hurdles when developing, building and marketing tomorrow’s vehicle

2016 Punch Powertrain Strictly confidential. All rights such as copying and passing on to third parties reserved by Punch Powertrain.

HURDLES WHEN DEVELOPING, BUILDING AND MARKETING TOMORROW’S VEHICLE

Patrick DebalPowertrain Expert Advanced Development

Punch Powertrain R&D

Green Drive Conference

22-23 September 2016

Antwerp


This presentation is based on nearly 20 years involvement in non-conventional, mainly hybrid and electric powertrain development. It is

based on personal experience, experience from others as well as published information.

Names, characters, businesses, places, events and incidents are irrelevant for the message I want to bring. Any resemblance to actual persons, living

or dead, or companies, dead or alive, or actual events or situations is purely coincidental.

Introduction

2


• Multidisciplinary teams

• Resistance to change

• Going to the Market – OEMs

• Going to the Market – Consumers

• Additional Material

Contents

3


Multidisciplinary Teams

4

Battery

Chemist

Electric

Engineer

Electronic

Engineer

Controls

Engineer

Mechanical

Engineer

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↔ LiC6

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dr


Universities and training institutes can help by:

• Broad education and training:

– Major: develop in depth knowledge

– Minor: know how to apply and get involved with specialists

– Other: able to connect with specialists and understand the big picture

• Projects needing multidisplinary approach and team work:

– Get the taste during studying by performing projects

– Develop eagerness to work in team

• Internships in industry:

– First experience with close follow-up and coaching

– Step towards employment


5


If not all disciplines are present within one company

Need for a multicompany multidisciplinary team

Approach:

• Look for complementary partner(s) to avoid possible conflicts

• Be prepared to show openess as proof of trust

• Avoid initiating suspicion and prevent further escalation if it appears

• Establish a working relationship like between colleagues

• Do not hesitate to help solve a partner’s problem


6


• People have a tendency to oppose change

• Development of alternative powertrains is a big change:

– New skills needed: new people to hire and others to be trained

– Investment for new technology (test equipment, production equipment, …)

– Management to convince are on average older and not familiar with the new technology

• Adopting new, unknown technology includes risks:

– Will the battery/motor/electronics last long enough?

– Are the proposed developments the right solutions?

– …

• And risk aversity leads to tougher requirements for new technology

Resistance to Change

7


• Risk aversity leads to tougher requirements for new technology

– Back-up solutions

– Larger safety factors

– Fairly simple solutions are not trusted

• Train the people to work with new technology in prototyping and production and take the necessary safety measures

• Irrealistic claims of external developments are considered to be true

– Spend time and resources to prove that the claims are not realistic

– Even then they keep on haunting your project


8


• Implementing the production equipment for new powertrain technologiesrequires more investments:

– “More-of-the-same” only requires “updates” of equipment and skills

– Producing new powertrain technologies requires:

• New machinery to produce and test parts and components

• New skills, either hiring new skilled employees or retrain current employees

• Steep learning curve required to cope with automotive volumes

• New powertrain technologies also involves new suppliers:

– Build new long term relationships

– Can involve new countries and new cultures

• Accidents with new technology are highlighted and increase the resistance


9



10

http://tingilinde.typepad.com/photos/uncategorized/upsfire.jpg

http://tingilinde.typepad.com/photos/uncategorized/upsfire.jpg



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A report putting the accident into

the right context does not.

“Based on the available data,

NHTSA does not believe that

Chevy Volts or other electric

vehicles pose a greater risk of fire

than gasoline-powered vehicles.”

A Tesla on fire gets the attention of

the world wide press.


Punch Powertrain builds the powertrain and not the complete vehicle. So we are a Tier-1 and our market consists of the vehicle manufacturers (OEMs).

• The benchmark for the OEMs is the Toyota Prius

• So some OEMs expect the same low fuel consumption without doing thesame efforts on the vehicle as Toyota did

• Some OEMs lack trust in the new technology and require back-ups

• The higher cost of new technology is hard to accept

• Fuel consumption data of conventional vehicles are not realistic anymore, so the fuel saving you present is much smaller than what can be achievedin reality

Going to the Market - OEMs

12


Consumers are fairly conservative when investing in expensive goods:

• Prefer to let others take the risk of buying new technology

• Reluctant to pay the hybrid/EV cost premium

• A fuel efficient car is not as attractive as a muscle car

• A hybrid car is sometimes a compromise (e.g. less luggage space)

• Some sales representatives can be misleading:

– Claim cars with start/stop systems are hybrids

– Redirect potential customers to conventional cars because the margin is higher

– Forget to mention the lower maintence cost, especially for EVs

• Mixed messages, contradictions or twisted information

Going to the Market - Consumers

13


Some concerns when buying non-conventional vehicles:

• Battery life and possible replacement cost

• Resale value

• In particular for EV:

– range anxiety

– charge time

– public charging infrastructure

• Assumption of poor performance

It takes time to convince the consumer


14


Market conditions:

• Current low oil prices do not favour non-conventional vehicles

– Is this intentional?

– Or is this “welcome” collateral damage for OPEC?

• Dieselgate and further “fall out” reveal that conventional vehicles

– Are not as clean as they should be

– Have a higher fuel consumption than in the catalogues

• Consequently

– Diesel vehicles may become as expensive as hybrids

– Electric vehicles may have the lowest total cost of ownership


15


How to convince the consumer:

• Extended warranty on the powertrain and batteries

• Lower the cost premium especially at ramp up

• Publish case studies and testimonies proving:

– the reliability

– the energy efficiency

– the user experience

• Government incentives may reduce the cost premium


16


Driving in a fuel efficient way with a hybrid takes some time toinvestigate the powertrain behavior and potential.

Gradually the driver builds insights into the powertrainoperation and the information he/she sees on the dashboard.

Then the driver and powertrain work together.

3,0

3,5

4,0

4,5

5,0

5,5

6,0

6,5

7,0

7,5

18/11/2010 17/05/2011 13/11/2011 11/05/2012 7/11/2012 6/05/2013 2/11/2013 1/05/2014 28/10/2014 26/04/2015 23/10/2015 20/04/2016 17/10/2016

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Date

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Catalog

MY

2016

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Additional Material

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Punch Powertrain is the fastest growing large enterprise in Belgium. So we are continuously looking for new colleagues. We offer a very dynamic workingenvironment where people can further grow and development themselveswhile helping to create the automotive future.

More information on http://www.punchpowertrain.com/en/careers

Additional Material

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http://www.punchpowertrain.com/en/careers

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