Tag Archives: Volkswagen

Volkwagen’s Electrification Roadmap Now Includes 80 Plug-Ins and 150 GWh of Batteries by 2025

In May 2017, Volkswagen (VW) brand CEO Herbert Diess claimed that VW will surpass Tesla to be the world leader in electric mobility by 2025 – an aggressive target, but coming from a company with the resources to achieve it. At the International Motor Show in Frankfurt, Germany, VW CEO Matthias Müller announced Volkswagen’s Roadmap E, committing those resources to a strategy that aims to transform one of the world’s largest OEMs. This roadmap is made up of several key initiatives: Continue reading

Dieselgate’s Big Data Trail: What Analyzing Innovation Data Says About Diesel Engines’ Spectacular Fall

In late 2015, intrepid emissions testing researchers sent shockwaves through the automotive world by catching Volkswagen in one of the biggest corporate scandals ever: Hidden software allowed its diesel engines to cheat on emissions testing. The repercussions are still being felt today, as more and more countries are turning against the technology. The common narrative is that this was a surprising, unforeseen event, and in many ways, it was. However, newly developed, specialized, big data analysis allows us to investigate diesel innovation – or rather, the lack of diesel innovation – and uncover some interesting trends. By applying our Lux Tech Signal software tool to the topic of diesel engines, we see a suspicious decline in interest in diesel innovation since 2010, as shown in the figure below:

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Risen From the Dead: Google Glass 2.0 Is Now for the Enterprise

Google Glass is back. Last week, X, a subsidiary of Google parent Alphabetannounced a revival of its most embarrassing wearable mishap with a new focus on the enterprise market. In the past couple years, Google Glass Enterprise Edition (EE) has been silently tested in pilot programs with companies such as GEDHLBoeingVolkswagen, and Sutter Health. After last week’s announcement of Glass EE, the wearable device will now be more widely available via a network of partners. As of now, there are no further plans to bring back the original consumer edition. Continue reading

Ripple Effects of Dieselgate Continue to Negatively Impact Diesel’s Outlook

Once touted as the cleaner alternative to gasoline due to lower CO2 emissions, the use of diesel as a transportation fuel is under intense scrutiny following Volkswagen’s scandal in 2015. Since then, academics and media outlets have publicized the adverse effects of NOx emissions on air quality and public health. In a somewhat knee-jerk reaction, many governments around the world called for an outright ban of diesel vehicles.

Lux Research compiled a non-exhaustive list of cities around the world that announced intentions to ban diesel vehicles. While some cities called for a blanket ban, others are introducing restrictions to limit the number of diesel vehicles, a step we believe will eventually move towards a ban.

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Deconstructing the Cocktail of Technologies in 2025’s Passenger Vehicle

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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 Errors of Emission Lead to an ObNOxious Destruction of Value

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.

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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.

Volkswagen’s Errors of Emission Lead to an ObNOxious Destruction of Value

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. And even the fix that VW recently proposed – a modified air intake tube meant to improve a sensor’s accuracy, and a software fix that will correct emissions at the expense of driving performance – was met with howling criticism even in automotive industry and German media.

Clearly we have not seen the end of #Dieselgate yet.

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.

Lux_Quarterly_Q4_VW_Article

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 CO2is 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 the 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 (Opel, Renault, and even the Kia Soul electric vehicle are already implicated in emission trickery), 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.

After the Fall: Volkswagen’s Diesel Scandal and Its Future Impacts

Volkswagen (VW), the world’s best-selling automotive OEM, has been caught in a vehicle emissions scandal of unprecedented proportions. At least 11 million diesel-powered VW cars worldwide use a specially-coded piece of software to purposefully cheat during emissions testing. The result is that VW’s diesel cars appear sufficiently clean to government regulators – enough to be eligible for sale – but when consumers drive their cars in the real world, the vehicles’ software switches the engines’ behavior: In consumer hands, these VW diesel engines switch into a mode where they perform better (more power and more fuel efficient), but pollute up to 35 times more than during official testing.

The initial fallout for VW has been swift and brutal: Its stock plummeted 23% in value, its lowest in three years, wiping out almost $20 billion worth of market capitalization. It faces a revenue decline too, as the OEM has told dealers to stop selling new diesels. Consumers are starting to file class-action lawsuits, as their VWs will have lower resale values. Next will come the fines: In the U.S., it will face fines of up to $37,500 per vehicle from the Environmental Protection Agency (EPA), totaling $18 billion in the worst case. The final amounts may not be as high, but nonetheless VW is preparing for some high losses, setting aside $7.2 billion already to start handling the fallout. Besides the U.S. Environmental Protection Agency (EPA), VW faces other challenges too: South Korea has already announced it will investigate VW’s vehicles, as will Germany. Even the U.S. tax agency is looking into VW’s cheating, because the OEM benefited from $52 million in tax credits for its “clean diesels” that have now turned out to be dirty.

VW is not the first OEM to court disaster.  Other high-profile fiascoes include General Motors’ faulty ignition key, Firestone’s tread separation on Ford Explorers, and Takata’s exploding airbags. All are bad in their own way, and these OEMs survived, just like VW will. The other fiascoes involved an inadvertent flaw in the design or manufacturing, which dishonest and incompetent managers later tried to cover up. The VW case is different: It appears that the OEM purposefully engineered the cheat into its cars from day one.

The audacity and sophistication of VW’s cheating software is stunning. Its engineers apparently programmed the cars to detect when a regulator like the U.S. EPA tested vehicles – doable because testing uses a stationary dynamometer, where some of the vehicle’s wheels spin, but others do not. For example, on a VW Jetta, the front wheels spin on a dynamometer because it is a front-wheel-drive car, but its rear wheels are stationary. In real-world driving all four wheels spin. VW engineers appear to have used sensors to distinguish between these two modes, programming the engine to behave in different ways depending on whether the car was being tested by the government or being driven in the real world by consumers. This cheat worked for years, until an independent study carried out by West Virginia University actually tested VW’s diesel emissions in the real world. It is flabbergasting that VW thought they wouldn’t be caught – the U.S. EPA had already fined diesel cheaters $1 billion in 1998, for deceptively programming their engines as well.

At its very root, VW’s misbehavior was driven by the push for cleaner cars. Automotive OEMs are under immense pressure from governments and consumers around the world to perform a fine balancing act: Make their cars emit less pollutants, keep power high and acceleration good, deliver better fuel mileage, and keep costs low. Diesel engines have had a hard time pulling all of these off. When OEMs optimize these types of engines to deliver good performance (snappy acceleration and fuel mileage), they become prone to emit poisonous, reactive gases known as nitrogen oxides (NOx). To deal with that NOx issue, OEMs like Mercedes-Benz and Toyota use an additive based on urea as part of a selective catalytic reduction (SCR) system, which is expensive. VW’s cars were unique in passing tests without a urea system, thus saving money on each vehicle. It turns out that their secret to doing so was a software cheat.

In the near-term, VW doesn’t have good options to fix the issue.  If they reprogram the software to pollute less, then 11 million of their car owners will have poorer acceleration and worse fuel economy. If they re-engineer the cars to retrofit them with a urea system, it would likely come at a cost of tens of billions of dollars over recall, R&D, component costs, and ongoing urea refills. In the longer term, this will force VW to re-evaluate their strategy for clean cars. The OEM had staked a lot on its “clean diesel” strategy – for example, just a few months ago, VW’s marketing arm proudly announced that one of its diesel-engined cars had set a new Guinness World Record for lowest fuel consumption by a nonhybrid car. In the aftermath of the cheating scandal, VW will face an uphill battle to win back consumer trust and acceptance.

Looking forward, clients should expect that:

1. Regulators will try to smarten up, but will need better equipment: It’s striking that the U.S. EPA, with its $8 billion budget and workforce of 15,000 staff, couldn’t catch VW, but a small team of researchers from West Virginia University could. Regulators should revise their testing protocols to test real-world performance when the vehicles are in motion in real traffic, rather than on a stationary dynamometer. With the miniaturization of sensors and better analytical software, making this change is easier than ever before. Indeed, testing authorities have known about discrepancies between real-world performance and testing for a long time, and more efforts like the upcoming Worldwide Harmonized Light Vehicles Test Procedure are needed.

2. VW will reconsider its clean vehicle portfolio strategy: VW was slowly moving beyond conventional gasoline and diesel engines anyway. Earlier this month, before the diesel scandal started, VW’s CEO discussed the OEM’s plan to put out 20 plug-in vehicles by 2020, like an Audi EV (client registration required) with a 500 km driving range. They have also invested (client registration required) in next-generation batteries, including lithium-sulfur and solid-state. VW is actually in a strong position to innovate their way out of this mess. They have been spending most on the R&D of any OEM (about $11 billion in 2013), and they are the largest automaker by volume. Arguably, no major OEM is better positioned than they are to decisively accelerate the push towards plug-in hybrids and electric vehicles, putting the shine back on their tarnished image. However, they probably lack the vision, leadership, and ambition to do it, so they will most likely carry on as usual after some apologies.

3. Automotive software will come under pressure to open up: In the U.S., it is illegal to prevent independent repair shops from fixing cars, under a policy called “right to repair”. However, OEMs successfully lobbied regulators to use the Digital Millennium Copyright Act (DMCA) to keep their software locked up and proprietary, and off-limits to diagnostic and repair companies the OEM does not like. That has led to legal squabbles, with GM arguing that while consumers may own their cars, the OEM owns the software; similarly, Ford sued a company called Autel, which was developing some independent repair software. Indeed, even VW itself sued some security researchers that pointed out a flaw in the way its key-fobs worked. Ironically, the U.S. EPA itself sided with OEMs, fearing that if the software is open-access then consumers would modify it at the expense of emissions. VW misused the protection of the DCMA to hide their crime – precisely the kind of scenario that open source software advocates have argued makes closed systems a bad idea. Forget consumers – OEMs’ actions show that they need watching too. The DMCA exception for automotive software should be struck down, and replaced with a policy in line with right to repair.

4. Diesel passenger vehicle sales in the U.S. will drop drastically: Due to strict NOx emission standards in the U.S. diesel passenger vehicles have failed to make any significant market penetration, representing less than 1% of passenger vehicles and only 3% of all vehicles on the road. In part, slow adoption was due to the requirement of installing the urea-containing SCR unit to control NOx emissions in diesel engines, which is expensive. When Lux Research compared OEM engine options – the cheapest engine option within a model range versus the diesel-engine option – we found on average the diesels cost $6,000 or more. VW’s “clean diesel” was positioned to revolutionize passenger diesel vehicles without the need of an SCR unit, saving costs. With the EPA setting new emission standards in early 2014, close to California’s much stricter regulations, this is not a good sign for diesel. Consumers will now consider other vehicle options likely to the charging of the U.S. EPA, which had plans to aggressively grow (client registration required) the biodiesel market over the next three years.

5. AdBlue systems and renewable diesel will infiltrate Europe’s existing diesel passenger vehicle market: The Euro 5 NOx emission standard that is applicable to vehicles prior to 2015 is nearly six times more lenient than that in the U.S. (180 mg/km compared to 31 mg/km). This has resulted in diesel powertrains present in approximately 35% of passenger vehicles and 53% of all vehicles and biodiesel making up 62% of Europe’s biofuels market (see the report “Biofuels Outlook 2018: Highlighting Emerging Producers and Next-generation Biofuels” [client registration required]). With Euro 6 approved and increased attention to NOx emissions (80 mg/km), and implementation of AdBlue systems in diesel passenger vehicles, it’s truly inevitable to achieve “clean diesel”. While biodiesel has carbon emission benefits that’s been the primary focus of Europe’s biofuel mandates, it actually has higher NOx emissions – up to 10% depending on blend percentage. Biodiesel will soon lose its luster as a viable solution. With the push for nonfood biofuels and new focus on NOx emissions, Europe offers potential for renewable diesel growth. By no means is renewable diesel the holy grail, but it has been shown through third-party testing to emit up to 9% less NOx compared to conventional diesel, and the region will see nearly 300 million gallons per year (MGY) of capacity come online by 2018, nearly doubling what it is today, according to our Alternative Fuels Tracker (client registration required).

Hyundai Motors Working on Lithium-Sulfur Batteries, but Remains Noncommittal

Researchers from the Hyundai Motor Company recently published a study about lithium-sulfur (Li-S) batteries, a promising next-generation energy storage technology. They focused on the effect that electrolyte choice has on Li-S battery performance, by replacing conventional ether-based mixtures with one that was sulfone-based. The Hyundai researchers claimed that this sulfone-based electrolyte improved Li-S battery capacity by more than 50%, reaching 715 mAh/g, and improved reversible capacity retention by more than 60%. This line of research is important, because performance degradation over extended cycling is one of the key problems that Li-S developers must overcome (see the report “Beyond Lithium-Ion: A Roadmap for Next-Generation Batteries” — client registration required).

 

Aside from the technical developments, which remain early stage (coin cells in this research from Hyundai), the work is important for three other reasons. Firstly, because Li-S batteries are so far from market, this work signals a long-term interest from Hyundai and Kia in plug-in vehicles and hybrids, areas where thus far they have not made much of an impact (see figure below). Secondly, it puts more automotive clout behind Li-S technology, a welcome change in an emerging landscape that has been start-up dominated to date, by the likes of Oxis Energy (client registration required) and NOHMs Technology (client registration required). Indeed, Hyundai has been working on Li-S for years, but it is not the only automaker active here: General Motors has been researching the technology, as well. Third, it adds another OEM to the list of players looking to go beyond lithium-ion batteries, joining the likes of Toyota (working on magnesium-ion batteries and solid-state designs) and Volkswagen (which is experimenting with lithium-air batteries).
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The big question associated with this Li-S study is whether Hyundai Motors will put its money where its researchers’ mouths are: Bringing a fundamentally new battery chemistry to market will likely require not only billions of dollars in investment along the value chain, but also the singular vision of an automaker willing to commit to making a car around Li-S technology. For now, Hyundai is focusing more on fuel cell (client registration required) vehicle development and deployment. Nonetheless, clients with any interest or activity in Li-S batteries should consider Hyundai as a potential partner in this next-generation energy storage chemistry.

Panasonic’s Battery Division Back to Profitability and is Expanding, Thanks in Part to U.S. EV Sales Surge

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Panasonic’s lithium-ion (Li-ion) battery division is resurgent: In Q2 2013, it
made about $40 million in profits, a turnaround from one year before, when it lost $20 million in Q2 2012. As a result, Panasonic will invest $200 million over the next year to expand its Li-ion production lines in Osaka and Kasai, making batteries destined for automotive applications.

The company’s improved Li-ion fortunes coincide with its customer Tesla Motors beginning to ship the Model S, an electric vehicle (EV) that packs a massive 60 kWh to 85 kWh worth of batteries. About 16,000 Model S units have been sold thus far, accounting for more than $400 million in revenues for Panasonic. Moreover, Panasonic has become the leading battery supplier for plug-ins and hybrids sold in the U.S. Its market share by capacity sold has increased to 54% during the last year, overtaking LG Chem and Nissan’s AESC in the process. This breakthrough has been four years in the making and involved Panasonic investing $30 million in Tesla in 2010.

Remarkably, the upstart Tesla now drives more of Panasonic’s battery revenues in the U.S. than the world’s largest automakers, like Toyota and Volkswagen. A mere 20,000 Tesla Model S units use three times more battery capacity than the U.S. sales of Toyota’s popular Prius hybrid family (which moved about 230,000 units during the past year). Tesla’s battery demand now outweighs all other OEMs in the U.S., taking 49% of the market share for battery capacity shipped in the U.S. plug-in and hybrid market in Q2 2013. Others are taking notice of Tesla’s increased clout: Samsung SDI, BYD, and LG Chem have reportedly been in talks with the automaker, seeking to supplement or displace
Panasonic. However, they may have to wait for Tesla’s next model, because Tesla could find it difficult to mix cells from different suppliers, due to battery management system considerations, and because the Panasonic-Tesla contract stipulates supplying 80,000 vehicles by 2015. Interested parties should now expect increased development and more pricing pressure for the Panasonic-Tesla battery solution, including more research on 18650 automotive cells and a strengthening nickel cobalt aluminum (NCA) cathode value chain.