakeholders plan their future investment and deployment strategies.
However, there is also significant risk of the industry over-hyping the China market, a trend clients should be wary of. Our analysis flags four key concerns behind the raw sales numbers:
1. The China market remains heavily policy-driven, which is expensive and unsustainable: Buyers of plug-in vehicles in China enjoy a range of benefits, including generous financial incentives which subsidize the purchase price, as well as the ability to bypass license plate restrictions and waiting times [(see the report “Clearing the Haze: Demystifying Energy Storage Opportunities in China“) client registration required]. However, such programs can be a victim of their own success. As plug-in vehicle sales increase, subsidies become increasingly expensive for governments, and must eventually be phased out. Plug-in vehicles can also begin to clog roads as their numbers increase, leading to negative backlash and a curtailment of even some non-financial benefits (client registration required). As these subsidies gradually expire, China will have to be careful to transition its plug-in vehicle industry gently, to avoid a sudden crash in unit sales.
2. Fraud happens in China, and the scale of misreporting remains opaque: The aforementioned generous subsidies have invited fraud in plug-in vehicles, where some companies try to abuse policy for monetary gain. For example, China’s central government recently launched a fraud investigation around plug-in vehicle sales, where vehicles are not really built in working conditions, or assembled to very poor standards, and parked in “ghost fleets” that never get used. The government said that it will begin to carry out surprise inspections as a way to combat this fraud. Until they are able to control this situation, the claimed unit sales in China must be taken with a grain of salt.
With oil prices continuing at rock bottom levels with no end in sight, a new dialogue is emerging around whether excess supply is a long term prospect, only to be further enhanced by key end markets migrating to alternate approaches. Front and center in that discussion are the developments in automotive technology that will steadily increase vehicle fuel efficiencies, as attendees at a recent webinar (client registration required) on the future of automotive transportation will be well aware.
Following on from this, we’ve launched an EV Inflection Tracker, which analyzes how compelling automakers’ plug-in offerings are as a leading indicator of when EVs will be positioned to take over the automotive market. Lux Research defines the “EV Inflection Point” concept as the year range when plug-in cars (technically, both EVs and PHEVs) make up more than 50% of new car sales. We’re watching all the plug-in offerings but, most notably, for depth of competition in EVs with greater than 200 miles of driving range at a price point of $35,000 or less, around which time a significant acceleration of adoption can be expected. Given the lack of any vehicles, let alone a wide variety, that meets these criteria we’re far from the EV Inflection Point. In fact, in the 2016 edition of the Tracker, we estimate that the EV Inflection Point is in the 2035-2040 time-frame. This corresponds to three full model cycles worth of development and iteration: By then, for example, the Nissan Leaf will be in its fourth generation.
This 2016 snapshot can be further broken down by vehicle type, to look beyond the EV vehicle fleet as a proportion of the total fleet, and into how many truly viable EVs there are in each segment. Continue reading
In 2015, Lux Research analysts profiled 1,189 companies across 20 different emerging technologies. As the year end approaches, we polled the analyst team to select the top 10 companies we covered in 2015 that are poised to make a significant impact on their target industries. These companies may be targets for partnership, investment, or acquisition, but their success also points to new growth areas and business opportunities that clients can capitalize on.
As always, each firm gets a “Lux Take” that ranges from “Strong Caution” to “Strong Positive,” to provide a bottom-line assessment of its prospects, with a “Wait and See” rating for companies that still face too much uncertainty for a definitive call. Full access to the detailed information and analysis in the profiles is for clients only, but the list with a brief explanation of each is available here for everyone.
- NeuroSky (Positive – BioElectonics; Sensors) — NeuroSky develops a number of bioelectrical signal detection and processing systems, most notably its electroencephalography (EEG) sensors that have enabled mind-reading brain-computer interface devices like Uncle Milton’s Star Wars Force Trainer – and will also enable future diagnostic and monitoring solutions as health care shifts to digital technologies.
- Organica Water (Positive – Water) — In addition to providing significant reductions in energy consumption, sludge production, and overall footprint for wastewater treatment, Organica builds low-cost greenhouses around its treatment plants to reduce odor, allowing it to locate plants closer to wastewater sources and enabling cost-effective reuse within cities.
- PFP Cybersecurity (Strong Positive – Connected Objects and Platforms) — PFP uses a physics-based approach to detecting cyber threats by analyzing the electrical patterns of processors, ideal for securing for Internet of Things (IoT) devices that can’t support modern security software or are limited by memory or compute constraints.
- Norsk Titanium (Positive – Advanced Materials) — 3D printing is best known for producing customized but pricey plastic pieces – Norsk’s plasma arc deposition allows it to 3D-print parts from titanium that are up to 70% cheaper than those made via conventional machining methods, due to greater material utilization.
- Nutrigenomix (Positive – Food & Nutrition) — Offering genetic testing to provide individualized recommendations on seven specific dietary components, Nutrigenomix is a step in the right direction for personalized nutrition.
- Fulcrum BioEnergy (Positive – Alternative Fuels) — Biojet fuel and renewable diesel are going to be major plays in 2016 and Fulcrum is well positioned to make both fuels from municipal solid waste (MSW) – it has strong partnerships along its entire value chain, and is the only Fischer-Tropsch biojet process developer with proven production at some scale.
- Zerlux (Positive – Exploration and Production) — The use of lasers in the oil and gas industry isn’t widely known, but Hungarian player Zerlux is a leader, with high-powered lasers for well stimulation, hard-scale removal, and subsea pipeline remediation.
- Hillcrest Labs (Positive – Sensors) — As the number of sensors in products from cars to mobile phones continues to grow, sensor fusion – integrating the interpretation of data from different sensors – is becoming more critical; strategic relationships with Bosch, Atmel, and ARM position Hillcrest to be a dominant player in this market.
- ENS Europe (Wait and See – Intelligent Buildings, Sustainable Building Materials) — More efficient electrostatic filters from ENS Europe can help clean indoor air, much like a HEPA filter does, but the technology has the potential to scale up to clean smog and address other city-wide air quality issues.
- AgDNA (Positive – Agro Innovation) — Finding successful business models for precision agriculture has been challenging, but AgDNA has been able to get traction licensing its technology – which integrates data from existing equipment into a decision-support system for growers – to OEMs like John Deere.
Other notable companies nominated by the analysts earned an honorable mention:
- Alsentis (Positive – Wearable and Flexible Electronics; Sensors) — Touch screens don’t work in high-noise environments – with wet surfaces or gloved hands – but Alsentis is changing that with its multi-touch sensor chips, used now in industrial and automotive applications with planned release for consumer devices in 2016.
- Elevance Renewable Sciences (Positive – Bio-based Materials and Chemicals, Alternative Fuels) — Elevance already has commercial scale production of specialty chemicals from crude palm oil (CPO), and is planning to expand by building or retrofitting plants in the U.S. and in Malaysia – notably deploying its technology outside the “conventional” regions of Europe and the Americas.
- Mapdwell (Wait and See – Solar) — Using Lidar data and an online portal, Mapdwell allows consumers to estimate the solar potential of any rooftop in cities it covers, helping to bring down soft costs associated with customer education, targeting, and system design.
- Sakti3 (Caution – Energy Storage) — Solid-state batteries are one of the key technologies for enabling higher density energy storage beyond the current Li-ion batteries today; while its unproven production process is reason for caution, its acquisition by Dyson later in the year could give it the boost needed to make the leap to commercial production.
- EasyMile (Positive – Autonomous Systems 2.0) — Lightweight, driverless, electric automobiles could revolutionize urban transport and change the current paradigm of car ownership. EasyMile – a joint venture of Ligier Group and Robosoft – is developing autonomous shuttles that could be the basis for future personal rapid transit systems.
The automotive industry is under intense pressure to lower emissions and increase fuel efficiency – and, as evidenced by VW’s recent scandal, this crucial question is costing the industry a lot of money. The roadmap to dramatically cleaning up transportation has many options, which include lightweight materials, increasing electrification, autonomy, and alternative fuels – but picking the right mix of options is tricky. Using a bottom-up model for automotive innovation for fuel economy improvements, the cost-effectiveness of all the various pathways for meeting regulatory targets can be built.
While the number of combinations is limitless in theory, comparing four distinct scenarios at least provides a starting framework to work within. To simplify, the four likely fuel source improvements were held constant across all scenarios, while material composition, electrification, and autonomy options were adjusted to find lowest added cost. A consistent reference fuel efficiency is needed, in this case defined by the 2015 Toyota Camry, and the associated baseline metrics of 25.4 mpg, 1,470 kg vehicle weight and a vehicle transaction price of $33,340.
In scenario one, electrification and autonomy were not considered and only lightweighting was used to reach the 2025 target of 37 mpg real-world fuel economy (54.5 mpg CAFE equivalent). This solution, in which the vehicle is 90% CFRP in the frame and body by volume, would result in $2,160 of additional cost in 2025, at a vehicle mass of 990 kg. More likely scenarios will integrate a variety of approaches to reach 2025 targets. In scenario two, the most basic levels of electrification and autonomy were considered in this case, and vehicle lightweighting was used to bridge the gap. This “grab bag” approach of technology and materials adds $2,210 to 2025 vehicle cost, while keeping the vehicle weight at 1,100 kg. In scenario 3, more advanced microhybrid technology is factored in, along with minor CFRP adoption and basic autonomy. This scenario uses 8% CFRP lightweighting in an 87% aluminum frame and 90% aluminum body with an advanced microhybrid drivetrain, adding $2,100 to the price. This scenario seems plausible from a technology perspective, with a very similar material distribution to the BMW 7-Series, but with the inclusion of a 12 V microhybrid drivetrain. Finally, in scenario 4 shown here, aluminum lightweighting and 48 V microhybridization are taken as core enablers. While 48 V microhybrid drivetrain is the most expensive and highest performing electrification option of the four scenarios shown, the overall additional cost is only $1,700 to hit fuel efficiency targets, even with a bulky 1220 kg vehicle weight. This most cost effective option is notable in that it avoids CFRP lightweighting and autonomous features to achieve efficiency goals.
It should be noted, however, that the difference on cost is not overwhelming, so further scenarios must be considered that factor in non-efficiency related technology decisions. For example, while autonomy is less important for fuel efficiency than the other technology categories considered herein, improving vehicle safety and function will result in adoption of autonomous features that subtly change the optimal outcome for efficiency. The model underpinning the cost and weight analysis above must be (and is) versatile enough to take such factors into consideration.
At a high level, automotive suppliers should expect automakers to pursue technologies that they are most familiar with, even if they face a small added cost for that choice. Fuel efficiency is going to be a dominant driver for these decisions, but still within the context of the overall vehicle roadmap and all that this entails.
Volkswagen’s troubles caused by the diesel emissions cheating scandal continue to worsen. It led to an unprecedented destruction of value of about $60 billion in one week. Most recently, additional Audi and even Porsche models were found to contain software designed specifically to sabotage pollution checks, and as of this writing, some 800,000 Volkswagen vehicles may have misreported CO2 levels in gasoline vehicles as well. The widespread deployment of the diagnostics-defeating software in so many of the company’s vehicles – about 500,000 in the US, and more than 11 million worldwide – implies more than the work of a few rogue engineers, which VW executives have ridiculously pleaded. Skeptics charge that the cover-up may extend not only throughout the company but even to other carmakers, regulators, and other bodies.
While the scandal may not yet know boundaries and rumors still rule the news, there are a few things we know for sure: the levels of NOX, SOX and other pollutants spewed out by Volkswagen’s diesel engines was about 35 times higher than what was allowed by the US EPA.
The cheating was substantial; we have heard people claiming that the discrepancy was between European and US standards. This is not the case – VW cheated both standards, and we have made the chart below to help visualize the magnitude of this deception and explain the various regulations. US regulations limit the amount of NO2 to 0.13 g per mile; nitrous oxide is known to be hazardous to human health. Scientists have calculated that an additional 60 Americans will die prematurely, solely due to the excess admissions produced by the Volkswagen vehicles.
European regulations on the other hand are less stringent about NO2 (allowing up to 0.13 g per mile) but are stricter regarding carbon dioxide emissions which they limit to 140 g per mile. Since CO2 is a known greenhouse gas that increases global warming, these regulations are better for the environment.
Whatever the fix is, it will likely be some combination of new hardware, software, regulation, and compromise. Because as bad as this is, that’s just Volkswagen and just what is known. It’s possible, or even likely, that other carmakers will be shown to have behaved similarly, or that tests in various markets are found to be erroneous, not by a few percentage points but allowing emissions many, many times greater than what was expected and explained by regulators and the public. But in the end, carmakers and regulators are sure to arrive at some compromise between economic, human health (NOx) and environmental (CO2) priorities. In fact, a proposal by the European Commission would allow new cars to “permanently exceed” EU emissions limits by up to 50%. Future linguists will have to decipher the difference between raising a limit and allowing it to be permanently exceeded; in the meantime, there’s a long road ahead before we get to cleaner transportation.