Hybrid Report 2009

THE HYBIRDS REPORT
Published by SupplierBusiness Ltd, An IHS Global Insight Company

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The Hybrids Report
Contents
Tableoffigures................................................................................................................................................ 5 ExecutiveSummary......................................................................................................................................... 8 Introduction...................................................................................................................................................12 History...................................................................................................................................................12 Driversofhybridvehicledevelopment.................................................................................................13 HybridTechnology.........................................................................................................................................21 Typesofhybridvehicle..........................................................................................................................21 MicroHybrids........................................................................................................................................21 Electroniccomponents..........................................................................................................................23 Serieshybrids.........................................................................................................................................23 Parallelhybrids......................................................................................................................................24 Series/Parallelhybrids...........................................................................................................................24 FullHybrid .............................................................................................................................................24 . MildorAssistHybrids............................................................................................................................25 PlugInorDualModehybrids ...............................................................................................................25 . Hybridtransmissions.............................................................................................................................25 OneModeandTwoModeHybrids.......................................................................................................27 Regenerativebraking.............................................................................................................................28 Electricmotors ......................................................................................................................................29 . ACMotors..............................................................................................................................................29 DCMotors..............................................................................................................................................29 Synchronousmotors..............................................................................................................................30 Switchreluctancemachines..................................................................................................................32 BatteryTechnology ...............................................................................................................................32 . Leadacid................................................................................................................................................33 Nickelmetalhydride(NiMH).................................................................................................................34 Sodiumnickelchloride(NaNiCl)............................................................................................................35 Lithiumion............................................................................................................................................36 Liiontechnologyimprovements...........................................................................................................38 Supercapacitorsandultracapacitors.....................................................................................................40 OEMStrategies..............................................................................................................................................42 GeneralMotors.....................................................................................................................................43 Ford .......................................................................................................................................................46 . Volkswagen............................................................................................................................................48 Daimler..................................................................................................................................................51 BMW......................................................................................................................................................54 Honda....................................................................................................................................................59 Nissan....................................................................................................................................................60 Renault..................................................................................................................................................61 PSA.........................................................................................................................................................62 Hyundai .................................................................................................................................................63 .
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Incentives......................................................................................................................................................68 FuelEconomy........................................................................................................................................68 HybridIncentivesandTaxation.............................................................................................................69 NorthAmerica.......................................................................................................................................69 Europe...................................................................................................................................................72 Japan......................................................................................................................................................72 Thegloballightvehiclemarket .............................................................................................................73 . Thehybridmarket.........................................................................................................................................73 NorthAmerica.......................................................................................................................................75 Europe...................................................................................................................................................77 Japan......................................................................................................................................................78 CompanyProfiles...........................................................................................................................................81 AisinAW....................................................................................................................................................81 AxeonHoldings .........................................................................................................................................83 . AzureDynamics.........................................................................................................................................85 Cobasys.....................................................................................................................................................88 Continental................................................................................................................................................90 Denso........................................................................................................................................................95 Eaton.........................................................................................................................................................98 Hitachi.....................................................................................................................................................101 JATCO......................................................................................................................................................103 JohnsonControls.....................................................................................................................................105 Keihin ......................................................................................................................................................109 . MaxwellTechnologies.............................................................................................................................111 NessCap...................................................................................................................................................115 Saft..........................................................................................................................................................117 Sanyo.......................................................................................................................................................120 SumitomoWiring....................................................................................................................................123 TDK..........................................................................................................................................................126 ToyotaIndustries ....................................................................................................................................129 . UQM........................................................................................................................................................132 Visteon....................................................................................................................................................135 Yazaki ......................................................................................................................................................139 . ZF.............................................................................................................................................................142
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Tableoffigures
Figure1:HybridmodelintroductionsbyyearUS......................................................................................... 8 Figure2:Figure2:HybridpercentageshareofUSvehiclesales..................................................................... 9 Figure3:USgasolinepricesversushybridmonthlysalesvolume................................................................10 Figure4:Globalhybridproduction20082015...........................................................................................11 Figure5:Proportionsofgasolineanddieselhybridvehicles........................................................................12 Figure6:Theattractivenessofhybridtechnologycomparedtootherpowertraintechnology...................13 Figure7:Potentialroadmaptomasshybriduptake.....................................................................................14 Figure8:Europeandieselsales19992008................................................................................................15 . Figure9:TherelationshipbetweenaccelerationandfueleconomyforselectedVWmodels.....................15 Figure10:Increasinglystrictemissionsstandardsfordiesels.......................................................................15 Figure11:Therelationshipbetweenaccelerationandfueleconomyforhybridvehicles. ..........................16 . Figure12:CO2versuscostforvariouspowertrainoptions...........................................................................16 Figure13:Carbondioxideemissionsversuscostperpercentagefuelreduction.........................................17 Figure14:CO2emissionsbyenginetype.......................................................................................................18 Figure15:CO2savingsbyhybridtype...........................................................................................................19 Figure16:Ratioofengineandmotoroperationinthehybridsystem.........................................................21 Figure17:ContinentalsISADUnit................................................................................................................22 Figure18:Microhybridproductionforecast................................................................................................22 Figure19:DelphiBeltAlternatorStarter.......................................................................................................23 Figure20:Hybridelectricvehicledriveconfigurations.................................................................................24 Figure21:OneModeHybridInputSplitEVT................................................................................................25 Figure22:TwoModeHybridInputSplitEVT................................................................................................26 Figure23:OneModeHybridInputSplitEVT................................................................................................26 Figure24:TwoModeHybridwithInputSplitandCompoundSplitEVTModes..........................................27 Figure25:Twomodehybridtransmission....................................................................................................28 Figure26:RegenerativeBrakingSystem.......................................................................................................28 Figure27:EVmotors.....................................................................................................................................29 Figure28:Switchreluctancemachines.........................................................................................................32 Figure29:Batterypricetrendforecast.........................................................................................................32 Figure30:Batterytechnologyevolution.......................................................................................................34 Figure31:Energystorageoverview..............................................................................................................34 Figure32:AtypicalZebrabatterymodule....................................................................................................36 Figure33:Lithiumionbatterypack..............................................................................................................37 Figure34:Energydensityversusoutputdensityinbatterysystems............................................................38
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Figure35:ARagoneplotshowingenergydensityvspowerdensityforvariousenergystoragedevices....40 Figure36:Regionalhybridmanufactureforecast.........................................................................................42 Figure37:HybridproductionforecastAsia...................................................................................................43 Figure38:GM'spowertrainandfuelsstrategy.............................................................................................44 Figure39:GM'sprereorganizationstrategy................................................................................................45 . Figure40:General Motors 2MT70 FWD two-mode hybrid transaxle, as seen from engine side.....46 Figure41:Fords SmartGauge cluster......................................................................................................47 Figure42:Ford Hybrid second generation hybrid systems architecture..............................................47 Figure43:Volkswagens twinDRIVE system operating modes.............................................................48 Figure44:Volkswagens powertrain and fuel strategy ...........................................................................49 . Figure45:VWforecastmicrohybridproduction..........................................................................................50 Figure46:VWTouareghybridpowertrain....................................................................................................50 Figure47:Emotorsupporteffectontorqueandpower..............................................................................51 Figure48:DaimlerMicroHybridproductionforecast..................................................................................51 Figure49:DaimlerMildandFullhybridproductionforecast.......................................................................52 Figure50:MercedesBenzmicrohybridsystemfeaturingabeltdrivenstartergenerator.........................52 . Figure51:MercedesBenzISGfeaturingadiscshapedelectricmotorasfittedtotheSClass....................53 Figure52:MercedesBenzTwoModehybriddrive......................................................................................53 Figure53:MercedesBenzBlueZeroconcept................................................................................................54 Figure54:BMWMicroHybridproductionforecast......................................................................................54 Figure55:BMWX6hybridconfiguration......................................................................................................55 Figure56:BMWGrouphybridstrategy.........................................................................................................55 Figure57:BMWMildandFullhybridproductionforecast...........................................................................55 Figure58:Figure43:Toyotamicrohybridproductionforecast....................................................................56 Figure59:Toyotafull,mildandpluginhybridproductionforecast.............................................................56 Figure60:JapaneseToyotaPriussalesbymonth.........................................................................................57 Figure61:EvolutionofToyotahybridsystemsto2009................................................................................57 Figure62:Prius3assembly...........................................................................................................................58 Figure63:Hondamildandfullhybridforecast.............................................................................................59 Figure64:2009HondaInsightinteriorfeaturingtheEcologicalDriverAssistSystem.................................59 Figure65:Honda'sCRZhybridsportscar.....................................................................................................60 Figure66:Nissan'sLeafelectricvehicle........................................................................................................61 Figure67:Renaults'Ondeliosdieselhybridcrossovervehicle......................................................................62 Figure68:Peugeot's308hybriddieselprototype ........................................................................................63 . Figure69:Hyundai'sElantraLPGHybridpowertrain....................................................................................64
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Figure70:Fueleconomy/GHGregulation.....................................................................................................68 Figure71:Phaseoutcreditcalendar ............................................................................................................69 . Figure72:ToyotaPriustaxcredittimeline....................................................................................................70 Figure73:ToyotaandHondataxcredithistory............................................................................................70 Figure74:USTaxcreditavailabilityApril2009.............................................................................................71 Figure75:Globalhybridproductionandgrowthratesto2015....................................................................73 Figure76:Globalhybridvehicleproductionforecastto2015,byregion.....................................................74 Figure77:Globalhybridvehicleproductionforecastto2015,byregion.....................................................75 Figure78:UShybridvehicleproductionforecastto2015............................................................................75 Figure79:UShybridsalesbymonth.............................................................................................................76 Figure80:USHybridmarketshares2008.....................................................................................................76 Figure81:UShybridsalesforJanuaryandApril2009bymanufacturerandmodel....................................77 Figure82:ToyotahybridvehiclesalesinJapan,1997to2009(JanApr)...................................................78 Figure83:NumberofToyota'scleanenergyvehiclessoldinJapan.............................................................79 Figure84:MonthlyPriussalessince2007Japan .......................................................................................79 .
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ExecutiveSummary
One of the primary driving forces behind the production of hybrid vehicles has been the tightening of global emission regulations. The need for fuel efficiency has moved from being a consumer based motivation to an environmental concern that requires regulation, not only to combat pollution from noxious gases, but to limit the transport contribution to CO2 output partly responsible for global warmingandtoprovidearoutetomovingawayfromstrategicdependenceonoil.
Figure1:HybridmodelintroductionsbyyearUS Source:USDepartmentofEnergy HybridvehiclesasweknowthemtodaywerelaunchedonthemarketbyToyotainJapanin1997andthis wasfollowedquicklybythearrivaloftheHondaInsightintotheUS.Sincethengasolineelectrichybrid vehicleshavebecomeapartoftheautomotivelandscapewithvirtuallyallthemajorOEMsineitherthe market orworking towards model launch. Atthe end of2008 there had been some 34 models ranging fromthefullhybridPriustothemildhybridMercedesSClass.Totalhybridglobalsalesarenowestimated at around 500,000(notincludingstopstart micro hybrids), withmorethan 350,000hybrids sold during 2007intheUSalonebeforethemarketfelltojustover300,000unitsin2008. Today,despitetheglobaleconomicissuescurrentlyfacedbytheautomotiveindustry,emissionlegislation holdsastrongerfocus;thisisdueinparttotheUnitedNationsClimateChangeConferenceinBaliduring December 2007 which highlighted the next round of negotiations for the subsequent Kyoto period covering20082012. IntheUS17statesincludingCaliforniahavebeendeniedtherighttosettheirownemissionstandards, and legal battles continue with the automotive industry poised to accept the implications of the final result.InJapanfueleconomystandardsaresettochangeastheymovefromthe1015testcycles and prepareforthe2010JC08cycledesignedtoenforcemuchtougherstandardsuptotheyear2015. Europe also is entering the phase II emission test cycle set for 20082012 and aims to reduce CO2 emissionsto120g/kmby2012and2540%below1990levels.Allthesechangeswillaffecttheautomotive sector considerably, and the hybrid electric powertrain is emerging as a critical technology in moving forwardoverthemediumandthelongterm.
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Figure2:Figure2:HybridpercentageshareofUSvehiclesales Source:USDOE Whileautomotivemanufacturershavemadefleetaveragefueleconomycommitments,suchasCAFEin theUS andtheACEA agreementin Europe,they have been placedunder pressure bythepopularity of SUVsandluxuryvehicles.However,theunderlyingconcernthatconsumershavebeenshowntohavein supporting green technology has now become a strong marketing focus in the automotive sector. However,theconsumerstillrequiresawiderangeofcomfortandconveniencefeatures,andincreasingly stringent safety regulation is driving even more feature content. This has meant that despite very significant progress in conventional powertrain efficiency and lightening of vehicles, more radical solutionsareneededtodeliversustainablelongtermimprovements. Oneofthekeyapplicationsforhybridtechnologyistoincreasethefuelefficiencyofinherentlyhighfuel consumptionvehicles,suchasSUVsandluxurysedansinordertohelpsustainthepopularitytheyhave enjoyedinrecentyears.Conceptunveilingshavealsoincludedsportscarsinwhichtheelectricdriveadds powerwithoutthepenaltyofpoorerfueleconomy.Whiletheseshiftsinapplicationarecriticisedbysome environmentalists, hybrid manufacturers defend the strategy by insisting that fleet fuel efficiency gains arestillbeingachieved. DespitefurtherregulatoryworkbytheEPAintheUS,todatemanyconsumershavebeendisappointed with the publication of fuel economy statistics for hybrids in comparison with conventional gasoline vehicles.Thisissuehascertainlyhadasignificantimpactonhybridvolumesalesandhasthepotentialto enhancetheuptakeofdieseltechnology.Thispointisemphaticallydemonstratedbytheachievablefuel efficiencyperformanceoflightdieselenginesinEurope,wheretheynowmakeupmorethan50%ofthe lightvehiclemarket. Furthermore, the price premium asked for a hybrid vehicle over and above a conventional gasoline version has been estimated at over $5,000. This has also made market success vulnerable to several competingtechnologiesnottheleastofwhichisthedieselengine,whichcancurrentlyproveequallyfuel efficient and carries a lower price premium. However it is subject to much more stringent emission regulationsandfightsalackofacceptanceinmanymarketsoutsideEurope.
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Reducingthepremiumpaidforthehybridpowertrainisoneofthekeyissuesfacingtheexponentsofthis technology, and although they are favourably viewed by US consumers, there remains considerable scepticismabouttheabilityofhybridvehiclestodeliverfuelefficiencyatareasonablecost. Recent research by Syovate in the US highlighted that there is a great deal of confusion amongst consumers faced with choices about which advanced powertrain to purchase. This has been perpetuated by the industry through the noise perpetrated through the press, which leads consumers to wait when considering advanced technologies. The survey found that although hybrids and plugin hybrids were the preferred technologies for most consumers, misconceptionsaboutthe alternatives threaten to bring about delays in the market. Figure3:USgasolinepricesversushybridmonthlysalesvolume Furthermore, the Source:USDepartmentofEnergy/SupplierBusiness Synovate survey highlighted the consumers concerns aboutreliabilityandthecurrentstateofdevelopmentofthetechnology,particularlybatteries.However, in2009perceptionsaboutreliabilityappeartobeimproving,butarenotyetanywherenearonaparwith traditional ICE powertrains. Furthermore, consumer perceptions about power and performance must improveconsiderablytobringaboutmainstreamsuccess. In the US those consumers considering a hybrid vehicle are primarily driven by considerations for the environment and fuel economy, and the recent falls in fuel prices have in many cases mitigated this motivationintheshortterm,asisillustratedbyFigure3andthefallsinhybridmarketshareoverallasthe oilpricehasrecentlyreduced.Howeverthiseffectisalsomaskedbytheconsumersunwillingnesstopay alargepremiumforahybridindepressed marketconditions.IntheUSin December 2008 hybrid sales dropped43%,incomparisontoareductionof36%inallvehiclesales. Inthelongertermtheshareofhybrids,eveninthedieselphobicUSmarket,arenotonlydependanton thereducingcostpremiumofthehybridandincreasingperceptionsofreliability,butalsothefutureprice premiumofdieselandthereducingcost. Technology development remains intense, particularly in the area of battery technology, which is consideredtobetheweakpointofhybridtechnologytodate.Lithiumiontechnologyisnowtakingcentre stageinitsvariousforms,butsignificantperformanceimprovementsarestillneeded,notleastintermsof cost. Current stateoftheart Liion batteries have costs estimated to be between $300 and $500 per KWh. Recently, in a response to a study by researchers at Carnegie Mellon University on the cost effectiveness of different sizes of battery packs for plugin hybrids, Jon Lauckner, GM Vice President Global Program Management, commented that the current cost of the GM Volt Liion packs is many hundredsofdollarsperkWhlowerthanthe$1,000kWhfigureoftenquotedtowardstheendof2008. Othercurrentestimatesquotecostsas lowas$250perKWh,reflectingbothmaterialandmanufacturing
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savings as well as considerable economy of scale benefits through the installation of new, more efficientplants. OEMs have entered into agreements and alliances withbatteryspecialistsina race to hold the key to energy efficiency, and the various strategies of the OEMs regarding hybrids are becoming, if not clear, more defined. However, the increasing mass of commentarybothfromthe Figure4:Globalhybridproduction20082015 OEMs and from the wider Source:GlobalInsight industry is also adding confusionanduncertaintyattheconsumerchoicelevel.Aswellasbasicgasolineelectrichybridsplugin hybrids,electricandfuelcellvehiclesanddieselhybridsarenowbeingdiscussedatlengthastheindustry strives for answers to the medium and long term carbon emissions issues. However, according to the Synovateresearch,thisiscausingconfusionandcannegativelyaffecttheriskaverseconsumers,despite theirwillingnesstodotherightthing. The conditions required for the mass uptake of hybrids have not yet been satisfied and the following issuesneedtobeaddressed: Moreconsumerchoiceintermsofattractivereliablemodelsfrommanufacturerstheytrust; Increasingconsumercommitmenttodotherightthingintermsoftheenvironment; Demonstratedbetterfueleconomy; Risingfuelprices; Reduce the perceived risk associated with alternative powertrain vehicles fuelled by conflicting messagesfromtheindustry; However, research to date would seem to indicate that hybrids are still favoured as an idea by the consumer,whowantstobeseentoaddresstheideasofconsumingandemittingless.Furthermore,the increasing environmental focus at a policy level around the world that is encouraging increasing fuel taxation and rewarding greener consumerism are having an effect, despite the short term issues associatedwiththecurrenteconomicdownturn.Onthe otherhandthepremiumdemanded for hybrid technology is increasingly unsustainable. Recently the beginnings of severe price competition have emerged, particularly between two key OEMs; Toyota and Honda. This picture, when added to the competition from downsized and turbocharged diesel engines and the general noise around other progressivepowertrainsolutionswillinevitablyleadtoloweringpremiumsforhybridmodels.Therefore the speed of hybrid technology development in terms of both performance and cost reduction is increasinglyimportant,anditisbecomingimperativeforOEMstoachievesignificantvolumeswithinthe nextfewyears.
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Accurately forecasting the hybrid vehicle market is perhapsmoredifficultthan forecasting the global vehicle market in general. The segment is still immature and future growth must be extrapolated from only a few years of history. Furthermore, it is not yet clear what effect the complex economic and competitive forces will have on the market. Not surprisingly,forecastsfrom different analysts vary Figure5:Proportionsofgasolineanddieselhybridvehicles widely, with global production volumes Source:GlobalInsight forecast by Global Insight at just over one million units in 2010 (full and mild hybrids) and approaching three and a half million vehiclesby2015.Duringthisperiodtheproductionofmicrohybridswillprogressfromaroundtwomillion units to nearly nine million, reflectingthe fast progress it is possible to make with this technology. It is likely,however,thattheUS,JapanandtherestofAsia,particularlyChina,willbetheleadingmarketsfor hybrid vehicles. Europe will continue to favour the diesel, but this will also contribute to an increasing populationofdieselhybridvehicles.Dieselelectrichybridproduction(fullandmildhybrids)isforecastto reacharound350,000unitsby2015.
Introduction
History
In 1839 Robert Anderson of Aberdeen, Scotland, built the first electric car and Dr Ferdinand Porsche is oftencreditedwiththeworlds first hybridin1901 with aprototype that usedinwheel motors andan inboardgasenginetorechargethebatteries,makingthecaraserieshybrid.However,hedidnotseeany good reason to continue development, as gasoline became very cheap and the electric motors were consideredprohibitivelyexpensive.Thevehicleissaidtohavebeencapableoftravellingfor40mileson batterypoweralone! In 1966 the US Congress introduced first bills recommending use of electric vehicles as a means of reducing air pollution and between 1968 and 1971 three scientists working at TRW created a practical hybrid powertrain. Dr. Baruch Berman, Dr. George H. Gelb and Dr. Neal A. Richardson developed, demonstrated and patented the system called an electromechanical transmission (EMT) providing brisk vehicleperformancewithanenginesmallerthanrequiredbyaconventionalinternalcombustionengine drive.Manyoftheengineeringconceptsincorporatedinthatsystemareusedintoday'shybrids. In1969theGM512,averylightweightexperimentalhybridcar,ranentirelyonelectricpowerupto10 mph.From10to13mph,itranonacombinationofbatteriesanditstwocylindergasengines.Above13 mph,theGM512ranongasoline.Itcouldonlyreachatopspeedof40mph. The1973oilcrisispromptedrenewedinterestinfuelefficientvehicles,andtheUSDepartmentofEnergy (DoE),rantestsonmanyelectricandhybridvehiclesproducedbyseveralmanufacturers.In1974,theUS Environmental Protection Agency (EPA) tested a prototype hybrid that had been created using a Buick
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Skylarkbody.ItwascertifiedasmeetingtheAgencysguidelinesforcleanvehicles,butnofurtherinterest wastakeninit. In 1976, the US congress enacted the Electric and Hybrid Vehicle Research Development and DemonstrationAct,withthegoalofencouragingtheimprovementanddevelopmentofbatteries,electric motors, controllers and other components. General Electric was chosen to construct a parallelhybrid sedan,andToyotabuiltitsfirsthybridasmallsportscarwithagasturbinegeneratorsupplyingcurrent toanelectricmotor. In 1979, Mother Earth News built and publicised a hybrid that averaged 83.6 mpg, and 60,000 readers wroteinfortheplans.ThehybridhadbeendevelopedusinganOpelGTthatwasdrivenbya6hp(4.5kW) lawnmowerengine,a400Aelectricmotorandanarrayof6voltbatteries. In1989,AudiunveiledthefirstAudiDuoexperimentalvehicle,whichwasbasedontheAudi100Avant Quattro.Thecarhada12.6hp(9.4kW)electricmotorthatdrovetherearwheels,whilethefrontwheel drivewaspoweredbya2.3litrefivecylinderenginewithanoutputof136hp(101kW).Anickelcadmium batterywasusedtostoretheelectricalenergy.Twoyearslater,AudiunveiledasecondgenerationDuo, alsobasedontheAudi100AvantQuattro.AudilaterbecamethefirstEuropeanmanufacturertotakea hybridvehicleintovolumeproductionanotherDuobasedontheA4Avant.Thevehiclewaspoweredby a90hp(67kW)1.9litreturbodieselengineinconjunctionwitha29hp(22kW)electricmotor.Bothpower sourcesdrovethefrontwheelsandaleadgelbatterystoredtheelectricalenergy.However,theDuowas notacommercialsuccess. WhentheUSClintonAdministrationannouncedthePartnershipforaNewGenerationofVehicles(PGNV) in1993,Toyotawasexcludedfromtheprogramandlaunchedasecretdevelopmentprogramofitsown. Afterseveralyearsandabilliondollars,thePNGVemergedwiththreeprototypesthatwereallhybrids capableof80mpg.In1997,ToyotaunveiledthePriusandsoldnearly18,000duringthefirstyear.Toyota alsolaunchedahybridmodelofitssmallCoasterbusinthedomesticmarketin1997. HondafollowedToyotaintothehybridmarketwiththequirkyInsightin1999,andwasthefirsttolaunch in the US market. Toyota applied hybrid technology to the domestic market Crown and Estima models during2001,andHondafollowedwiththeCivicHybridin2002.ThefirstUSmanufacturedhybridwasthe FordEscapeHybrid,whichwaslaunchedlatein2004.
Driversofhybridvehicledevelopment
Thefundamentaldriversofhybriddevelopment,aswithothermorefuelefficienttechnologies,areonthe face of it quite simple: a reduction in dependence on oil for reasons of both scarcity and strategic
Figure6:Theattractivenessofhybridtechnologycomparedtootherpowertraintechnology Source:AllianceBernstein
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dependence, and a reduction in noxious emissions. In addition, both of these objectives need to be achievedinmarketconditionswhere,despitethecurrentmarketdownturns,therearelikelytobemore carsproducedinthenext20yearsthaninthelast110years. By2006globaloilconsumptionhadincreasedto85millionbarrelsperdayfrom49millionin1971despite efficiencyimprovementsspurredonbytheoilshocksof1973/74and1979/80.Withinthistimescale,as otherindustrieshavemovedawayfromoil,consumptionhasshiftedmarkedlytowardtransportation,and roadtransporthasbeenresponsibleforaroundtwothirdsoftheincrementalgrowthinoilconsumption since1971.By2030estimatesputthetransportationdemandataround65millionbarrelsperdaywith nontransportation uses running at around 56 million. Within transportation, light duty vehicles are critical at around 32 million barrels per day. The key drivers for the development of hybridvehicleshaveforsomeyearsbeen debatable in terms of the ability of the technology to deliver a cost effective solution in the face of competition from other drivetrain technologies. However, thissituationhaschangedsomewhatand the economic crisis affecting the global economy can be seen as something of a catalyst for changes in the driving forces that better promote the development anduptakeofhybridtechnology. Many technologies and powertrains are likely to increase fuel efficiency in the near future, including gasolineelectric hybrids, diesel, dieselelectric hybrids, natural gas, exfuel (biofuel), allelectric (battery only)and fuelcellvehicles. Over thenextdecade,however,itislikelythat hybrid technology will be the most important.LeeIacocca,theformerCEOof Chrysler, said, I dont see anything on the horizon short term that can improve fueleconomyfasterthanahybrid. Hybridpower technology offers a more attractive setof benefits thanalternative powertrains (Figure 6). Hybrids offer Figure7:Potentialroadmaptomasshybriduptake improvedfuelefficiencyandperformance Source:AllianceBernstein measured by acceleration and horsepower (hp), lower emissions and greater convenience. Unlike diesel, hybrids do not sacrifice performance to gain fuel efficiency (diesels require additional technology such as turbochargers to approach gasoline performance); unlike biofuel vehicles, hybrids do not require special pumps at refuellingstations;unlikeallelectricvehicles,hybridsdonotlimitdrivingrange. Additionally, consumers are enjoying an increasingly wide array of model choices. Furthermore, the technologyhasbeenrapidlyimprovingandinanindustryatmosphereofcostcuttingandrationalisation, hybrids stand to benefit substantially from research underway on engine, electrical component and batterytechnologies.
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Finally, hybrids offer tremendous flexibility: dieselandexfuelengines, as well as gasolineburning engines, can be hybridised. Gasolineelectric hybrids (the most common offering today) have just two weaknesses: load capacity andinitialcost. Load capacity is generally not a major issue for passenger cars, although it isaconcernforpickupand heavy trucks, but over the next few years, diesel hybridscouldemergeasthe Figure8:Europeandieselsales19992008 option for these segments. Source:IHSGlobalInsight As for the initial price premium, costs for this new technology are set to fall significantly as both increased competition and economiesofscalebenefitsemerge. Given their many advantages and limited, surmountable drawbacks, hybrid cars are likely tomakeuparound20%ofnewcarsalesby2020 intheUSandaround13%ofglobalsales.Within this period JPMorgan forecasts that the oncost of the hybrid system will fall to $1,890 from $5,667in2008.Correspondingly,thismeansthat the market for hybrid components will grow from an estimated $3.16 billion in 2008 to around$23.6billionin2020. Diesel is the powertrain most often mentioned as a viable competitor to hybrids, due to its Figure 9: The relationship between acceleration and lower initial price, high fuel efficiency and high fueleconomyforselectedVWmodels Source:fueleconomy.org power torque at low speeds. In Europe, where taxationmakesgasoline much moreexpensivethan it is in the US, diesel popularity has increased significantly over the past decade such that diesels share of new lightduty vehicle sales in Europe had risen from about 20% in 1997 to over 50% in 2008. On the other hand diesel car sales still remain around the 3% mark and over the longer term, the conventional diesel powertrain may be complementary, rather than competitive, to the hybrid powertrain in the passenger vehicle market. Figure10:Increasinglystrictemissionsstandards This is likely to come about for several reasons: firstly, although conventional diesel engines are fordiesels more fuel efficient than gasoline engines when Source:dieselnet.com
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measured over the full cycle from oil well to vehicle wheels (on a welltowheels basis), they are not as efficient as hybrids. A Toyota study comparing vehicles of similar weight and size concludedthatthedieselcarhasawelltowheel efficiency of 19% versus 13% for gasoline, and 32% for the Prius hybrid. Other studies provide similar results, though the magnitude of the hybrids advantage varies somewhat between studies. Second, conventional diesel engines require a tradeoff between performance (acceleration) Figure11:Therelationshipbetweenaccelerationand andfuelefficiency;hybrids,bycontrast,improve fueleconomyforhybridvehicles. both performance and fuel efficiency. Although diesels can deliver more torque in addition to Source:fueleconomy.org higher fuel efficiency than gasoline equivalents, their highertorque is best usedforaccelerating tolowspeedsandforcarryingheavyloads. Diesels perform less favourably when judged by horsepower and acceleration to high speeds than gasolinepoweredvehicles.Comparedtohybrids,dieselsaredisadvantagedinaccelerationtolowspeeds, since hybrids produce maximum torque instantaneously while diesels need time to achieve maximum torque. Diesels are also likely to be disadvantaged in acceleration to high speeds because they generally have lowermaximumpowerthangasolineandhybridvehicles.Therefore,dieselsarenotanocompromise solutionintermsofperformance,ashybridshavethepotentialtobe.
Figure12:CO2versuscostforvariouspowertrainoptions Source:Ricardo
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Third,andperhapsmostimportant,conventionaldieselvehiclesfacesignificantregulatorychallengesin many regions. While diesel engines emit less carbon dioxide than gasoline engines, they emit more nitrogenoxideandparticulatematter.Thus,California,NewYorkandseveralotherstatesintheUShave effectivelyrestrictedsalesofdieselpassengervehicles. Cleandieselenginesandfuelsmaybedevelopedinthefuture,butthisislikelytobeanexpensiveeffort. Furthermore,itremainsunclearifeventhesenewenginesandfuelscanmeettheincreasinglystringent environmentalrequirementsbeingadoptedinmanycountries.InfactanumberofOEMshaveprovedtoo reluctanttoincurtheexpenseofcleaningupdieselpowertrainsfortheUSmarket.VW,Audi,BMWand MercedesBenzaretheonlymainstream OEMsoffering dieseloptionsin the UStodayandaroundnine diesel models planned for this market by other manufacturers including Nissan, Honda and GM, have recentlybeencancelled. Competition from hybrids is particularly important in Europe, because Europe is where diesel has capturedthegreatestmarketshare.EuropeanUnionenvironmentalstandardsaresetto becomemuch tighterinthenextfewyears,whichwillfurtherincreasethepriceofdieselvehiclesandispushingOEMs towardsgasolineelectricordieselelectrichybrids. The Euro 5 requirements in place today reduced allowable emissions of nitrogen oxide and particulate matter for dieselby 20%and80%,respectively in 2008.PossibleEuro6standards will go even further, particularlyonnitrogenoxide,sometimearound2014anadditional50%reductioncomparedtoEuro5. Furthermore, OEMs complying with the standards must also ensure that devices fitted for pollution controllastforadistanceof160,000km. The cost of compliance with the increased particulate standards alone has been estimated at $500 to $1,000pervehicle,andthiscouldbemoreifmedicalresearchshowsthatmoreeffectiveparticulatefilters are required to curb health risks. New, more expensive catalytic converters may also be required to reducenitrogenoxideemissionstothetargetlevel.
Figure13:Carbondioxideemissionsversuscostperpercentagefuelreduction Source:Ricardo
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Inaddition,theEuropeanUnionistargetingreductionsincarbondioxideemissionsto120gramsperkm (g/km)forallnewpassengervehiclesby2012,versus172g/kmtodayfornewgasolinevehiclesand155 g/km for new diesel vehicles. Several OEMs have suggested that the cost of compliance with this new standard could initially be more than $5,000 per vehicle. This regulation therefore further motivates OEMstoembracehybridsasacosteffectivealternative.
Figure14:CO2emissionsbyenginetype Source:Ricardo Conventionaldieseltechnologymayremainthebestchoiceforpickuptrucksandvansthatcarryheavy loads, but as price premiums for hybrid vehicles decline and the technology becomes standardised, manufacturerswillintroducedieselhybridsthatwouldprovidethegreatertorqueneeded.Furthermore withEuropeslargescaleconversiontodieseloverthepastdecade,OEMsarequicklyannouncingplansto introduce diesel hybrids into the European passenger car market, offering better performance, fuel efficiencyandemissionsthaneitherconventionalgasolineordieselpowertrains. Significantfueleconomygainshavebeenclaimedforhybridvehiclesformanyyears,andataconsumer level this has proved to be a mixed blessing. Once the expectations for considerably improved fuel efficiency have been established the mixed achievements on this front across all manufacturers have seemedsomethingofadisappointment,andmanyanalystsandcommentatorshavepointedoutthatthe failuretodeliveronexpectationshashadanegativeeffectondemand.Howeverthispicturehaschanged significantly over the past two years as consumer expectations have been pulled back and the fundamentalreasonsforbuyingahybridvehiclehavebecomeunderstoodtoincludereasonsotherthan justfueleconomy. This picture can be clouded considerably as fuel prices fluctuate, and although the high prices of early 2008hadtheeffectofmakingconsumerspaycloseattentiontofuelefficiency,thelowpricesof2009can be seen to have the opposite effect. In this case, consumers who are in the market for new vehicles, considerthatfuelconsumptionimprovementsarenotasimportantastheyearlierbelieved,andcertainly thatthehighoncostofahybridisprohibitive.
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On the other hand there is little doubt that in the long term fuel prices are on an upward trend based purely onsupplyanddemandeconomics operatinginconcertwiththedevelopedeconomies desireto disentanglesupplydependencefromthepoliticallydifficultMiddleEast. RecentmovesbytheUSgovernmenttosetfuelconsumptiontargetshavebroughttheimportanceoffuel economyasadriverfor hybriddevelopmentandconsumeruptakeintosharprelief.SimilarlyinEurope OEMs must achieve significantly lower CO2 fleet average outputs and the underlying threat of financial penalties is serving to reinforce this point where a previous voluntary agreement failed to deliver. Regardlessofthetechnologyusedtoachievetheresultsalongtermwoollycommitmenttofuelcellsand abusinessasusualfornowstrategyisnolongergoodenough.However,thelimitedtimescalesforthe implementation of such fuel saving measures may also have the effect of promoting the already cost effective diesel technology available in Europe, as it will bring about the cost savings needed to make hybrid technology competitive. Indeed the increasing influence of European OEMs over the US market withthecurrentChryslerandGMsituationsmayalsoservetopromotedieseloverhybrid. Fuel economy alone, although becoming increasingly desirable across even low fuel cost markets, has as yet failed to be enough of a driver to bring hybrid production up to mainstream industry volumes, particularly as the consumer has seen the oncost as prohibitive across most of the market. However,ifthisisseen Figure15:CO2savingsbyhybridtype in the context of CO2 Source:Ricardo reduction and environmental concern,hybridpowertrainswiththeiruseofcleanelectricmotorsatleastforpartofthesystemcanbe seen as a way for some consumer segments to make a statement about their green credentials. It is indeed telling that car purchasers who might have been considered as highend consumers, and have purchasedexecutive,luxury orsportmodelsnowregularlyconsiderwhatareeffectivelymidrangecars suchasthePriusasawayofdemonstratingtheirenvironmentalbeliefs. Lower emissions levels are of global, regional and national interest, particularly to countries that have signedtheKyotoProtocol.Likewisemanufacturershavehadtoadheretoincreasinglystringentemissions standardsthatcanmeanbothfinancialriskandopportunitiesforOEMs.TheEUandJapanhavethemost restrictive emission standards, but these nations are already forecast to have a $300 per vehicle advantageovertheUSOEMs,whowillneedtoacceleratetheircompetinghybridtechnologyinorderto advanceintheindustry. To dateOEMshavebelievedthathybridswillnotyieldthereturnoninvestmenttheyrequire forsome years, although Toyota are believed to be close to this situation if the current global industry demand crisisisdiscounted.HoweveraviewtothenextroundofemissionsregulationshowsthatmoreOEMsare utilising the kudos of hybrid development to highlight their green credentials through marketing channels and are attempting to gain consumer approval by their willingness to develop and support hybridtechnologyintheirproductionplanning.
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Figure 13 highlightstherelationship between carbondioxideemissionsreductionsandthecostsof fuel efficiency technology. In the figure, FC stands for Fuel Consumption, FE for Fuel Efficiency and %FE for percentage fuel efficiency benefit. The values along the xaxis are the dollar cost divided by the fuel efficiencybenefit. Consumers today are increasingly driven by green credentials. Hybrid sales volumes have risen rapidly, despitethepricepremium,buttheToyotaPriushasoutsolditsclosestrival,theHondaCivicHybrid,by someconsiderabledistance.WhilethiscanbeexplainedtosomedegreebythefactthatthePriusisafull hybrid with higher EPA fuel economy ratings than the mild hybrid Civic, the Prius is also a designated hybridvehiclewithnononhybridmodelavailable.Itisthereforedistinctive,whereastheCivicHybridis identicaltoanonhybridCivic,apartfromminorbadgedetail.Manufacturersarewellawareofthis,and plantobadgetheirhybridofferingsmoredistinctively. For some years before the introduction of binding regulations with penalties for those OEMs not complying, government and state incentives have provided both manufacturers and consumers with rewardforproducingandpurchasinghybridcarsrespectively.Japan,France,ChinaandtheUStonamea few countries all have developing policies for purchase and manufacturing subsidies and credits, while thesemeasures have beenseen astemporary, the push for further fiscal interventionin whatever way possiblecontinuesinthehybridarena. Since its early options of specific hybrid models such as the Prius and Insight, the model offering has expandedconsiderablytoincludemodelsacrosstherangeofsegments.Itcanbearguedthatthelarger margins generally available on upper segment vehicles make it easier to introduce technology with a significant oncost rather than trying to introduce the technology in the hardest fought, most cost competitivesegments.However,theuseofahybridelementinthepowertrainofUSpickuptrucksand luxurybrands isalsoless effectiveindeliveringlowfuel consumption vehicles.However, it would seem thatthemarkethasnowprogressedquicklytoastatewhereahybridpowertrainisanoptionalongwitha range of other options, including diesel and downsized ICE. Hybrids are best suited to the urban drive cycleswhereregenerativebrakingandstopandgotrafficrunscanhighlightthemorecostefficientfuel saving opportunities. On the other hand a diesel powertrain might be better suited to longer distance commuting. In this way the current competitive conditions around the world are driving towards a product offering that reflects the optimum powertrain solution for each application or duty cycle a situationalreadyunderconstantconsiderationinthetransitbusmarket. However,themarketdevelopinginthisfashionbringssomeissuestotheOEMsthemselves.Historically engine families with production runs amounting to decades have done changes restricted to head and smallermodifications.However,theofferingwholesaleofalternativepowertrainsincludinghybridsbrings anotherdimensiontotheestablishedbusinessmodel,andfurtherdevelopmentssuchasPHEVsandEVs will contribute to the product offering complexity. This will also drive further collaborations between OEMsofthekindthathavealreadyproducednewtransmissionsforhybridpowertrainsbetweenBMW, DaimlerandChrysler.Itmayalsobringnewopportunitiesforthesupplysectortomakefurtherinroads intothepowertrainsector.EngineshavehistoricallybeenseenbymanyOEMsasacriticalinhousepart oftheirproductoffering,butagrowingvarietyofoptionswillmeanincreasedoutsourcing. However city buses and delivery trucks are already being manufactured in hybrid variants, and some forecastspredictthatthehybridheavydutymarketwillreach25%by2020,whereaspassengercarand smalltruckpenetrationisexpectedtoreachlessthan10%inthesameperiod.
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HybridTechnology
Typesofhybridvehicle
There are several ways to create a hybrid drive system using a combination of an internal combustion engine(ICE)andoneormoreelectricmotors. Thedifferingtypescanbedifferentiatedby: HowtheelectricandICEdrivesystemsofthepowertrainconnect; Atwhattimeseachdrivesystemisinoperation;and What proportion of the power is provided by Source:Toyota eachpropulsionsystem
Mosthybridsalsousetheelectricmotor(s)asgenerators toaddchargetothebatterywhenthevehicleisbraking, retrieving some of the vehicles kinetic energy for later use. Many also shut off the ICE when it is not needed, thus saving energy and reducing emissions in stopstart
Figure16:Ratioofengineandmotoroperationinthehybridsystem
traffic, although this feature is not unique to hybrids. It was pioneeredbySubaruintheearly 1980s and has been used, for example,intheVWLupo3Land Citron C3. This is sometimes referred to as micro hybridisation.
The most common types of electricICEhybridareseriesand parallel. The parallel type is currently being applied to most hybrid vehicles. Parallel hybrid systemscanbefurthersubdividedintoassist,mildorfull,andfullcanbedividedintoinputsplitor combinedsplit
MicroHybrids
Stop/start systems are also commonly referred to as micro hybrids, which can create confusion when looking at the hybrid market. Typically a micro hybrid uses electric motors only to supply the starter/generatorandtomanageenginestop/startandbatterychargingsometimeswithregenerative brakingpowerandauxiliarypower.Theelectricmotorisnotusedtosupplyadditionaltorquewhenthe ICEisrunning. TheuseofhighervoltageelectricalsystemsenablestheuseoftheIntegratedStarterAlternatorDamper (ISAD),whichhasbeenacentralcomponentinthedevelopmentofhybridsbutwhichcanbringseveral benefits to nonhybrid vehicles. Indeed, many analysts believe that the ISAD will be the strongest competitiontofullhybridsinthemediumterm.
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As the name suggests, the ISAD integrates the vehicles startermotorandalternatorintotheflywheel,orcrankshaft damper, on a conventional ICE. The starter motor, bybeing integrated,isengagedatalltimesandcanstarttheengine with little noise and no wear and tear on components. Dependingonthesizeofthebattery,thestartermotorcan alsobeusedtolaunchthevehiclefromrestbeforetheICEis started, or can be used to provide added torque for acceleration. The enginestarting function allows the engine tobeturnedoffwhenthevehicleisstationaryandtheISADs use during initial acceleration from rest helps to reduce emissionsduringtheICEsmostpollutingphase. Since an electric motor can be used as a generator when driven, the integrated starter motor functions as an alternator,butwithouttheenergylossesassociatedwiththe conventional, beltdriven configuration. It can also be used for regenerative braking, converting some of the vehicles kinetic energy back into electrical energy by charging the battery.
Figure17:ContinentalsISADUnit Source:Continental
The ISAD configuration is similar to that already used in several socalled mild hybrids, of which the HondaInsightwasthefirstcommercialsuccess.Mildhybrids,unlikefullhybrids,cannotoperatesolely onelectricpower,apartfromtheinitiallaunchfunctionfromrest.ISADtechnologyistypicallyassociated withfueleconomyandemissionsimprovementsof1530%,which,whilelessthanthepotentialofafull hybrid, is very attractive. General Motors uses Continentals ISAD technology in its Chevrolet Silverado andGMCSierramildhybridpickups,andclaimsfueleconomybenefitsofupto15%. However, ISAD technology has several advantages over full hybrid technology, not the least of which being that they cost no more to produce than the components they replace. Further, major suppliers, such as Siemens and Continental, plan to produce millions of ISADs annually, 10,000,000 whichcanonlyhaveabeneficial 8,000,000 effectonunitprice,makingthe technology low risk for 6,000,000 automotivemanufacturers,with 4,000,000 batteries and DCDC converters as the only significant extra 2,000,000 costs. The Belt Alternator Starter (BAS)
0 2008 2009 2010 2011 2012 2013 2014 2015
Several manufacturers have employed similar, but less Figure18:Microhybridproductionforecast integrated, technology in the Source:GlobalInsight form of the Belt Alternator Starter(BAS). TheBAS,althoughlesseffective than the ISAD, is also providing competition for full hybrids because the technology is relatively inexpensivetoproduce,itcanbefittedintoexistingvehicleplatformsandengineswithoutanysignificant modifications,anditprovidessomeimprovementinfueleconomyandemissions,particularlyinstopstart conditions.
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In a BAS system, the conventional, beltdriven alternator is replaced with a larger electric motor that acts both as a generatorandastarter.Whenthevehiclesengineisrunning, the BAS operates normally as a beltdriven alternator and chargesa36/42voltbatteryaswellasthe12/14voltsystem. As with the ISAD, ancillary units, such as power steering and airconditioning,aredrivenbythehighvoltagebatterysystem so that they can operate without the ICE. The BAS also operatesunderbrakingaspartoftheregenerativesystem,and asthevehiclecomestoastop,theICEisswitchedoffuntilthe driver takes pressure off the brake pedal, at which point the BAS operates as a beltdriven starter motor, restarting the engine.TheBAScanalsobeusedtosmooththegearshifting Figure19:DelphiBeltAlternatorStarter ofanautomaticgearbox. Source:Delphi For highway driving, the system offers no advantage, and claims regarding improvements in fuel economy have ranged fromafew%toasmuchas15%.Clearlytheresultsdependon thetypeofdrivingcycleand,asever,thedriversdrivingstyle.
Electroniccomponents
Aswellasbatteries,electricmotorsandtransmissions,electroniccontrollers,convertersandinvertersare key components in hybrids. In turn, these electronic units require components such as semiconductors and sensors that are specific to hybrids. Extra wiring harnesses are also necessary to connect hybrid componentsandthecontrolunitsthatmanagethepowerthroughoutthevehicle. AninverterconvertstheDCbatteryoutputtoACinputfortheelectricmotor.Underregenerativebraking, thisprocessisreversed,sothattheACoutputofthemotor,whileoperatingasagenerator,isconverted to DC to recharge the battery. A DCtoDC converter converts the high voltage supplied by the main battery to a lower voltage to charge a 12volt auxiliary battery and supply electric power to various accessories,suchasheadlamps,wipersandhorns.Abatterymonitoringcontrolunitmonitorsthevoltage, currentandtemperatureofthehighvoltagebattery. Computermodulescontroltheinternalcombustionengineandtheelectricmotor,allowingthemtorun together or separately, and the transmission, whether automatic, CVT or dual clutch, is also managed electronically.Amainsystemrelayconnectsanddisconnectselectriccurrentsbetweenthehighvoltage batteryandhighvoltagesystem,andshutsoffthehighvoltagesysteminacollisiontoensurethesafety ofvehicleoccupantsandrescueworkers. Hybridvehicleshaveledtheshifttowards36/42voltelectricalsystemsbecausetheyrequireelectrically poweredancillaries,allofwhichrequiresensorsandelectroniccontrolunits.Nonhybridvehicleswillalso increasingly require these, as will fuel cell vehicles. Fuel cell vehicles will also need other electric/electronic components, such as valves for air and hydrogen, blowers to recirculate hydrogen, hydrogensensors,compressorsandwaterpumps. Itisforecastthatthevaluepercentageperlightvehicleofelectronicsystemswillincreasetoatleast35% ($4,300)by2010,andthiswilldriveamovetomodulebasedsoftwareplatformsandaconsolidationof thecurrenthighnumberofcontrolunitsdespitetheincreasingnumbersoffunctionstobecontrolled.
Serieshybrids
In a series hybrid, the ICE has no mechanical connection to the electric drive, but powers an electric generator todrive the electric motor and charge the battery. A series hybrid is therefore essentiallyan electric vehicle with a fossil fuel recharging system on board. Locomotives have used a series hybrid configurationformanyyears,althoughtheydonotusebatteriestostoreenergy.
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Inaserieshybridvehiclewithabatterysystem,bothsourcesofpowercanbeusedifnecessary,andthe use of wheel motors can provide allwheel drive. Weaknesses of the series arrangement are that it requiresaseparategenerator,whereasaparallelsystemcanusetheelectricdrivemotorasagenerator forregenerativebraking,andpowerdeliveryislimitedbytheelectricdrivemotorsbecausetheICEcannot directlydrivethewheels.
Parallelhybrids
ParallelsystemsconnectboththeelectricmotorandtheICEtoamechanicaltransmission.Insomecases, theICEisthepredominantdrivesystemwiththeelectricmotoroperatingtoaddextrapowerasrequired. Others can run with just the electric motor driving. Most designs combine an electric motor/generator intooneunit,oftensituatedbetweentheICEandthetransmissionwhereaconventionalflywheelwould be. A large battery is required, providing high voltage and high storage capacity. Accessories such as power steering and airconditioning must be powered by electric motors so that they can operate independently when the powertrain is stopped. This, in turn, offers further efficiency gains by using energyonlywhenitisneeded,ratherthanhavingancillarysystemsdrivenatalltimesbytheICE.
Series/Parallelhybrids
Aseries/parallelsystemcombinesseriesandparallelsystemstomaximisethebenefitsofbothbyusing bothanelectricdrivemotorandageneratorsothatelectricitycanbegeneratedwhiletheelectricmotor isdrivingthewheels.ToyotasTHSsystemusesseries/paralleltechnologyinaninputsplitconfiguration. Source:Bosch
FullHybrid
A full hybrid can run on just the ICE,orjusttheelectricmotor,ora combination of both. The Toyota Prius and the Ford Escape Hybrid Figure20:Hybridelectricvehicledriveconfigurations are examples of full hybrids. A large, highcapacity battery is required for electriconly operation. A full hybrid has a split drive system that allows flexibility and balances the drive from each system using a differentialtype linkage between the ICE, the electric motor and the transmission. An electroniccontrolsystemmanagesthepropulsionsystems,determiningwhichcombinationofthetwoto useineachcircumstance.Typically,theICEisshutdownwhenthevehicleisstationary,andthevehicleis launchedintomotionagainbytheelectricdrive,engagingtheICEonlywhenitisneededforextrapower ortorechargethebattery. ThedifferingtorquecharacteristicsoftheICEandelectricmotorsareidealforsynergisticoperation.An ICEstorqueislowatlowenginespeedsandtheneedforadequatepowerunderaccelerationhasresulted
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intheuseofenginesthataremuchlargerthanrequiredforsteadycruising.Ontheotherhand,anelectric motordevelopsmaximumtorquefromstationary,anditsefficiencytendstoimprovewithload,makingit idealforacceleration. TheToyotaHybridSystem(THS)isaninputsplitsystem,withonlyasinglepowersplitdevice.Thiskeeps themechanicalcomponentryrelativelysimple,andallowstheuseofasmallerICE,buthasthedrawback of maximum speed being limited by the speed of the smaller electric motor. Also, the efficiency of the transmissionisheavilydependentontheamountofpowerbeingtransmittedbytheelectricmotor,asthe multiple power conversions, each with their own losses, lead to a low efficiency path compared to the purelymechanicalpath.Thismeansthatathigherspeeds,theefficiencyofthetransmissionfallsbelow thatofaconventionalautomatictransmissionwithahydrauliccoupling. Acombinedsplitdrivesystemhasasecondplanetarygearsetandtwoclutches,enablingswitchingofthe proportionsof mechanicallyand electrically transmitted power inorder to manage both low and high speedregimes.However,thisrestrictsthesystemtosmaller,lesspowerfulelectricmotors.Toovercome this,GeneralMotors,BMWandDaimlerChrysler(nowDaimlerandChrysler)havebeenworkingtogether on a socalled twomode hybrid system, which uses two electric motors of around 50kW to 70kW to providetwoelectricspeedranges.
MildorAssistHybrids
MildorassisthybridsusetheICEforprimarypower,withanelectricmotortoprovideadditionalpoweras requiredviaaconventionalpowertrain.Assisthybridsdifferfromfullhybridsinthattheycannotoperate normally on the electric motor alone. Hondas hybrids use this system, which Honda calls Integrated MotorAssist(IMA),combiningthecompanysexpertisewithsmall,efficientgasolineengineswithalow powerelectricdriveanditscorrespondinglysmallerbatterycapacity.
PlugInorDualModehybrids
PlugIn hybrids are vehicles that can run in a pure electric mode (electric motor drive) or ICE mode independentlyortogetherdependingonthedifferentdrivingmodes,buthavethefacilityforexternally chargingthebattery. ThesetypesofhybridareknownasDMhybridinChina,andarenottobeconfusedwiththeTwoMode hybridsasdescribedbelow.
Hybridtransmissions
Thecurrentsuccessofhybridsreliesuponseveralfactors including a robust versatile transmission system. The architecture of many hybrid systems depends on the transmissionsystemforitssuccessfulimplementation,so it is essential to consider the transmission function duringthespecificationanddevelopment.TodateOEMs have often approached hybrids with a mixandmatch concept in order to get an acceptable balance between performanceandfuelconsumption.
Figure21:OneModeHybridInputSplitEVT. Thismeanstherearedegreesofhybridisationwhichhave Source:GM,Daimler,BMW evolvedfrommildhybridstofullhybridsandfurtherto include socalled plugin hybrids with larger batteries, rightuptofullEVs.Themarketdemandsparticularlevels of shift characteristic, shift quality, gear change speed, launch quality, creep and hillhold, and the acceptabilityofthesecharacteristicschangesacrossmarketsectorsandgeographicregions.
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Manualtransmissionsareacceptableinsomemildhybridsystems,howeverifthehybridsystemrequires thetransmissiontobeapartofthehybridcontrolsystem,thenanMTisnotsuitable.Thechoiceforan automated transmission is now very wide with ATs, CVTs, AMTs and DCTs all available. Hybridisation represents opportunities to make improvements to transmission features and functions and to make systems,particularlyAMTsacceptablewhereotherwisetheyarebroadlyunacceptable. Examples of full hybrids are the ToyotaPriusandtheFordEscape, whichare builttobepoweredby the internal combustion engine independently, or the electric motor independently, or a combination of both. Both power sources are connected by link to the transmission. The pathway of power is divided between mechanical and electrical. Thus, depending on what kind of drivetrainstructure it houses, the vehicle is able to utilise an internal combustion engine, an Figure22:TwoModeHybridInputSplitEVT electric motor and in many cases Source:GM,Daimler,BMW an electric generator, with power usage divided in relation to drivingconditions.Forexampleatstandstill,anelectricmotorcanprovidemaximumtorqueasopposed totheminimaltorqueatlowerenginerevolutionsinaconventionalvehicle.Theuseofthegeneratorcan providepowertoanelectricmotor(orseveralmotors)thatinturncanmovethevehiclewhilethebattery is simultaneously charging. More efficiency gains are possible by linking accessories such as power steeringtotheelectricmotorinsteadofthecombustionengine.Similarlysupercapacitatorscanbefitted to certain hybrid drivetrains to minimise the loss of battery power. Charging options during idling and cruisingcanalsobeextendedtoboostenginepowerwhenroaddemanddictatesandconverselycanbe utilisedtoproduceregenerativebrakingwhilstactuallyimprovingfueleconomy. Plugin hybrids (PHEVs) are widely forecast to become a significant part of the hybrid vehicle market in the future. They allow the driver the freedom to operate in full electric mode for small journeys and general commuting, but for longer distances the fueldependent mode can be utilised. In addition to this its larger capacity battery can be recharged using an electrical power grid (national power source), hence the concept Figure23:OneModeHybridInputSplitEVT of plugin. It is also not confined to just conventional gasoline fuel Source:GM,DaimlerBMW butcanbedesignedfordiesel,bio dieselorhydrogen.
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Intermsoftransmissiondesign,thelatestdevelopmentsinATsandDCTsincorporatefeaturesthatallow them to be considered relatively hybrid ready. This can be in terms of limited hybridisation by incorporationofanintegratedstarteralternatordamper(ISAD),ormoresophisticatedsystems.
OneModeandTwoModeHybrids
In 2006, an alliance was formed between General Motors, Daimler and BMW called the Global Hybrid Cooperation Group, with the sole purpose of developinghybridtechnologyandmorespecificallythe twomode hybrid transmission. This was the basis for establishing the Electrically Variable Transmission (EVT). Similar to that of Continuously Variable Transmission (CVT) where the speed of the engine is varied mechanically, ECT allows for the same process Figure 24: TwoMode Hybrid with InputSplit but by electrical means as well as storing energy andCompoundSplitEVTModes. electrically in a battery. Overall the result is system efficiencyandreducedfuelconsumption.Howeverthe Source:GM,DaimlerBMW groupacknowledgedproblemswiththetransmissionof electrical power like efficiency, packaging and cost issues,thusthetechnologydevelopedwasaimedateliminatingorreducingtheseproblems.Thisbecame thebirthofthetwomodehybrid. Whilethegroupusedamodernautomatictransmissionwithfixedgearratiosasoneoftheconceptsfor itstwomodehybrid,theEVTprovidedthestrongerconceptforexploringpowersplittransmission. Thereaderisguidedtoavarietyofearlierpatentsthatappeartodescribethisconfigurationveryclosely, includingworkfromStridesberg. InitiallytheonemodeEVTwasthemostcommonlyusedhybridsystem,andwasmadeupoftwoelectric motorsandoneplanetarygearset(withoutclutches).Thepowerflowingthroughthetransmissionwas splitintotwoways(inputsplit):powerflowbeginsfromenginetogearsetandthroughthetransmission where it would then split. First, mechanically, which ultimately transfers to the final drive; and second, electrically,whichpassesthroughthefirstelectricalmotorand/orsecondelectricalmotorbeforepassing tothebatteryandeventuallybackintomechanicaloutput. One of the inherent problems with the onemode EVT was the fact that there was seldom enough electrical power to match that of the engine, requiring larger sized motors which results in reduced efficiency,packaging issues andincreased manufacturing costs. This is ultimately attributed to the one modehybridonlyhavingasingletransmissionratiowhichimpactstheelectricalpathintheformofpower loss,makingthisoptionsuitableforsmalltomediumsizedvehiclesatbest. The twomode hybrid was designed to combat these problems, and essentially the difference is that a dualEVTmodeisaddedprovidingasecondclutch(withtorqueadvantageatlowspeeds)whichallowsa twowaypowerflowthroughthetransmission.Alternatelybetweeneachclutchthesystemrunsasboth acompoundsplitEVTandaninputsplitEVT,thusincreasingtherangeoftransmissionratios. With both compound and input options the vehicle has the ability for electriconly launch, engine off idling, engineoff during deceleration, plus the boost to the engine electrically and energy capture in deceleration.Highspeedcruisingismoreefficientandthereisminimumelectricalpowerloss. LikewisewheretheonemodeEVTrequiresmuchlargercumbersomemotors,thetwomodeEVTallows forcompactsizedmotorsaidingregenerativebraking. AsfarasGeneralMotors,DaimlerandBMWGroupareconcernedthehybriddrivetrainisheretostayand 20072008haveseenmoretwomodehybridsinthemarketplaceinawidevarietyofvehiclesegments.
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Overall, the twomode hybrid offers General Motors, Daimler, and BMW Group customers an optimal combinationofperformance,fueleconomyandcomfortincompact,efficientpackages.Motorpeakand continuous power are reduced by the options of operation in inputsplit, compoundsplit or fixed gear parallelhybridoperation. The factthat motor size is not only smaller but less dependent on engine size enables a more conventional and smaller hybrid transmission package and allows the twomode hybrid to be offered on a wider range of vehicles while reducing overallsystemcost. Thefirsttwomodehybridtobeoffered for sale by the Global Hybrid Cooperationwillbeforrearwheeldrive SUVs and other fullsize light trucks. This transmission will be featured in General Motors and Chrysler vehicles, startingwiththe2008ChevroletTahoe followed shortly after by a Dodge Durango.Figure25displaystheexterior Figure25:Twomodehybridtransmission. of the twomode hybrid transmission Source:GM,Daimler,BMW for rear wheel drive trucks, which will be installedinNorthAmerican V8truck engines.
EachofthemembersoftheGlobalHybridCooperationwillalsobeofferingamorecompacttwomode hybrid transmission for rearwheeldrive luxury cars and other vehicles which require a more compact transmission. This transmission will be featured in a variety of General Motors, Daimler, Chrysler and BMWGroupvehicles. Although the twomode hybrid design will be jointly developed, the hybrid drivetrain system will be integratedintothevehiclesbythemanufacturerstakingintoaccountthebrandspecifications.
Regenerativebraking
There are a number of regenerative braking system designs and all of the major braking system manufacturers now have products available. Continentalusesaconventional ESC unit allowing the Regenerative Brake System to perform all the usual braking interventions and stability functions (e.g., ABS, EBV, TCS, ESC,BAS,OHBV,ACC,etc.). The companys ESC Hybrid is based on a standard hydraulic brake system. The only additional component required isabrakepedalpositionsensor. When the driver depresses the
Figure26:RegenerativeBrakingSystem Source:Continental
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brakepedal,thedriveractivatesthehydraulicbrake.Simultaneously,thepedalpositionsensormeasures thebrakepedalstroke.ThebrakeHECUconvertsthebrakepedalstrokeintoadecelerationtorqueand commandsanelectricgeneratortoachievethetorque.Inessence,thedriversimultaneouslyactivatesthe conventional hydraulic brake and the electric generator based brake. The recuperation focuses on the dominantvehicledecelerationrange(<0.1g). The driver compensates the decreasing generator torque at low vehicle speed. To increase the recuperationefficiency,theeffectofthehydraulicbrakeisdeferredtoahigherbrakepedalstrokeusinga hydraulic gap (also called eGap) in the brake HECU. The hydraulic gap takes advantage of the already existingvalvesinthebrakeHECU. TRW'ssystem,calledSlipControlBoost(SCB)haditsfirstproductionapplicationontheGeneralMotors twomodehybridSUVsandthefuelcellEquinoxthatisbeingusedforProjectDriveway.Becausehybrids andEVsdon'tnecessarilyhaveavacuumsourceavailableforbrakeboost,theSCBsystemincorporatesa hydraulicbrakeboosterandahighpressureaccumulatortosupplybrakepressureondemand.SCBalso providesfullslipcontrolfunctionality,includingABS,tractioncontrolandstabilitycontrol.TRWhasalso announcedasecondgenerationversionSCB2thatis25%smallerandlighterthantheoriginal.TheSCB2 systemcanalsobeusedondieselvehiclestoreplacethevacuumpumporhydraulicassistsystemsforthe brakes.Thisshouldalsobealowercostwhichwillcontributetoautomakersreducingthecostsoftheir hybridandelectricvehicles.
Electricmotors
Motion is produced by magnetic attraction/repulsion. Magnetic field may be produced by permanent magnetsorcurrentflowinginawire.Togetrotation,thecurrentand/ormagneticfieldmustchangeas therotorrotates.Therearemanydifferenttypesofmotor,themainonesbeing:
ACMotors
AnACmotorisanelectricmotorthatisdrivenbyanalternating current. It consists of two basic parts, an outside stationary stator having coils supplied with AC current to producearotatingmagneticfield,andaninside rotor attached totheoutputshaftthatisgivenatorquebytherotatingfield. There are two types of AC motors, depending on the type of rotor used. The first is the synchronous motor, which rotates exactly at the supply frequency or a submultiple of the supply frequency. The magnetic field on the rotor is either generated by current delivered through slip rings or by a permanent magnet. The second type is the induction motor, which turns slightly more slowly than the supply frequency. The magnetic field on therotorofthismotoriscreatedbyan induced current.
DCMotors
ADCmotorworksbyconvertingelectricpowerintomechanical work by forcing current through a coil and producing a magneticfieldthatspinsthemotor.Onedrawbacktothemotor isthelargeamountoftorqueripplethatithas.Thereasonfor thisexcessiverippleisbecausethecoilhasaforcepushingonit onlyatthe90and270positions.Therestofthetimethecoil spins on its own and the torque drops to zero. Thetorque
Figure27:EVmotors Source:SupplierBusiness
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curveproducedbythissinglecoil(always morethanone coil),as morecoilsareaddedto themotor, is smoothedout.The resultingtorquecurve neverreachesthezero pointandtheaverage torque for the motorisgreatlyincreased.Asmoreandmorecoilsareadded,thetorquecurveapproachesastraightline andhasverylittletorquerippleandthemotorrunsmuchmoresmoothly.Anothermethodofincreasing the torque androtational speedof the motor is to increase the current supplied to the coils. This is accomplishedbyincreasingthevoltagethatissenttothemotor,thusincreasingthecurrentatthesame time. BrushedMotors The brushedDCmotor generatestorquedirectlyfromDCpowersuppliedtothemotorbyusinginternal commutation,stationarypermanentmagnets,androtatingelectricalmagnets.Advantagesofabrushed DCmotorincludelowinitialcost,highreliability,andsimplecontrolofmotorspeed.Disadvantagesare highmaintenanceandlowlifespanforhighintensityuses.Maintenanceinvolvesregularlyreplacingthe brushes and springs which carry theelectric current, as well as cleaning or replacing the commutators. Thesecomponentsarenecessaryfortransferringelectricalpowerfromoutsidethemotortothespinning wirewindingsoftherotorinsidethemotor. SynchronousDCMotors Synchronous DC motors, such as the brushless DC motor and the stepper motor, require external commutationtogeneratetorque.TheylockupifdrivendirectlybyDCpower. BrushlessDCMotors BrushlessDCmotorsusearotatingpermanentmagnetintherotor,andstationaryelectricalmagnetson the motor housing. Amotor controller converts DC toAC. This design is simpler than that of brushed motors, because it eliminates the complication of transferring power from outside the motor to the spinningrotor.Advantagesofbrushlessmotorsincludelonglifespan,littleornomaintenanceandhigh efficiency.Disadvantagesincludehighinitialcost,andmorecomplicatedmotorspeedcontrollers. High power brushless DC motors are at the root of most electric vehicle technology. These motors are essentiallyACsynchronousmotorswithpermanentmagnetrotors.
Synchronousmotors
Thesearedistinguishedbyarotorspinningwithcoilspassingmagnetsatthesamerateasthealternating currentand the resultingmagnetic fieldwhich drives it. They can be said to have zero slip under usual operatingconditionsincontrastwithaninductionmotor,whichmustslipinordertoproducetorque. Synchronousmotorshavethefollowingadvantagesovernonsynchronousmotors: Speedisindependentofload,providedanadequatefieldcurrentisapplied; Accuratecontrolispossibleinspeedandpositionusingopenloopcontrols,e.g.steppermotors; SynchronousmotorswillholdtheirpositionwhenaDCcurrentisappliedtoboththestatorand therotorwindings; Theirpowerfactorcanbeadjustedtounitybyusingaproperfieldcurrentrelativetotheload; Furthermore,a"capacitive"powerfactor,(currentphaseleadsvoltagephase),canbeobtained byincreasingthiscurrentslightly,whichcanhelpachieveabetterpowerfactorcorrectionforthe applicationoverall;and Theirconstructionallowsforincreasedelectricalefficiencywhenalowspeedisrequired.
Examplesofsynchronousmotorsare: BrushlesspermanentmagnetDCmotors;
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Steppermotors; SlowspeedACsynchronousmotors;and Switchedreluctancemotors.
TheelectricmotorforanEVcanbesitedinanumberoflocations.Mitsubishihaselectedtoworkwithan inwheel motor electric vehicle (MIEV) concept, (the company also envisages the utilisation of this technologywithhybridpowertrainsandfuelcellvehicles). Theinwheelmotormakesitpossibletoregulatedrivetorqueandbrakingforceindependentlyateach wheelwithouttheneedforanytransmission,driveshaftorothercomplexmechanicalcomponents.The factthatthedrivesystemishousedinsidethewheelitselfofferssignificantlygreaterdesignfreedomand also makesiteasier to locatesuch spaceconsumingcomponents as the battery system, fuel cell stacks andhydrogentanksusedinhybridandfuelcellvehicles.However,thepackagingoftraditionalfoundation brakes,whicharerequiredbyconstructionanduseregulation,isproblematic. UK company PML Flightlink has developed its HiPa Drive system, a disruptive (through the use of a 1 switchpercoil inverter system) vehicle propulsion unit that can be used inwheel. It features a fully integratedpowerdeliverysystemanddevelopmentplatformincludingboththeinwheelmotorthatcan actasageneratororbrakeandisseveraltimeslighter,smallerandmorepowerfulthantheconventional electronic propulsion systems and generators it replaces. It also features embedded control electronics thatcanmanagethecontrolofthemotors.Theintegratedpowermanagementsystemdistributesdrive power to the motor and then recaptures and feeds most of that energy back into the battery using a regenerativesystem.Intelligentcontrolsoftwareisusedtooptimiseefficiencyandvehicleperformance whilegivingdriversasignificantfeelofcontroloverthedrivingexperience. Indeed,oneofthedrawbacksoftheinitialrangeoftechnologydevelopedforEVsisaperceivedlackof involvementforthedriverusedtousingconventionalvehicles. US electric car maker Zapp has signed an exclusive $10 million deal with PML Flightlink, whose wheel centred technology is to play a major role in the next generationEVs that are currently in design with ZappLotusEngineering.Thevehiclescurrentlyindevelopmentboastatopspeedof155mph,060mphin 4.8secondsandapeak644hp.ThePMLsystemsbringtheadvantageofindependentquadelectricdrive, traction control and anti skid built into each wheel, regenerative braking for energy recovery, good acceleration and top speed, around 80 mpg via onboard engine/generator and no need to recharge batteries(althoughyoucanifyouwish).AlthoughintheprototypeMiniQEDasmallpetrolmotorisused forrechargingpurposesonly,thiscanbeturnedoff. TheEVismeanttobeasimplermachinewithfewermovingpartsthantheinternalcombustionengine, however,thereareasyetfarmoreunknownssurroundingEVtechnology.Theprincipaltechnicalhurdle forthewiderapplicationofpureelectricalvehiclesisthedevelopmentoftheelectricalstoragedevicei.e. batterytechnology. TheothercrucialandexpensivepartoftheEVisthecontrolelectronicsforthebattery,andthisneedsto achievethecorrectlowcost/highefficiencylevel.
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Switchreluctancemachines
Switchreluctancemachinesworkthroughrotationcausedasa magneticallypermeablerotormovestominimisereluctancethe magneticfieldcreatesbythestatorcoils. Theadvantagesare: They are very robust due to simple rotor with no windings; Nearly all losses occur in stator, which has a few concentratedcoils; Highstartingtorquewithawidespeedrange; Torque ripple (cogging) can be higher than other motortypeswhichmayalsocauseacousticnoise; o o Figure28:Switchreluctancemachines Source:Ricardo Torque ripple can be improved by increasing numberandshapeofpoles;and Noise characteristics can be improved by carefulhousingdesign.
Asimpleinverter(noshootthrough); o Onlyfourmosfetsperthreephasesispossible ifonlyusedasamotor.
Willstillfunctionwithonelostphase.
These characteristics result in the increased use of switch reluctance machines in the automotive sector, particularly consideringtheirlowrelativecost.
BatteryTechnology
Currentbatterymanufacturingtrends As the manufacture of electric vehicles gains momentum, one of the most intense areas of development is that of battery technology. Battery makers are underimmensepressuretoproduce smaller, more powerful and cost effective batteries, whilst at the same time conforming to environmental compliance and safety. Two things are happening in car design that are having far Figure29:Batterypricetrendforecast reaching consequences in Source:Volkswagen automotive battery technology. Firstly,powerconsumptionisrelentlesslyincreasingwithconventionalvehicles.Systemsthatwereonce enginedrivenhavechangedtoelectricpowertoreducefuelconsumptionthroughparasiticengineload, andthecustomerhasacontinuingappetiteformorefeaturesandgadgets.Renaultestimatesthatsince 1980,electricalpowerconsumptionhasincreasedtenfoldandsomelargervehiclestodayrequirearound 5kilowatts.However,despitethetalkof42voltsystemstheindustryhasbeenveryslowindevelopment.
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However,anothersetofelectricalrequirements,drivenbytheuseofalternativepowersystemsentirely arenowdrivingconsiderabletechnologychanges.AsillustratedbyFigure31,vehicleapplicationsrequire eitherhighenergyorhighpowerdensitybatteries. Despite the fact that battery technology is at the forefront of electric and hybrid progress, the battery industry has seen a demise of the smaller manufacturers and an upturn in the larger manufacturers consolidating to compete for global market share. Only the stronger players remain and this group includes Exide Technologies, Johnson Controls Saft, Delphi and GM Yuasa. However that has not stopped companies that are less known for their automotive sectors, such as Panasonic, Sanyo and Cobasysfromcompeting. At the same time more stringent legislation in emissions and recycling options are forcing the market awayfromleadbasedbatteriesandmoretowardnickelmetalhydrideandlithiumiontechnology.Several startupcompaniesarealreadyemergingtotenderforcontractstodevelopthetechnologyandsecurea futureintheEV,HEVandPHEVmarkets.CompactPowerInc(CPI),whichisasubsidiaryofKoreanbattery manufacturer LG Chem, was recently awarded a contract by the United States Advanced Battery Consortium(USABC)todeveloplithiumiontechnologyspecificallyforPHEVs. Similarly BYD Auto, a Chinese subsidiary of BYD Group, has developed a 20 kWh lithiumion phosphate batterypackforitsrecentlydisplayedpluginhybridcalledtheF6DM,showcasedattheNorthAmerican International AutoShow inJanuary2008. Itwasconstructed through BYDs own production cellsand is saidtobeabletoachievea50%rechargeintenminutes,isEuro4compliantandonlyemits70gCO2/km. BYDisconfidenttheycanmarketitsproductwithassociatedtechnologyinthenextthreetofiveyears.
Leadacid
Leadacidbatterieswereinventedin1859byFrenchphysicistGastonPlantandtheyaretheoldesttype ofrechargeablebattery.Despitehavingthesecondlowestenergytoweightratio(nexttothenickeliron battery) and a correspondingly low energytovolume ratio, their ability to supply high surge currents means that the cells maintain a relatively large powertoweight ratio. These features, along with their low cost, make them attractive for use in cars to provide the high current required by starter motors. Today lead is still relatively cheap, it is recyclable and performs well at low charge. However this technologydoesnotworkunderdeepcycleconditions. Startingbatteries Leadacidbatteriesdesignedforstartingautomotiveengines arenotdesigned fordeepdischarge. They havealargenumberofthinplatesdesignedformaximumsurfacearea,andthereforemaximumcurrent output, but which can easily be damaged by deep discharge. Repeated deep discharges will result in capacity loss and ultimately in premature failure, as the electrodes disintegrate due to mechanical stressesthatarisefromcycling.Acommonmisconceptionisthatstartingbatteriesshouldalwaysbekept onfloatcharge.Inreality,thispracticewillencouragecorrosionintheelectrodesandresultinpremature failure. Starting batteries should be kept opencircuit but charged regularly (at least once every two weeks)topreventsulphating. Deepcyclebatteries Specially designed deepcycle cells are much less susceptible to degradation due to cycling, and are required for applications where the batteries are regularly discharged, such as photovoltaic systems, electric vehicles (forklift, golf cart, electric cars and others) and uninterruptible power supplies. These batterieshavethickerplatesthatcandeliverlesspeakcurrent,butcanwithstandfrequentdischarging. Fastandslowchargeanddischarge Whenabatteryischargedordischarged,thisinitiallyaffectsonlythereactingchemicals,whichareatthe interfacebetweentheelectrodesandtheelectrolyte.Withtime,thesechemicalsattheinterfacespread bydiffusionthroughoutthevolumeoftheactivematerial.
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Figure31:Energystorageoverview Figure30:Batterytechnologyevolution Source:Ricardo Ifabatteryhasbeencompletelydischargedandnextisgivenafastchargeforonlyafewminutes,then during the short charging time it develops only a charge near the interface. After a few hours this interfacechargewillspreadtothevolumeoftheelectrodeandelectrolyte,leadingtoaninterfacecharge solowthatitmaybeinsufficienttostartthecar. Ontheotherhand,ifthebatteryisgivenaslowcharge,whichtakeslonger,thenthebatterywillbecome more fully charged, since then the interface charge has time to redistribute to the volume of the electrodesandelectrolyte,andyetisreplenishedbythecharger. Similarly,ifa battery is subject to afast discharge(such asstartinga car,which is a draw of some 200 amps)forafewminutes,itwillappeartogodead.Mostlikelyithasonlylostitsinterfacecharge;aftera waitofafewminutesitshouldappeartobeoperative.Ontheotherhand,ifabatteryissubjecttoaslow discharge (such as leaving the car lights on, which is a draw of only 6 amps), then when the battery appearstobedeadithasprobablybeencompletelydischarged.
Nickelmetalhydride(NiMH)
The first commercial variety of NiMH appeared on the market in the late 1980s based on electrode research and development carried out by Dr Masahiko Oshitani from Yuasa Company (formerly Yuasa BatteryJapan).Whiletheoriginalbatterieswereusedinelectronicapplications,todaytheyhavebecome popular in many HEV applications and are predominantly being developed for use in hybrids by most majorOEMs.AutomakersandEVupgradersarefastbecomingawareofthehighspecificenergyandlong life cycle associatedwithNiMHbatteries.Theyaremuchless expensive than nickelcadmiumbatteries and less toxic (NiCad batterieshave been banned for automotive use due to the material toxicity), and alsoofferaround50%higherenergydensity(50to60Whr/kg),havelowinternalimpedancethatallows highdischargeratesandhaveahighercycleresistance.Howevertheyhaveahighselfdischargerateat around30%permonth.
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OriginalpatentsforNiMHwereheldbyOvonicswhosebatterydevelopmentandmanufacturingventures caughttheeyeofGeneralMotorsin1994and,throughaseriesofacquisitionsandpurchaseagreements, have now passed to Cobasys LLC which is a 50:50 jointventure between Chevron Corp and Energy ConversionDevicesInc.TheyhavesuppliedNiMHbatteriesandvariousbatterycontrolsystems.However, the company has been caught in funding limbo since September 2007, when Chevron Technology VenturesfiledclaimsagainstOvonics.Chevronasserteddamagestotalling$162millionandotherrelief, allegingamongotherthingsthatthealternativeenergycompanywithheldfundingforCobasys. ThetwosidessuspendedarbitrationinFebruary2008topursueasaletoGM,ButinMarch2009theOEM notifiedECDandChevronitwouldnotpurchaseCobasys. Complicating matters for Cobasys is a lawsuit filed during 2008 by Daimler, which alleges the company failedtosupplybatterypacksforaplannedMercedesBenzhybridSUVaftertheOEMpaidit$6million. Cobasyswassubsequentlyatthecentreofarecallinvolving9,0002007SaturnAuraandVuehybrids.The companyclaimstoremainanactivebatterysuppliertoGM,sayingthatitwasalsosupplyingbatteriesfor thetwomodehybridSaturnVue,anditwasamongthesuppliersbeingconsideredforalithiumionplug inVuetobeproducedin2011. Despite initial bad publicity and accusations that Cobasys has tried to monopolise the NiMH market, recentcontractswithGMhighlighttheirdesiretoutilisethetechnologyinthedevelopmentofhybrids.In keepingwiththis,CobasysprovidedtheNiMHbatteriesfortheSaturnAurahybridsedanreleasedbyGM in2007andwilldothesamewiththeChevroletMalibuhybriddueforreleaseinlate2008. There are four main suppliers of NiMH batteries for automotive use. They are Japans Panasonic and Sanyo, Chinas GP Industries, Johnson Controls from US and the aforementioned Cobasys. Ford is using batteries from Sanyo especially for its Ford Escape Hybrid, while Toyota sources from Panasonic and Hondausesbothcompanies. However,batterychemistryissteadilymovingawayfromleadacidandNiMHtoLiionandZebra;ultra capacitorsandflywheelsarealsobeingdevelopedforothernicheapplications.Furthermore,thehighand rising cost of nickel, and the reducing cost of LiIon technology due to increasing scale will eventually produceacostparitysituation.
Sodiumnickelchloride(NaNiCl)
Apromisingfuturebatteryforelectricpropulsionofvehiclesisthesodiumnickelchloridebatteryoften referredtoasaZEBRA(ZeroEmissionBatteryResearchActivities)variety.Itisahightemperaturebattery that offers a higher energy density (around 100Wh/kg) than NiMH along with similarly low internal impedance. It has a lower cycle resistance and although its cooling requirement in operation is easily accommodated,itrequiresheatinginordertooperateagainafterstanding.Itcanbeleftunpluggedfor significant amounts of time without incurring damage, but before driving can continue it must be re heatedtoitsstandardoperatingtemperature,whichisconsideredrelativelyhighandsitsataround270 350C.Asaresult,batterytemperatureisusedtosustaintemperature. NaNiClbatterieshavebeenthetopicofsignificantresearchinrecentyears,andcompaniessuchasAEG and MercedesBenz have tested this technology in various applications demonstrating that the battery hasapotentialcalendarlifeofapproximatelyfiveyears andcouldessentially beavailableata lowcost dependingoneconomiesofscale.Ithasbeenthoughttobeidealforapplicationswherebatteryusageis continual,forexampleintaxisanddeliveryvans.
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InJune2007anengineeringteamatImperialCollegeLondondevelopedandtestedaserieshybridwitha combinedpowertrainthatconsistedofanIntermediateTemperatureSolidOxideFuelCell(ITSOFC)with a ZEBRA battery (manufactured by Beta Research and Development). SOFC fuel cells operate at a higher temperature than PEM Fuel cells (Polymer Electrolyte Membrane or Proton Exchange Membrane) and in general have a greater level of fuel flexibility. By connecting these separate technologies the result is overall system efficiency, as the battery provides maximum power while the fuel cell operates in a predominantly always onmode.TheSOFCworksinconjunctionwith a fuel processor, which uses heat generated by the SOFC as well as from the battery. In effecttheheatcanbereutilisedforadditional powergeneration. Such technology is still in the development Figure32:AtypicalZebrabatterymodule phase with respect to automotive use but points the way to greater and more effective Source:RollsRoyce solutions. ZEBRAbatterieshavethefollowingadvantages: Overadischargeofonehour,theZebrabatterydeliversdoubletheenergyandishalfthesize whencomparedtotheleadacidcell; Rangeofbatteryconfigurationsavailablefrom2to50kWh; Energy is stored by the transfer of sodium ions through a solid electrolyte of betaalumina ceramic, leaving a coating of nickel chloride on the nickel powder granules of the positive electrode; 0to80%chargingin75minutes;and Normaloperatingtemperature250300C.
However,selfdischargeandtheenergyrequiredforselfheatingisaseriousproblemtoovercome.These effectscanflattenabatteryinfivedays.
Lithiumion
Perhaps the technology best positioned to dominate the automotive world is Lithium Ion Phosphate (LiFePO4)commonlycalledlithiumion.Predictorsaresayingthatthesebatterieswilleclipseallothersin the hybrid/electricworld of the future, and already the technology is being primed to take over where other technologies have left off. Most OEMs have already recognised its potential and are including lithiumion development in their hybrid strategies. As the price of crude oil has increased, the race to providealternativeelectricpowertrainshassnowballedandwillcontinuetodoso,untilthepriceforthe averagebatteryandelectricpowersupplytoavehiclebecomesamerefractionofthecostonceincurred throughagaspoweredvehicle.
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Figure33:Lithiumionbatterypack Source:Bosch capacity,life,andsafetyofalithiumionbatterycanchangedramatically.
Thethreeprimaryfunctional componentsofalithiumion battery are theanode,cathode, and electrolyte, for which a variety of materials may be used. Commercially, the most popular material for the anode isgraphite. The cathode is generally one of three materials: alayered oxide, such as lithium, one based on apolyanion, such aslithiumion phosphate, or aspinel, such aslithium manganese oxide, although materials such as TiS2(titanium disulphide) were originally used.Depending on the choice of material for the anode, cathode, and electrolyte, the voltage,
In January 2008, the worlds first lithiumIon factory was opened in Nersac, France, by leading battery specialists Johnson Controls in a jointventure with Saft Advanced Power Solutions. The factory is intendedtomassproducelithiumionbatteriesspecificallyforelectricandhybridvehicles.Itisdesigned to support customers such as GM, Chrysler and MercedesBenz, but with the added intention of expanding the operation into Asia and other regions as a global operation. Officially it looks like the lithiumionbatteryisverymuchheretostay. Thesebatterieshavebeenwidelyusedinportableandconsumerelectronics,butinrecenttimeslithium ionhasbeendevelopedtothepointthatconsiderablescopeforfurtherdevelopmentisimminent.They haveanexceptionallygoodenergytoweightratioandaslowlossofchargewhennotinuse.Theyoffer energydensityupto125W/kgwithsomeresearchersrecordinglevelsashighas2000W/kg. However, lithiumion batteries can suffer from thermal runaway under certain conditions, and this risk has been minimised by more stringent selection of materials used in their production to enhance their safety. The other major concern facing manufacturers was the cost to produce these types of battery. AlthoughrelativelycheaperthanNiMHvarieties,withsmallproductionnumberscosts,havehistorically been high. However, economies of scale effects as production numbers grow should make lithiumion costviableagainstabackdropofincreasingnickelpricesadverselyaffectingthecostofNiMHtechnology. Thiswillalsohelptoreducetheoverallcostpremiumofhybridtechnology. Continentalisanotherbatteryspecialistthatbeganproductionoflithiumionbatteriesin2008,although theyestimatefairlysmallproductionnumbersinitially.TheyalsohaveacontractwithGMtodevelopthe product for their electric drive system called EFlex, which is project designed to enhance hybrid and electricdrivevehiclesasfeaturedintheirChevroletVoltconcept. Similarly there seems to be a race to develop this technology as fast as possible, with Japan focusing research and development resources on battery development. Japans Ministry of Economic Trade and Industry (METI) is planning a research project through business and academic channels to create an electricvehicleby2015onthesamecostbasisasastandardminicarvariety.Thisincludesanextrataskto
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thebatterymanufacturersconcernedtodevelopahighcapacitylithiumionbatterysetat85%lessthan itscurrentcoststructure. NissanhasrecentlysignedajointventureagreementwithNECCorporationandsubsidiaryNECTokinto mass produce advanced lithiumion batteries for use in electricpowered vehicles. The new company is called Automotive Energy Supply Corporation (AESC) and has begun trial production of lithiumion batteriesforawiderangeofautomotiveapplicationsatitsfactoryinZama,KanagawaPrefecture,Japan. With startup capacity at 13,000 units per year, Automotive Energy will gradually increase battery productionto65,000unitsayearby2010.ThecompanywillmanufacturethebatteriesforuseinNissan electricvehiclesandhybridvehiclestobeintroducedinJapanandtheUnitedStatesin2010. The batteries employ a compact module comprised of laminatedtype cells that contribute to more efficient packaging. The use of a manganesetype electrode reportedly offers thermal stability and the laminatedstructureimprovescooling. Automotive Energy intends to mass produce and eventually market its batteries to other interested OEMs. Germany also has its own project through Volkswagen who has an alliance with STEAG Saar Energie, Bosch,EvonicDegussa,BASFandLiTecinordertochampionalithiumioninitiative,whichhasbeenco fundedwitha60minvestmentthroughGermanysFederalMinistryforEducationandResearch.
Liiontechnologyimprovements
ImprovementsinLiiontechnologyfocusonseveralareas,andofteninvolveadvancesinnanotechnology andmicrostructures:
Figure34:Energydensityversusoutputdensityinbatterysystems Source:METI
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Increasingcyclelifeandperformance(decreasesinternalresistanceandincreasesoutputpower) bychangingthecompositionofthematerialusedintheanodeandcathodealongwithincreasing theeffectivesurfaceareaoftheelectrodes(relateddevelopmentshavehelpedultracapacitors); Improvingcapacitybyimprovingthestructuretoincorporatemoreactivematerials;and Improvingthesafetyoflithiumionbatteries.
ManganeseSpinelCathodes LG,whichisthethirdlargestproduceroflithiumionbatteries,usesthelithiummanganesespinelforits cathode. It is working with its subsidiaryCPIto commercialise lithiumion batteries containing manganesespinelforHEVapplications.Several other companies are also working on manganese spinel, includingNECandSamsung. LithiumIronPhosphateCathodewithTraditionalAnode TheUniversity of Texasfirst licensed its patent for lithium iron phosphate cathodes toHydro Quebec.Phostechwas later spun off from Hydroquebecfor the sole development of lithium iron phosphate. ValenceTechnology,locatedinAustin,Texas,hasalsobeenworkingonlithiumironphosphatecells.Since March 2005, theSegway Personal Transporterhas been shipping with extendedrange lithiumion batteriesmadebyValenceTechnologyusingironphosphatecathodematerials.Segwaychosetobuildits largeformat battery with this cathode material because of its improved safety over metaloxide materials. In November 2005,A123Systemsannouncedthe development of lithium iron phosphate cells based on research licensed from MIT. While the battery has slightly lower energy density than other competing lithiumion technologies, a 2Ahr cell can provide a peak of 70 amps without damage and operate at temperaturesabove60C.Theirfirstcellisinproduction(1Q/2006)andbeingusedinconsumerproducts includingpowertools,aviationproducts,automotivehybridsystemsandPHEVconversions. TraditionalCathodewithLithiumTitanateAnode Altairnano, a small firm based inNevada, has announced a nanosizedtitanateelectrodematerial for lithiumion batteries. It is claimed the prototype battery has three times the power output of existing batteries and can be fully charged in six minutes. However, the energy capacity is about half that of normalLiioncells.Thecompanyalsosaysthebatterycellshavenowachievedover9,000chargecycles andtheystillretainupto85%chargecapacity,sodurabilityandbatterylifearemuchlonger,estimatedto bearound20yearsorfourtimeslongerthanregularlithiumionbatteries. The batteries can operate from 50 C to over 75 C and will not explode or result in thermal runaway even under severe conditions, because they do not contain graphitecoatedmetal anode electrode material.ThebatteriesarecurrentlybeingtestedinaproductioncarmadebyPhoenixMotorcars. Combinedanodeandcathodedevelopments EnerDel, which is jointly owned byEner1andDelphi, is working to commercialize cells containing atitanateanode andmanganesespinel cathode.Although the cells show excellent thermal properties andcyclability,theirlowvoltagemayhampercommercialsuccess.
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Supercapacitorsandultracapacitors
Anotherenergy storagetechnologythat is attracting researchand developmentattention isthatof the Super or Ultra capacitor (Supercap/Ultracap) also known as Electrochemical Double Layer Capacitors (EDLC). An Ultracap is an electrochemical energy storage device with exceptionally high volumetric capacitanceenergy.ItwasfirstnoticedbyengineersatGeneralElectricbutnotfullyexploreduntil1966 when Standard Oil of Ohio tripped over the concept while researching fuel cell technology. They eventually passed the licence agreement to NEC who began marketing the concept in 1978. Today the technologyisworthapprox$400millionintheUS. Inrelationtoenergydensitygeneralultracapacitorsrateapproximately0.510Wh/kg.Bycomparisona leadacidbatteryisaround40Wh/kgwhereaslithiumionbatteriesratecloserto120Wh/kg.Relativeto ordinary batteries ultracapicitors offer a much higher power density approximately ten to one hundred timesasgreatasthefollowingdiagramdepicts. AccordingtotheUSEnergyDepartmentthisclassofcapacitorscanstoreenoughpowertobe usefulin advanced automotive powertrain applications. Subsequently ultracapacitor technology has achieved performance levels that are useful for power assist hybrid vehicles and for use in buses, medium and heavy duty trucks and other large vehicles. Ultracapacitors pack up to 100 times the energy that conventionalcapacitors offerandtheydelivertentimes thepower of ordinary batteries. Theyobtain a higher overall energy conversion efficiency especially during urban driving cycles and, with extended poweravailability,allowfunctionstoremainduringoutagesinthemainpowersource. Their capabilities have become integral to OEM development programs for lowemission, fuelefficient hybridpowertrainsandadvancedelectricaldrivesystems.Althoughtheyaresensitivetotemperature,if usedappropriatelyultracapacitorscanlastoversixyearswhichplacesthemasarivaltechnologytodiesel powerintermsofcost,butalsowithexceptionalemissionsadvantages.Plustheyareaboutonethirdthe weightandonehalfthevolumeofconventionalbatteries. NASAhasenjoyedsignificantsuccessatitsGlennResearchCentrewithultracapacitorenergystorageas part of its Hybrid Power Management Program (HPM) which was utilised in many applications but, specificallyinaNASAHybridElectricTransitBus(HETB),a40fttransitbuswithhybriddriveandagross weightexceeding37,000lb.Intheirresearchtheydiscoveredthatultracapacitorshadmanyadvantagesin comparison with batteries. One particular benefit was the ability to charge and discharge an ultracapacitor over one million times, which improves system reliability and reduces lifecycle costs. Likewise,environmentalimpactsaregreatlyreducedbytherecyclablecomponentsofultracapacitorsand theyaresignificantlyefficientincapturingrechargingenergy.Theyaredurable,reliableandmaintenance freewithconsistentperformanceovertime.Safetyisalsopromoted,inthattheycanbedischargedeasily and then left indefinitely in a safe dischargedstate. Ultracapacitors have already found their way into the Toyota Prius, albeit in a minor and largely unnoticed role a Panasonic supercapacitor powers an electrohydraulic pump in the mechanical braking system. The combination of an ultracapacitor and a battery has considerable potential for vehicle energy storage systems and is already used in a hybrid application by Nissan Diesel in its Capacitor Delivery Truck. It enables the Figure35:ARagoneplotshowingenergydensityvspower use of a smaller battery because peak densityforvariousenergystoragedevices loadings can be covered by the ultracapacitor and low loadings by the Source:MaxwellTechnologies
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battery, making ultracapacitors an option as the motive power storage system in mild hybrids. For example, in electric vehicles, the use of ultracapacitors can increase range by more than 20% and accelerationbyupto15%. Thenextstageofsupercapacitordevelopmentissettoincludesomeelectrochemicalactivitytoincrease therelativeenergydensityandclosetheperformancegapwithLiionbatteries.
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OEMStrategies
OverthepastfiveyearsToyotahastakenaconsiderableleadinthehybridrace,withitsuniquemarket leadership and branding along with patenting its key components. It is on schedule to sell 600,000 hybridsperyearintheUSaloneandmorethanonemillionworldwide,byearlynextdecade. However, developing hybrid technology as an early market leader has proved expensive and Toyota initially wanted to franchise its technology to other manufacturers to capitalise on its investment, become an industry standard, share the ongoing R&D burden and to help drive down costs, which add from $3,000 to $11,000 to the price of a vehicle dependingonsegment.
1,600,000.00 1,400,000.00 1,200,000.00 1,000,000.00 800,000.00 600,000.00 400,000.00 200,000.00 2008 2009 2010 2011 2012 2013 2014 2015 Asia Europe North America
Figure36:Regionalhybridmanufactureforecast
To this end Nissan and Source:GlobalInsight Ford eventually purchased the technology, but their licensing hasso farnot beenextensiveand,inthe caseof Fordat least,isnot likely tocontinueas the company utilises its own proprietary solution. General Motors in Europe has had plans to use Toyota hybrid technology to develop hybrid cars under the Vauxhall brand, but other brands had decided to maketheir ownway.However, withthechangesand rationalisation affecting GM,itwasreportedthat ToyotaandGMwouldentertalksinAugust2009tolookatoptionsforsellingaGMbrandedPriusvariant utilisingthejointlyownedNUMMIassemblyplantinCalifornia.However,subsequentlyTroyClarke,GMs President, North America said in a statement that GM and Toyota could not reach an agreement on a futureproductthatmadesensetoallparties.Asaresult,NUMMIwouldbeconsideredpartoftheOld GMandsoldoffasthecompanyworksitswaythroughbankruptcy. Currently GM has eight hybrid models, two of which are Saturns and therefore due for sale to Penske AutomotiveGroup.OftheremainingsixmodelsonlyoneisnotalighttrucktheChevroletMalibu.This will then give GM the option to fill a considerable hole appearing in its product range through rationalisation. Atleastinpartasaconsequenceofnotrecruitingmanyothermanufacturers,Toyotahasworkedhardto strengthen its current market domination through acquisitions and increasing inhouse activity. Other manufacturers have been concerned that Toyota is moving to control as much of the supply base of hybrid components as possible, in order to delay the transfer of hybrid technology to other suppliers, especiallythoseinNorthAmericaandEurope. Toyota has increased its ownership of Panasonic EV to 60%, giving it control of the batteries that Panasonic produces. The acquisition also turned Toyotas jointventure with Matsushita Electric, which producesawiderangeofelectronicproductsincludingsensorsandcontrolunits,intoaToyotasubsidiary. ToyotahasalsoacquiredastakeinFujiHeavyIndustries,whichsomeseeasrelatedtothefactthatFuji andNEChaveajointventureforthedevelopmentoflithiumionbatteries.AlthoughAisinSeiki,whichis 25% owned by Toyota, has supplied the hybrid transmission since the firstgeneration Prius, Toyota is
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Japan 1,400,000.00 1,200,000.00 1,000,000.00 800,000.00 600,000.00 400,000.00 200,000.00 2008 2009 2010
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Figure37:HybridproductionforecastAsia Source:GlobalInsight producingitsthirdgenerationelectronicallycontrolledhybridtransmissioninhouse.Toyotaalsoplansto produce400,000electricmotorsperyearatitsownplantsinJapan. TodatetheToyotaPriusisstillthemostpopularhybridonthemarketandisprojectedtocontinueasthe sales leader among hybrids for some time to come. However there are indications that the recently launchedHondaInsightmadesignificantinroadsintoToyotasleadershipaheadofthelaunchofthePrius III,forwhichthecompanynowhas180,000ordersinJapanalone,farsurpassingitstargetof10,000per month.ForMay2009theToyotaPriuswasthebestsellingvehicleinJapanwherecurrentlyhybridsare heavilyincentivisedthroughzeroroadtaxandrebates. Sales of the new Honda Insight are thought to be below the planned 90,000 units and the company is consideringadditionalsmallermodelsinlowerpricebracketsastheimpendingpricewarbetweenthese twomajorplayersbeginstotakeeffect. As the production of hybrids and the range of new model offerings increases rapidly the ensuing competition will have some marked effects on the sector as it grows. The premium paid for hybrid powertrains will be quickly eroded, a situation exacerbated by the current market downturn in overall automotivedemand. In2008,hybridproductioninAsiawasapproximately470,000unitswithpredictionsfor2009exceeding 530,000despitetheeconomiccrisis,increasingto850,000in2010.Whilerapidgrowthisforecasttooccur inbothChinaandIndia,Japancontinuestobethelargestmanufacturerofhybrids. AlthoughforecastsforhybridsinEuropearelessencouraging,theincentivetoproducevehiclesfortheUS markethaspromptedEuropeanmanufacturerstoconsiderdevelopment,andsomearealsotargetingthe EuropeanmarkettocompetewiththesmallandmediumsizehybridsfromToyotaandHondainJapan. While it has become a standard part of most OEMs sustainability report, many of the larger vehicle manufacturers have developed a focus toward a hybrid strategy for the near future. With ongoing legislationchangesandtheneedtoexploreenergyalternatives,electricallydrivenvehiclesareseenasa valued source of sustainability in the war to reduce emissions. In general most hybrid strategies also involve the use of other technologies such as fuel cells, biofuels, catalytic converters, transmission technologyandthelikeasameanstodevelopanoverallholisticapproachtoasustainablefuture.
GeneralMotors
DespiteitsrecenthighprofilefinancialtroublesGMissteadilyprogressingacrossarangeofalternatives to the traditional engine options offered. The aggressive rollout of hybridelectric vehicles is a key
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portioninthecompanyspublicisedinitiativetobuildaportfolioofelectricallydrivenvehiclesthathelpto improvefueleconomyandreduceemissions.IntheUS,GM'shybridcurrentlystandsatsixmodelsonthe roadtodayandthecompanyplanstoincreasethistoninemodelsbytheendof2009.By2012,GMplans to offer a total of 15 hybrid models. These will use a range of hybrid systems designed to meet global drivingpatterns,andwhichwillvaryinfueleconomysavingsandcost. GeneralMotorsfirmlybelievesinadisplacementofpetroleumthroughenergydiversity;itisfocusedona rangeofgasfriendlytogasfreeadvancedtechnologiesandvehicles.Currentlyitbelievesthatethanolhas the most potential as an oil alternative, but ultimately the future holds fleets of vehicles that will be electricallydrivenandpoweredbyelectricityandhydrogeninterchangeably.IntheinterimGMhasuntil recentlybeenreleasinganaverageofonenewhybridmodeleverythreemonths. These models include the Saturn Vue and Chevrolet Malibu. In addition to these a selection of two mode hybrid vehicles is available such as the Chevrolet Tahoe and GMC Yukon which boast a 50% improvement in city mileage over gas versions. Director for Global Products for Cadillac John Howell recentlycommented,Ithinkyoucouldeasilyimagineafutureatleastwhereallcarswillhaveacertain amountofhybridisation... ThispartofGMsstrategytofocusonenergydiversificationcouldbeconsideredthecornerstoneforits pluginhybridconceptliketheChevroletVolt.Thiscanbepoweredtorunoffthenationalelectricitygrid, andthepoweristhenstoredasbatterycapacityandwouldenableadrivertotravelinfullelectricmode forapproximately40milesintotal. Makingitsdebutatthe2009New YorkInternationalAutoShow,the YukonDenaliHybridaddsanother fullsized truck utilising the Two Mode system to the GM lineup, designed for direct competition with the luxury Lexus offerings. The eightpassenger GMC Yukon DenaliHybridgoesjustasfarona gallonofgasinthecityasamuch smallerV6ToyotaCamrysedan, commented Susan Docherty, vice president, BuickPontiacGMC. Andinterms offuelsavings,the GMC Yukon Denali saves about 250gallonsoffuelayearoverthe LexusGX470. Figure38:GM'spowertrainandfuelsstrategy Source:GM
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Docherty said the number one consideration for thosepurchasingtheGMC Yukon Hybrid is fuel economy (80%); followed by 66% for its environmentally friendly technologies and more than half because of its technologicalinnovation. At the heart of GMs hybridofferingistheTwo Mode system which was firstseeninthecompanys 2007ChevroletTahoeand YMC Yokon, and has moved on in 2009 to a frontwheeldriveoptionin the Saturn Vue Green Line.
Figure39:GM'sprereorganizationstrategy Source:GM
WiththeFWDtwomodetargetedatlargersedansupintocrossoversandSUVs,andtheRWDtwomode applied infullsizeSUVs andlight trucks, GMhasaproduct gap for an advanced fullhybrid offeringfor smaller,lowertorqueenginesinmorecompactvehicles. Toaddressthat,GMisdevelopingathirdfullhybridsystemtargetedattheseapplications,accordingto LarryNitz,GMexecutivedirectorofHybridPowertrains.Healsonotedthatthecomingnextgenerationof themildGMHybridSystem,whichinitscurrentformisappliedintheMalibu,VueandAura,will offer equivalent power to Hondas IMA system in the new Insight and that the nextgeneration GM Hybrid SystemwasalignedwithHondasperspectiveoncosteffectivenessandperformance. Meanwhile in Europe GM is working with Politecnico di Torino and Regione Piemonte in Italy and has announcedthat,withintheir three partiesalternativepowertrain focus,akey developmentwill bethe creationoftheDieselElectrificationCompetenceCentrewithintheGMEngineeringCentre.Thecentres objective will be to lead research and development on a costeffective diesel hybrid technology which could be implemented across a range of GM vehicles. Diesel hybrid has the potential to become a key elementofGMselectrificationstrategyinEurope.However,thefutureofthisinitiativeisunknownatthis timeinthelightoftheacquisitionofGMsEuropeanorganisationbyotherparties,includingFiat.
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TheneteffectofGMsmoveintoChapter11bankruptcy protectiononthecompanyshybridstrategyisyettobe determined, but GM would seem to be committed to moving forward across a wide range of powertrain options. It may have to scale back its ambitions in development of longertermoptions,suchasfuel cells, but its commitment in growing its portfolio of hybrid modelsintheUSremainsrelativelyintact. However, one recent casualty is the Chevrolet Malibu hybrid, which is to be discontinued due to low sales numbers. Recent commentary has highlighted that the premium of $4,000 in the US market over the base model is proving too much for the consumer, particularly as fuel mileage forboth models is identical andGMstillmakesalossonthehybrid. Figure40:GeneralMotors2MT70FWDtwomode hybridtransaxle,asseenfromengineside Ford executive chairman Bill Ford has announced an accelerated plan to bring the companys next Source:GM generation hybridelectric (HEV), a plugin hybrid electric (PHEV), and batteryelectric (BEV) vehicles to marketquicklyandmoreaffordablyoverthenextfewyears. The plan, unveiled in early 2009, builds on Fords work with a range of partners in areas including batteries,manufacturingandinfrastructure.Fordwillintroduceanewbatteryelectriccommercialvanin 2010intheUS,andintheUKFordiscollaboratingwithTanfieldtoofferbatteryelectricversionsofthe FordTransitandTransitConnectcommercialvehiclesforfleetcustomersintheEuropeanmarkets. Anewbatteryelectricsmallcarduein2011istobedevelopedjointlywithMagnaInternational,withthe electricpowertraintobeappliedinanewgenerationCsizedglobalvehicleplatform.TheBEVwillfirstbe introducedinNorthAmerica,withthepotentialtomigratetotheEuropeanandAsiaPacificmarketslater. Fordalsoplanstointroduceelectrifiedpowertrains(batteryelectricorpluginhybrid)intotwomajornew global product platforms: a new Focussize Ccar platform and another Fusionsize, CD segment platform. Fordspluginhybridcommercialisationpartners By 2012, Bill Ford said, the company will have four highmileage BEVs and the likely development directionforBEVsistotheBsizeplatformfromthe Csize, according to Barb Samardzich, Ford vice presidentofPowertrainEngineering. Fordiscommittedtoofferingcustomersaffordable, environmentally friendly technologies in vehicles theyreallywant,saysMulally.Wearefocusingon sustainable technology solutions that can be used not for hundreds or thousands of cars but for millions of cars, because that is how Ford can truly makeadifference. Ford is now in its fifth year producing the Escape Hybrid, and the company has five hybrids on the SouthernCaliforniaEdison NewYorkPowerAuthority ConsolidatedEdisonofNewYork AmericanElectricPowerofColumbus,Ohio AlabamaPowerofBirmingham,Ala. ProgressEnergyofRaleigh,N.C. DTEEnergyofDetroit NationalGridofWaltham,Mass. New York State Energy and Research DevelopmentAuthority,astateagency.
Ford
ElectricPowerResearchInstitute(EPRI)
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road: the Escape, Mercury Mariner Hybrid and Mazda Tribute, the Ford FusionandtheMercuryMilanHybrid. In the future Ford has announced plans to deploy different levels of hybridisation with either diesel or gasoline engines depending on the marketandvehicletype.InEurope,for example, Ford has established (in 2006) its European Hybrid Technologies Centre in Gothenburg, Sweden, which will have overall responsibilityforensuringthatFordof Europe is able to apply core hybrid systems into its products. This Figure 42: Ford Hybrid second generation hybrid systems relationship is likely to continue architecture despite the companys ambitions to offloadVolvo. Source:Ford The companys hybrid strategy also callsfortheaggressivedevelopmentofpluginhybridelectricandfuelcellvehiclestorampuptogreater volumesoncethetechnologychallengescanbeovercome. In December 2008, Ford delivered a demonstration version of its Ford Escape Hybrid Plugin to ten partners as part of a partnership to explore the commercialisation of plugin hybrids together with the businessmodelsthatmightmakethemviable.Thepartnershipisdesignedtoadvanceplugintechnology aswellasanenergyvisionthatconnectstransportationtotheenergygrid. In a recent interview with SupplierBusiness, Sharif Marakaby, chief engineer, Ford Global Hybrid EngineeringsaidOurmainstrategyistogetfueleconomy,whichisimportanttomillionsofdrivers.This is a really high volume strategy and we are pursuing using our EcoBoost turbocharged, fuel injection engine, which allow us to downsize and get a 10 15% fuel economy performance. Along with this we realisetheimportanceofelectrification,whetheritishybrids,pluginhybridsorelectricvehicles. Asyetitisnotveryclearwhichoftheseoptionsisgoingtowin,saysMarakaby.Wewanttoposition ourselvessothatwearereadytorampupthevolumeonanyoftheseoptions,whetheritshybrids,plug insorEVs,dependingonthecostofthesesystemsandthemarketreception. Aswiththemajorityofhybridapplications,FordusesAtkinsoncycleICEswithitshybridvehicles. TheAtkinsoncyclekeepstheintakevalveopenlongerafterthepistonreachesbottomdeadcentre.This resultsinacompressionstrokethatiseffectivelyshorterthanthepowerstroke.AnAtkinsoncycleismore efficient but produces less torque than a conventional Otto cycle. Hybrids compensatebyusingtheelectricmotor to fill in the gaps in the torque. At the endof2009asecondgenerationhybrid system will be launched that builds on the Escapes full hybrid power split system and benefits extensively from Fords work on HMI (Human Machine Interface), which has resulted in the development of the companys Figure41:FordsSmartGaugecluster SmartGaugeCluster. Source:Ford
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Ford claims that the second generation system uses Ford engineered technologies developed in North America. It delivers increased powertrain output, and features an integrated inverter and power electronicscontrollerwithavariablevoltageconverter.Thissecondgenerationhybridsystemisdesigned tooptimisethecombinationbetweentheAtkinsoncycleengine,IntakeVariableCanTiming,whichallows thesmoothtransitionbetweenelectricandICEmodesbecausethesparkandcamtimingcanbevaried accordingtotheengineload.Thevariablevoltagecontrollerbooststhevoltagetothetractionbatteryto operatebothmotorandgeneratorinamoreefficientrange,andthenewconvertertechnologyincreases output.Thesystemalsocombinessmarterclimatecontrolwithregenerativebraking,andthepackageas a whole is designed to allow the operation of the vehicle in electric mode to higher speeds, therefore deliveringthehybridisationbenefitsoverawiderrangeofdutycycles.Thisalsomaintainsoverallcontrol overitskeytechnologiesasthesectortakesoff.Tothisendthe2010FordFusionhybridhastodatebeen thesubjectof119patentsorpatentapplicationsmakingitthemostpatentedcartodate.
Volkswagen
Volkswagen has developed a powertrain strategy that covers fuels and powertrain. The company has considerablecommitmentstothewholerangeofCO2reducingstrategies,includingthehighperformance dieselsthatarefundamentallyimportanttoitsshorttermEuropeanbusiness,biofuels,hybrids,EVsand fuelcells. During2009,VolkswagenhasstatedplanstosimultaneouslybringthreefuelefficientPassatversionswith lowemissionstothemarket:thesecondgenerationofthePassatBlueMotion,thePassatBlueTDIandthe PassatTSIEcoFuel.VolkswagenispresentingallthreePassatsunderanewumbrellabrand:BlueMotion Technologies.Thislabelcoversallproductionmatureornearproductiontechnologiesandproductsthat significantlyreducefuelconsumptionandCO2emissions.Underthesamelabel,Volkswagenisofferingan initiallookattheprototypeofthenewTouaregHybrid. ThetermBlueMotionTechnologiesdoesnotdefineafixedsetoftechnologiesbutarangeofcontinually evolvingsolutions,currentlyincludingsystemssuchasanewstopstartsystem,regenerativebraking,SCR catalyticconverterandtheNOxstoragecatalyticconverter,electricdriveandhybridsystems. Thecompanyhasbeenresearchingelectricdriveswithnumerouspartnersforseveralyearsaspartofits fuel and powertrain strategy. During 2008, the company unveiled its Golf twinDRIVE at the Automobil ForuminBerlin.TwinDRIVEisapluginhybridconceptthatcombinesanelectricmotorwithacombustion engine as usual, but the prototype can cover distances of up to 50 kilometres exclusively on electrical power.Itsbatteriescanbechargedsimplyusingconventionalmainspower.
Figure43:VolkswagenstwinDRIVEsystemoperatingmodes Source:Volkswagen
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Figure44:Volkswagenspowertrainandfuelstrategy Source:Volkswagen Atpresent,carswouldbeinconceivablewithouthighlyefficientpetrolanddieselengines.Onethingis sure: the future, however, will belong to electric motors filled up at a mains socket, commented ProfessorDr.MartinWinterkorn,ChairmanoftheBoardofManagementofVolkswagenAGatthelaunch of the twinDRIVE prototype. The first prototype was equipped with a diesel engine (1.5l TDI) as the combustion unit.However a further 20test vehicleswereintroduced atthe beginning of 2009 utilising 1.4lTSIpetrolenginesaroundBerlinandWolfsburgtobegintheprocessofprovingtheelectricaldrivein everydayuse. Improvedbatterytechnologywillalsobedevelopedintheproject,whichinvolvessevenothercompanies andresearchinstitutionsandwillrununtil2012. Overall,Volkswagenisexpandingitsresearchanddevelopmentprogramforlongtermelectrificationof drivesandstatesthatitsthreeessentialgoalsinthisareaare: Thedevelopmentofregenerativebrakingtopowertheelectricmotors; Thedurabilityandcostprogressofthelatestbatterytechnology;and Achieving high durability and low cost to allow the electric drive to make the breakthrough to massproduction.
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In electric mode, twinDRIVE is designed to offer competitive range and zero emissions for an urban or local duty cycle. Current fuel consumption figures released by Volkswagen show the prototype with a diesel engine uses around 2.5 litres of diesel and eight kilowatt hours every 100 kilometres in combined operation. The TSI version used for the fleet test achieved three litres and eight kilowatt hours per 100 kilometres.
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Volkswagenhasstatedthatitisinvesting a twodigit million sum in the research projectfortheemissionsfreemobilityof Figure45:VWforecastmicrohybridproduction tomorrow. Furthermore, the German FederalMinistryfortheEnvironmenthas Source:GlobalInsight granted a millionfigure subsidy for its rangeofprojectpartners. Incontrasttootherhybriddrivesystems,VolkswagenclaimsthatitstwinDRIVEallowsmediumrangesin citydrivingconditionsinexclusivelyelectricalmode.ThekeypointwiththetwinDRIVEsystemistheway thattheICEsupplementselectricaloperationratherthantheotherwayaround. The intelligent vehicle operating system is designed to select the best operating mode. The system is individuallytailoredtotherespectiverouteanddrivingsituationsothatthemostefficientcombinationof electricmotorandcombustionengineisused. Althoughthecompanymakesaconsiderableeffortindescribingitselectrificationroadmapasitmoves throughthemicro/mildhybridandfullhybridtowardsitsstatedgoalofextendedrangefuelcellvehicles, to date the numbers of hybrids produced are small. The company is forecast to produce more than 800,000 micro hybrids by 2015, reflecting the extensive uptake of stopstart technology, however, productionofsome70,000fullandhybridunitsareforecastfor2015withaconsiderablenumberofthe mildhybridsusingadieselICE. Volkswagens first production offeringswill betheTouaregSUV fullhybridandtheGolfdieseland Touran MPV gasoline mild hybrids.Volkswagenhaschosena parallelhybriddriveforuseinthe Touareg. In contrast to other possiblehybridsystems,bothoff road properties and climbing performance can be maintained, ascanthetowingperformanceof the SUV with a maximum trailer loadofupto3.5metrictons. Figure46:VWTouareghybridpowertrain Source:Volkswagen In the new Touareg BlueMotion Hybrid,incommonwiththelarge US manufacturers, Volkswagen is applyinghybridtechnologytoone of the companys thirstiest
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vehicles,allowingittogetsubstantiallybetterfuelefficiencywhilemaintainingitsSUVcapabilities. Thismodularparallelhybridsystemiscapableof operating in electric boost, electric only and regenerative braking modes. When the nickel metal hydride battery has sufficient charge, the total output from the powertrain is 374 hp and 406 lbft of torque,enough topush the Touareg to 62 mph in 6.8 seconds. Electric drive is available at speeds up to 30 mph and a clutch disengages the engine from the transmission when the throttle is released, reducing drag. In the production model, VW claims the hybrid delivers a 25% overall boost in fuel efficiency, Figure 47: Emotor support effect on torque and withacombinedratingof26.1mpg(US),slightly power better than the 25.3 mpg (U.S.) achieved by the Source:Volkswagen 3.0LTDITouaregontheEuropeantestcycle. ThepowertrainitselfconsistsoftheVolkswagens V6TSI,an8speed automatictransmissionsuitedfor hybridoperationandtowvehicleuseandthehybridmoduleintegratedbetweentheinternalcombustion engineandtheautomatictransmission.Thelatterweighs55kilograms.Thecompactmodulehousesin oneunitthedisengagementclutchlocatedaftertheV6engineandtheelectricmotor. The hybrid manager is a multifunctional unit integrated with the engine controller, and this communicates via the CAN bus lines with the various operational components the automatic transmission,highvoltagebatteryandpowerelectronicsthatcontroltheelectricmotor.Thelatteralso managestheenergyflowbetweentheelectricmotorandbattery.Dependingonthechargestateofthe battery, vehicle speed and other vehiclespecific parameters, the hybrid manager automatically selects theidealoperatingmode.
Daimler
Daimler has made it clear that it sees vehicle electrification as a major plank for its future powertrain strategy including a full range of hybrid options to complement the companys successful diesel powertrains. These range from micro, or stopstart functions to full electrification. The companys low nitrogenBLUETECdieselengineshavereducedthefuelconsumptionandCO2emissionsoftheirpassenger carfleetinEuropeby20%since 1995. Theyarealso wellpositionedin the area of hybrid technology, are the worldwide market leader in the hybrid bus segment and have a significant range of delivery commercial vehicle options in production. Beyond this however, the company has a stated aim of developing hybrid options for every one of their passenger cars.
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Figure48:DaimlerMicroHybridproductionforecast Source:Globalinsight
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Daimler has established a strategicalliancewithEvonik 250,000 Industries for the development and 200,000 production of lithiumion 150,000 batteries. Evonik has investedaround80million. 100,000 Both groups plan to drive forward the research, 50,000 development and production of battery cells 0 and battery systems in 2008 2009 2010 2011 2012 2013 2014 2015 Germany, and Daimler is also thought to be looking Diesel-Electric Gasoline-lectric for a third partner in this venture with expertise in Figure49:DaimlerMildandFullhybridproductionforecast controlelectronics,although Source:Globalinsight the company has worked extensively with Continental todevelopthebatteryandpowermanagementsystemsfortheS400hybrid. MercedesBenzlaunchedits twomodeML 450HYBRIDat the2009NewYorkInternational AutoShow. The twomode hybrid technology is derived from the work done in cooperation with BMW, GM and ChryslerintheGlobalHybridCooperation.TheML450HYBRIDwasspecificallydevelopedfortheNorth Americanmarket. In response to increasing engine loads and higher speeds, the twomode technology variably shifts the power transfer from the electrical path to the mechanical drive path. As a result, the system exhibits improvedefficiencyacrossthedrivingdutycycles.Italsoallowssmallerelectricmotorstobeused. In2010MercedesBenzisduetolaunchitsS400BlueHybrid,whichusesathin15kilowattelectricmotor sandwiched between a 275horsepower V6 engine and the company's sevenspeed automatic transmission.Themotoraddstorqueto the engine under heavy loads, restarts the engine when it stops at rest, and helps the car move away from rest in the second or so before the engine switches on. The result is almost 30 miles per gallon (or 7.9 litres/100 km on the European test cycle), relatively efficient for a fullsize luxury automobile. Another advantage of using this alternativeto theTwoModesystemis thattheS400systemrequiresnobody reengineering, unlike the larger 1.8 kilowatthour nickelmetalhydride pack used in the ML450. Instead, the Figure 50: MercedesBenz micro hybrid system featuring a lithium pack used replaces the car's beltdrivenstartergenerator standard12voltbattery,withaloopof the airconditioning system routed Source:Daimler throughittokeepthecellscool.
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However,evenasDaimlerbringstheseinitialofferingstomarket,thecompanyisthoughttoberethinking its hybrid strategy and be moving away from the TwoMode Hybrid system. Instead thecompanysproprietary mild hybridsystemwillspreadfromthe2010 S400 Hybrid into the new EClass in a "couple of years. Mercedes is moving toward mild hybrids as a solution, something like the Honda approach, according to Bernhard Glaser, general manager of product management for MercedesBenzUSA. The SClass hybrid is the worlds first integration of a lithiumion battery in a massproduced passenger car and a critical element in the technology integration is the fact that the lithium Figure51:MercedesBenzISGfeaturingadiscshapedelectric ion battery uses the vehicles air motorasfittedtotheSClass conditioning circuit for cooling. As a result of this, the battery unit is able to Source:Daimler operate at system temperatures between15and35C.Thisallowsanacceptableservicelifeforuseinpassengercars(10calendaryears; 600,000chargingcycles)coupledwithefficiencyandsafety. Oneoftheadvantagesofthelithiumionbatteryover conventional nickelmetal hydride batteries lies principally inits compact dimensions combined with much greater efficiency. Compared with NiMH technology, lithiumion batteries have an improved energy density (around 30%) and powertoweight ratio(50%).Continentalwasresponsibleforsoftware development and overall system application. A complex battery management system ensures the battery remains within an optimum operating range at all times. The electronics also monitor general functionssuchastemperatureandenergy outputas compared with battery age. Safety circuits prevent thebatteryfromoverheating,forexample,andacell supervising circuit monitors individual cells so as to guarantee optimum interaction. Production of the battery will be overseen by Continental at a new productionfacilityinNuremberg. Looking to the future Daimler has demonstrated its Figure 52: MercedesBenz TwoMode hybrid thoughts about progressing towards a future drive electrification strategy using its BlueZERO concept. This concept vehicle uses a sandwich floor based Source:Daimler architecture that makes it possible to realise a wide varietyofpowertrainandenergysourcesincludingelectriconly(ECell),hybrid(ECellPlusandhydrogen powered (FCell). Herbert Kohler, Daimlers vice president, Group Research and Advanced Engineering responsible for EDrive and future mobility development says, besides the affordability of electric and fuel cell vehicles there are two concerns: first customers need to feel certain that there is sufficient
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infrastructure in terms of recharging and refuelling available tothem.Second,standardsneedto be established to ensure that you can refuel or recharge across nationalboundaries. However, continues Kohler, as far as battery development is concerned we will still take things stepbystep.Thewholeautomotive industryisexperiencingaparadigm shift, from being based on fossil energy resources in internal combustion engines to electrification and beyond to fuel celldrivesystems.
Figure53:MercedesBenzBlueZeroconcept Source:Daimler
BMW
Although BMW reduced its CO2 average considerably during recent years to achieve 137g/km, the companystillneedstomakeimprovementsofcloseto20%by2012.Someyearsagothecompanybegan developmentinthehybridareawithitsBestofHybridapproachthatlookstouseoptimumcomponents withinarangeofvehicleconcepts.Thisstemsfromthecompanysbeliefthatahybridsystemisonlyone step in a consolidated network of fuelsaving measures. It has also led them to develop the BMW ActiveHybrid drive system which focuses on a balance of twomode hybrid coupled with a twomode activetransmissionthatregulatesitspowersplitforoptimumperformanceandovercomesproblemsthat occurinconventionalhybridswithacontinuouslyvariabletransmissionsystem. WhileBMWbeganitshybriddevelopmentprograminthelate1980sdevelopmenthasculminatedinthe form of the BMW Concept X6 ActiveHybrid which will pave the way for BMW hybrid drive vehicles availablein2009,andthepromiseofrearwheeldrivepassengervehiclesinthepremiumsegment. BMWisalsocontinuingresearchintoHydrogen7whichisahydrogenbasedcombustionenginethatuses regenerative hydrogen as a fuel source in motor traffic. It endorsed the technology by installing the worlds first hydrogen filling station at Munich airport, 800,000 firmly believing that this 700,000 could well be the energy of 600,000 thefuture. As a culmination of its 400,000 development to date the X6 300,000 and 7Series will be 200,000 productionreadybytheend of 2009. The 7Series is to 100,000 useaLiionbatterypackina 0 mild hybrid configuration 2008 2009 2010 2011 2012 2013 whiletheX6willusetheTwo Mode hybrid drivetrain which was developed in Figure54:BMWMicroHybridproductionforecast conjunction with Chrysler, Source:Globalinsight GMandMercedesBenz.This
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is likely to be the first part of the companys effort to use hybridisation to achieve drivetrain efficiency while maintaining the BMWs characteristic performance. According to Norbert Reithofer, Chairman of the Board of Management of BMW AG, between 2010 and 2012 the company will update more than half the entire product range. The companys strategy Number ONE also brings about the formation of projecti for the development of increasingly sustainabletransport.
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Figure57:BMWMildandFullhybridproductionforecast Source:Globalinsight
The first projecti vehicle is currently undergoing a large scale testing program with a view to bringing the vehicles into production by 2015. We will be launching the first megacity vehicle with a fully electric driveoranultraefficientcombustion engine by the first half of the next decade. This vehicle will launch a whole family of extremely low emission single and doubletrack vehicles, explains Reithofer. A first step in this direction is the electric poweredMINIEwhichisbeingtested in extensive customer field trials in Germany, the United States and the UKaspartofprojectithisyear. The BMW X6, ActiveHybrid is the culmination of development of Figure55:BMWX6hybridconfiguration BMWs EfficientDynamics strategy, Source:BMW combining features for optimum energymanagementandaerodynamicswithlightweightconstruction.Thetwomodeactivetransmission hybridhasan8cylinderpetrolenginethat usesaround20%lessfuelthanacomparablevehiclewitha standardcombustionengine. People always seem to think that performance is in contradiction to fuelefficiency,saysJrgenGuldner, department manager, Project Engineering X6 ActiveHybrid. We have shown with our strategy that they are not a contradiction at all, butthatwecandeliverboth.Soour hybrid strategy is allowing us to deliver driving dynamics, performance and better fuel efficiency in the order of 20% improvement. We have shown that
Figure56:BMWGrouphybridstrategy Source:BMW
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efficiencyanddynamicsarecomplementary. EfficientDynamicsisathreephasedproductstrategythathasalreadyseentheintegrationofadvanced technologiesonourlatestcarsandreducedfuelconsumptionbyupto23%inEurope.Ournew7Series aloneoffers5%morepowerand12%betterfueleconomythanitspredecessor,makingitthemostfuel efficientinitssegment.We areproudtoberolling outthenextstageof EfficientDynamicswithourX6 ActiveHybrid in 2009 followed by a 7 Series ActiveHybrid in 2010. Both these models will integrate the latestelectricandpetrolenginetechnologies,whichwillprovideefficientpowertrainsandfurtherreduce emissions.Atthesametimewecontinuetoinvestinresearchanddevelopmentofalternativefuelssuch as hydrogen so we can realise our long term vision of vehicles with zero emissions. says Phil Horton, managingdirectorofBMWMiddleEastGroup.
Toyota
800000 700000 600000 500000 400000 300000 200000 100000 0 2008 2009 2010 2011 2012 2013 2014
Toyota continues to dominate the global industry in full hybrid manufacture and sales and the companys enormous successwiththePrius,releasedinitiallyin Japan in 1997. The Prius has paved the way for significant progress towards the volume production needed to make hybridstrulyviable. Furthermore,inmid2009afteraperiodof cutting output Toyota was once again 2015 increasing overtime and production of its newversionofthePrius,whichnowholds the number one spot for Japanese domestic car sales with sales of 22,292 vehiclesforthemonthofJuly2009.
Figure58:Toyotamicrohybridproductionforecast Source:GlobalInsight Since the launch of the second generation Prius in 2003 the model has moved from being essentially a niche vehicle to mainstream. The Prius is now Toyotas third best selling model in the US and seems to inspire a cultlikedevotionforitsdrivers.
1200000 1000000 800000 600000 400000
200000 The thirdgeneration Prius was officially unveiled at the Detroit 0 auto show in January 2009 and 2008 2009 2010 2011 2012 2013 2014 2015 went on sale in April. It has built FULL MILD PLUGIN on the phenomenon started by previous models, although competition with the Honda Figure59:Toyotafull,mildandpluginhybridproductionforecast Insighthasbecomefiercer. Source:GlobalInsight
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However, the Japanese company remains the global leader in hybrid vehicles by some margin and offers, as well as the ubiquitous Prius, a further five hybrid models between its Toyotaand Lexus brands. This number is set to grow dramatically as the OEM has a stated strategy to make every vehicle it supplies available with a hybrid powertrain option by 2020. Figure60:JapaneseToyotaPriussalesbymonth Toyota will however, not be combining the Source:GreenCarCongress benefits of diesel and hybridtechnologyaccordingtoKatsuakiWatanabe,presidentofToyota,becausethecombinationofthe twopowertrainoptionswouldbetooexpensive. In late 2011 it is likely that the OEM will launch a sub compact model based on the Yaris platform. However,suchavehiclewillcontinuetheuniquedesignstrategythathasprovedsuccessfulforthePrius,
Figure61:EvolutionofToyotahybridsystemsto2009 Source:Toyota
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althoughthehybridsystemislikelytobemorecostcompetitivethantheexistingfullhybridsystemssold bythecompany.TheYarisisamajorsellerforToyotainbothJapanandEurope(whereitismanufactured inFrance). Toyotaisheavilycommittedtoaggressivecost managementofitsincreasinghybridportfolio asitgrows.Furthermore,itislookingforearly commercialisation advantages from its next generation technologies including looking beyondLiIonbatterytechnology.Recentlythe companyestablishedadepartmentforbattery researchthatappearstobefocusingonmetal air cells as the next generation of its battery technology. At a recent technology forum in Tokyo Watanabe said that the company was setting outtoproduceanextgenerationbatterythat will far outperform Liion. The company has alsofoundedachairforresearchonadvanced batteriesatKyotoUniversity.
Figure62:Prius3assembly Source:Toyota
Figure12:WorldwideToyotaPriussales19972009 *2009JanuaryApril Source:Toyota AfurthercriticalelementtoToyotastechnologystrategyisitsworkonPowerControlUnits(PCUs)and regenerativebrakingsystems.PCUsareacriticalcomponentforloweringfuelconsumptionandimproving driving performance, and PCU development has resulted in reductions in dimensions of around 30%
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coupledwith a180%increaseinpower densitytodate,which enables theuse ofsmaller andeasier to installunits.
Honda
Hondas threefold sustainability strategy involves the development of existing engine technology, advancingfuelefficiencythroughresearchanddevelopmentofcurrentandnewenginetechnologieslike hybrids and clean diesel and finally the exploration of new fuel alternatives. In terms of hybrids the companysIntegratedMotorAssist(IMA)hybridsystemisnowinitsfifthgeneration,andHondacanbe currently thought of as dominating the mildhybridsector. Hondawouldseemtobeconcentrating on the compact and subcompact sectors, because the company believes that it is in these segments that hybridisation can deliver the greatest benefits, according to Masaaki Kato, president of the Honda Research & Development (Hondas product development subsidiary). This strategy differs radically from many of its rival OEMs that are using hybridisation to improve the fuel efficiency of larger models. To date the companys largest Figure 64: 2009 Honda Insight interior featuring the hybrid vehicle is the Civic, and the EcologicalDriverAssistSystem company sees future product developmentasbringingitsIMAsystem Source:Honda tosmallerratherthanlargervehicles.Katosaysthathybridsystemsarebestusedinsmallcars,because smallhybridsaremostoftenusedforcitydriving,whereregenerativebrakingcanbeatitsmosteffective inrechargingthebatteries.Carsthatstopandgoarethemostsuitableforhybridtechnology,saysKato. IntegraltothesuccessofHondashybridstrategyhasbeenthelaunchofitsdedicatedhybridmodel,the Infinity.SignificantlythiscartookmarketshareawayfromtheToyotaPriuspriortothelaunchofthethird generation of Toyotas dedicated hybrid model, and there is some evidence of intensifying price competitionbetweenthesemodelsasbothcompanieslookforhybridsystemsvolume. Thecompanysnewchiefexecutive,TananobuIto,saysthatHondaissettospeedupthelaunchofhybrid models as the competition with their Japanese rivals becomes more intense. During June 2009 Ito said Honda will launch its planned CRZ hybrid sports car around February 2010 and a gasolineelectric Fit towards the end ofthe year, citing the growing importance that customers place onfuel economy and environmental issues. I think everyone is going to move towards 700,000 FULL MILD hybrids, said Ito. Bringing hybrids 600,000 quickly to customers will be a major 500,000 focusofouractivities,hesaidashe 400,000 went on to discuss a strategy that 300,000 uses an increased pace of 200,000 development to attain a competitive 100,000 edge. 0
2008 2009 2010 2011 2012 2013 2014 2015
Figure63:Hondamildandfullhybridforecast SourceGlobalInsight
Almost all the engineers that were part of Hondas Formula One team aresaidtobenowworkingonhybrid development and Takeo Fukui, Itos
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predecessor recently predicted that hybrid vehicles will account for 10% of worldwide car sales in the earlypartofthenextdecade. Honda is accelerating the development of a new hybrid system that utilises two electric motors to be mountedon mediumandlarge models,andthecompany has significantlyshelveditsplanto useclean dieselenginestoimprovefueleconomyonlargervehicles. Hondas overall sales of the Insight have exceededthemonthly target of 5,000 and the company is installingnewcapacity at its Suzuka plant that will take daily production to over 700 units. However, Insight salesin theUS have not reached the annualised target of 90,000 units, or just underhalfofitsglobal sales of 200,000. This shortfall has been Figure65:Honda'sCRZhybridsportscar partly due to the Source:Honda economic situation in theUSandproductionlimitationsinJapan,althoughthePriusisbothlargerandmoreluxuriousataround $2,000 more than the Insight. In light of these results Ito believes that emerging markets in China and India hold the most promise for growth with the US and Europe looking at two years at least to some significantrecovery,apositionwhichalsogivescredencetothecompanyssmallerhybridmodelstrategy.
Nissan
WhileNissanshybridfleetseemslimitedithashadsuccesswithitsAltimaHybridreleasedin2007using technologylicensedfromToyota.WithaV6enginethesedanhasbeenmarketedasgivingfueleconomy comparable to that of compact cars. Their focus extended to the development of further hybrid technology through the technical partnership with Toyota who provided some of the hybrid power components for the Altima. Currently the company favours noncore electricpowered technologies capableofbeingincorporatedintotheircurrentvehicleportfolio. Nissanwastheworlds firstOEMtomarket acar poweredby alithiumionbattery the PrairieJoy EV whichwasreleasedinJapanin1996,andthisgivesastrongcluetothecompanyslongtermstrategyfor lowemissionsorzeroemissionsvehicles.Thecompanyhasestablishedacompanyforthedevelopment, productionandsaleoflithiumionbatteriesdestinedtobeinstalledinNissanshybridofferingaswellas thecompanysfuelcellvehiclesandelectricvehicles. Nissans Green Program 2010 sees the launch of a hybrid vehicle using its own hybrid technology sometimein2010.WhilethecompanysCEOhasconsistentlyindicatedthathebelievesthathybridsare tooexpensiveforconsumersandhavelittleprofitincentiveforcarmakers,morerecentlythecompany hassaidthatitsownhybridcarswillbalancecostandvaluesothattheywouldbeprofitablefromthe start. InAugust2009thecompanytookitsfirststepstowardsitstatedgoalofleadingtheindustryinthezero emissions field by showing its muchawaited electric car the Leaf. Nissan will begin selling the Leaf
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modelintheUS,JapanandEuropetowardstheendof2010.Itisduetoaddtwomoreelectricmodels during2011andexpectstobeproducingaround200,000unitsby2012. Nissan has been badly affected by slowing vehicle sales worldwide and it has suspended its goals previously set under its midterm businesspla,withtheexceptionof the companys aggressive push in the electric vehicles. The CEO Carlos Ghosn recently commented thatheexpectsoneintennewcars tobeelectricby2020. While its overtly electric car strategy begins to take shape, Nissan is developing a hybrid system that can be used to power smaller cars as an interim solution Figure66:Nissan'sLeafelectricvehicle to improving mileage before pure Source:Nissan electric cars can take over. Executive vice president Mitsuhiko Yamashita said that the OEM had made no final decision about actually offering small and midsized hybrid vehicles, but that the technology may be necessary for consumers who need fuelefficient, all purposecarsthathavethesamedrivingrangeasconventionalgasolineordieselcars. Thebestoptionofcoursewouldbeforzeroemissionelectricvehiclestocoverallneeds,butthatsgoing totakeawhile,Yamashita,whoheadsresearchanddevelopmentatNissan,saidataNissantechnology event. However, a substantial range of hybrid powertrains would signal a major shift in strategy for Nissan,whichhasbeenlookingtoclosetheimagegapinenvironmentallyfriendlytechnologywithhybrid pioneersToyotaandHondabyleadinginthezeroemissionelectricvehicle(EV)field. Nissanhaslongmaintainedthatzeroemissionelectricvehicles,whilelimitedinrangeonasinglecharge, aresufficientforeverydayuse,citingresearchthatmorethan80%ofdriverstravellessthan100km(62 miles)aday.
Renault
RenaultiscurrentlyworkingonthedevelopmentoflowemissionandzeroCO2emissionsvehiclesinwhat itreferstoasadeterminedbidtointroduceasmanyeffectivetechnologiesaspossibleatanaffordable price.Itsworkonfuturepowertrainsfocusesontwomainareas:thedevelopmentofarangeofelectric motors for allelectric vehicles, and new technologies for conventional engines, including a new generation of turbocharged internal combustion engines as well as on new automatic transmissions. Thereforethecompanyscommitmenttohybridpowertrains,likeNissan,islimited.Italsofindsitselfin thesituationthatbyfarthemajorityofitsvehiclesaresoldintheEuropeanmarket,whichhasnowhere near the enthusiasm for hybrids that is seen in the US and Japan, and where more than 50% of car powertrainssoldarediesels. Like Nissan, Renault believes that hybrid vehicles are essentially not profitable and costly to both the manufacturer and consumer, although they are exploring the use of electrically powered cars in their alliancewithNissan.ThishasledtoanIsraeliprojectestablishedwithRenaultknownasProjectBetter PlacethatconsistsofRenaultproducing100%electricvehiclesforsaleinIsraelby2011.Taxincentives are to be introduced nationally to all customers as will an electric recharge grid with around 500,000 chargingunitsavailablenationwide.StandardisedlithiumionbatterypackswillbesourcedfromNissan. Most Israeli car owners drive an average of 70 kilometres as a daily commute, and all major areas are
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accessiblewithinaradiusof150kilometresmakingthisprojecttheidealmassmarketforanallelectric fleet. As with its partner Nissan, Renault has firmly established that electric vehicles are its future in the medium to long term. To this end the alliance has signed an MOU for collaboration with UK transport infrastructurecompanyElektromotivewiththeaimofacceleratingtheinstallationofchargingnetworks forEVsincities.Thealliancewillalsoundertakeaneducationprogramanddevelopincentiveschemesto hastentechnologyuptake.ThealliancealsohaspartnershipswithFrenchutilitycompanyEDFandSwiss electriccompanyEnergieOuestSuisse(EOS). IntheshorttermRenaultaimstoremainversatilewithitshybridstrategyandiskeentobeperceivedas flexible initsfutureoptions,andthecompanywill,aspartofitsprocessofachievingCO2reductionsin conventional combustion engines, be extensively using stopstart systems that are also referred to as micro hybrids. Rising fuel prices andnewenvironmentaltaxes will help us introduce technologies like stopstart thatourcustomerspreviously werenotwillingtoinvestin, says Alice de Brauer, Renaults environmental director. The micro hybrid technologywillbeintroduced in both gasoline and diesel models. Figure67:Renaults'Ondeliosdieselhybridcrossovervehicle In terms of mainstream Source:Renault hybrids Renault has shown a dieselelectricpowertrainina mildhybridconfiguration.TheOndeliosasshownatthe2008ParisMotorShowisanaerodynamicand environmentally friendly concept vehicle. Some of the cars structural parts are made from natural flax fibre for greater recyclability, and in order to make the car as light as possible, its body is made from carbonandtheglazedareasfrompolycarbonate. TheOndeliosispoweredbyapowerplantwhichcombinesa205hp(150kW)2litredieselengine,withtwo 20kWelectricmotorsatthefrontandrear.Theseoperateinamildhybridmode,givingtheengineextra boostasrequired.Theyuseabrakeandboostsystem,recoveringenergyduringbrakingthendeliveringit to the engine to boost acceleration. The front motor also features stopstart technology. The electric motor mountedontherear axledrivestherearwheels when theESPsensors detectaloss of traction, thusgivingOndeliosthecapabilityofa4WDvehicle.Usingasevenspeed,doubleclutchtransmissionthe vehicleachievesafuelconsumptionof4.5litres/100kmandCO2emissionsof120g/kmandisdescribedby Renaultasaluxurycrossovervehicle. ThecompanyalsoproducesapluginhybridversionofitsKangoomodelalongwithapureEV.
PSA
PeugeotCitronundertookareviewofitshybridstrategyin2008andfollowinguncertaintyconcerningits partnershipprojectwithContinental,Bosch,ValeoandThyssenKruppanddelaysingovernmentfunding the OEM, decided to develop its own vehicles. Originally the OEMs partnership project was to have receivedpublicfundingof101m,however,delaysduetoaninvestigationbytheEuropeanCommission competitionauthoritieshasleadtheOEMtorethinkitsstrategy.
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CitronexmanagingdirectorGillesMichelsaidthatnewmodelsareduetobereadyforseriesproduction fromaround2011andtheywillbeapartofthePeugeotlineupandCitronspremiumrangeofvehicles. AstheGroup(PSA)wasnotabletogoaheadwithamasshybridproject,andasoursolutionremainsan expensiveonewearegoingtoapplyittoexpensivecarsandvolumeswillbemorelimited,saidPascal Henault,PSADirectorofResearchandInnovation. Subsequenttothis,PSAandBoschworkedtogethertodevelopdieselhybridpowertraintechnology,and the two brands exhibited the Peugeot Prologue and Citron Hypnos with a view to series production ofmodelsin2011. PSA unveiled the first diesel hybrid in 2009, which is based on a 308 four wheel drive model. The Hybrid4 is a conventional front wheel drive turbocharged diesel powertrain featuring a stopstart system. However the rear axle of the vehicle has been modified to incorporate an electric motor and driveshafts for the rear Figure68:Peugeot's308hybriddieselprototype wheels. A battery pack Source:PSA and power control units havebeenfittedunderthebootfloorandthehybridsystemissaidtoaddonly100Kgtothemassofthe vehicle. To reduce costsPeugeot is using its existing robotised sixspeed transmission, which uses an automatic clutchactuationtoenableautomatedshifting,andtheonlyconnectionbetweenthetwopowertrainsis the underfloor wiring. The Hybrid4 can run in front wheel drive mode, all wheel drive and rear wheel drive,thelatterofferingazeroemissionsoption. ThehybridsystemhasbeendesignedtofitPSAsPlatform2(Peugeot308/CitronC4)andthePlatform3 (Peugeot407/CitronC5),andalthoughinitialhybridsystemcostsarereputedtobeapremiumofaround 15%overtheexistingtopoftherangemodels,thecompanybelievesthatitcandrivesystemcostsdown asthehybridpowertrainisutilisedacrossmoreofitsmodelrange.
Hyundai
Recently Hyundai Motor began selling the world's first LPG (liquefied petroleum gas) hybrid cars (July 2009).AlthoughHyundaiisonlyduetosellthemodelinSouth Koreaforthemomentthemove bythe KoreanOEMsignalsthestartofanambitiousstrategy.AccordingtoKimPilSoo,AutomotiveEngineering ProfessoratDaelimCollegenearSeoul,thenewmodel,whichstartsat$16,200,isasteppingstonefor Hyundai as it prepares to face off against the likes of Toyota and Honda in the global hybrid vehicle markets. The introduction of Hyundai's first hybrid electric vehicle coincides with the company's aggressive marketingcampaignintheUS,andsuchcampaignsinthepasthavehelpedtheOEMtoincreaseitssales significantlyoverthepastdecade.IntheUS,forinstance,Hyundaismarketshareincreasedto4.3%inthe
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first six months of 2009 from 3.1% a year earlier. In China and the European Union, Hyundai's share jumpedto7.3%(from5.3%)andto2.3%(from1.7%),respectively,inthefirstfivemonthsof2009. The first hybrid electric model, largely based on the existing Elantra, uses an innovative lithiumion polymerbatterystack.YangWoongChul,Hyundai'spresident,commentedrecently"Wearemovingwith 'Hyundai speed' to achieve our goal of environmental leadership in our industry and redefining the Hyundaibrandasatechnologicalinnovator". Hyundaisaysitslithiumionpolymerbatteriesweigh35%lessthancurrentnickelmetalhydridecellsused inToyota's(TM)PriusandHonda's(HMC)Insightandare40%smaller.Theyalsolast1.5timeslongerthan nickelmetal hydride batteries, generate less heat, and are more resilient to shock than other types of lithiumionbatteries.Furthermore,becausethepolymerresemblesagel,thebatterystackcanconform tomanyshapes,allowingasolutionto the thorny problem of packaging because they can be installed almost anywhereonavehicle. The Korean carmaker has no current plans to sell the Elantra hybrid in export markets, as only a handful of countries use LPG as an automotive fuel on any scale. However, Hyundai plans to introduce a gasolineelectric hybrid in the USin2010basedon the nextgenerationSonatausingthesame battery technology as the Elantra hybrid. Figure69:Hyundai'sElantraLPGHybridpowertrain
Hyundai sees that it has made Source:Hyundai significantstridesinitshybridstrategy astheOEMhasdevelopedallofthemajorcomponentryforitssystem,suchasbatteries,electricmotors, and converters in Korea to avoid patent disputes with the likes of Toyota. "We now have all the key ingredients to compete in the hybrid segment," says Lee Ki Sang, director in charge of developing the hybridsystematHyundai. Using an LPG instead of gasolinepowered ICE may limit Hyundai's hybrid export chances for the moment, but in its domestic market the move will help the company take advantage of low prices for propane. LPG costs about half the price of gasoline in Korea for the price of one litre of gasoline the Elantra hybrid can travel 39 km, according to Hyundai. This is a one kilometre improvement over the latestPrius.Hyundaiaimstosell22,500Elantrahybridsbytheendof2010andhasindicatedthatitwill increasetotalannualhybridsalesto50,000oncetheSonatahybridislaunched. Industry analysts have commented that defending its domestic market is necessary for Hyundai as it makesthebulkofitsearningsinSouthKorea. Hyundai has also signalled its intention to launch a plugin hybrid in the US market by late 2012. Yang WoongChulconfirmedthatthemodel,theBlueWill,willtargetotherOEMmodelssuchastheChevrolet VoltandthePlugInPrius.ThecarwillfeatureaproprietarypowertraindevelopedbyHyundaiinSouth Koreabasedonitsnowextensiveinhousecapability.
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HybridModelTimeline
1997 1999 2000 2002 2004 TOYOTA HONDA TOYOTA HONDA FORD HONDA 2005 TOYOTA TOYOTA MERCURY GM GM CHRYSLER 2006 TOYOTA TOYOTA MERCURY 2007 NISSAN TOYOTA MAZDA GMC 2008 GM GM FORD MERCURY
MH=MildHybrid,FH=FullHybrid
Prius FH Launched in Japan Insight MH Launched in USA Prius FH Launched in USA Civic Hybrid MH Escape Hybrid SUV FH Accord Hybrid MH Lexus RX 400H SUV FH Highlander SUV FH Mariner (Compact SUV) FH Saturn VUE SUV FH Chevrolet Silverado Pick-Up MH Ram Dodge Pick-Up MH Camry Hybrid FH Lexus GS 450H FH Mariner SUV FH Altima Hybrid FH Lexus LS 600H L FH Tribute Hybrid SUV FH Yukon SUV FH Saturn Vue Green Line FH Chevrolet Tahoe SUV FH Fusion Sedan Hybrid FH Milan Hybrid FH
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KIA MERCEDES AUDI GM HYUNDAI 2009 CHEVROLET BMW FORD TOYOTA SMART HONDA VW TOYOTA FORD CADILLAC CHRYSLER 2010+ PORSCHE VW HONDA PORSCHE HONDA CHEVROLET GM TOYOTA
Rio FH S-Class Hybrid MH Q7 Hybrid SUV FH Chevrolet Malibu Hybrid MH Accent Hybrid MH Silverado Hybrid Pick-Up FH X6 FH Five Hundred Hybrid FH Prius Generation 3 FH Hybrid 2-Seat Subcompact MH Insight MH Jetta Hybrid FH Sienna (Van) FH Escape Hybrid SUV FH Escalade Hybrid FH Aspen Hybrid FH Cayenne Hybrid FH Touareg Hybrid SUV FH Fit FH Panamera Hybrid FH CR-Z sports car MH Volt Plug-In Hybrid FH Saturn Vue Green Line Plug-In Hybrid FH Jolt Plug-In Hybrid FH
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MERCURY HYUNDAI FISKER TOYOTA TOYOTA HONDA
Montego Hybrid FH Elantra Hybrid FH Plug-In Hybrid Sports Sedan FH FT-HS Sports car FH Sienna FH Fit MH
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Incentives
Hybridvehiclesaleshavebeensubjecttovariousincentivesfrompaymentstoreducethepremiumpaid tolesstangiblebenefitssuchasparkingconcessionsandexemptionfromroaduserorcongestioncharges. "I think incentives are useful to kick start the technology or get it going, I think we all know incentives dontlastforever,saysSherifMarakby,HybridChiefEngineerforFord,Theyhavehelped,butIthinkitis veryimportanttodevelopasustainablebusinessthatcanthriveonitsown.
FuelEconomy
Vehiclecomparisonsinrelationtoemissionsroadtestingnotonlyprovidesaninvaluablemeasuringtool but helps to educate and inform consumers of their environmental options when purchasing new vehicles.IntheUStheEnvironmentalProtectionAgencyisresponsibleforcarryingoutlawstocontrolair pollution from motor vehicles, engines and their fuels. Their extensive testing facility utilises a combination of inspections, urban dynamometer drive schedules and federal testing procedures. The results are calculated in the form of miles per US gallon (mpg) for both city and highway driving and a combinedtotalfigureisavailablealso.USconsumerscansavebetween$200and$1500infuelcostseach yearbychoosingthemostfuelefficientvehicleinrelationtompgachieved. Japan 10-15 Cycle EPA figures did come under intense scrutiny for some time due to inconsistencies and claims of misrepresentationinrelationtofuelconsumptionfigurespublished.Consumercomplaintsresultedinthe
Country/Region United States European Union Japan China California Canada Australia Taiwan, South Korea
Type Fuel CO2 Fuel Fuel GHG Fuel Fuel Fuel
Measure mpg g/km km/L L/100-km g/mile L/100-km L/100-km km/L
Structure Cars and light trucks Overall light-duty fleet Weight-based Weight-based Car/LDT1 and LDT2 Cars and light trucks Overall light duty fleet Engine size
Test Method US CAFE EU NEDC Japan 10-15 EU NEDC US CAF US CAF EU NEDC US CAFE
Figure70:Fueleconomy/GHGregulation
CAFE Corporate Average Fuel Economy EU NEDC New European Drive Cycle
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EPAreconfiguringtestingschedulesandpublishingfiguresmoreinlinewithindependentproducttesting organisations. In reality all vehicles are subject to drive conditions and fuel efficiency figures may not coincidedirectlywiththeactualfuelconsumedineverydaydrivesituations.TheEPAhavetakenstepsto rectify this as far as possible by taking into account higher operating speeds in their testing schedules alongwithairconditionerusageandcoldstartconditions. Research conducted by the Civil Society Institute (CSI, a nonprofit energy and ecological think tank) showsadistinctfuelefficientcargap,andin2007itwasrevealedthatonlytwohybridscouldachievea combinedgasmileageofatleast40mpgtheHondaCivicHybridandtheToyotaPriusHybrid.Afurther studyconductedbyJDPowerfoundthatmanyconsumersoftenoverestimatedtheactualfuelefficiency gainedbyhybridelectricvehicles. However,sincetheEPAchangeditstestschedulesthefueleconomyfiguresobtainedthroughrealworld testinghavebecomemuchclosertothosestated.
HybridIncentivesandTaxation
Governments, particularly in the US, have taken considerable steps to incentivise the uptake of hybrid vehiclesthroughtaxcredits.ThisapproachisincontrasttotheEuropeanapproachthatseekstolimitCO2 outputthroughagreementwithACEA,andwhenthisproveslessthaneffective,sanctionsagainstOEMs thatfailtocomplywiththeregulation.
NorthAmerica
The United States has used tax incentives to the greatest extent to kick start the hybrid market. The EnergyPolicyActof2005providedacreditfortaxpayerswhopurchasecertainenergyefficientvehicles. Thecreditforpurchasinganewhybridcarortruck(previouslyownedvehiclesdonotqualify)withagross vehicleweightrating of8,500poundsorlesscanrange between aminimum of $250 toamaximumof $3,400dependingonfueleconomy.Thehybridtaxcreditismadeupoftwoseparatecredits,thehybrid taxcreditandthealternativefuelvehiclecredit.TheInlandRevenueServiceisresponsibleforcertifying thecorrecttaxcreditavailabletoeachconsumer.
Figure71:Phaseoutcreditcalendar Source:USIRS
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Date Jan 1 2006 Dec 31 2010 June 2006 Jul 1 2006 Sept 30 2006 Oct 1 2006 Mar 31 2007 Apr 1 2007 Sep 30 2007 Oct 1 2007 Ongoing
Situation Tax Credit becomes available Toyota reaches threshold 60,000 vehicles Prius purchased still eligible during this time Prius purchased eligible 50% credit Prius purchased eligible 25% credit Prius purchased not eligible for credit
Available Credit $3,150 $3,150 $3,150 $1,575 $787.50 $0
Figure72:ToyotaPriustaxcredittimeline Source:USIRS At the beginning of 2006, Toyota was selling over 10,000 hybrids a month; therefore it quickly hit the 60,000 limit. The tax credit phaseout period began for Toyota just nine months from the start of the programon1stOctober2006.Hondatooklonger,beginningthephaseoutperiodon1stJanuary2008. The Internal Revenue Service (IRS) recently added ten bus hybrid bus models to a list of vehicles that qualifyfortheAlternativeFuelMotorVehicleCreditenactedbytheEnergyPolicyActof2005. ThetenqualifyingmodelsofferedbyICBusarethefirstschoolandcommercialbusestobeaddedtothe list,andthroughthisIRSprogram,purchasersofcertainlargehybridvehiclescanclaimcreditsof$3,000, $6,000or$12,000iftheyqualifyfortheQualifiedAlternativeFuelMotorVehicleCredit. Thesecreditsaresignificantbecausetheycanhelptooffsetthepriceofhybrids,notedDavidHillman, marketing director at IC Bus. This tax credit will be appealing to schools and organisations looking for addedincentivestopurchasehybridbuses.Eventaxexemptcustomerslikeschoolscantakeadvantageof thefederalprogrambyworkingwiththeirsellingICBusdealer.
Figure73:ToyotaandHondataxcredithistory Source:IRS/GreenCarCongress
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Make BMW BMW Chevrolet Chevrolet Chevrolet Ford Ford Ford GMC GMC Honda Honda Lexus Lexus Lexus Mazda Mazda Mercedes Mercedes Mercedes Mercury Mercury Mercury Nissan Saturn Saturn Toyota Toyota Toyota Volkswagen
Model 335d (Clean Diesel) X5 xDrive35d (Clean Diesel) Malibu Hybrid Silverado Hybrid Tahoe Hybrid Escape Hybrid (2wd) Escape Hybrid (4wd) Fusion Hybrid Sierra Hybrid Yukon Hybrid Civic Hybrid 2005 Civic Hybrid (auto) GS 450h LS 600hL RX 400h Tribute Hybrid (2wd) Tribute Hybrid (4wd) GL 320 Bluetec (Clean Diesel) R320 Bluetec (Clean Diesel) ML 320 Bluetec (Clean Diesel) Mariner Hybrid (2wd) Mariner Hybrid (4wd) Milan Hybrid Altima Vue Green Line Aura Green Line Camry Hybrid Highlander Hybrid Prius Jetta TDI (Clean Diesel)
Tax Credit $900 $1,800 $1,300 $2,200 $2,200 $3,000* $2,200* $3,400* $2,200 $2,200 $2,100* $1,700* $1,550* $450* $2,200* $3,000* $2,200 $1,800 $1,550 $900 $3,000 $2,200 $3,400 $2,350 $650 $1,300 $2,600* $2,600* $3,150* $1,300
The second credit is called the alternativefuelvehiclecredit.Inorder to be eligible for this credit, vehicles must be able to run solely on compressed or liquefied natural gas, liquefied petroleum gas, hydrogen or any liquid that is at least 85% methanol.Thiscredit isnotsubject to asalesthresholdandphaseoutperiod andissetatamaximumof$4,000. While it is the manufacturers responsibilitytogetavehiclecertified, each taxpayer must follow certain criteriainordertoqualifyforacredit: 1. 2. Thevehiclemustbeplacedon orbefore31December2010; Theoriginaluseofthevehicle mustbeginwith thetaxpayer claimingthecredit; The vehicle must be acquired for use or lease by the taxpayer claiming the credit; and The vehicle must be used predominantly within the UnitedStates.
3.
4.
As well as federal tax incentives, a number of state governments also offer tax rebates or credits for low emissionvehicles.Taxincentivesrange from $500 for some hybrids in Pennsylvania to $2,000 in Massachusetts, although some of the amounts stated are upper limits for creditsthatarebasedonaproportion of the incremental price difference betweenthehybridanditsnonhybrid equivalent model. Some states also offerdiscountsonannuallicencefees. Several cities in the US offer free or discounted parking for low emission vehicles and allow them to use high occupancy traffic lanes (HOV) with onlyoneoccupant,althoughthelatter is generally limited by fuel economy ratings so that a number of large car and SUV hybrids fail to qualify. Some statesoffer$100prepaidparkingcards if their vehicle reaches a certain EPA
* Credits for Toyota and Honda hybrids no longer qualify at all for tax credits. Ford hybrids are still eligible, but the credits will be cut in half from amounts listed below starting April 1, 2009. In October 2009, the credits will be cut in half again, and will completely phase out on April 1, 2010.
Figure74:USTaxcreditavailabilityApril2009 Source:USIRS
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air pollution score. These policies are receiving criticism from environmentalists who believe they encourage increased vehicle use with increased fuel consumption and emissions and question whether theseincentivesaresoundtransportpolicy.WhileothergroupssuchastheSetAmericaFreeCoalition,a groupofenvironmentalistswhoarecampaigningfor$2billioninincentives,areadvocatingthatifallcars arehybridsandhalfthattotalarepluginhybrids,USoilimportswoulddropbyeightmillionbarrelsper day. Furthermore,somecorporationsoffertheiremployeesincentivestopurchaseahybridvehicle.TheBank of America will reimburse a proportion of the price to employees purchasing new hybrids. Google softwarecompanyHyperionSolutionsplusorganicfoodanddrinkproducerClifBar&Cohavealimitof $5,000fortheirhybridbuyingemployeeswhichdoesincludePriusmodels.IntegratedArchiveSystems,a Palo Alto IT company, offers a $10,000 subsidy toward the purchase of hybrid vehicles for eligible employees. These and others offer free or preferred parking, or increased vehicle allowances. Some insurancecompaniesareofferingdiscountstohybridownersforexample,TheFarmersInsuranceGroup offers10%discountinmoststates,andsomehotelsofferparkingandtariffdiscounts.Representativesof theseorganisationshavequitefranklypointedouttheirincentivepoliciesareintendedtoattractcustom throughthepropagationofagreenimage. The federal government in Canada has approved a purchase rebate for consumers buying or leasing hybrid cars with similar incentives being offered in British Columbia, Manitoba, Quebec, Ontario and PrinceEdwardIsland.
Europe
Anumberofgovernmentshavedifferingincentivestoencouragehybridpurchase. In Belgium the national government provides a purchase reduction of as much as 15% to hybrid consumers,whileintheNetherlandsthegovernmenthasloweredthetaxforClassAcars(thePriusbeing onesuchclass).Allotherclassesofcarspayavehicletaxsetat2225%whereasclassAmodelsaresetat 14%. France,alongwithFinland,hasjustintroducedanewtaxationsystemdirectlyrelatedtotheamountof CO2emissionsreleasedbynewcarsbought.Gasconsumptionwillbesetatathresholdof160g/km.Any vehicle exceeding this level will be charged from 200 to 2,600 for vehicles that emit as much as 250 g/km. This is reversed if consumers drive cars such as the Smart and VW Polo BlueMotion. They will receiverebatesbetween2001,000iftheyareabletoachievelessthan130g/km.InFinlandthiswill beapplicabletousedimportsaswell. IntheUKthegovernmenthasrecentlyannouncedincreasedtaxincentivesforpluginhybridsandEVsto encouragethegrowthofthissectorandhasimplementedsignificantreductionsinvehicleexcisedutyfor fuelefficientvehiclesincludinghybrids.ForexampleaHondaCivichybridownerwillpayaround 15per annum whereas a conventional gasoline engine variant will cost 140 per annum. Furthermore, hybrid vehicle drivers are exempt from Londons 8 per day congestion charges, and some London Boroughs suchasWestminsterchargehybriddriverslessforparkingpermits.
Japan
In Japan, electric and hybrid vehicle purchasers can receive a purchase subsidy of up to 50% of the incremental cost of the vehicle over a nonelectric or nonhybrid equivalent. This subsidy amounts to around10%ofthepurchasepriceofaToyotaPriusorHondaInsightand11%ofthepriceofaHondaCivic Hybrid.AToyotaCoasterHybridsmallbusiseligibleforasubsidyof31%ofitspurchaseprice,although thisleavesitstillconsiderablymoreexpensivethananonhybridCoaster. InDecember2007theJapaneseMinistryofEconomicTradeandIndustry(METI),inconjunctionwithKeio University, revised a set of promotional policies for a full scale diffusion of next generation vehicles. It includedsubsidiesforcleanenergyvehiclepurchasers,a50%reductionoftheautomobiletaxdepending
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onemissionandfuelefficiencyand1.8%reductionoftheautoacquisitiontaxforhybridpassengercarsin 2008.Otheradvantagesincludediscountparkingopportunities,discountedinsurancefornextgeneration vehicles and the possibility of lowinterest loans for those choosing to purchase clean energy vehicles. Thesepoliciesarecurrentlybeingrevisedinconjunctionwithnationalandlocalgoverningbodies.
Thegloballightvehiclemarket
Global Insight forecasts that demand for light vehicles is expected to grow to 87.4 million by 2013. Similarly demand for dieselpowered light vehicles is projected to increase from 17.4 million to 23.7 millionduringthesameperiod,whichislikelytoresultinanincreaseinmarketsharefromaround24%in 2007to27%by2013forglobaldieselpowertrainsales.ThepopularityofdieselinEuropehasledtoan overall sales growth in central and eastern Europe with considerable growth throughout the region (excludingRussiaandUkraine).However,thismayalsoindicatethatthedieselmarketinwesternEurope has already passed its peak, and increasingly stringent emissions standards will mean that costs associatedwithdieselpowertrainswillbecometooonerous.OverallsalesgrowthforEuropeispredicted to remain at around 3%. North America, which is an almost entirely mature market, is forecast to see growthofslightlyover1%perannum.AfricanandMiddleEasterncountries,whichmakeupthebulkof salesintherestoftheworld,arepredictedtoseegrowthofaround3.5%perannum. Chinahasbeenthefastestgrowingautomotivemarketoverthepastdecadeandisforecasttocontinue such high growth levels to the point that it will eventually become the largest worldwide automotive marketwithinthenext1015years.Salesarereportedtohaveexceeded9.3millionunitsin2008.Indiais alsoexpectedtoachievehighsalesgains,andwiththeadventofTataMotorspeoplescarin2008,and OEMs like Renault and Ford investing billions in assembly plants in India, rapid sales growth which is expected to be around 8%, is forecast to continue making both these nations the largest vehicle sales regionsgloballyby2012.
TheHybridMarket
Forecastinghybridcarsalesisnotoriouslydifficultgiventhecurrentfluctuationsineconomicfortunesand fuel prices around the world and in fact hybrid sales since 2000 have progressed more quickly than anticipated. In February 2004, Dave Hermance of Toyota, said, "The Japan and US markets are taking orders for the product at a much higher rate than expected. Fourteen months later, in April 2005, Dieter Zetsche,thenDaimlerChryslers CEO said, "We underestimated the interest that Toyota and Honda hybrids would generate." In May 2005, Mary Ann Wright, Ford's former hybrid chief, said Frankly, we underestimated the demand for the Escape Hybrid." As late as October 2005, Kazuo Okamato, Toyota executive vicepresident ofR&D,wasstill showing surprise. He declared, "We didnt think demand wouldjumplikethis." Figure75:Globalhybridproductionandgrowthratesto2015 By the end of 2005, the Source:GlobalInsight thoughts of the OEMs seemed
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2008 W Europe Asia/Pacific C/E Europe NAFTA Total

151,612 602,218 2,218 120,602 876,650
2009
606,732 685,683 156,032 142,649 1,591,096
2010
1,533,965 1,148,991 324,167 266,509 3,273,632
2011
3,054,857 1,545,866 644,699 551,249 5,796,671
2012
4,736,976 1,929,473 875,494 837,763 8,379,706
2013
5,728,478 2,152,410 1,134,232 1,167,459 10,182,579
2014
6,416,646 2,325,011 1,371,836 1,383,482 11,496,975
2015
7,196,582 2,427,110 1,523,687 1,570,805 12,718,184
Figure76:Globalhybridvehicleproductionforecastto2015,byregion Source:GlobalInsight
to have changed and a survey by KPMG suggested that nearly 90% of senior executives expected gas electrichybridstogainmarketshare,asignificantincreasefromthe75%whothoughtthisayearearlier. Furthermore, the executives had begun to change their opinions on fuel efficiency, and the survey indicatedthattheybelievedsalesofallfuelefficientmodelsincludinghybridswouldoutpacethesalesof SUVs, pickups and luxury modelsto2010. To date all of the worlds automotive forecasting professionals have found it difficult to come up with consistent numbers. A situation that is not surprising once the speed of the recent economic downturn is taken into account, together with the large effect fuel price movements has on sales in the short term, and the increasing range of choice availabletotheconsumer. Figure55:UShybridsalesfigures19992009
Source:Various In 2005 global hybrid productionstoodataround 340,000 vehicles. Production and sales have grown dramatically from that time to a total of around 877,000 in 2008. Global hybrid vehicle production between 1997 and the end of 2008 is estimated at around2,590,000,withToyotaclaimingalmost70%ofthattotal.However,thepaceatwhichotherOEMs arejoiningthefray isheating up despitetheglobal recession,and no fewerthan50hybridmodels are forecasttohavebeenlaunchedintheUSmarketbytheendof2010. Furthermore, the market is also maturing quickly with the beginnings of a price war evident as Honda seekstochallengeToyotasdominance.Aswellasthisthechoiceofhybridtypepowertrainsisincreasing rapidly.AccordingtoGlobalInsighttherewillbemorethanthreemillionhybridvehiclessoldperannum by2010andthisforecastgrowsto12.4millionby2015.
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NorthAmerica
Atthebeginningof2009lightvehicle sales in the US were at their lowest per capita level in nearly 50 years. Within this environment, diminished access to credit, together with the stress caused by low volumes, have brought to the fore some very significant problems for the industry. This has culminated in the demise of two of the Big Three US car manufacturers as they have existed and coupled with the current initiatives to get these large companies moving again there are significant structural changes emerging. Withinthisvolatilemarketthemarket for hybrids continued to grow as a proportion of overall light vehicle sales despite depressed sales overall reaching just over 26,000 units for June 2009, a significant reduction on therecordmonthofMay2007,when saleswere45,000unitsintheUS.This Figure77:Globalhybridvehicleproductionforecastto2015,by marksthefourthmonthinarowthat region hybridshavetakenanincreasedshare ofthemarket. Source:GlobalInsight Since its introduction in 1997 the hybridhasgainedjust2.5%oftheUSmarketasconsumersandOEMshaveprogressedfromwhatwere seenasexoticvehiclescloserto mainstream market penetration. To date, the US has been the major market for hybrids, and growthinhybridsaleshasbeen increasingly strong. Initially in 2000 there were only two hybrid models available and fewerthan10,000sold,in2007 therewere17modelsandsales totals of over 350,000. However,therewasadramatic contraction in sales in 2008, with November sales dropping 53%,comparedwithan overall autosalesdropof37%.ByMay Figure78:UShybridvehicleproductionforecastto2015 2009 Toyotas Prius was still selling 30% less compared to a Source:GlobalInsight year earlier, and Honda was
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selling 7.5% more hybrids thanks to the launchofitsnewInsight. During 2009 sales have dropped 45.5% yearon yearover2008to21,735 units. This compares to total LDV US sales down 34.4%overall. Based on these figures hybrids hold around 2.4% market share of new vehicle sales, a significantdropfromthe 3.2% high point in April 2008. Within these figures Toyota hasseena62.8% drop in sales year on year. Prius sales are down 61.5% in advance Figure79:UShybridsalesbymonth oftheintroductionofthe new model in 2010. In Source:GreenCarCongress contrast the new Insight pushed Honda hybrid sales up 25% yearonyear and at Ford the new Fusion and Milan models have pushed hybrid sales to 2,299 units, up 21% compared to April 2008, while within these numbers the EscapeandMarinerhybridsweredown40%. US hybrid sales are currently running at (June 2009) 100,311 units, a fall of 36% on the 2008 figure of 157,118overthesameperiod.Theannualtotalsalesisforecastataround255,000 unitsfor2009,ora 10%declinefortheyear,whichfollowsa9%declinefor2008over2007whensalespeakedatjustover 352,000units. AccordingtoSherifMarakby,hybridchiefengineerforFord,thecurrentmarketdeclineintheUSisnot justafunctionoftherecession.ThefuelpricestendtoaffectdemandmoresaysMarakby,Whenfuel prices were peaking in 2008 you couldnt buy a hybrid and waiting lists were out at a year. Then fuel pricesdroppedtohalfandtheywereavailable,soconsumersarereactingmoretothefuelpricesthanthe recession. In the same way, analysts and forecasters have some trepidationas to the popularityof newSUVhybrid models entering the market since the compact and medium sized variants have been so successful. Perhaps because the market is not fully developed and requires more maturity for accurate predictions, a waitandsee approach has permeatedtheindustry,withspeculatorswonderingiffuel efficiencyalonecanguaranteethesuccessofhybridsinthe US market, and whether compromise on power levels will bereadilyacceptedinthenameoftheenvironment. Hondawasthefirstmanufacturertotakehybridtechnology tothemidsizesedansegmentintheUSwiththeAccordV6 Figure80:USHybridmarketshares2008 Hybrid, but its slow sales could have supported the Source:GreenCarCongress argument that hybrid buyers tend to place fuel economy
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above power, and/or they wish to make a visible environmental statement. Again, the Accord Hybrid looks like any other Accord and it provides no fuel economy advantageoverafourcylinder,nonhybrid Accord they have almost identical EPA ratings.
Europe
Although there is likely to be rapid and widespreaduptakeofstopstartsystemsor socalled microhybrids in Europe, the adoption of mild and full hybrids will remain slow in competition with other powertrainoptions. As environmental concerns increase, forecasteddemandforhybridsinEuropeis likely to exceed 50,000 units by 2012. The UK is regarded as the likely leader in the adoption of hybrid vehicles in Europe, followed by France, where PSA Peugeot Citron has already launched micro hybrids.Inthelongertermitisconsidered likelythathybridvehicleswillalsobecome establishedinGermany,withthepotential to propel the nation to one of the leading hybridmarketsinEuropeby2015. Another factor working against hybrids in Europe is the European drivers culture of requiringsuperiorvehicledynamicstotheir counterparts in Asia and North America. For hybrids to appeal, they will have to match the dynamics of traditional European vehicles, including reasonable levels of overtaking performance. It is not Figure 81: US hybrid sales for January and April 2009 by that the current range of full and mild hybrid vehicle products is not capable of manufacturerandmodel satisfying these requirements, but rather Source:HybridCars the historical image of sluggish electric vehicles which could lead new vehicle purchaserstooverlookhybrids. Withtheintroductionofthefirsttwohybridsin2000,saleswereapaltry1,330andtookthreeyearsto doubletoaround3,000in2003.In2004,salestrebledtoaround9,000andmorethandoubledagainin 2005toreacharound19,000units. By June 2006, Toyota hybrids, including the Lexus brand, had exceeded the cumulative total of 50,000 vehiclessoldinEurope.ByJune,salesofthePriushadreached41,000sinceitslaunchintotheEuropean market in 2000.The Lexus RX400h and GS450h entered the European market at thebeginning of 2005 andhadsoldmorethan10,000unitsbymid2006.
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CombinedsalesofToyotaandLexushybridsinEuroperosesome18%in2008overthepreviousyearto 57,819units,whichrepresented5.7%ofthecompanystotalsales.OverallToyotaMotorEuropessales weredown10%to1,119,521versus2007.ThePriuscontinuedtoperformstronglyinEuropein2008,up 29%to41,495units,helpingTMEbreakthe175,000markin2008forcumulativeEuropeanhybridsales. TheLexusRX400hsold11,923unitsin2008(down10%versus2007). However, the situation has become significantly more competitive in 2009 with the introduction of the new Honda Insight leading to this model becoming the best selling hybrid for a number of months. Toyota, however, has recently introduced the new Prius, which has been selling very well in North AmericaandJapan.
Japan
Since its launch in 1997, the Toyota Prius has dominated the hybrid vehicle market in Japan, withHondasInsightand Civic hybrids trailing in distant second and third places respectively. By April 2005, when Honda reachedcumulativesales of 100,000 hybrids worldwide, it had sold only 5,900 in Japan, compared to around 155,000 Toyota Prius units.
ThefirstgenerationPrius was very much a niche Figure82:ToyotahybridvehiclesalesinJapan,1997to2009(JanApr) market vehicle, and Source:Toyota production capacity was initially set at only 12,000unitsperyear.Afterthe initial interest in 1998, sales volumes in Japan trended down until 2003. The second Priusmodel,whichisequipped with the Toyotas second generation Hybrid System II, wasintroducedin2003withan emphasis on delivering both ecofriendliness and driving performance. Production capacity was increased substantiallyandsalesvolumes multiplied worldwide during 2004. In Japan, sales volumes fell27%in2005. Figure29:Japanesehybridvehicleproductionforecastto2015 For 2006, Prius sales in Japan Source:GlobalInsight totalled 48,571. This, together
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with 2005 sales, possiblyindicatesthata strong early adopter effect was seen during 2004 and early 2005. Another likely factor in the drop in Prius sales is that Toyotas Camry hybrid went on sale in Japan early in 2006, offering competition from among the popular following that Figure83:NumberofToyota'scleanenergyvehiclessoldinJapan the Camry has enjoyed Source:Toyota for many years. Through2007and2008 salescontinuedatamonthlyrateofbetween5,000and7,000units.However,byJuly2009,despitethe launch of the newInsight leading toJapanese salesleadership forHonda,the launch ofthe Prius3has bought about sales leadership for three consecutive months (see Figure 84) with sales increasing emphaticallysinceApril2009.
Figure84:monthlyPriussalessince2007Japan Source:GreenCarCongress Overall forecasts for hybrid sales vary considerably and are generally highly inaccurate as the global market recovers from the recent economic downturn and reengages with the longer term issues of improvingfuelefficiencyandreducingCO2output.
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AftertheUS,Japanisthemostimportanthybridmarketinvolumetermsoverall,andthetwokeyOEMs remain Toyota and Honda. To date Toyota has enjoyed a first mover advantage and the beginnings of economy of scale. Honda however, showed with the Insight that new models can bring about rapid changesinconsumerbehaviour. The next few years will see the hybrid vehicle finally cease being a niche vehicle choice and enter the mainstreamasalegitimate powertrainchoice.Allovertheworldtheconsumerneedstobecomemore accustomedtomakinganinformedchoiceinpowertrainbasedonthekindofusethevehicleisputto, and there is no doubt that urban Japanese drivers are responding by selecting a higher proportion of hybrids.However,thechoicesarealsolikelytobecomemorecomplex,withtherangeincreasingby2015 to include a significant number of plugin hybrid offerings and later a significant number of electric vehicles.
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Aisin AW
Hybrid systems
Address Aisin AW Co. Ltd. 10, Takane, Fujii-cho, Anjo City, Aichi 444-1192, Japan Tel: +81 566 73 1111 Internet: http://www.aisin-aw.co.jp Senior Officers Tsutomu Ishikawa, President Kazumasa Tsukamoto, Executive VicePresident Kazuo Nishida, Executive Vice-President Mutsumi Kawamoto, Executive VicePresident Yoshikazu Noguchi, Senior Managing Director Tadashi Nakamura, Senior Managing Director Toshihiro Shintani, Senior Managing Director Yasunobu Ito, Managing Director Kozo Yamaguchi, Managing Director Masahiro Hayabuchi, Managing Director Akira Takeuchi, Managing Director Shigeo Omura, Managing Director Makoto Hirano, Managing Director Products Hybrid transmissions Plants Japan (4) Sales Group: 748.9bn (US$7.69bn, 31 March 2009) (Year to 31.03.09) Employees Group: 17,061 (2009)
Aisin AW, a subsidiary of Aisin Seiki, is a leading supplier of automatic transmissions, hybrid systems and car navigation systems for passenger cars and commercial vehicles.
The company supplies transmission systems, hybrid systems, car navigation systems, intelligent transport systems, catalyst air purifiers and filters. Its major customers include OEMs such as Mazda, Nissan, Suzuki and Toyota. Ford and Toyota are two main customers of the company for hybrid systems. Recent Developments Corporate strategy In light of the increasing awareness and demand for hybrid vehicles, Aisin AW is concentrating on expansion of its hybrid vehicle business. The company is primarily targeting an increase in its manufacturing presence in North America and Asia, along with expansion of its marketing capabilities. The company has established itself as one of the leading suppliers for hybrid systems in the world. In line with this strategy, the company expanded its production capacity for automatic transmission and core components for hybrid vehicles in Japan. It also set up a new plant in Aichi (Japan) to manufacture automatic transmissions for hybrid vehicles in 2005. Like many other suppliers across the globe, Aisin AW is also facing pressure due to rising costs. In order to offset this, the company plans to develop new technologies which will help it improve margins and expand its geographical presence. Joint-venture In November 2008, Aisin AW announced plans to establish AW Hangzhou Software Development Co., Ltd., in the city of Hangzhou in Chinas Zhejiang Province. The new software development joint-venture was formed with Totyu Software Co., Ltd., in response to growing demand for the development of control software for automatic transmissions. Investments In January 2006, Aisin AW invested 6bn (42.2m) to increase the production capacity of torque converters. The company also made investments to upgrade the production lines for parts such as shafts used in hybrid cars. In January 2006, Aisin AW started operations at its Okazaki, Aichi (Japan) plant which supplies automotive transmissions and core components for hybrid vehicles. In February 2005, Aisin AW invested 20bn (US$190.1m) in the construction of a new automatic transmission plant to supply Toyota. The plant produces 200,000-300,000 six-speed automatic transmissions annually. Contracts In January 2006, Aisin AW started production of gasoline-electric hybrid systems for a Toyota Lexus model. In 2006, Aisin AW commenced supply of (rear-wheel drive) RWD hybrid system for Toyota Lexus GS450h model. In 2003, Aisin AW started supply of electric-motors to Ford for application in gas-electric hybrid vehicles. The company supplies 10,000 to 20,000 units annually. New Product Developments As Aisin AW is privately-held, it does not disclose its research and development (R&D) expenditure. In April 2005, Aisin AW developed HD-10, a new full hybrid transmission for front wheel drive vehicles. The hybrid transmission helps improve fuel economy and performance. Financial Overview In the financial year ended 31 March 2009, Aisin AW sales were 748.9bn (US$7.6bn, 31 March 2009) compared with 958.3bn (US$9.66bn, 31 March 2008) in the preceding year. Further financial details were not available as the company is privately-held.
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Year 2009 2008 2007 2006 2005 Year 2009 2008 2007 2006 2005
Sales (bn) 748.9 958.3 777.5 723.2 566 Sales (US$bn) 7.7 9.7 6.6 6.2 5.3
Operating Income (bn) 42.2 40.0 Operating Income (US$m) 358 245 -
No. of Employees 17,061 16,750 11,520 9,979 8,774 No. of Employees 17,061 16,750 11,520 9,979 8,774
Outlook The increasing popularity of hybrid vehicles and the companys growing presence in this segment is expected to open new growth opportunities for the company in the years to come. Aisin AW is currently focusing on developing a range of next generation of transmission systems to grow its hybrid business. After opting for the organic route to growth in North America, Aisin AW made significant investments in Asia in an effort to enhance its geographical diversity. This would help the company lower its costs and benefit from the growing Asian market. Aisin AWs strategy to explore the growing hybrid vehicles market, along with increased sales to its largest customer, Toyota, is expected to help the company perform well in the long-run.
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Axeon Holdings
Batteries
Address Axeon Holdings Nobel Court, Wester Gourdie Dundee, DD2 4UH Scotland UK Tel: +44 1382 4000 40 Fax: +44 1382 4000 44 Internet: http://www.axeon.com Senior Officers Lawrence Berns, CEO David Campbell, CFO Jim Ferguson, Group COO Don Newton, Group Technical Director Products Batteries, chargers, lithium ion cells, battery management systems Plants Poland, UK Sales Group: 61m (US$88.3m, 31.12.2008) (Year to 31.12.2008) Employees Group: 570 (31 December 2008)
Axeon Holdings is a lithium ion battery systems supplier to electric and hybrid electric vehicles. The company supplies over 70 million cells a year and supplies volume production of batteries for global markets.
Axeon Holdings is headquartered in Dundee (UK) where operations include manufacturing, commercial and engineering departments. The company manufactures batteries for a wide range of applications from low capacity batteries for industrial, leisure and medical uses to high capacity batteries for use in electric and hybrid electric vehicles. In April 2009, AG Holdings acquired the entire business of Axeon Holdings Plc and are backed by funds managed by Ironshield Capital Management LLP. Axeon has a manufacturing facility in Poland, a commercial and engineering base in Switzerland and a sales facility in Germany. Axeon currently produces batteries for leading electric vehicles (EVs) suppliers, Modec and Allied Vehicles. Recent Developments Corporate strategy Axeon is in the process of expanding its customer base and trying to secure a strong foothold in the hybrid market. The company has secured new customers in the automotive industry. In 2008, Axeon won contracts for electric buses and taxis. In May 2008, the company secured a major contract from Allied Vehicles Ltd. where the contract was valued at 17.3m (US$ 33.8m, 13 May 2008). Axeon continues to work on prototype opportunities with new customers however; they are now shifting their focus to those customers where the company gets the chance to go into volume production. Axeon initiated a restructuring program in September 2008 to reduce cost and stabilise cash flow. The board decided to reduce the overhead of the business. The company reduced the headcount across its locations in Dundee (UK) and Poland. The decision is in response to the slump in the production for powertool and automotive business. Simultaneously, with the thrust of government aid Axeon increased its R&D allocation in the automotive sector to become a technology led business. In February 2009, Axeon unveiled a new lithium ion battery, a result of a two year development program which was aided by Department for Transport under the Energy Savings Trusts low carbon R&D program. However, currently the company has decided to reduce it to reflect a better balance between sales contribution and investment cost. Acquisition In July 2007, Aexon Holdings acquired Swiss battery pack maker Ristma in 7.4m (US$15.03m, 14 July 2007). Axeon paid 5.11m (US$10.38m) in cash and a deferred share issue worth 2.25m (US$4.57m). The added value part of the deal came from the Ristmas European infrastructure. Ristma has an engineering and sales operation in Germany and manufacturing plants in Poland. The Polish plant turned out to be important because it has a good location to supply European automotive customers with electric and hybrid vehicle battery packs. In February 2006, Axeon Holdings acquired Advanced Batteries for 1.5m (US$2.6m, 17 February 2006). The strategic move was to create a reliable electrical energy source for cars and buses which in turn aided to reduce carbon-dioxide emissions. Contracts In July 2008, Axeon Holding secured a contract from an Italian electric bus manufacturer, Technobus, to provide a 72kWH prototype battery. The two companies are in the process of evaluating the battery. After successful completion of the evaluation, the production program is set to begin in 2009. Further information on the production is not yet provided by the company.
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In May 2008, Axeon won a contract from Transteq, a US customer for the supply of five prototype battery packs for an HEV bus application. In May 2008, Axeon Holdings won a major contract from Allied Vehicles Ltd. The contract was valued at 17.3m (US$ 33.8m, 13 May 2008). The company established a long term supply agreement followed by the delivery of prototype batteries along with 25 production units. In November 2007, Axeon won a contract from Veicoli, an Italian vehicle converter, to supply ten prototype battery sets for taxi and minibus demonstration vehicles. This order was followed by the swift delivery of a proof of concept battery which was announced in July 2007.
New Product Developments In February 2009, Axeon Holdings unveiled a new lithium ion battery, result of a two-year development program. In early 2007, the company received funding from the Department for Transport under the Energy Savings Trusts low carbon R&D program, to develop and improve performance of automotive batteries at lower costs. The new lithium ion is cheaper, safer and offers a threefold increase in life compared with earlier lithium-ion batteries. Financial Overview For the year 2008, the company reported sales of 61m (US$88.3m, 31 December 2008), compared with 29m (US$57.9m, 31 December 2007) due to an acquisition in Germany in mid-2006. Axeon was expecting an operating loss of around (3m) (US$4.34m) in 2008, compared to an operating profit of 140,000 (US$279,623) in 2007. Cash in December 2008 was 2m (US$2.89m), down from 12m (US$23.9m) in 2007. Axeon received a covenant waiver by its bank which was valid till the end of February 2009 after losses in the fourth quarter of 2008. However, it plans to seek a continuation of the waiver beyond February 2009. With the support of its principal lender, the company has sufficient working capital for its expected levels of activity and can reach a minimum of a cash break-even position in 2009. Outlook For 2009, Axeon is anticipating sales considerably lower than its expectations. The demand at its small battery division has been hit by an unprecedented change in the general economic environment. The company has experienced further deterioration in its markets since their interim results on 24 September 2008. Axeons restructuring program led to reduce overheads and headcounts in all locations with annualised savings of 2m (US$2.86m, 3 February 2009). The move will assist the company to reserve cash and secure higher margin sales. The company is banking on the rising prices of oil, which will eventually accelerate the demand for electric vehicles. The aid from government and global policy is also moving in favour of electric and plug-in hybrid vehicles.
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Azure Dynamics
Hybrid electric components
Address Azure Dynamics, Inc. 14925 Eleven Mile Road Oak Park, MI 48237-1013 USA Tel: +1 248 298 2403 Fax:+1 248 298 2410 Internet: http://www.azuredynamics.com Senior Officers Scott T. Harrison, CEO Curt Anthony Huston, Chief Operating Officer Ronald V. Iacobelli, Chief Technology Officer Ryan S. Carr, Chief Financial Officer Jay A. Sandler, Vice-President, Sales Ricardo Espinosa, Vice-President, Engineering Michael L. Elwood, Vice-President, Marketing Products DC-DC converters, electric motors, batteries, parallel hybrid-electric powertrain, series hybrid-electric powertrain, motor controllers, traction motors and ultracapacitors Plants Canada, US Sales US$7.7m (Year to 31.12.08) Employees 125 (September 2008) Azure continued to form significant relationships with industry leaders to increase penetration into its target markets and advance its product development programs. Along with Ford Motor, StarTrans (a business division of Supreme Corporation), Utilimaster Corporation and Kidron, Azure also formed relationships with Altec and launched new products with key customers such as FedEx Express, AT&T and Purolator. Azures restructuring, announced in January 2009, included a 25% workforce reduction, cuts in discretionary spending, and a focused effort to share its product development costs with its partners. It also involved rationalisation of the product line to allow the company to concentrate its efforts on existing products and product programs. Additionally, the company is planning to access low cost loan from the US and Canadian governments to support the development of more fuel efficient vehicles. Acquisition In January 2005, Azure Dynamics acquired Solectria Corporation, a US based hybrid electric powertrain and components supplier. Joint-venture In January 2009, Azure Dynamics and Johnson Controls-Saft formed a jointventure (JV) to supply lithium-ion hybrid batteries for commercial trucks in the North American market. The supply agreement extends for the next five years. Financial terms of the deal have not been disclosed. Under the Recent Developments Corporate strategy During 2008, Azure Dynamics worked towards positioning itself to become a major player in the hybrid electric commercial vehicle business in the future. Its partnership with Ford to hybridise their E-450 commercial vans continued to grow stronger, the manufacturing arrangement with Utilimaster progressed smoothly, and the new agreement with Johnson Controls-Saft resolved potential future battery supply problems. The company primarily has four hybrid platforms and products: G1 is a series hybrid platform for delivery vans and shuttle buses. P1 is a parallel hybrid platform for Class 3 to 5 trucks and buses. Azure Dynamics has an agreement with Ford to develop parallel hybrid powertrain on the Ford E-350 and E-450 commercial vehicle chassis. P2 is the parallel hybrid platform for Class 7 and 8 trucks, such as delivery vans and buses. Low Emission Electric Power system (LEEP) is a source of power for onboard vehicle auxiliary loads and off-vehicle power requirements. The company supplies to Canada Post, FedEx, Purolator Courier, Smith Electric Vehicles, StarTrans, Utilimaster and United States Postal Services.
Azure Dynamics is a manufacturer of hybrid vehicle technology for light to heavy-duty commercial vehicles, including delivery vehicles and shuttle buses. The company develops control software, power electronics and helps in vehicle systems engineering and integration.
The company manufactures series and parallel hybrid electric powertrains and hybrid components including motor controllers, custom battery packs, ultracapacitors, DC-DC converters, traction motors and generators. The company has manufacturing plants in Boston (US) and Vancouver (Canada).
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agreement, Johnson-Saft will supply 20,000 battery systems to Azure Dynamics, which will be the part of Azure Dynamics Balance Hybrid Electric system and other future hybrid platforms. The batteries will be produced at the Johnson Controls headquarters at Glendale, Wisconsin (US). Production is expected to be increased in 2009 and 2010 and the trucks equipped with hybrid batteries are expected to roll out by end of 2010. In March 2008, Azure and Altec signed a Memorandum of Understanding to develop LEEP Lift systems for electric utility and telecom aerial lift trucks. According to the agreement, Altec integrated Azures LEEP Lift systems into their utility and telecom truck bodies and Altec promised to market the systems through their existing sales and service network.
Investment In February 2004, Azure Dynamics established a new facility in Burnaby, British Columbia (Canada) to support its engineering and testing operations. Divestment In May 2007, Azure Dynamics closed its head office in Toronto (Canada) and another office and service centre in Kenilworth (UK). The company opened its headquarters in some location in North America. This was done to better serve its customers, mainly Ford Motors. Contracts In April 2009, Azure Dynamics received sixteen orders for its Low Emission Electric Power (LEEP Freeze) system, which is an integral part of Kidron's UltraTemp cold plate transport refrigeration solution. Kidron is a division of VT Specialised Vehicles Corporation. In August 2008, Azure Dynamics won an initial order for three units from Con Edison of New York for its Balance Hybrid Electric system integrated on Fords E450 chassis. In July 2008, Azure Dynamics received orders for two Hybrid Electric CitiBuss from the West Harlem Art Fund, Inc (WHAF). WHAF is a ten-year old community-based, cultural arts and preservation organisation serving northern Manhattan in New York City. In June 2008, Azure Dynamics secured an order from the Pennsylvania Department of Transportation for 10 hybrid buses with an option for 15 additional buses at a later date. The powertrain, with a GM Vortec 4.8L engine, offers over a 40% improvement in fuel economy, and a 30% reduction in carbon emissions in city conditions. In May 2008, Azure Dynamics received an order from AT&T for 15 gasoline parallel hybrid electric Ford E-450. In February 2008, Azure Dynamics entered into an agreement with Utilimaster Corporation. Under the agreement, Azure will provide P1hybrid electric powertrain which Utilimaster will integrate into the Ford E-series. In May 2007, Azure signed an agreement with FedEx to supply a parallel hybrid-electric test vehicle. Azure will supply 20 pre-production parallel hybrid electric Ford E-450 delivery vans to FedEx. In April 2007, Azure Dynamics signed a supply agreement with Electro Autos Eficaces of Mexico. The company will supply 1,000 drive systems which will be integrated into Nissan Tsuru platform. Tsuru, which is generally used as municipal fleet in Mexico City, is being converted from gasoline power vehicles to electric vehicles. In October 2006, Azure Dynamics signed an agreement with Ford to jointly develop hybrid electric drive technology for Fords E-350 and E-450 commercial vehicle chassis. Ford agreed to assist Azure in powertrain development. In August 2006, Azure entered into an agreement with StarTrans, a division of Supreme Corporation, to develop hybrid electric CitiBus for urban transit applications. The company will supply its hybrid cab-chassis on which StarTrans will assemble its shuttle bus body. StarTrans will use its HD Senator Series model line of shuttle buses. In May 2006, Azure Dynamics received a purchase order from Smith Electric Vehicles, a part of the Tanfield Group Plc, for 20 electric powertrain systems. The order is a follow-on order to the supply agreement between Azure and Smith Electric Vehicles signed in June 2005.
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In 2006, Azure received a purchase order from Canada-based Purolator Courier Ltd for 115 hybrid electric delivery vehicles. This is a result of a fiveyear supply contract that was signed between these two companies in 2003. The five year contract was valued at about US$90m.
New Product Developments In 2008, Azure Dynamics engineering and R&D expenses totalled US$21.5m (including US$11.6m in product development costs) compared with US$17.8m in 2007 (including US$10m in product development costs). Financial Overview For the financial year ended 31 December 2008, Azure Dynamics sales increased to US$7.7m compared with US$2.8m in the same period in 2007. Net loss was US$38.9m over a net loss of US$30.2m in 2007. As at 31 December 2008, the companys cash and cash equivalents totalled US$13.8m and working capital totalled US$19.8m compared with cash and cash equivalents of US$24.1m and working capital of US$32.3m as at 31 December 2007. Azure Dynamics sales for the first quarter ended 31 March 2009 totalled US$0.6m compared with US$0.4m in the first quarter of 2008, mainly attributable to the sale of one Azure Citibus shuttle bus recorded in 2008 compared to six Balance Hybrid Electric systems and one LEEP Freeze system recorded in 2009. Net loss was US$7.4m compared with a net loss of US$7.9m in the first quarter of 2008. During the first quarter, the company continued to focus on the development of its Balance Hybrid Electric program and component development, as well as ongoing production activities associated with the Series Hybrid shuttle buses and electric components. As at 31 March 2009, the company's net cash and cash equivalents reached US$7.9m and working capital totalled US$13.1m over cash and cash equivalents of US$13.7m and working capital of US$25.1m as at 31 March 31 2008. Year Net Sales (US$m) 7.7 2.8 5.8 4.6 Operating Income (US$m) (23.8) 22.2) Net Income (US$m) (38.9) (30.2) (23.4) (21.9) (8.2) R&D Expenditure (US$m) 21.5 17.8 13.5 11.4 No. of Employees 125 112 109 -
2008 2007 2006 2005 2004
Outlook Azure Dynamics has not attained financial viability yet. The company has been incurring losses since its inception, mainly due to high product development costs. The company believes that its products will qualify for federal funding assistance from a variety of programs announced by the Obama administration in 2009. The addition of federal support could greatly accelerate the companys production ramp. In the future, demand for hybrid vehicles is expected to grow as environmental and fuel-saving concerns rise among consumers as well as numerous OEMs. Azure Dynamics is a leading supplier of hybrid systems for commercial vehicles, with clients such as AT&T, Con Edison, FedEx Express and Purolator Couriers. The new supply agreement with Johnson Controls-Saft will further strengthen Azures position in the hybrid drives market.
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Cobasys
Batteries
Address Cobasys LLC 3740, Lapeer Road South Orion, Michigan 48359 USA Tel: +248 620 5700 Fax: +248 620 5702 Internet: http://www.cobasys.com Senior Officers Tom Neslage, President & CEO Scott Lindholm, Vice-President, Systems Engineering & Chief Sales Officer Joseph S Crocenzi, Vice-President, Finance Jim Greiwe, Vice-President, Manufacturing Gary Absher, Vice-President, Product Development Products Nickel metal hydride batteries Plants USA Sales US$14.4m (Year to 30.06.2007) Employees 380 In 2007, the company also announced investments of over US$30m in plant and equipment to meet the growing demand for NiMH battery systems at its Springboro, Ohio (US) module manufacturing and system assembly plant. In February 2008, partners of the company planned to provide substantial capital contribution which was necessary to fund approved operations in proportion to their membership percentage interests. At the beginning of 2009, the company restructured its business due to the reduction in the production level. The company laid off 119 people. The move was in response to lower orders from its clients. Investments In April 2007, Cobasys announced the expansion of its headquarters with an additional 18,860ft2 at Michigan to facilitate development of NiMH and lithium systems. Joint-ventures In January 2007, Cobasys and A123Systems signed an agreement to form a partnership to develop lithium-ion energy storage systems for HEV applications. In August 2005, Cobasys signed an agreement with Motorola to manufacture battery control system components for HEV battery systems. In July 2005, Cobasys signed a technical cooperation agreement with Panasonic EV Energy, a joint-venture between Matsushita Electric and Toyota The company is focusing on the commercialisation of NiMH batteries for the HEV market. The companys strategy is to conceptualise, design and develop materials, products and production processes and commercialise them internally and through third-party relationships, such as licences and joint-ventures. In January 2007, the company signed an agreement with A123Systems to use its lithium technology to develop products for the HEV market.
Cobasys is a leading manufacturer and supplier of nickel metal hydride (NiMH) batteries for hybrid electric vehicles (HEVs), and medium-heavy duty vehicles. The company also supplies to the telecommunication, UPS and distributed generation sectors.
In 2001, Cobasys was formed as Texaco Ovonic Battery System, but was later renamed as Cobasys in 2004. It is a joint-venture between ChevronTexaco Technology Ventures LLC and Energy Conversion Devices, Inc. For the HEV segment, Cobasys offers NiMH advanced battery systems for passenger cars, SUVs, buses and trucks. The company is working towards development of lithium-ion batteries for plug-in hybrid vehicles (PHEV) as the hybrid industry has moved forward. Recent Developments Corporate strategy Owners of Cobasys are exploring strategic alternatives to capitalise on opportunities for energy storage solutions in the growing HEV and stationary power industries. Cobasys is working with OEMs to develop batteries and energy storage systems for HEVs, heavy-duty vehicles and plug-in HEVs applications. The company is developing lithium technology and energy system solutions for rechargeable plugin HEVs. These include providing battery systems for the Saturn Vue Green Line, Saturn Aura Green Line, the Chevrolet Malibu hybrid and a contract to develop lithium battery systems for the new General Motors plug-in hybrid vehicle (PHEV) development program.
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Motor Corporation. Under the agreement, Panasonic will sell NiMH battery products for North American transportation applications. Cobasys will receive royalties from Panasonic on North American sales of NiMH battery products through 2014. Contracts Cobasys has contracted for the majority of its capacity through 2010. In May 2007, Cobasys supplied its NiMHax battery systems to Enova Systems for integration into hybrid service vans for Verizon. In March 2007, Cobasys and A123Systems signed a contract with General Motors to develop batteries for the Saturn Vue. In March 2007, Cobasys started supplying the 2008 Chevrolet Malibu Hybrid Sedan with the 36V NiMH battery system. In March 2007, Cobasys started supplying NiMHax Nickel Metal Hydride (NiMH) battery systems for integration in the Lotus Engineering EVE (efficient, viable and environmental) vehicle. In December 2006, Cobasys received a contract from General Motors to supply NiMHax NiMH battery system for Saturn Aura Green Line hybrid mid-size saloon.. In June 2005, Cobasys received an order from Denver Regional Transport District (RTD) to convert ten hybrid buses from lead batteries to its NiMH battery systems.
New Product Developments In November 2004, Cobasys, in cooperation with Azure Dynamics, developed NiMhax 336-70 NiHM battery packs for HEVs. In August 2004, Cobasys introduced NiMHax battery packs for all transportation applications. Its packs range from 144volts and 30KW for light duty automotive applications to 672 volts and 280KW for large commercial applications. Financial Overview: In the financial year ended 30 June 2007 Cobasyss sales were US$14.4m, 778% higher than the previous years figure of US$1.64m. Year 2007 2006 2005 Sales (US$m) 14.4 1.64 1.17 Operating Income (US$m) (64.5) (41.5) (41.1) Net Income (US$m) (75.35) (45.32) (41.27)
Outlook Cobasys has been facing loses since its inception. The partners plan to sell Cobasys because of its uncertain financial conditions. GM had plans to acquire Cobasys, but the process has been put on hold. The members of Cobasys OBS and CTV did not approve of 2008s business plan and budget because of its lower growth prospects. In 2008, due to a breach of contract the company was sued and jeopardised its relationship with Daimler AG, which further impacted the prospects of the company. Cobasys future will depend on developing new products such as the lithium technology and energy system solutions for rechargeable PHEVs that the company is currently exploring. The company might perform better in the future as it has signed major contracts for HEVs up until 2010. Further, the investments that the company is making to increase production capacity at its manufacturing locations are likely to ensure future growth.
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Continental
Mild hybrid systems
Address Continental AG Vahrenwalder Strae 9 D-30165 Hannover Germany Tel: +49 511 938 01 Fax: +49 511 938 81770 Internet: http://www.conti-online.com Senior Officers Rolf Koerfer, Chairman Karl-Thomas Neumann, CTO, Chassis & Safety, Interior and Powertrain divisions Jorg Grotendorst, Head, Hybrid Electric Vehicle business unit Heinz-Gerhard Wente, COO, ContiTech Division Ralf Cramer, COO, Chassis & Safety Products Electronic powertrain and chassis components and system, electronic safety system, electronic suspension systems, hybrid system, integrated control unit for double clutch transmission, transmission control unit Plants Powertrain Division: Australia, Brazil, China (4), Czech Republic (4), France (2), Germany (9), Hungary, India, Italy, Korea (2), Malaysia, Mexico (3), Philippines, Romania, Russia, Thailand, UK, USA (7) Sales Group: 24.3bn (US$34.2bn, 31 December 2008) (Year to 31.12.2008) Automotive group: 14.9bn (US$21bn, 31December 2008) (Year to 31.12.2008) Powertrain division: 4bn (US$5.6bn, 31 December 2008) (Year to 31.12.2008) Employees Group: 139,155 (December 2008) Powertrain Group: 25,244 (December 2008)
Continental is a leading supplier of tires and automotive components. The group manufactures brake systems, chassis components, vehicle electronics and powertrain controls.
The Continental Group is made up of the Automotive group and the Rubber group. Each group has three divisions. The company has 200 sites for production and R&D in 36 countries. The headquarters are situated in Hannover (Germany). Continental Rubber group is divided into three main divisions: Passenger & Light Truck Tires, Commercial Vehicle Tires and ContiTech. Continental Automotive Systems (CAS) is divided into three divisions: Chassis & Safety, Powertrain and Interior. The Continental Automotive group had sales of approximately 15bn (US$21bn) in 2008. The Powertrain division is further divided into five divisions: Engine Systems, Transmissions, Sensors & Actuators, Fuel Supply and Hybrid Electric Vehicles. The Hybrid Electric Vehicles business unit offers all the basic components for a complete hybrid system. The company develops components such as power electronics, electric machines and energy storage devices for hybrid drives. Siemens VDO, which is now part of Continental, is active in developing and manufacturing propulsion solutions and control units in the hybrid segment,. The Powertrain division has presence in 62 locations in 20 countries. In 2008, approximately 25,000 employees achieved sales of 4bn (US$5.6bn). Region wise, in 2008 the Powertrain division had 28% sales from Germany, 13% from Asia, 36% from Europe (excluding Germany), 22% from NAFTA and 1% from rest of the world. Continental supplies to almost all major vehicle manufacturers. Its major customers include BMW, Chrysler, Daimler, Fiat, Ford, General Motors, Toyota, Volkswagen and Volvo. Recent Developments Corporate strategy Continental is focusing on integrating several acquisitions it has made over the last few years, the most recent being Japanese lithium ion specialist, Enax in June 2008, where the company acquired 16% holding in Enax, Continental acquired Siemens VDO, the automotive electronics business of the Siemens group in July 2007. The company paid 11.4bn (US$15.6m) for the takeover. The acquisition placed Continental among top five global suppliers. The takeover was closed in December 2007. In the last ten years, the company acquired businesses of Teves, Temic and the automotive electronic business of Motorola. These buyouts have transformed Continental from a tire manufacturer to an automotive systems supplier. In addition, these strategic acquisitions are helping it broaden its product portfolio and global presence in the hybrid market. Continental is expanding its customer base in hybrids where the company had contracts from Mercedes, Volkswagen and GM to supply mild hybrid systems and batteries for electric and hybrid vehicles. Simultaneously, Continental is maintaining a strong grip in the market through the alliances it has formed. Recently, the company joint ventured with ZF, Enax, Siemens VDO, and GM. In April 2009, Continental and ZF concluded an agreement to cooperate in the development and production of commercial vehicle hybrid drives. Then, in June 2008 Continental and Enax came together for the development of lithium ion cell technology for future hybrid and electric drives in automobiles. Continental is in the process of restructuring its businesses and removing overlapping functions. The job cuts will be made as part of the companys restructuring plan in powertrain components division that merged with Siemens VDO last year. Continental AG reduced its workforce by 6,000 employees in March 2009. The supplier cut 8,000 jobs globally last year, following the economic crisis and slump in automotive demand. The company did not specify the division from which the job reductions were made. Continental is consolidating its operations by shutting down its tire-manufacturing plants. Continental is cutting jobs in UK, France by 1,500, 10% of workforce or 1,600 employees in North America over the the few months.
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Continental is laying a strong focus on the OE (original equipment) market in Europe. In 2008, the company increased its European share from 30% to 32% and withdrew unprofitable contracts in NAFTA states (reduced 14% market share in 2008) and South America. Continental anticipates fewer sales to vehicle manufacturers in 2009, and assumes the market will pick up again in the fourth quarter this year. Despite the current downturn in vehicle sales, Continental expects its OE market to remain as an important aspect of its business. The company aims to maintain its strong presence in both the OE and replacement market. The group is also expanding its presence in low cost countries including Czech Republic, Malaysia, Mexico, Philippines, Romania and Slovakia where it plans to shift its production from high-cost countries. Acquisitions In June 2008, Continental acquired shares of Japanese lithium ion specialist, Enax. The company acquired 16% holding in Enax. The two companies intend to improve safety, service life and performance of lithium ion batteries. In July 2007, Continental acquired Siemens VDO, the automotive electronic division of Siemens group. The company paid 11.4bn (US$15.6m) for this takeover. The acquisition placed Continental among the top five global suppliers. The takeover was closed in December 2007. In December 2006, Siemens VDO acquired Ballard Power System Incs Electric Drive Business located in Dearborn, Michigan (USA) for US$4m. Ballard Power System develops electric drive technology for hybrid and fuel cell vehicles. Joint-ventures In April 2009, Continental and ZF concluded an agreement to cooperate in the development and production of commercial vehicle hybrid drives. ZF will develop and produce the drive system and is in charge of the system integration for the hybrid system. Continental is to supply the energy accumulator and system electronics. Volume production is scheduled for 2011. In June 2008, Continental and Enax agreed on a cooperative venture for the development of lithium ion cells for future hybrid and electric drives in automobiles. In December 2007, Continental and ZF Sachs announced their decision to jointly develop hybrid drive systems. The two suppliers have selected SupplyOn AG for web-based collaboration solutions. In September 2007, Siemens VDO and Lotus Engineering of UK formed a collaboration to develop a demonstration vehicle which will showcase an integrated systems approach for reducing CO2 emissions. Both companies are working on direct fuel injection systems, hybrid drives, integrated powertrain management, emission after-treatment systems and system components. In June 2007, Continental secured a contract from GM for advance development of lithium ion batteries for the GM Chevrolet E-Flex propulsion system to be used in the Chevy volt concept car. The plan is to launch the car in late 2010. In the process, Continental used battery cells designed by A123Systems. In May 2008, GM tested two competing battery packs for use in the GM Chevrolet Volt, one provided by Continental and another by LG Chem. However, in January 2009 LG Chem won the contract to supply lithium ion batteries to GM. In January 2006, Continental formed a joint-venture with Volkswagen AG to develop and supply power electronics for future hybrid drive projects. In September 2005, Continental formed a partnership with ZF Friedrichshafen AG to develop hybrid vehicle technology for passenger cars and light commercial vehicles. The partnership provides hybrid solutions including brakes, electric accessories and electronics brakes. Investments In April 2009, Continental AG opened a new automotive technical centre in Jiading Industrial Zone, Shanghai (China). The technical centre will undertake engineering activities related to electronic brake systems, hydraulic brake systems and engine management & system control. Two major product divisions of Continental, Chassis & Safety and Powertrain, have invested in the technical centre. The centre will conduct vehicle application development and system test of new technologies and products developed by Continental customised for the Chinese OEM market. In September 2008, Continental started series production of lithium ion batteries to be used in hybrid drive cars. The company initiated planning to start the production from December 2007. In 2007, Continental started preseries production of lithium ion batteries in Berlin (Germany). The powertrain division invested over 3m (US$4.3m, 30 September, 2008) in building a manufacturing capacity at Nuremberg site (Germany). The plant can produce
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15,000 units each year in a production facility covering 300m2. This capacity can be doubled at short notice. In September 2008, Continental opened a second manufacturing plant at Calamba (Philippines). The Chassis & Safety Division of the plant will produce inertial, speed and advanced sensors, chassis components, passive safety and advanced driver assistance systems (ADAS) components. The Powertrain Division will manufacture ECUs, transmission controllers, sensors and actuators. In April 2008, Continentals Powertrain division announced that it is increasing the production capacity of diesel injection pumps at its facility in Trutnov (Czech Republic). The company is constructing a new plant near its existing one. It will include a production area of 8,500m2 and a logistics building spanning 3,500m2. In order to achieve the desired expansion, Continental will invest 18m (US$28.09m). The facilitys construction is expected to be complete by 2010 and will employ 450 people. Currently, the existing plant has a workforce of 100 people. The plant is expected to be fully operational by 2011, with an annual production capacity of 900,000 pump cylinders and two million injection pumps. In November 2007, Continental invested US$60m to open its first automotive electronics parts facility in Costa Rica. The new facility, which manufactures electronic parts for transmission systems of cars, started operations in 2008. Continental will primarily export the products of the new facility to the US market, taking advantage of the Free Trade Agreement between Central America, the US and the Dominican Republic. In August 2007, Continental set up a research and development centre (R&D) in Yokohama (Japan) to strengthen its relations with Japanese and Korean OEMs. The centre will be the R&D hub for the company in Japan, integrating four other R&D centres at Yokohama, Chiba, Hamamatsu and Hiroshima (Japan). In January 2006, Siemens VDO invested around 20m (US$25.9m, 31 January 2007) to establish a research and development centre in Iasi (Romania). In September 2005, Siemens VDO Automotive invested 7m (US$8.4m, 30 September 2005) in expanding its research and development facility in Singapore. In September 2005, Continental inaugurated a new electric drive development centre in Berlin (Germany). The company grouped together all the units including electric motors, actuators and control electronics at the centre. In February 2004, Siemens VDO established regional headquarters and a research and development centre for the Diesel Systems North America group in Columbia, South Carolina (USA).
Divestments In December 2007, Brose agreed to acquire the electric motor operations of former Siemens VDO from its current owner, Continental. The financial details of acquisition have not been disclosed and the transaction is subject to approval from antitrust authorities. In April 2007, Continental decided to close its small electric motor facility in Haldensleben, Saxony Anhalt (Germany) due to the loss of some crucial customers. The decision includes shifting the production of electrical motors to Temic Automotive Electric Motors GmbH in Berlin (Germany). In November 2006, Continental decided to close its facility in Buffalo, New York (USA) by the end of 2009. Production from the plant, which manufactures sensors for engine and transmission controls, will be shifted to Asia, resulting in the loss of 380 jobs. In November 2006, Continental decided to close its car electronics facility in Elma, New York (USA) which it bought from Motorola. The company plans to close the unit by the end of 2009. Contracts In March 2008, Continental signed a contract to supply lithium ion batteries to Daimler for Mercedes S 400 BlueHYBRID. Johnson Control supplied battery cells to Continental to supply lithium ion batteries to Daimler. In September 2008, the company developed the first production ready lithium ion battery for hybrid vehicle. Mercedes Benz planned to launch S 400BlueHybrid in the early 2009. In line with the plan, Mercedes introduced S 400BlueHybrid, the worlds first lithium ion battery car in April 2009. In January 2006, Continental and ZF won an order from Volkswagen to develop hybrid drive module consisting of an electric drive including the power electronics. In 2006, Continental commenced supplies of mild hybrid system (ISAD system) to General Motors for Silverado/Sierra pick-up trucks. New Product Developments In 2008, R&D expenses climbed by 79.5% to 1.49bn (US$2.11bn) compared with 834.8m (US$1.23bn) in 2007. The expenses
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accounted for 6.2% of sales compared with previous years 5%. This was mainly due to changes in the scope of consolidation after the acquisition of Siemens VDO and the automotive electronics business of Motorola. In Powertrain division R&D expenses increased by 189.9% to 420.1m (US$592.2m) compared with 144.9m (US$213.4m) in 2007. The expenses accounted for 10.4% of the divisions sales compared to previous years 12.3%. In April 2008, Continental announced the launch of a new-generation electronic brake system, MK100, by 2011. The new brake system will be based on a modular structure and hence will make scalability possible. The product will facilitate the installation of Anti-Lock Braking System/Electronic Stability Control (ABS/ESC) in all vehicle categories, ranging from a motorcycle ABS system with or without an integral braking function to highend ESC designs with extremely powerful, low-pulsation pump variants. In March 2008, Continental AG showcased the latest version of power electronics in the concept vehicle BMW Vision Efficient Dynamics at the 2008 Geneva Autosalon. The hybrid modular assembly allows the components to be used flexibly for different power categories and in different installation circumstances. The power electronics control the flow of energy from the engine to the energy accumulator and vice versa. In March 2007, Continental and ZF announced development of power electronics modular systems for hybrids. The modular system can work in hybrid drive systems with different power ratings, from high voltage applications to those using less than 60-volts.
Financial Overview Continental AG has reported growth in net sales for fiscal year ended 31 December 2008. The company registered a growth of 45.8% in net sales from 16.6bbn (US$24.4bn) in 2007 to 24.3bn (US$34.2bn) largely aided by the acquisition of Siemens VDO. Continentals adjusted EBIT (before amortisation and depreciation of acquired assets) was 1.83bn (US$2.57bn), a decrease of 296m (US$417.2m, 31 December 2008) from last year. The company reported net loss of 1.07bn (US$1.52bn) in 2008. Segment wise, Continentals Automotive Group witnessed extremely adverse market conditions and restructuring initiatives. Net sales of the Group were recorded at 14.9bn (US$21bn) while adjusted EBIT was 908.9m (US$1,281.3m). Sales in the Powertrain division increased by 243.2% to 4bn (US$ 5.6bn) from 1.1bn (US$ 1.6bn) in 2007. The increase resulted from the acquisition of Siemens VDO. In the first quarter of 2009, Continental predicted large deviations, particularly in the first half, with the comparative figures in 2008. Continental AG reported a 35.2% drop in sales for the quarter ended 31 March 2009. Sales dropped to 4.3bn (US$5.67bn) compared with 6.64bn (US$10.49bn) in the same period in 2008, primarily due to the reduction in global automotive demand. Sales of the Automotive group registered a 42% decline to 2.52bn (US$3.32bn) while the sales of the Rubber group declined 22.2% to 1.78bn (US$2.35bn). Rubber group sales were supported by demand in the replacement market. Net loss for the quarter was 267.3m (US$353m) compared to a net income of 166.8m (US$263.5m) in the comparable period. Despite the loss in the quarter, the company was able to comply with financial covenants. The company expects business conditions to improve in the subsequent quarters and thus expects to comply with the covenants for the rest of the year as well. Continental anticipates substantial free cash flow in the full year 2009 by suspension of the dividend, substantial cuts in capital spending and further reductions in fixed costs and debts in 2009. Year Net Sales (bn) 24.3 16.6 14.8 13.8 12.5 Net Sales (US$bn) 34.2 24.45 19.66 EBIT (bn) (0.29) 1.67 1.60 1.51 1.16 EBIT (US$bn) (0.40) 2.46 2.11 Net Income (m) (1,077) 1,049.9 1,004.6 952.2 716.2 Net Income (US$m) (1,518.29) 1,546.35 1,326.34 R&D Expenditure (m) 1,498.2 834.8 677 589 524 R&D Expenditure (US$m) 2,112.07 1,229.54 893.82 No. of Employees 139,155151,654 85,225 79,849 80,586 No. of Employees 139,155151,654 85,225
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2008 2007 2006 2005 2004 Year
2008 2007 2006

The Hybrids Report
2005 2004
16.39 17.05
1.79 1.58
1,127.83 977.18
697.64 714.95
79,849 80,586
Outlook Continental's take-over of Siemens VDO has positioned it among the leading automotive suppliers. The acquisition has not only increased its global presence and product offerings but also strengthened its technological capability. Continental AG expects cost savings from the acquisition of Siemens Automotive (SI) VDO to reach around US$450m per year beginning 2010. This is more than double what the company first expected. The savings will add an additional justification to the US$15.7bn deal made in 2007. Continental foresees high growth potential in the emerging market especially in BRIC countries, (Brazil, Russia, India and China) mainly driven by volume. However, the developed automotive markets in Europe and North America will continue to be strategically important due to high margins. Continental has come up as one of Europes best fuel efficient product suppliers due to a strong position in fuel injection and hybrid technologies. The acquisition of VDO has positioned Continental as one of the leading three players in the fuelefficiency field. The acquisition is further expected to strengthen Continentals capabilities in efficiency technologies, including direct fuel-injection systems, micro, mild and full hybrids, energy management systems, telematics and low rolling resistance tires. In the future, stricter emission norms and rising oil prices require new approaches to drive systems with minimal environmental and climatic impact. This will increase the demand for fuel-efficient and hybrid vehicles. Simultaneously, the interest in hybrid drives is growing not just in North America and Asia, but in Europe as well. This will offer a huge market of opportunities for Continentals Powertrain division, which sees hybrid and electric drives as the proper route for those vehicles which are economical yet dynamic.
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Denso
Hybrid vehicle components
Address Denso Corporation 1-1, Showa-cho Kariya Aichi 448-8661 Japan Tel: +81 566 25 5511 Fax: +81 566 25 4537 Internet: http://www.globaldenso.com Senior Officers Akihiko Saito, Chairman Nobuaki Katoh, President & CEO Koichi Fukaya, Vice-ChairmanHiromi Tokuda, Executive Vice-Presiden Mitsuharu Kato, Senior Managing Director Kenji Ohya, Senior Managing Director Koji Kobayashi, Senior Managing Director Kazuo Hironaka, Senior Managing Director Sojiro Tsuchiya, Senior Managing Director Hikaru Sugi, Senior Managing Director Shinji Shirasaki, Senior Managing Director Shoichiro Toyoda, Director Products Battery-monitoring unit, DC-DC converter, electric compressor, electronic control unit (ECU), current sensors Plants Argentina, Australia, Belgium, Brazil, Canada, China, Czech Republic, France, Germany, Hungary, Italy, India, Japan, Korea, Malaysia, Mexico, Netherlands, Philippines, Poland, Portugal, Saudi Arabia, Singapore, Spain, Sweden, Taiwan, Thailand, Turkey, UK, US, Vietnam Sales 3,142.7bn (US$32.31bn, 31 March 2009) (Year to 31.03.09) Employees 119,919 (March 2009) Investments In January 2008, Denso announced plans to invest nearly 6bn (US$55.02m) to expand its plant in Anjo, Aichi Prefecture (Japan) which manufactures components for hybrid vehicles. The company is planning to increase the plant area by 25% which would result in an additional 1.2 million ft2. In June 2005, Denso established an additional facility in Kota (Japan) to produce integrated circuit (IC) wafers for ECUs and electric control components. The facility started operations in June 2006 with an initial investment of 17bn (US$146.2m).
Denso is one of the largest automotive components suppliers in the world and ranks first in Japan. It manufactures powertrain control systems, electronic systems, electric systems, thermal systems, and information and safety systems for the automotive industry. In fiscal 2008-09, 96.8% of sales were from the automotive business.
Denso manages the group's automotive businesses through the following product groups: Powertrain Control Systems: fuel injection products, engine control components and systems control components. Electric Systems: electrical systems and Electric Hybrid Vehicle (EHV) components. Electronic Systems: electronic products and electronic devices. Thermal Systems: air-conditioning products, cooling systems & components. Information & Safety Systems: Intelligent Transport System (ITS) products, driver assist & safety products and body electronics components. The company also manufactures products for industries other than automotive. The Industrial Systems division manufactures industrial systems products such as automatic identification products (bar-code readers, two-dimensional code readers, and IC card-related products), industrial robots and programmable logic controllers. As on 31 March 2009, Denso has 187 consolidated subsidiaries, out of which 68 are in Japan, 38 in the US, 33 in Europe and 48 in Asia-Oceania. The companys major Japanese customers are Toyota, Honda and Mitsubishi. It also supplies to Audi, BMW, Chrysler, Cummins, Daewoo, Daimler, Fiat, Ford, Hyundai, Jaguar, PSA Peugeot-Citron, Renault, Saab, Volkswagen and Volvo. Recent Developments Corporate strategy In its Hybrids business, Denso has followed organic expansion. Over recent years, the company has been investing in setting up new facilities to supply its key customers, especially Toyota. In an effort to expand its hybrid components business, Denso expanded its plant in Anjo, Aichi Prefecture (Japan) in January 2008, which manufactures components for hybrid vehicles. At present, the supplier intends to concentrate its hybrid components manufacturing operations in Japan where it can closely monitor quality. In September 2008, Denso announced that although Toyota plans to build its Prius hybrid car in the US, it will not immediately follow the OEM for supplying its hybrid components in North America. In 2006, the company reorganised its business groups, which included transferring operations related to hybrid electric vehicles (HEVs) from the Powertrain Control Systems business group to Electric Systems Business group. This move was to reinforce its position in the power electronics field for HEVs. It has also boosted capacity for gasoline fuel injectors by adding capacity at production sites in Japan, North America, Hungary and China.
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Contracts In May 2007, Denso won a contract to supply a power control unit and battery cooling system to Toyota Lexus LS 600h and Toyota Lexus LS600hL. In April 2006 Denso started supplying DC-DC converter, a battery-monitoring unit and a system main relay to the Toyota Lexus GS450h model. In March 2005, Toyota launched Harrier hybrid and Kluger hybrid vehicles in Japan. Denso supplies these models with hybrid control computers, batterymonitoring units, DC-DC converters and electric compressors for airconditioning systems. In April 2005, Toyota introduced Lexus RX400h and Toyota Highlander hybrid vehicles in the US. Denso has the contract to supply hybrid control computers, battery-monitoring units, DC-DC converter and electric compressors for air-conditioning systems. New Product Developments In 2009, the company invested 297.1bn (US$3.04bn, 31 March 2009) on research and development activities compared with 311.5bn (US$3.14bn, 31 March 2008) in the preceding year. The recent developments are: In May 2007, Denso developed a high output power control unit (PCU) that can produce higher output power by about 60% per unit volume as compared with the company's conventional technology. In May 2007, Denso developed a battery cooling system that can use air from the cooling unit of the rear air-conditioning system and cabin air to cool the main battery. In September 2006, Denso, in cooperation with Toyota, introduced a new power supply management ECU. The ECU calculates battery charge rate and internal resistance using battery voltage and current. In April 2006 Denso developed a power conversion circuit for DC-DC converter. It reduces greater energy loss as compared to a conventional DCDC converter, improves fuel consumption and decreases the amount of heat generated by using power conversion. In April 2006 Denso introduced three new hybrid vehicle components: DCDC converter, a battery-monitoring unit and a system relay unit. In April 2006 Denso introduced boost converters used for inverters and electric compressors.
Financial Overview For the financial year ended 31 March 2009, Denso reported net sales of 3,142.7bn (US$32.31bn, 31 March 2009), a decline of 21.9% compared with 4,025.1bn (US$40.58bn, 31 March 2008) in the previous year. The companys operating loss was 37.3bn (US$383.48m) against an operating profit of 348.7bn (US$3.51bn). Net loss for the year was 84.1bn (US$864.64m) compared to a net income of 244.4bn (US$2.51bn). The decrease in sales was largely due to decline in worldwide sales of cars in the second half of the financial year. The results were negatively impacted by foreign currency fluctuations. Segment wise, the companys sales in Japan decreased 21.3% to 2,145.6bn (US$22.05bn) from 2,725.89bn (US$27.48bn) in the previous year. Operating loss was 114.7bn (US$1.18bn) against an operating income of 197.51bn (US$1.99bn). Decrease in car sales in Japan coupled with a dramatic decrease in exports to North America and Europe and negative currency fluctuations impacted the financial results. In America, Denso reported a 32.7% decrease in sales to 559.8bn (US$5.75bn) from 832.3bn (US$8.39bn). The sales decreased due to decline in demand mainly from Toyota and three other American automakers. Although the company made efforts to reduce cost, the lower production volumes resulted in a 87.8% decline in operating income to 5.1bn (US$52.43m). In Europe, Densos sales declined 25.4% to 462.5bn (US$4.75bn) from 620.8bn (US$6.25bn) in the previous year. The region reported a 86.4% decrease in operating income to 3.6bn (US$37.01m). The sales and operating income declined due to lower car production of Japanese auto manufacturers. In Asia and Oceanic, the companys sales declined 17.6% to 507.7bn (US$5.21bn) from 616.15bn (US$6.21bn) in the previous year. Operating income for the region declined 24.8% to 60.5bn (US$622m). Although there was an increase in car production volumes for Japanese auto manufacturers in China, the slowdown in car
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production in the ASEAN countries and an unfavourable foreign exchange resulted in decrease in sales and operating income. Year Net Sales Net Operating R&D No. of (bn) Income Income Expenditure Employees (bn) (bn) (bn) 2009 3,142.7 (84.1) (37.3) 297.1 119,919 2008 4,025.1 244.4 348.7 311.5 118,853 2007 3,609.7 205.2 303.1 279.9 112,262 2006 3,188.3 169.6 266.6 256.3 105,723 2005 2,799.9 132.6 213.89 235.2 104,183 Year Net Sales (US$bn) 32.3 40.6 30.61 27.3 26.04 Net Income (US$bn) (0.9) 2.5 1.74 1.44 1.23 Operating Income (US$bn) (0.4) 3.5 2.57 2.3 1.98 R&D Expenditure (US$bn) 3.0 3.1 2.37 2.18 2.18 No. of Employees 119,919 118,853 112,262 105,723 104,183
2009 2008 2007 2006 2005
Outlook With the growing requirements to improve fuel economy and reduce emissions, car manufacturers are responding by developing more hybrid electric vehicles and fuel cell hybrid vehicles (FCHVs). The companys hybrid business is expected to expand further in the near future, especially in the light of strict emission and safety regulations and Toyotas vision of manufacturing one billion units of hybrid vehicles by 2010. Other domestic and overseas automakers are poised to follow the OEMs lead and accelerate their growth in the hybrid vehicle market. Denso expects that by 2020 the market for hybrid vehicles will expand from 12 million units (in 2008) to 22 million units, and the market for related products will grow from 1.8 trillion (in 2008) to around 3 trillion.
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Eaton
Diesel-electric hybrid systems
Address Eaton Corporation 1111 Superior Avenue Cleveland Ohio 44114-2584 USA Tel: +1 216 523 5000 Fax: +1 216 523 4787 Internet: http://www.eaton.com Senior Officers Alexander M. Cutler, President, Chairman & CEO Richard H. Fearon, Vice Chairman and Chief Financial and Planning Officer Craig Arnold, Vice Chairman and COO, Industrial Sector Thomas S. Gross, Vice Chairman and COO, Electrical Sector Joseph P. Palchak, President, Automotive Group William R. Van Arsdale, President, Hydraulics Group Richard D. Holder, Executive VicePresident, Eaton Business System Products Hybrid power systems Plants Automotive: Brazil, Canada, China, France, Germany, India, Indonesia, Japan, Korea, Mexico, Monaco, Netherlands, Poland, Spain, Taiwan, Turkey, UK, USA Sales Group: US$15.4bn (Year to 31.12.08) Employees Group: 75,000 (2008) The company is also working closely with the truck fleet owners by developing a program to assist them in applying for grants of US$156m from American Recovery and Reinvestment Act for diesel hybrid truck. This would help the company to continue good relations with the fleet owners as well as create an opportunity to integrate its hybrid electric technology in commercial vehicles. The company has already streamlined its Fluid Power segment into Hydraulic and Aerospace, through which more emphasis will be given on hydraulic systems which are gradually gaining importance in the automotive industry. The company has set itself a target of achieving an annual growth rate of 10% over a span of five years (up to 2010). During this period the company intends to gain partly from organic growth and partly from future acquisitions. Eaton wants to focus on improving margins and reducing fixed and working capital intensity. In addition, the company will diversify its business into non-automotive sectors such as electrical devices and pumps in order to reduce its exposure to automotive business environment in North America. Joint-ventures In August 2007, Eaton and PACCAR signed an agreement to jointly develop hybrid technology for heavy-duty commercial vehicles in North America. The products will be introduced in Kenworth and Peterbilt trucks, targeted for initial production by 2009. In 2006, the company partnered with Beiqi Foton Bus to develop a hybrid diesel-electric city bus that entered Chinas clean bus competition for the 2008 Beijing Olympic Games and Shanghai World Expo 2010. Investments In November 2008, Eaton bought a new building in International Business Park of Changning District, Shanghai. The new building will be addressed as the headquarters of Asia-Pacific region.
Eaton Corporation is a global supplier of engineered products for the aerospace, automotive, commercial vehicle, construction, industrial and semiconductor markets. It manufactures diesel-electric hybrid and hydraulic hybrid power systems for truck, bus and other commercial applications.
Eatons business which was initially categorised into four divisions, was divided into five different divisions in the first quarter of 2008. The Fluid Power segment was divided into the Hydraulics segment and the Aerospace segment. Electrical (accounted for 45% of 2008 sales), Hydraulic (16.4%), Aerospace (11.8%), Truck Components (14.6%) and Automotive Components (12.16%). Eaton manages its operations through its facilities in 150 countries with 75,000 employees. The US continues to be the largest market for Eaton, where it generated 52.8% of the total sales in 2008. Europe contributed 24% to the total sales followed by AsiaPacific at 11.8%, Latin America at 8.8% and Canada at 2.6%. In the automotive components business, Eaton supplies to nearly 70 OEMs. Some of its major clients include BMW, Chrysler, Daimler, Ford, GM, Honda, Mazda, Nissan, Suzuki, Toyota and Volkswagen. In the truck components segment, its major customers include PACCAR, Navistar and Volvo. The companys HEV and HVV systems are used by FedEx Express, UPS, Coca-Cola Enterprises and PepsiCo delivery vehicles. Recent Developments Corporate strategy Eaton is focusing on expanding its product capability, especially in hybrid technology. It is looking for deploying its hybrid electric technology to the utility, telecom and commercial vehicle market.
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Contracts In February 2008, Coca-Cola Enterprises announced its decision to purchase 120 new trucks powered by Eatons hybrid electric drivetrain systems. New Product Developments Eaton generally spends 2.53% of its sales on R&D. In financial year 2007, it spent US$335m, up 6.3% from US$315m in 2006. Eaton is working in close collaboration with its customers and universities to come out with new products. The company has created an Engineering Research Centre (ERC) for fluid power technology, including development of a hydraulic-hybrid passenger car. In March 2009, Eatons plug-in hybrid electric system was integrated in Southern California Edisons plug-in hybrid truck. The technology is developed by Electric Power Research Institute (EPRI) and manufactured by Eaton Corporation. In October 2008, UPS announced the purchaces of Hydraulic Hybrid Vehicles (HHVs). Eaton will help monitor the vehicles fuel economy performance and emissions in the Minneapolis where the vehicles will be deployed in the first quarter of 2009. In January 2008, Eaton introduced its first commercially available hybrid power system in China with Beiqi Foton Bus Company, deploying the hybrid system in 30 city buses for Guangzhou Yiqi Bus. In December 2007, Eaton announced plans to develop digital hydraulic hybrid drive system for US army vehicles in collaboration with Western Michigan University (WMU). In September 2005, Eaton and International Truck and Engine Corporation introduced their diesel-electric hybrid powertrain at the pilot truck program, a hybrid commercialisation project for truck fleet users, truck makers and technology companies.
Financial Overview For the financial year ended 31 December 2008, Eaton reported a 18.5% increase in net sales to US$15.4bn compared with US$13bn in the preceding year. The company recorded higher sales in all business divisions except its Automotive division. Electrical segment reported a sales growth of 45.4% to US$6.9bn, Hydraulics segment 5.5% to US$2.5bn, Aerospace segment 13.6% to US$1.8bn Truck segment 4.8% to US$2.3bn. Automotive segment reported a decline in sales of 12.7% to US$1.9bn. Income from continuing operations before tax improved by 8.4% to US$1.13bn compared with US$1.04bn in the previous financial year. Net income at US$1.06bn, was 6.4% higher than US$994m achieved in the previous fiscal. In the first quarter of 2009, Eatons sales declined 20% to US$3.46bn compared with US$2.81bn for the same period in the preceding year. The company reported an operating loss of US$26m in the first quarter compared with operating income of US$256m for the same period in 2008. Net loss was recorded at US$50m in first quarter of 2009 compared with net income of US$247m in the previous year. For the current financial year ending 31 December 2009, Eaton expects ongoing slowdown to continue in its major markets in 2009, at least till the second and possibly the third quarter. The company expects its markets to record a decline of 7% to 8% during 2009. However, the company hopes to outgrow its end markets during the year by approximately US$300m. Year 2008 2007 2006 2005 2004 Sales (US$bn) 15.4 13 12.4 11.0 9.8 Pre Tax Income (US$m) 1,128 1,041 969 964 749 Net Income (US$m) 1,058 994 950 805 648
Outlook The company has already taken a step forward in the hydraulic hybrid systems by refining and developing hydraulic systems for HHV bought by UPS. Focus on the new technology is the need of every company in the time of global slowdown. Eaton seems to have taken a similar path to keep its focus on its five year plan which finishes in 2010.
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Hitachi
Lithium ion battery
Address Hitachi Ltd 6-6 Marunouchi 1-chome, Chiyoda-ku Tokyo 100-8280 Japan Tel: +81 3 3258 1111 Fax: +81 3 3258 2375 Internet: http://www.hitachi.com Hitachi Vehicle Energy Ltd. 1410 Inada, Hitachinaka-shi, Ibaraki-ken 312-8505 Japan Internet: http://www.hitachi-ve.co.jp/en/ Senior Officers Hidetaka Kawamoto, President, Hitachi Vehicle Energy Ltd Takashi Kawamura, Representative Executive Officer, Chairman, President & CEO Kazuo Furukawa, Representative Executive Officer, Vice-Chairman & Executive Officer Hiroaki Nakanishi, Representative Executive Officer, Executive VicePresident & Executive Officer, Automotive Systems Business Taiji Hasegawa, Representative Executive Officer, Senior Vice-President & Executive Officer, General Manager, Battery Systems Division Yasuhiko Honda, (to be transferred to Hitachis new Automotive Systems Company, effective from 1 July 2009) Kunihiko Ohnuma, President & Director, Automotive Systems Group (effective from 1 July 2009) Akira Maru, Vice-President & CEO, Power Systems Business Division Products Lithium ion battery Plants China (6), Germany (2), Japan (13), Mexico, Singapore, Taiwan, Thailand (3), UK, US (5) Sales Group: 10,000.3bn (US$102.8bn, 31 March 2009) (Year to 31.03.09) Employees
Hitachi is one of the worlds leading electronics manufacturers. The companys product line includes electricity generation systems, consumer products and electronic devices. Hitachis automotive business is a part of Power & Industrial Systems segment.
The company operates its business through seven segments: Information & Telecommunication Systems, Electronic Devices, Power & Industrial Systems, Digital Media & Consumer Products, High Functional Materials & Components, Logistics, Services & Others and Financial Services. Hitachi's Automotive Systems Business is focused on the development of technologies for four types of system engine management, electronic powertrain, drive control and car information systems. Hitachis major automotive customers include Ford, General Motors, Suzuki and Toyota. Recent Developments Corporate strategy Hitachi has decided to separate its Automotive Systems Group and Consumer Business Group from the parent company, effective 1 July 2009, in an effort to operate more efficiently as well as fuse automotive and electronics technologies. In the automotive business, the company will concentrate on developing automotive systems that address environmental and safety demands. Specifically, in the environmental field, it will produce lithium-ion batteries, compact inverters, small motors and other key devices for hybrid vehicles. The company will establish Battery Systems Division to enhance the lithium-ion battery business. The company also aims to work with its subsidiary Hitachi Vehicle Energy, related business groups and laboratories to develop batteries for hybrid vehicles and other markets. Hitachi is planning research and development strategies to expand in the areas of lithium-ion battery and renewable energy-related businesses as it sees significant opportunities in the environmental and energy saving-related areas over the medium and long terms. Workforce reduction and manufacturing base consolidation are another part of Hitachis reorganisation plan. The company plans to restructure the manufacturing bases both in Japan and overseas by the end of fiscal 2009. Hitachi is on track with its Environmental vision 2025 plan, where the company is using the expansion of its systems business, starting with its battery operations, to combat environmental issues such as global warming and simultaneously reinforce the companys social innovation business. Additionally, in order to improve margins, the company initiated a plan in 2008-09 named Strengthening The Base '08-'09 which is focused on cutting fixed costs, including personnel expenses, as well as other costs such as procurement. As per the plan, the company targets reduction of fixed costs by around 200bn (US$2.04bn, 16 March 2009) and procurement costs by around 300bn (US$3.06bn) for the year ending 31 March 2010. In an effort to improve cash flows, Hitachi will postpone capital expenditures except for certain investments, reduce inventories and expedite the collection of accounts receivable. Acquisition In March 2004, Hitachi acquired its affiliates Tokico and Hitachi Unisia Automotive aiming at stronger automotive products business. Joint-venture In June 2004, Hitachi formed a joint-venture (JV) Hitachi Vehicle Energy Ltd. The JV was formed with Shin-Kobe Electric Machinery Co Ltd and Hitachi Maxell Ltd, to manufacture lithium batteries for hybrid electric vehicles
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(HEVs). Group: 389,752 ( 2008) Investment In April 2005, Hitachi established Research & Development Corporation in China, which is used as a research and development (R&D) base for all Hitachi Group businesses including Hitachi Automotive Systems (HAS). Contracts In October 2008, Hitachi secured a contract from Eaton for the supply of motors, inverters, lithium-ion batteries and other components for Eaton's hybrid power systems through 2011. In March 2008, Hitachi received an order from GM to supply lithium ion batteries for more than 100,000 hybrid cars. The batteries are being produced for the Chevrolet Malibu and the Saturn Vue. New Product Developments Hitachis Research & Development group operates six laboratories in Japan and some overseas facilities. Overall, the Hitachi group has a staff of approximately 6,000 worldwide in its R&D activities. For the year ended 31 March 2009, the groups expenditure on research and development decreased by 3% to 416.5bn (US$4.2bnbn, 31 March 2009). In May 2009, Hitachi developed a new lithium-ion battery specifically for use in hybrid and other eco-friendly vehicles. These fourth-generation batteries have high power density of 4,500W/kg, 1.7 times the output of the company's mass-produced, automotive lithium-ion batteries. Hitachi will begin to supply these new batteries to domestic and foreign auto makers before 2009-end, with mass production expected to start in 2013.
Financial Overview For the financial year ended 31 March 2009, Hitachi reported an 11% decline in its net sales to 10,000.3bn (US$102.8bn, 31 March 2009) compared with 11,226.73bn (US$113.2bn, 31 March 2008) in the preceding year. The companys operating income declined from 345.5bn (US$3.48bn) to 127.1bn (US$1.3bn). Net loss widened to 787.3bn (US$8.1bn) from 58.12bn (US$585.9m) in 2008. Power & Industrial System sales declined from 3,568.1bn (US$35.9bn) to 3,310.5bn (US$34.1bn). Geographically, Japan accounted for 59% of the total sales, followed by Asia at 19%, North America and Europe at 9% each and other areas 4%. Year Sales (bn) 10,000.3 11,226.7 10,247.9 9,465 9,027 Sales (US$bn) 102.8 113.18 86.9 80.5 83.9 Operating income (bn) 127.1 345.5 182.5 256 279 Operating income (US$bn) 1.3 3.4 1.5 2.1 2.5 Net Income (bn) (787.3) (58.1) (32.7) 37.3 51.5 Net Income (US$m) 8,092.2 (585.9) (277.3) 317.2 479 R&D Expenditure (bn) 416.5 428.1 412.5 405 389 R&D Expenditure (US$bn) 4.2 4.3 3.4 3.4 3.6 No. of Employees 389,752 384,444 355,879 347,424 No. of Employees 389,752 384,444 355,879 347,424
2009 2008 2007 2006 2005 Year
2009 2008 2007 2006 2005
Outlook After incurring losses for 2007 and 2008, Hitachi has taken certain measures to improve margins. The companys existing hybrid contracts with GM and Eaton will help it to secure more such contracts with other suppliers and OEMs. Owing to stricter environmental regulations and rising concern about fuel economy worldwide, Hitachi expects the global market for commercial vehicle and passenger car HEVs to continue expanding from the 690,000 unit level recorded in 2007 to 1.5 million units by 2010. In light of the growing popularity of HEVs, Hitachi projects significant growth opportunities in the years to come.
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JATCO
Hybrid systems
Address JATCO Ltd 700-1 Imaizumi Fuji City Shizuoka 417-8585 Japan Tel: +81 545 51 0047 Fax: +81 545 51 5976 Internet: http://www.jatco.co.jp Senior Officers Shigeo Ishida, President & CEO Yo Usuba, Executive Vice-President Akira Hasenaka, Senior Vice-President Toru Akiba, Senior Vice-President Minoru Kurosawa, Senior Vice-President Masami Matsuoka, Senior Vice-President Toshihiko Okumura, Senior Vice-President Hitoshi Nagakura, Senior Vice-President Koujirou Miyoshi, Corporate VicePresident Tatsuya Hirokawa, Corporate VicePresident Takashi Shibayama, Corporate VicePresident Akira Ishii, Corporate Vice-President Yoshiaki Nishikawa, Corporate VicePresident Takeshi Kitajo, Corporate Vice-President Kazutoshi Noma, Corporate Vice-President Products Hybrid system for front-wheel drive (FWD) and rear-wheel drive (RWD) vehicles Plants China, France, Japan (7), Mexico, US Sales 515.04bn (US$5.19bn, 31 March 2008) (Year to 31.03.08) Employees 7,265 (March 2008)
JATCO is one of the leading suppliers of transmissions worldwide. The company is an affiliate of Nissan Motors which is JATCOs largest shareholder and also its biggest customer.
JATCO produces a full line-up of transmission products including manual transmissions (MTs), automatic transmissions (ATs), continuously variable transmissions (CVTs), toroidal CVTs, and high performance transmissions for hybrid electric vehicles (HEVs). In the HEV segment, the company produces transmissions for both front wheel drive (FWD) and rear wheel drive (RWD) vehicles. JATCO supplies hybrid systems that use both step ATs and CVTs. JATCO has manufacturing presence across China, France, Japan, Mexico and the US. JATCO serves numerous OEMs, including Chrysler, Ford, GM, Mazda, Mitsubishi, Nissan, Renault, Suzuki and Volkswagen. Recent Developments Corporate strategy JATCO is primarily focused on increasing supplies to its stakeholders. The company is raising its production capacities in response to the planned expansion of CVT-equipped vehicles by its customers, Nissan Motors and Suzuki Motors. JATCO supplies all CVTs used by its major shareholder, Nissan, and also caters to Mitsubishi Motors Corp., which holds 15% of JATCO, and Suzuki Motor Corp., which bought a 10% stake in 2007. Increasing demand for CVTs for small cars has prompted JATCO to increase its annual production of CVTs from 1.6 million in 2008 to two million by 2011. In addition to increasing production capacity in Japan, the company strengthened its foothold in overseas markets. For instance, in order to supply the North American markets the company increased its capacity to 700,000 CVTs per year by opening a second production line in Aguascalientes city (Mexico) in 2008. In an effort to supply Nissan's local partner in China, Dongfeng Motor China, JATCO has recently set up a manufacturing plant in the country. Investments In October 2008, JATCO started the construction of a new transmission facility in Guangzhou (China). The facility produces steel belt CVTs. Nearly 6bn (US$879.8m) was invested in the facility which has a production capacity of 140,000 units per year. Initially, the plant will produce CVT fitted to front-wheel-drive car with 2.0 litre engine capacity. The Chinese facility is JATCOs second overseas manufacturing facility after Mexico. In April 2008, JATCO opened a second production line for CVT in Aguascalientes city (Mexico) which increased the plant capacity to 700,000 units per year. The company invested US$200m in the expansion of the building and production facilities. In October 2006, JATCO invested in its Yagi Plant in Nantan, Kyoto prefecture (Japan). The plants space was doubled to 66,000m2 to produce 300,000 next generation CVTs for small and mid-size front wheel drive cars. In January 2006, JATCO expanded annual production capacity of its Mexico plant from 300,000 units to 400,000 units. The Mexican facility is JATCOs first production unit outside Japan to produce CVTs. The company invested 2bn (US$17m) in the capacity expansion.
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Divestment In September 2006, JATCOs Fuji AT joint-venture (JV) was strategically dissolved. The JV was established in 2003 to develop CVTs for mini cars and sub-compact cars. Post divestment, Fuji manufactures CVTs and JATCO distributes them. Contracts JATCO supplies front wheel drive 6-speed automatic transmission to the Renault Laguna III. The company manufactures variable transmission (with manual 6-speed mode) for the Nissan Altima Coup. New Product Developments JATCO has four research and development centres. These R&D centres are based in Atugi, Kyoto, Okazaki and Shin-Yokohama (all in Japan). In March 2008, JATCO developed a new stepped seven-speed automatic transmission for rear-wheel-drive applications. The transmission consists of two torque applications, medium and large, and can be used in a variety of applications. The transmission shares components with an existing five-speed automatic transmission that has helped to reduce costs. The technology consists of adaptive shift control and synchronised revolution control, which improves driver control. The JR710E and JR711E transmissions are produced in JATCOs manufacturing plant in Fujinomiya City (Japan). The transmissions are supplied to Nissan Infiniti EX37 and Infiniti FX50 sportsutility vehicles (SUVs).
Financial Overview For the financial year ended 31 March 2008, JATCO reported an increase of over 5% to 515.04bn (US$5.19bn, 31 March 2008) in net sales, from 490bn (US$4.15bn, 31 March 2007) in the same period in 2007. Being a privately-owned company, JATCO is not obliged to publish its financial reports. Outlook With increased production capacities, JATCO is well positioned to grow with an expected increase in market penetration of CVTs in North America and Asia. In these markets, an increasing number of OEMs are shifting towards more efficient transmission systems. The company expects to do well in the hybrid systems business in the coming years as the technology is likely to gain more acceptance with the increasing awareness of fuel efficiency and vehicle emission norms. The companys major customers, including Nissan Motors, are likely to strengthen their presence in the hybrid vehicles market.
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Johnson Controls
Batteries
Address Johnson Controls Inc. 5757 N. Green Bay Avenue P.O. Box 591 Milwaukee, WI 53201 USA Tel: +1 414 524 1200 Fax: +1 414 524 2070 Internet: http://www.johnsoncontrols.com Senior Officers Stephen A. Roell, Chairman, CEO Keith E. Wandell, President, COO R. Bruce McDonald, Executive VicePresident, CFO Beda Bolzenius, Vice-President & President, Automotive Experience Alex A. Molinaroli, Vice-President & President, Power Solutions Jeffrey S. Edwards, Vice-President & General Manager, Japan & Asia Pacific, Automotive Experience Mary Ann Wright, Vice-President & General Manager, Hybrid Systems for Johnson Controls, CEO, Johnson Controls-Saft Brian Kesseler, Vice-President & General Manager, Americas, Power Solutions Walther Wever, Vice-President & General Manager, Europe, Power Solutions Shu Yang, Vice-President & General Manager, Asia, Power Solutions Products Lead acid batteries, nickel metal hydride, lithium ion batteries. Plants Power Solutions: China, Czech Republic, France (2), Germany (3), India, Mexico (5),South America (2), Spain (2), South Korea (3), US & Canada (8). Sales Group: US$38.06bn (30 September 2008) (Year to 30.09.08) Power Solutions: US$5.85bn (30 September 2008) (Year to 30.09.08) Employees Group: 140,000 (2008) Power Solutions: 12,000 (2008) JCI plans to shift operations from high cost to low cost regions such as in Asia and eastern Europe, and increased low cost sourcing to 54% by 2013.The company plans to grow its battery business in China. The Chinese hybrid vehicles market will grow as several domestic OEMs have announced plans to launch these in the next three to five years. In an attempt to reduce cost and improve efficiency, Johnson Controls announced a restructuring plan in the second quarter of 2009 and incurred US$230m as restructuring charge. The company expects the restructuring process to complete in 2010 and anticipates positive returns in 2009 financial figures. JCI has been strengthening its electronics expertise and integrating electronics into nearly every system during development. It has also integrated electronics into its batteries, developing the first anti-theft battery and power-saving battery.
Johnson Controls Inc. (JCI) is a leading supplier of automotive interior systems, seating and batteries. The companys product portfolio includes seating, instrument panels, overhead components & systems, floor consoles & storage systems, door systems, electronics, cargo management and battery & power management.
JCI operates 1,300 locations in 125 countries worldwide. The company organises its operations into three business groups: Automotive Experience (48% of sales in fiscal 2008): seats including foam cushions, seat covers, metal frames and mechanisms. Power Solutions (15% of 2008 sales): automotive batteries for the replacement and original equipment markets. Building Efficiency (37% of 2008 sales): facility systems and services including comfort, energy and security management for the residential and non-residential buildings market.
In the financial year 2008, US generated US$13.3m sales; Europe contributed US$14.9m, and the rest of the world generated US$9.7m. JCIs customers include BMW, Chrysler, Daimler, Ford, General Motors, Honda, Isuzu, Mazda, Mitsubishi, Nissan, PSA-Peugeot-Citron, Renault, Toyota and Volkswagen. Recent Developments Corporate strategy JCI is aiming for a long-term sustainable growth by focusing on improving efficiency, new product and technology development and expansion in emerging markets. Besides acquisitions, the organisation plans to prioritise its organic growth. The company has been restructuring its businesses in North America and Europe so that it becomes more profitable. It also wants to focus on product lines that are profitable to the company. The companys Power Solution division supplies batteries for both original equipment market as well as aftermarket. The high-margin business division accounted for just 15% of 2008 sales but contributed 26% to the companys total earnings. The company has 36% of global market share in lead acid batteries. The company is aiming to be the leading supplier of lithium-ion battery technology for the next generation hybrid vehicles. In the area of hybrid batteries, JCI has a joint-venture with Saft SA of France. The joint-venture is diversifying into the commercial vehicles segment. In January 2009, Johnson-Controls Saft (JCS), entered a five-year agreement with Azure Dynamics to supply batteries to power its commercial vehicles in North America. The joint-venture, entered into a development collaboration agreement with Maxwell Technologies in April 2008 to develop a new technology on electrode manufacturing in order to reduce the cost and environmental impact of automotive batteries on hybrid vehicles. It secured several supply contracts in 2008 from global OEMs including Ford, GM, Daimler, Chery and SAIC.
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Acquisitions In July 2005, JCI acquired Delphis global automotive battery business for US$202.5m. Under the agreement, JCI received a long-term contract to supply GM with original equipment and original equipment service batteries. Delphis automotive battery business includes operations in more than 10 countries with joint-venture interests in China and South Korea. In July 2004, JCI acquired its joint-venture partners, Group IMSA, automotive battery business in Mexico and South America. For the remaining 51% share of the Group IMSA Johnson Controls paid approximately US$525m. Joint-ventures In April 2008, Johnson Controls-Saft (JCS) and Maxwell Technologies entered into an agreement to test and evaluate Maxwells lithium-ion battery electrodes for hybrid vehicles. In July 2007, JCI entered into a joint-venture with a Chinese company, Fengfan Ltd. of Baoding, to manufacture maintenance-free lead acid batteries for the automotive market in China. In January 2006, JCI and Saft Groupe formed a joint-venture to supply advanced-technology batteries for current and future-generation hybridelectric vehicles (HEVs) and electric vehicles (EVs). Saft Groupe holds a 49% stake and Johnson Controls holds the rest. Investments In April 2009, JCS announced plans to invest US$220m to open its first US based lithium-ion battery cell manufacturing facility in Holland, Michigan (US). The plant will recruit around 500 employees. The plantss initial capacity is measured to around 15 million lithium-ion cells. JCS will receive a combination of tax credits and incentives from the state of Michigan amounting to US$148.5m as part of the states strategy program for advanced battery. In December 2008, JCI planned to set up a plant Changxing Economic Development Zone of Zhejiang province (China) to produce a lead acid battery. The plant will be operational by June 2010. In January 2008, Johnson Controls-Saft Advanced Power Solutions opened its first lithium-ion battery facility in Nersac (France). The company initially invested 15m (US$22.28m) in the plant which is the worlds first lithium-ion battery manufacturing facility. In November 2007, JCI opened a new Automotive Business Centre in Bratislava (Slovakia). The company created 170 new jobs by the end of 2008 in order to help it grow in the eastern European markets. In July 2007, JCI planned to expand and remodel its headquarter campus in Glendale (US). The company anticipated completion of the project by mid 2009. Contracts In February 2009, JCS received a contract from Ford Motor Company to supply complete battery system. It will be introduced in 2012 in its first series of plug-in hybrid electric vehicle (PHEV). In June 2008, JCS was the battery supplier for the Ford test fleet of Plug-in Hybrid Electric Vehicles. In January 2009, JCI entered into a supply agreement to provide automotive batteries to OReilly Auto parts. In January 2009, JCS and Azure Dynamics Inc. (AZD) entered into a supply agreement. The agreement incorporates provision of the advanced lithium-ion (Li-Ion) hybrid battery technology to power commercial vehicles in North America. The agreement will expire in 2014. In October 2008, JCS received the second production contract to provide lithium-ion batteries for BMWs 7-Series Active Hybrid Car. In August 2008, JCS was awarded a second contract of US$8.2m by United States Advanced Battery Consortium (USABC). It focuses on the development of lithium-ion battery systems for plug-in hybrid electric vehicles (PHEVs). The contract will expire in 2010. In January 2008, JCS was selected by SAIC Motor Corporation Ltd, China to supply lithium-ion batteries for its demonstration fleet of new energy vehicles. In January 2008, JCS received a production contract from Chinese auto manufacturer, Chery Automobile, to provide a hybrid battery system for its latest vehicle, A5 ISG sedan. In September 2007, JCS signed a contract with Daimler to supply cell module and cooling system for the hybrid battery for the Mercedes-Benz S-Class 400
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hybrid sedan. The project will commence in June 2009. In August 2007, JCS received an order to supply nickel-metal hydride (NiMH) and Li-ion battery packs for the Dodge Sprinter plug-in hybrid delivery vans. In March 2007, JCI and Federal-Mogul signed an agreement to market Federal-Moguls famed Champion Brandin in the lead-acid storage battery category. In January 2007, the JCS signed a contract with GM to supply Liion batteries for the Saturn Vue Green Line plug-in hybrid SUV. In August 2006, JCS received a two-year contract from United States Advanced Battery Consortium (USABC) to supply advanced, lithium-ion (Lilon) batteries for hybrid-electric vehicles (HEVs). In September 2006, JCS was awarded a development contract for lithium-ion batteries from a major OEM for its late model 2008 hybrid vehicle. Post the development phase, the contract is expected to lead to volume production.
New Product Developments In the financial year 2008, JCI spent US$829 on research & development (R&D) activities compared with US$767m in 2007. In January 2009, JCI introduced re3 concept vehicle as part of its product and technology at the 2009 North American International Auto show (NAIS). It features plug-in hybrid battery system among others. In September 2005, JCI started an advanced Li-ion battery development laboratory in Milwaukee, Wisconsin (US). The US$4m facility located at the companys Battery Technology Center, develops power-storage and powermanagement concepts based on Li-ion technology. In January 2005, JCI launched dual-purpose new Group 75/25 and Group 35 YellowTop batteries. In January 2005, JCI introduced NiMH battery technology at the North American International Auto Show. The NiMH was developed using technologies from its Varta Battery Automotive business.
Financial Overview For the financial year ended 30 September 2008, JCIs sales amounted to US$38.06bn, a 10% increase from US$34.6bn in 2007. The increase was thanks to higher net sales in all three business segments as well as favourable impact of foreign currency. Income from continuing operations decreased by 24% and reached US$0.97bn. Net income was US$0.97bn, a 22% decrease over last years figure of US$1.25bn. This was mainly due to a restructuring charge which was recorded in the fourth quarter and lower volumes in automotive experience in North America and Europe. Excluding the restructuring charge, net income was US$1.4bn, a 12% increase over the prior year. For the fiscal year 2008, the company projected sales to increase 10% to about US$38bn, which they have successfully achieved. For the fiscal year 2009, the company expects that the forecasted estimates will not match the actual estimates in 2009, due to the uncertain economic conditions. For the six months ended 31 March 2009, Johnson Controls reported sales of US$13.65bn compared with US$18.89bn for the same period in 2008. Loss from continuing operations before income taxes and minority interests stood at US$761m. The company reported a net loss of US$801m compared to a net profit of US$524m in 2008. Power solutions reported sales of US$2.02bn compared with sales of US$3.1bn for the same period in 2008. The segment reported 58% decrease in income to US$106m compared with US$254m in 2008. Automotive experience posted sales of US$5.57bn, down 40% for the six months ended 31 March 2009. The segment incurred loss of US$604m compared to a profit of US$233m for the same period a year ago. Johnson Controls expects that the loss in the Automotive Experience in the third fiscal quarter would be less than US$50m and forecasts the business to achieve break-even results in the fourth fiscal quarter.
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Year 2008 2007 2006 2005 2004
Net Sales (US$bn) 38.06 34.6 32.2 27.5 24.6
Net Income (US$bn) 0.97 1.25 1.02 0.90 0.81
Operating Income (US$bn)
R&D Expenditure (US$m)
No. of Employees
0.97 1.29 1.03 0.75 0.76
829 767 743 817 844
140,000 140,000 136,000 130,000 123,000
Outlook JCIs investment in the developing markets of Asia and eastern Europe will help the company in its future developments. Also, the companys investments in the Li-ion R&D activities, are expected to drive the future growth. The company is making significant progress in its development of advanced batteries for fuelefficient, environmentally friendly hybrid vehicles. In 2008 JCI increased its presence in hybrids, as it opened a Li-ion battery manufacturing plant in France and plans to open the second unit in the US. The company is expanding its traditional lead-acid car batteries to next-generation batteries which provide better fuel efficiency. These efforts are likely to help the company to win development or production contracts for hybrid vehicle batteries in Europe, North America and China. The government grants, such as a combination of tax credits and incentives from the state of Michigan as part of the states strategy program for advanced battery, and a grant awarded to the company for the development of hybrid battery technology, as well as lithium-ion battery systems for plug-in hybrid electric vehicles, increase the prospects for the company in the field of batteries. JCI had forecasted stability and recovery in 2009 compared to the challenges put forth by the automotive industry in 2008. However, the company had to announce restructuring plans after the second quarter of 2009 results. The company anticipates break-even results in fourth quarter of 2009.
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Keihin
Address Keihin Corporation Shinjuku Nomura Bldg. 39F, 1-26-2 Nishi-Shinjuku Shinjuku-ku Tokyo 163-0539 Japan Tel: +81 3345 3411 Fax: +81 3345 3414 Internet: http://www.keihin-corp.co.jp Senior Officers Kunimichi Odagaki , President & CEO Kazuyuki Sasa, Senior Managing Director Kazuoki Ukiana, Senior Managing Director Masami Watanabe, Managing Director Fumio Yamagata, Managing Director Hiroshi Irino, Managing Director Products Electronic control units (ECUs) Plants Brazil, China (2), India (2), Indonesia, Japan (9), Philippines (2), Taiwan, Thailand (2), UK, USA (5) Sales Group: 288.34bn (US$2.96bn, 31 March 2009) (Year to 31.03.09) Employees Group: 14,642 (2008)
Keihin is a leading manufacturer of fuel-control systems and related components. The company also produces electronic control units (ECUs) for hybrid vehicles.
Keihins operations are categorised into four main divisions. Fuel Supply Systems for Motorcycles, Recreational Vehicles and Power Products accounted for 24.1% of the total sales in 2008, Mechanical Products for Automobiles (34.5%) Electronic Control Unit (ECU) (22%) Air-conditioning Systems (19.4%). In 2008, Japan contributed 40.4% to the total sales followed by America with 31.7%, Asia with 24.7% and Europe contributed 3.2%. The company has 27 manufacturing plants and three research and development centres across the world. Recent Developments Corporate strategy With a growing concern for the environment, the popularity of hybrid vehicles is gradually increasing. Keihin, in response to this phenomenon, has increased its focus on hybrid components. The company is currently developing components for fuel-cell vehicles and expects a significant growth in demand for these vehicles. Also, the company is increasing its research and development efforts for exhaust systems and emission controls systems. It is working on the development of fuel injection systems that meet emission controls. Keihin is strengthening its global supply system, primarily by increasing production capacity. In line with this strategy, Keihin established a new subsidiary in USA in April 2007 to manufacture fuel-supply systems and air-conditioning products. In fiscal 2008 the company continues to keep its focus on the global supply system. The production of the new plant in Thailand was completed and the mass production of fuel supply systems products for automobiles started in March 2008. Investments In November 2007, Keihin invested 1.6bn (US$14.4m) to construct a new building at its existing facility in Thailand. The new building will be used to assemble fuel supply parts along with exhaust gas recirculation (EGR) valves and production of engine air intake manifolds and throttle bodies. In April 2007, Keihin established a new subsidiary in USA. The facility manufactures fuel-supply systems and air-conditioning products. Operations started in March 2008. In March 2006, Keihin completed construction of a plant to manufacture automobile ECUs. This plant is located in Thailand. New Product Developments Keihin generally spends 4-5% of its total sales on research and development. In 2008 it reported 5.78% decrease in R&D expenditure to 14.9bn (US$151.02m, 31 March 2008). Keihins core R&D centre is located at Tochigi (Japan). In addition, the company operates two more R&D centres in Japan and China. Financial Overview For the financial year ended 31 March 2009, Keihins sales declined 15% to 288.34bn (US$2.96bn) compared with 339.32bn (US$3.42bn) in 2008. The company recorded a net loss of 5.63bn (US$57.88m) compared to 11.2bn (US$112.9m) in fiscal 2008. Operating income declined 51.6% to 11.61bn (US$119.36m) compared with 24bn (US$241.9m) in 2008. For financial year 2010, the company has forecast further decline of 16.8% in net sales to 240bn. The company expects operating income to decrease by 98.3% to 200m and consolidated net loss of 6.2bn.
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Year
Sales (bn) 288.34 339.32 330.6 300.9 271.4 Sales (US$bn) 2.96 3.42 2.80 2.56 2.53
2009 2008 2007 2006 2005 Year
Operating Income (bn) 11.61 24 22.11 24.84 20.87 Operating Income (US$m) 119.36 241.9 187.5 211.2 194.1
Net Income (bn) (5.63) 11.20 12.85 17.50 10.85 Net Income (US$m) (57.88) 112.9 108.82 148.86 100.96
R&D Expenditure (bn) 14.98 15.9 14.2 12.1 R&D Expenditure (US$m) 151.02 134.8 120.7 12.5
No. of Employees 14,642 13,949 No. of Employees 14,642 13,949 -
2009 2008 2007 2006 2005
Outlook In the future, growing environmental awareness across the world is expected to give rise to stricter emission norms. This changing trend is also likely to increase the demand for hybrid vehicles which are efficient in reducing emissions and increasing fuel-economy. The companys established presence in manufacturing ECUs for hybrid vehicles and efforts to develop high-end components for fuel-cell vehicles are expected to provide future growth opportunities. The company is also shifting its focus from the American markets, as the demand has decreased due to the global slowdown. Instead the company is expanding its operations in Asian markets that are doing relatively good in the current situation. Thus, the company is focused on its growth plan with constant focus on the upcoming hybrid vehicle demand in the future.
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Maxwell Technologies
Ultracapacitors
Address Maxwell Technologies 9244 Balboa Avenue San Diego, CA 92123 USA Tel: +1 858 503 3300 Fax: +1 858 503 3301 Internet: http://www.maxwell.com Senior Officers David J. Schramm, President & CEO Richard D. Balanson, Senior Technical Advisor Tim T. Hart, Vice-President, CFO & Treasurer George Kreigler III, Senior VicePresident, Operations Alain R. Riedo, Senior Vice-President, General Manager, Maxwell Technologies SA John M. Miller, Vice-President, Systems, Applications & Integration Michael J. Liedtke, Vice-President, Business Development, Sales & Marketing Michael A. Everett, Vice-President, CTO Products Electrochemical double layer capacitors (EDLC) Plants China, Switzerland, US Sales Group: US$82.19m (31.12.2008) (Year to 31.12.2008) Employees Group: 346 (31 December 2008) Maxwell broadened its customer focus by supplying its BOOSTCAP ultracapacitors to hybrid vehicles. Recently, the company added Chinas three leading transit bus producers and Vanner Inc. to its list of customers in 2009. Golden Dragon Co. Ltd used Maxwells BOOSTCAP ultracapacitors for integration into diesel-electric hybrid buses in 2008. In 2007, Maxwell collaborated with Mercedes car to develop ultracapacitors for an advanced engineering hybridelectric drive train program. Azure Dynamics Corporation used Maxwells BOOSTCAP 390-volt heavy transportation ultracapacitor module (HTM) for the latest hybrid shuttle bus powertrain. For Maxwell, China is one of the important markets to expand its presence in the automotive industry. Maxwell has a cost advantage by expanding in the low cost countries. The company formed an alliance with Belton Technology Group, through which it is making inroads in the Chinese market. In April 2007, the company also opened a sales office in China for its ultracapacitor products and it expects to serve the Asian market through this office. Joint-ventures In April 2008, Maxwell Technologies and Johnson Controls-Saft entered into an agreement to evaluate and test Maxwells lithium-ion battery electrodes for hybrid vehicles. In November 2007, Maxwell formed an alliance with Tianjin Lishen Battery Joint-Stock Co., Ltd to supply hybrid energy storage products. The two companies combined their respective capabilities in ultracapacitor and lithiumion battery technologies to develop hybrid energy storage products. The new products have applications such as quick-charge cordless tools and electric vehicles. Production and delivery of initial product samples began in early 2008. In July 2007, Maxwell entered into an agreement with Valeo to incorporate its BOOSTCAP ultracapacitors in Valeos stop-starts and regenerating braking systems. In May 2007, Maxwell and Argonne National Laboratory entered into an agreement for a collaborative research project. The project intended to
Maxwell Technologies is a leading manufacturer of ultracapacitors, high-voltage capacitors and radiationmitigated microelectronic products. The company supplies these products to various industries such as transportation, industrial electronics and telecommunications.
Maxwell Technologies business is divided into three product lines of ultracapacitors (35% of total sales in 2008), high-voltage capacitors (46%) and radiation-mitigated microelectronic products (19%). Geographically, sales in the US accounted for 28%, while rest of the world contributed the remaining 72% of sales in 2008. In the automotive sector, Maxwell Technologies manufactures BOOSTCAP ultracapacitors, cells, multi-cell packs and modules with applications in powertrain, chassis and interior. Ultracapacitors are used by hybrid vehicles and trucks. Recent Developments Corporate strategy Maxwell is working with OEMs and suppliers to strengthen its position as the leading supplier of ultracapacitor-based solutions. Maxwell is increasing production capacity to meet the future anticipated demand for ultracapacitors. The company has formed numerous strategic alliances with other suppliers for its expansion in the market. In order to boost its position in the hybrid vehicles market, the company collaborated with Johnson-Controls Saft in 2008 to test the lithium-ion battery electrode for hybrid vehicles. Also, in 2007, Maxwell formed an alliance with Tianjin Lishen Battery Joint-Stock Co., Ltd to supply hybrid energy storage products.
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demonstrate the compatibility of ultracapacitors with hybrid vehicle batteries. In September 2006, Maxwell Technologies and Kromberg & Schubert GmBH & Co. KG formed an alliance to incorporate Maxwells BOOSTCAP ultracapacitors into engine starting system for automobiles. In April 2006, Maxwell Technologies signed a contract and granted a licence to Shanghai Urban Electric Power Investment Development Corporation (SUEP). The contract will expire in 2012. SUEP can manufacture and market ultracapacitor products based on Maxwells proprietary large cell and multicell module technology under its own brand in mainland China. With this alliance, Maxwell targeted the Chinese market. In April 2006, Maxwell Technologies started a toll manufacturing alliance with China-based Belton Technology Group for the production of BOOSTCAP ultracapacitors. Post the production of carbon powder electrode material, Maxwell sends it to Belton for final assembly. In March 2006, Maxwell Technologies and Yeong Long Technologies Co. Ltd (YEC) expanded their alliance to supply carbon powder-based ultracapacitor electrode material to assist YECs small cell ultracapacitor products. Additionally, Maxwell facilitated YEC in setting up worldwide marketing and distribution. The alliance was initiated in February 2003, to commercialise BOOSTCAP ultracapacitors in China.
Investments In April 2007, Maxwell Technologies opened a sales office in Shanghai (China) to market its BOOSTCAP ultracapacitor products, service customers and support its distribution channel partners throughout Asia. Contracts In April 2009, Maxwell Technologies received purchase orders of US$13.5m from three of Chinas leading transit bus producers. The contract incorporates Maxwell to supply BOOSTCAP ultracapcitor modules to support braking energy recuperation and torque assist functions in diesel-electric hybrid transit buses. In January 2009, Maxwell Technologies supplied its BOOSTCAP ultracapacitor modules to provide burst power for a retrofit diesel engine starter system to Vanner Inc. In July 2008, Maxwell Technologies supplied its BOOSTCAP ultracapacitors to Golden Dragon Bus Co. Ltd. for integration into diesel-electric hybrid buses. In July 2008, Maxwell Technologies supplied its 125-volt BOOSTCAP ultracapacitor modules for braking energy recuperation and torque assist in emission free electric buses to Vossloh Kiepe GmbH. In January 2008, Maxwell Technologies supplied BOOSTCAP ultracapacitors to Continental AG as the energy storage component for a broadnet stabilisation system. In September 2007, Maxwell Technologies signed a contract with Mercedes Car group. Maxwell has to design and produce ultracapacitors for an advanced engineering hybrid-electric drive train. It incorporates a braking energy recuperation system that enables it to increase fuel efficiency and reduce emissions. In June 2007, Maxwell Technologies and Azure Dynamics Corporation came together to use Maxwells BOOSTCAP 390-volt heavy transportation ultracapacitor module (HTM) for the latest hybrid shuttle bus powertrain. The product works as the energy storage and power delivery component. In January 2007, Maxwell Technologies received a purchase order for 100,000m2 from Shanghai Sanjiu Electric Equipment Company Ltd. (Sanjiu). Sanjiu planned to introduce a line of ultracapacitor products based on Maxwells cell architecture and high-performance electrode for transportation and other markets in mainland China. Additionally, the alliance helps Maxwell to expand its market in China. New Product Developments In the financial year 2008, Maxwell Technologies spent US$14.8m on R&D activities, an increase of 30.97% over the previous years figure of US$11.3m. In March 2007, Maxwell Technologies and AFL Automotive introduced a cold start system for the commercial truck market. The cold start system integrates Maxwell Technologies BOOSTCAP ultracapacitors with AFL's power management system. In March 2007, Maxwell Technologies introduced the 390-volt BOOSTCAP ultracapacitor module. It increases the efficiency level, energy storage and power-delivery solutions for heavy hybrid, electric vehicles and heavy duty industrial applications.
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In November 2006, Maxwell Technologies launched a 125-Volt BOOSTCAP ultracapacitor module for heavy hybrid and electric vehicles. The module, HTM BMOD0063-P125, is based on 2.7-volt BOOSTCAP BCAP3000 power cells. In May 2006, Maxwell Technologies introduced the C-Cell BOOSTCAP ultracapacitor for various industrial and transportation applications. The new ultracapacitor cells are also applicable in distributed power nodes for automotive subsystems. The new 2.5-volt cells weigh two-thirds less than an ordinary C-size battery and are easily mountable on circuit boards and other electrical devices and systems. In May 2006, Maxwell Technologies developed D-Cell ultracapacitors for automotive electric power network stabilisation. The new product provides low-cost backup power solutions and avoids microprocessor malfunctions through better management. In March 2006, Maxwell Technologies introduced 16 new power-type BOOSTCAP ultracapacitor cells and modules for the automotive market. The new ultracapacitors increase the power and longevity of batteries by ten times. In June 2005, Maxwell Technologies introduced large cell BOOSTCAP ultracapacitor cells and multi-cell modules. The product stores more energy and delivers more power per unit volume. The life of the product is longer than any other commercially available ultracapacitors products.
Financial Overview For the financial year ended 31 December 2008; Maxwell has reported growth in net sales by 43.28% to US$82.19m over US$57.36m in 2007. The company reported an operating loss of US$12.24m from operations compared with US$16.08m in 2007. It shows the impact of less credit availability and volatile security prices due to slump in the global financial markets. Full-year interest expense was US$4.81, resulting in a loss from continuing operations of US$14.8m in 2008. However, the company gained on embedded derivatives and warrants which was US$1.2m in 2008. The company incurred a net loss of US$14.8m in 2008 down from US$15.7m posted in 2007. For the first quarter of 2009, Maxwell reported increase in total sales of 31% to US$22.5m for the first quarter of 2009 compared with US$16.5m in the first quarter of 2008. This was due to the stable sales growth in electric utility infrastructure, wind energy, and public transport and space programs. Operating loss decreased to US$1.7m in the first quarter of 2009 compared with US$3.4m in 2008. Net loss decreased to US$2.9m in2009 compared with US$5.5m in 2008. Cash and restricted cash amounted to US$15.4m by the end of the first quarter of 2009. Ultracapacitor revenue increased 34% to US$7.6m in first quarter of 2009 compared with US$5.3m in 2008. High voltage capacitors together with microelectronics recorded 66% increase in total revenue to US$14.8m in the first quarter of 2009 compared with US$11.8m in 2008. The year-on-year sales growth in the company was attributable to ultracapacitors, private and public investments in wind energy, and hybrid and electric transit vehicles. In 2009, the company is anticipating positive cash flows from operations sufficient enough to finance its operations. The company is undertaking numerous programs to avoid the situation of negative cash flow from operations, such as product cost reductions, improved gross margin from the companys BOOSTCAP product line, manufacturing & quality improvement. Year Sales (US$m) 82.19 57.36 53.88 45.43 32.21 Operating income (US$m) (12.24) (16.08) (14.13) (7.38) (8.94) Net Income (US$m) (14.80) (15.73) (16.49) (6.29) (9.07) R&D Expenditure (US$m) 14.8 11.3 10.06 7.17 5.52 No. of Employees 346 302 377 241 222
2008 2007 2006 2005 2004
Outlook Maxwell Technologies future growth in the global automotive market
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depends on the successful commercialisation of applications of ultracapacitors. The companys effort to team up with suppliers and OEMs is expected to help in the future. Ultracapacitor and electrode technologies are clearly the main drivers for the companys future growth. The main properties are to increase the fuel efficiency and reduce emissions which draw lot of attention in favour of better prospects of the company. The company foresees growth opportunities in the Asian automotive markets as vehicle production increases. Particularly, the demand for its BOOSTCAP ultracapacitors and multi-cell modules is expected to rise, with OEMs looking for cost-effective, reliable and durable power delivery solutions. Expansion in China will open further avenues for growth, apart from reducing its dependence on few selected markets in Switzerland and the US. For 2009, Maxwell is expecting to have positive cash flows, with the numerous measures the company is taking for a strong financial growth.
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NessCap
Ultracapacitors
Address NessCap Co., Ltd. 750-8, Gomae-dong Giheung-gu Yongin-si Gyeonggi-Do Korea Tel: +82 31 289 0721 Fax: +82 31 286 6767 Internet: http://www.nesscap.com Senior Officers M.Cho, CEO & President Sunwook Kim, Chairman Robert Tressler, Senior Vice-President & General Manager Products Electric double layer capacitor, pseudocapacitor Plants Korea Employees c. 65 (2005)
NessCap is a Korea-based manufacturer of ultracapacitors for hybrid electric vehicles. Globally, the company ranks as one of the four leading producers of ultracapacitors.
Apart from automotive applications, ultracapacitors produced by the company are also used in other applications such as power, audio and electronics. Besides being used in hybrid electric vehicle, ultracapacitors are used in other automotive applications such as cold cranking in extremely cold weather. NessCap products are available in both cells and modules for transportation, power and consumer markets. In 2001, Ness Capacitor Co., Ltd was spun off from NESS Corp and was later renamed as NessCap Co, Ltd in May 2002.The company serves numerous OEMs such as Chrysler, Ford and GM. The company currently supplies start-stop systems, mild & full hybrid motor-generator systems and DC/DC converter and control electronics to these OEMs. Recent Developments Corporate strategy NessCap started operations with an aim to develop ultracapacitors for various applications. For hybrid vehicles, NessCap has developed products that can be used for multiple hybrid platforms. In March 2009, NessCap introduced a series of new ultracapacitor cylindrical cells that can be used in multiple hybrid platforms for automobiles, buses, trucks and trains. The company has also focused its efforts on building strong relationships with automakers such as GM. NessCap signed a deal with GM in May 2008 to supply its 6 100F supercapacitors for GMs E-Flex series of extended range electric vehicles. Separately, NessCap in September 2005 secured a contract from United States Advanced Battery Consortium to develop ultracapacitors for an automotive research program. Contracts In May 2008, NessCap signed a deal with GM to supply its 6 100F supercapacitors for the automakers E-Flex series of extended range electric vehicles. Terms of the contract were not disclosed. In September 2005, NessCap received a US$4.5m contract from United States Advanced Battery Consortium to develop ultracapacitors for an automotive research program. The program is run by a cooperative research consortium of Chrysler, Daimler, Ford and GM. New Product Developments NessCap has a focus on R&D initiatives to develop products for the hybrids market. Being a private company, NessCap does not disclose its research and development (R&D) expenditure. In March 2009, NessCap introduced five new ultracapacitor cylindrical cells that range in capacitance from 650 farads to 3000 farads with operating voltage of 2.7 volts and standard screw or welded terminal connections. These new cells can be used in multiple hybrid platforms for automobiles, buses, trucks and trains, industrial telecommunications buffering and back-up as well as windmill shaving and large solar energy systems. The company has developed an electric double layer capacitor (EDLC) which comes in 25 models ranging from 2.5Volt to 2.7Volt (3000 to 5000 farads). These capacitors are used in 14Volt/42 Volt hybrid electric vehicles. The company has also developed EDLC Module which comes in more than 10 models ranging from 4.6Volts to 120Volts and are used in electric and hybrid electric vehicles, besides having other applications.
Financial Overview NessCap, being privately held, is under no obligation to publish its financial results. Outlook When seen in the light of the growing popularity for hybrid drives, demand for ultracapacitors is likely to increase in the years to come. The company will benefit from its strong clientele such as Chrysler, Ford and GM, as these automakers have plans to introduce hybrid and electric vehicles in future.
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Saft
Batteries
Address Saft Groupe 12 rue Sadi Carnot 93170 Bagnolet France Tel: +33 1 4993 1918 Fax: +33 1 4993 1950 Internet: http://www.saftbatteries.com Senior Officers John Searle, Chairman & CEO Mary Ann Wright, CEO, Johnson Controls-Saft Advanced Power Solutions Xavier Delacroix, Director & General Manager Industrial Battery Group Dr Richard Doisneau, Chief Technology Officer Products Lithium-ion batteries, nickel cadmium batteries, nickel metal hydride batteries Plants France (JCS)
Saft manufactures batteries including nickel-cadmium (NiCd), rechargeable lithium-ion (Li-ion) and nickel-metal hydride (Ni-MH) batteries.
Saft categorises its business in three divisions: Industrial Battery Group (generated 48% of 2008 net sales), Specialty Battery Group (40%) and Rechargeable Battery Systems (12%). Industrial Battery Group segment manufactures rechargeable lithium-ion batteries, nickel cadmium batteries and nickel metal hydride batteries which are used in hybrid electric vehicles as well as other industries. Saft has 17 manufacturing sites worldwide and is present in 10 countries. Recent Developments Corporate strategy Saft automotive business is currently focused on developing batteries for the hybrid vehicles market through its joint-venture (JV) with Johnson Controls. The JV named as JCS, was formed in January 2006 to develop solutions for hybrid and electric vehicles. In February 2008, JCS set up a plant in Nersac (France) to produce lithium-ion batteries for hybrid vehicles There are further expansion plans for this facility. To cater for the increasing demand of hybrid vehicles, JCS collaborated with Maxwell Technologies in April 2008 to develop lithium-ion automotive batteries. Additionally, JCS invested in Wisconsin (US) to get the benefit of the Bio Energy Grant awarded by the Wisconsin government. The grant was for the innovation and advancement of hybrid vehicle batteries which contributes to the states clean energy agenda. Saft has reviewed its operations and cost base. The company planned to merge the Industrial battery group and Rechargeable battery systems by July 2009. The cost synergies to be put into effect would include elimination of duplicate production assets, and technical resource for nickel technologies would be merged. The synergies would be adopted by end of 2010. Raw materials would be obtained from low cost suppliers and there are plans to transfer final assembly plant of Special Battery Group to low cost countries. Joint-ventures In April 2008, Johnson Controls-Saft (JCS) and Maxwell Technologies established a development collaboration to evaluate the integration of Maxwells electrode process into the mass production of Safts lithium-ion batteries for hybrid vehicles. In January 2006, Saft and Johnson Controls established a joint-venture, Johnson Controls-Saft Advanced Power Solutions (JCS), to develop batteries for current and future generation hybrid electric vehicles (HEV) and electric vehicles (EV). The joint-venture is involved in production of nickel-metal hydride and lithium-ion batteries. With this joint-venture the company intends to become a leading supplier in North America for hybrid and electric vehicles. Johnson Controls has 51% stake and the remaining 49% stake is held by Saft. Investments In April 2009, JCS announced plans to invest US$220m to open first US based lithium-ion battery cells manufacturing facility in Holland, Michigan (US). The plant will recruit around 500 employees. The plantss initial capacity is measured to be around 15 million lithium-ion cells. JCS will receive a combination of tax credits and incentives from the state of Michigan amounting to US$148.5m as part of the states strategy program for advanced battery. In February 2008, JCS opened its first lithium-ion battery facility in Nersac (France). The company invested 15m (US$22.3m, 1 February 2008) in the plant which is the worlds first lithium-ion battery manufacturing facility.
Sales Group: 609.4m (US$859.09m, 31 December 2008) (Year to 31.12.08) Employees 4000 (2008)
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Contracts In February 2009, JCS secured a contract from Ford to supply battery systems for its plug-in hybrid electric vehicle (PHEV) which were tested on a fleet of 20 cars in June 2008. The PHEV will be introduced in 2012. In January 2009, JCS won a contract from Azure Dynamics to supply lithiumion hybrid batteries for commercial trucks for the North American market. The agreement is extended till 2014. The production will begin in the fourth quarter of 2010. In October 2008, JCS won a contract from BMW to supply lithium-ion batteries for BMWs 7 series active hybrid car. This is the second lithium-ion production contract for JCS. The project will commence in 2010. In August 2008, JCS got a second contract from United States Advanced Battery Consortium (USABC) valued at US$8.2mn to produce lithium-ion battery systems for PHEV. In 2006, JCS secured a 24-month contract from USABC to develop advanced, lithium-ion batteries for HEVs. USABC is a project run by United States Department of Energy, Daimler Chrysler, Ford and GM. In January 2008, JCS won a contract from Chery Automobile to supply nickel metal hydride batteries for its A5 ISG hybrid saloon. The cells for these batteries will be produced at Safts Nersac (France) plant. In January 2008, JCS won a contract to supply lithium-ion batteries for a demonstration fleet of new energy vehicles to SAIC Motor Corporation Ltd. In September 2007, JCS won a contract with Daimler to supply lithium-ion batteries for the Mercedes S Class 400 hybrid. The project will commence in June 2009. In January 2007, JCS was awarded an advanced battery development contract by GM to design and test lithium-ion batteries for use in the Saturn Vue Green Line plug-in hybrid SUV. New Product Developments The companys R&D expenditure was 5.6% of the companys sales or 30.47m in financial year 2008 compared with 5.5% to 30m in 2007. In addition to the plant in Nersac, Johnson Controls-Saft has research and development centres in Milwaukee (US) and Bordeaux (France). Some of its recent developments include: Saft has developed new advanced high energy lithium-ion battery systems based on its VLE module, VL45E (45 Ah) and VL 41M (41 Ah) cells range. These cells are used in assembled battery systems which in turn are used in electronics and thermal management units. Saft has developed VH series nickel-metal hydride batteries that offer high power, constant voltage during discharge, long life cycle (over 500 charge discharge cycles) and are used in hybrid vehicles, electric vehicles, electric bicycles, scooters and wheelchairs. The company has also developed nickel cadmium and lithium-ion batteries for electric bus applications and hybrid bus applications. Financial Overview In the financial year ended 31 December 2008, Safts consolidated net sales increased by 4.9% to 609.4m (US$859m, 31 December 2008) compared with 600.5m (US$884.4m, 31 December 2007) in 2007. In the Industrial Battery Group, sales increased by 6.8% to 292.1m (US$411.7m) from 282.4m (US$415.9m) in 2007. The profits could be achieved due to control on the pricing. In Specialty Battery Group, sales increased by 6.7% to 240.8m (US$339.4m) compared with 334.7m (US$492.9m). This was possible due to strong performance in the civil market. For Rechargeable Battery Systems, sales declined by 6.8% to 76.5m (US$107.8m), over 83.4m (US$122.8m). The negative impact was due to the falling nickel price throughout the year. Safts net sales in the first quarter ending 31 March 2009 declined 2.9% to 145.6m (US$192.3m, 31 March 2009) compared with 149.9m (US$236.8m) in the first quarter of 2008. Industrial Battery Group sales declined 11.1% to 64.5m (US$85.18m) in the first quarter of 2009 compared with 72.6m (US$114.7m) in 2008. Speciality Battery Group sales increased 15.7% to 66.0m (US$87.17m) compared with 57m (US$90.06m) in first quarter of 2008. Rechargeable Battery Systems recorded substantial decline of 25.8% to 15.1m (US$19.9m) in the first quarter of 2009 compared with 20.3m (US$32.07m) in 2008.
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Year 2008 2007 2006 2005 2004 Year 2008 2007 2006 2005 2004
Sales (m) 609.4 600.5 560.2 566.2 586.1 Sales (US$m) 859 884.4 739.6 670.6 799.6
EBIT (m) 80.8 68.4 73.5 85.7 71.3 EBIT (US$m) 113.9 100.7 97 101.5 97.2
Net Income (m) 35.1 26.9 37.9 34.9 Net Income (US$m) 49.4 39.6 50 41.3 -
Outlook Global demand for lithium batteries is expected to grow as hybrid vehicles become popular in response to increasing environmental awareness. Saft is positive about the demand for high energy advanced batteries in the future and expects growth in this segment. In the future, the joint-venture between Saft and Johnson Control is expected to improve the market presence of Saft in hybrids. The recent opening of the worlds first lithium-ion batteries manufacturing facility and new hybrid contracts signed in 2006-2008 present the company with future growth opportunities. Furthermore, JCS has successfully acquired contracts from three continents in the period 2008-2009. This includes second contract from USABC and a five-year contract from Azure Dynamics. JCS would also be working with the State of Wisconsin on their clean energy plan in which JCS would get an incentive of US$500,000 for further innovation in hybrid vehicle batteries. The new plant project in Michigan (US) will help the company to supply products to the new contracts secured by the company. JCS would also receive funds from the American and French governments. The US would be providing a stimulus package of US$2bn for advanced batteries and renewable energy storage and with the new plant project the JV will receive a combination of tax credits and incentives of US$148.5m from the state of Michigan (US) as part of the states strategy program for advanced battery. France would be providing automotive industry aid package of 450mn (US$566.2mn, 19 February, 2009) in support of clean vehicles. All these are expected to boost the growth of the company in the area of providing batteries for hybrid vehicles.
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Sanyo
Batteries
Address Sanyo Electric Co Ltd 5-5, Keihan-Hondori 2-chome Moriguchi City, Osaka 570 8677 Japan Tel: +81 6 6991 1181 Fax: +81 6 6992 0009 Internet: http://www.sanyo.co.jp Senior Officers Seiichiro Sano, President Koichi Maeda, Executive Vice-President Kazuhiko Suruta, Executive VicePresident Kentaro Yamagishi, Executive VicePresident Mitsuru Honma, Vice-President Hidetoshi Arima, Vice-President Hiromoto Sekino, Vice-President Satoshi Inoue, Vice-President Osamu Kajikawa, Vice-President Hiroshi Ono, Vice-President Akira Kan, Vice-President Teruo Tabata, Vice-President Products Lithium-ion & nickel metal hydride batteries Plants China, Japan, Mexico, Singapore, UK, USA Sales Group: 2,017.8bn (US$20.3bn, 31 March 2008) (Year to 31.03.08) Employees Group: 99,875 (2008)
Sanyo Electric is one of the leading suppliers of electronic products. The companys product portfolio includes consumer electronic appliances, audio & video equipment, batteries and home appliances. The company supplies electronic components such as navigation systems and rechargeable batteries to the automotive sector.
Sanyo organises its operations into four segments: Consumer (generated 37.5% of 2008 sales), Components (47.2%) Commercial (13%) and Others (2.3%). The Components division manufactures lithium-ion batteries and nickel-metal hydride (Ni-MH) batteries and other commercial rechargeable batteries for various markets. Apart from rechargeable batteries, the division also manufactures capacitors, motors, optical pick ups, semiconductors and solar cells. Sanyo and Panasonic have an agreement with Capital and Business Alliance which was signed in December 2008. Sanyo will become a subsidiary of Panasonic. Decisions are pending as Panasonic is seeking antitrust approval from all the 11 countries where Sanyo is operational. By April 2009, two firms present in five countries had given their approval for the same. In 2008, the company generated 36.8% of net sales from Japan, 35.3% from Asia, 12.8% from North America, 11.9% from Europe and 3.2% from rest of the world. Its major automotive customers include Chrysler, Daimler, Ford, Honda and Volkswagen. . Recent Developments Corporate strategy In November 2007, Sanyo developed a new mid-term business strategy which will guide it from April 2008 to March 2010. The plan aims to achieve operating income of 100bn and net sales of 2,380bn by the end of fiscal 2010. Sales target for energy business area is set at approximately 610bn till 2010. The new mid-term plan from 2009-2010 is a shift in the companys strategies from the Business Reconstruction strategy to Path to Growth. Here, the company plans to make a record-scale capital investment of 360bn (US$3.6bn), 70% of which would be put into component business. This includes an investment of 125bn (US$1.2bn) for rechargeable battery business. The plan has been made keeping the goal of financial year 2010 in mind.
The companys focus on batteries for hybrid electric vehicles which include rechargeable lithium-ion batteries and nickel-metal hydride HEV battery sytems has bought them in collaboration with OEMs, such as Volkswagen. The company plans to invest 80bn (US$771.2mn) to develop a new plant for lithium-ion batteries for the HEV business by 2015. A new plant location considered by the company would be chosen according to the infrastructure that provides appropriate production logistics and human resources. The new initiative is in order to create a new customer base by fiscal year 2010. Think GAIA is the brand vision of the company used to accelerate development of next generation rechargeable batteries which would cater to HEV as well as plug-in hybrid electric vehicle (PHEV). The vision also contributes to the corporate social responsibility of the company as it talks about providing environmental friendly global energy solutions. Joint-ventures In January 2006, Sanyo and Volkswagen entered into an agreement to start codevelopment of the next generation of Ni-MH battery systems for hybrid electric vehicles. Investments In May 2009, Sanyo announced the plan to construct a new facility in its
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already existing Kasai Plant, Japan. The facility will be used to manufacture lithium-ion batteries for HEVs and help meet the growing demand for the same. In March 2009, Sanyo completed the construction of mass production line for lithium-ion batteries for HEV at its Tokushima plant (Japan). This production capacity would be able to supply batteries for 15,000 to 20,000 cars per year.
Divestments In December 2008, Sanyo agreed to the Panasonic Capital and Business Alliance agreement. Panasonic declared in March 2009 that it plans to sell bonds worth 400bn (US$4.1bn) to acquire Sanyo as the subsidiary. The total deal would be of 806.7bn (US$9.1bn). Panasonic requires approval from antitrust clearance from 11 countries where Sanyo is operational which would delay the acquisition till May 2009. Contracts In 2004, Sanyo entered into an agreement with Daimler to develop batteries for Mercedes gasoline hybrid cars. In 2004, Sanyo commenced supplies of Ni-MH for the 2005 Honda Accord hybrid model in the North American Market. Sanyo delivers over 20,000 batteries to Honda for this program annually. New Product Developments In the financial year 2009, Sanyos expenditure on research and development was 75.43bn (US$775.50m), an increase from 71.79bn (US$723.75m) in the previous year. In hybrids, the company is developing rechargeable batteries for hybrid electric vehicles and their control systems. The company would be supplying plug-in hybrid electric vehicles battery systems by 2011. Financial Overview Sanyos sales decreased 12.2% in the financial year ended 31 March 2009 to 1,770.7bn (US$18.20bn) compared with 2,017.8bn (US$20.3bn) in the preceding year. The company reported a 89.1% decrease in operating profit to 8.3bn (US$85.33m) in financial year ended 2009 compared with 76.1bn (US$767.2m) in the previous fiscal. It recorded a net loss of 93.22bn (US$958.40m) in 2009 compared with 28.7bn (US$289.3m) in the previous year. Component division sales decreased to 508.99bn (US$5.23bn) in fiscal year ended 31 March 2009 compared with 571.11bn (US$5.75bn) in the previous year. Overseas sales decreased 13.8% to 1,099.9bn (US$11.30bn). Sales decreased in Japan by 9.7% to 670.8bn (US$6.89bn) compared with 742.5bn (US$7.4bn) in the previous year. North America sales decreased 11.2% to 229.83bn (US$2.36bn) in 2009 compared with 258.86bn (US$2.60bn) in the previous year. Europe sales decreased 19.5% to 192.47bn (US$1.97bn) compared with 239.15bn (US$2.41bn) in the previous year. Asia reported decrease of 14.7% to 608.46bn (US$6.25bn) compared with 713.32bn (US$7.19bn) in previous fiscal year.
Year
Sales (bn)
Operating Income (bn)
Net income (bn)
R&D Expenditure (bn)
No. of Employees
2009 2008 2007 2006 2005
1,770.65 2,017.8 1,882.6 1 2,031.6 5 2,089.7 9 Sales (US$bn) 18.20 20.3 15.96
8.27 76.14 42.60 (35.90) 4.85 Operating Income (US$m) 85.33 767.2 361.30
(93.22) 28.70 (45.4) (205.7) (171.5) Net income (US$m) 958.40 289.3 385
75.43 71.79 90.09 94.26 114.15
86,016 99,875 94,906 106,389 96,023
Year
R&D Expenditur e (US$m) 775.50 723.75 764.08
No. of Employees 86,016 99875 94,906
2009 2008 2007
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2006 2005
17.28 19.43
(305.37) 45.11
(1,749.7) (1,595.0)
801.78 1061.66
106,389 96,023
Outlook Sanyo has set a long-term goal of securing 50% of the global market share for hybrid vehicle batteries by 2010. In the future, the company aims to capitalise on its technical know-how and to develop the next generation of Ni-MH batteries for new hybrid electric vehicles. The company has taken one step forward towards its contribution to the increasing demand for hybrid vehicle batteries. They have collaborated with Volkswagen once again to produce lithium-ion battery systems which would cater to 15,000 to 20,000 hybrid cars per year. The company also plans to supply plug-in hybrid electric vehicle (PHEV) batteries till 2011 as they sense a great demand of PHEV. This collaboration is not only expected to increase its product development capability but also provide access to the European market.
The Capital and Business agreement between Sanyo and Panasonic which is expected to be completed by May 2009 would be adding to the capital expenditure that the company is planning. Some new technology could be expected in the years to follow. The company will have to concentrate on its new-mid term plan as the forecasts for fiscal year 2008 show a substantial decrease in net sales. This is mainly due to the global crisis especially in US market. The decline can be observed from the fourth quarter of the year ending 31 March 2009.
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Sumitomo Wiring
Wire harnesses
Address Sumitomo Wiring Systems Ltd 1-14 Nishisuehiro-cho Yokkaichi, Mie, 510 8503 Japan Tel: +81 59 354 6200 Fax: +81 59 354 6318 Internet: http://www.sws.co.jp Senior Officers Fumikiyo Uchioke, President & CEO Mamoru Sato, Senior Managing Executive Officer Osamu Inoue, Senior Managing Executive Officer Masaoshi Fuse, Managing Executive Officer Hiromi Yabutani, Managing Executive Officer Hiroshi Yasuno, Managing Executive Officer Products Electronic and electrical distribution systems, wire harnesses Plants Bulgaria, China (18), Germany, Hong Kong, Hungary (3), India (3), Indonesia (2), Italy, Japan (15), Malaysia (2), Morocco (3), Philippines (5), Poland (5), Portugal, Romania, Slovakia (2), South Africa, South Korea, Taiwan, Thailand (3), Turkey, UK, Ukraine, US (10), Vietnam (4) Sales 511.96bn (US$4.32bn, 31 March 2007) (Year to 31.03.07) Unconsolidated: 3,480bn (US$35.78bn, 31 March 2009) Employees 106,244 (March 2009) Unconsolidated:3,993 (March 2009)
Sumitomo Wiring Systems is one of the leading suppliers of electric wires, cables and related products. In the automotive sector, its products include wiring harness and components such as connectors, junction blocks, exterior parts and engine cables.
In May 2007, the board of directors at Sumitomo Wiring Systems (SWS) and Sumitomo Electric Industries (SEI) agreed to merge their business through a stock swap. Now, SWS operates as a wholly-owned subsidiary of SEI. Sumitomo Wiring has global market presence with 120 subsidiaries. The company supplies to Ford, GM, Honda, Renault-Nissan and Toyota. Its customers for hybrid electronic and electrical distribution systems are Honda and Toyota. Recent Developments Corporate strategy Sumitomo Wiring is focused on a mid-term business plan called 12Vision for 2008-2012 period, whereby the company aims to achieve consolidated sales of 600bn and global market share of 25% by the end of the plan. In order to achieve this target, the company is focused on increasing its international presence and reducing production costs. In an effort to improve profitability, Sumitomo has expanded its manufacturing presence in low cost countries. The company has restructured its domestic production system and increased the proportion of products supplied to customers in Japan from low cost locations. The company has focused on maximising production in China, Vietnam, Thailand, amongst others. . In the hybrids segment, the company has developed high-voltage wiring harness for hybrid electric vehicle (HEV) applications and has developed supplier contracts with Honda and Toyota. The company is capitalising its expertise in the wiring harness domain to develop new wiring harnesses for hybrids. In the hybrids segment, the company has developed high-voltage wiring harness for hybrid electric vehicle (HEV) applications and has developed supplier contracts with Honda and Toyota. The company is capitalising its expertise in the wiring harness domain to develop new wiring harnesses for hybrids. Acquisitions In March 2006, Sumitomo Wiring and Sumitomo Electric acquired Volkswagen Bordnetze, a leading manufacturer of wiring harnesses in Germany. In 2004, Sumitomo Wiring acquired a stake in South Korean wiring harness manufacturer Kyungshin Industrial Co. Ltd. The company supplies wiring harness components to South Korean automotive companies. Joint-ventures In May 2008, Sumitomo Wiring Systems signed a technical assistance agreement with Pasdec Automotive Technologies, South Africas leading supplier of wiring harnesses to the automotive manufacturing industry. The technical assistance agreement will have a beneficial impact on a number of Nissan models including the Hardbody, Livinia, Acenta and Visia. In November 2006, Sumitomo Wiring and Suzuki entered into a joint-venture (JV) agreement to produce harness terminals used in automotive wiring harnesses. The JV company, S&S Components Co., Ltd., was capitalised at 80m (US$0.68m) with 51% funding from Suzuki and the remaining 49% from SWS. Investments In February 2008, Sumitomo Wiring announced its intention to establish a manufacturing subsidiary in Ha Nam (Vietnam) to increase production capacity of automotive wiring harnesses. The subsidiary was capitalised at US$1.7m, all funded by the parent company, SWS. The plant became operational in January 2009 and is expected to employ 2,500 by the end of
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2011. In May 2006, Sumitomo Wiring completed the construction of the SWS Headquarters Technical Centre at Yokkaichi (Japan) which was started in April 2005. This technical centre acts as a hub for global technological development activities. In January 2006, Sumitomo Electric and Sumitomo Wiring established an automobile wiring manufacturing plant in Hai Duong Province (Vietnam) to increase its production capacity in Asia. In November 2005, Sumitomo Wiring established a logistics subsidiary in Hizhou City (China), to strengthen its logistics support systems and to expand in China. In September 2005, Sumitomo Wiring established automobile wiring harness development centres in Bangkok (Thailand) and Shanghai (China).
Contracts In November 2005, Sumitomo Wiring started supplying high-voltage AC wiring to the Honda Civic Hybrid. The wiring harness connects the inverter with the motor in engine compartment. Sumitomo Wiring developed this wiring harness with Auto Network Ltd. In 2005, Sumitomo Wiring won a contract to supply high voltage wiring harness for traction and power generation motors for the Toyota Prius model. New Product Developments: In the financial year ended on 31 March 2007, the company spent 21.2bn (US$179.80m, 31 March 2007) on its research and development activities compared with 21.01bn (US$178.71m, 31 March 2006) in the preceding year. Sumitomo Wiring, along with Auto Networks Ltd, has developed a new electromagnetic shielding construction and compact connector for highvoltage wiring harnesses used in HEV applications. The new wiring harness uses aluminium pipe armouring that functions both as shield and protector for three cables in a bundle. Sumitomo Wiring has developed a compact 9.5 level type connector for the new wiring harness, which is used in the Honda Civic Hybrid. Use of this connector improves work efficiency at the automakers assembly line and makes the service and maintenance of vehicle easier.
Financial Overview: In the financial year ended 31 March 2007, Sumitomo Wiring reported a 15.9% increase in net sales to 511.96bn (US$4.32bn) compared with 441.5bn (US$3.75bn) in preceding fiscal. Net profit grew 35.7% from 8.12bn (US$69.07m) in 2006 to 11.02bn (US$93.46m) in 2007. The company reported a 63% increase in operating income to 15.87bn (US$134.60m) from 9.73bn (US$82.76m). Unconsolidated sales for the year ended 31 March 2009 were 3,480bn (US$35.78bn, 31 March 2009) compared with 4,285bn (US$43.19bn, 31 March 2008) in 2008. In May 2007, Sumitomo Wiring became wholly-owned subsidiary of Sumitomo Electric Industries. The company is not obliged to publish its financial information. Year 2007 2006 2005 2004 2003 Year 2007 2006 2005 2004 2003 Sales (bn) 511.96 441.49 372.83 345.59 308.63 Sales (US$bn) 4.32 3.75 3.47 3.27 2.57 Operating Income (bn) 15.87 9.73 10.06 6.96 5.07 Operating Income (US$m) 134.60 82.76 93.56 65.90 42.31 Net Income (bn) 11.02 8.12 9.06 8.92 3.79 Net Income (US$m) 93.46 69.07 84.26 84.46 31.63 R&D Expenditure (bn) 21.20 21.01 17.85 14.67 R&D Expenditure (US$m) 179.80 178.71 166.02 138.91 -
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Outlook Automotive wiring harness business has been growing over the past few years as electronics content per vehicle continues to increase across the world. Following the global trend, Sumitomo Wiring has also experienced growth in sales during the period. The companys merger with Sumitomo Electric is expected to further consolidate its worldwide presence and improve its competitiveness. Global demand for HEVs is projected to grow 20% per year through 2010. Growth is expected to be driven by increasing fuel prices and emissions regulations. This would also fuel demand for high-voltage wiring harness used on these HEVs. The companys strength in the wiring market positions it well to record higher growth in the hybrids business in coming years.
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TDK
Hybrid Systems
Address TDK Corporation 1-13-1, Nihonbashi, Chuo-ku Tokyo 103-8272 Japan Tel: +81 5201 7102 Fax: +81 5201 7114 Internet: http://www.tdk.co.jp Senior Officers Hajime Sawabe, Chairman & CEO Takehiro Kamigama, President & COO Shinji Yoko, Senior Vice-President Takeshi Nomura, Senior Vice-President Takaya Ishigaki, Senior Vice-President, General Manager, Capacitors Business Group Minoru Takahashi, Senior Vice-President Seiji Enami, Director Raymond Leung, Senior Vice-President Shiro Nomi, Senior Vice-President Shinichi Araya, Senior Vice-President Takeo Suzuki Senior Vice-President Products Ceramic capacitors, DC/DC Converters, Plants Group: Germany, Hungary, Japan (11), Korea (4), Taiwan (4), US (5) Capacitors: Japan (3) Sales Group: 727.4bn (US$7.47bn, 31 March, 2009) (Year to 31.03.09) Employees Group: 66,429 (31.03.2009) TDK has also been expanding its overseas production. The companys overseas sales now account for more than 80% of the net sales. The company considers capacitors as one of the earning drivers in electronics material segment. The demand for the same was high this fiscal year which the company was unable to meet. The company is developing DC-DC converters for electric vehicles and highly durable heat-resistant multilayer ceramic chip capacitors. In the past the company developed high efficiency DC-DC converters for hybrid electric cars, which help in reducing power loss. Acquisitions In October 2008, TDK acquired Germany based EPCOS AG as a subsidary. The company owns 94.35% shares of EPCOS. After the Annual General Meeting in June 2009, TDK will be merging its component business with EPCOS under a new company name TDK EP Components KK. In July 2005, TDK signed an agreement to acquire Invensys Plcs Lambda Power division, for 26bn (US$231.2m) which develops power supplies such as inverters and converters. The Lambda Power consists of Lambda US, Lambda Europe, Densei-Lambda KK and conducts business in 13 countries around the world. Contract In November 2005, TDK Corporation enetered into a contract with Honda to supply DC/DC converter for the civic hybrid model. New Product Developments: In 2009, R&D expenditures rose 0.4% year- on- year to 57.6bn (US$592.6m), 7.9% of net sales. In fiscal 2010, the company plans to invest 53bn on R&D. In the area of hybrids the company is focusing its R&D activities to develop converters & inverters for hybrid electric cars.
TDK Corporation is a leading manufacturer of electronic components, which includes electronic media, ferrite products, recording devices, hard disk drives and other components. In the hybrid electric vehicle segment, the company provides capacitors for battery control units.
TDK organises its business into four segments: Electronic Materials (capacitors), Ferrite Cores and Magnets (20% of 2009 sales) Electronic Devices (inductive devices), DC-AC inverters, DC-DC converters and other high frequency components (22.8%) Recording device manufacturing (HDD) (34%) Other electronic component segment (electroluminescent (EL) displays and equipment) (23.2%) In 2009, overseas sales accounted for 84% of consolidated net sales compared with 82.4% in the previous fiscal year. In 2009, TDK had 16% of total sales from Japan, 10.9% from Americas, 9.9% from Europe and 63.2% from Asia & Others. Recent Developments Corporate strategy The company is concentrating mainly on the electronics materials and components sector. TDK has made an acquisition in this segment, EPCOS AG will be operating as TDKs subsidiary and the existing components business of TDK will be diverted to the new subsidiary. This will make its electronic materials and components business strong in the market. Earlier, TDK made two acquisitions in this segment, Amperex Technology Limited (polymer lithium batteries) and Lambda Power Division (power supply business) to strengthen its position in the hybrids and electronics market.
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In August 2008, TDK Corporation planned to construct a large scale anechoic chamber at its Technical Centre in Ichikawa City (Japan), Chiba Perfecture. It is scheduled to complete in October 2009. The facility will consist of a 10metre room, a three-metre room, an antenna room and a shielded room. In conjunction to existing facilities, TDK will be able to perform electromagnetic wave measurements of all products that it handles as well as measurements tailored to customer requirements. In January 2008, TDK Corporation began mass production of the industrys first automotive clamp filter, the ZCAT08V-BK, ZCAT12V-BK. In March 2006, TDK and Densei-Lamda KK launched a unified brand called TDK-Lamda for power supply products. The brand covers AC-DC switching power supplies, DC-DC converters, DC-AC inverters and power module.
Financial Overview TDK posted consolidated net sales of 727.4bn (US$7.47bn, 31 March 2009), down 16% from 866.2bn (US$8.73bn, 31 March 2008). Operating income fell from 87.1bn (US$878.1m) to operating loss of 54.3bn (US$558.2m). TDK faced net loss of 63.1bn (US$648.7m) compared to net income of 71.4bn (US$719.8m) in 2008. The downturn in automotive electronics market was due to the impact of higher oil prices, which affected the auto market in the first half and a large drop-off in demand in the auto market due to the global recession in the second half of fiscal 2009. During second half of fiscal 2009, prompt production cuts were initiated. TDKs net sales are made up of four product sectors electronic materials, electronic devices, recording devices and others. All the business segments of TDK faced slump in sales. Electronic materials sector dropped 27.5% to 145.1bn (US$1.49bn) from 200.1bn (US$2.01bn). The reason is the lower sales of multilayer ceramic chip capacitors which are used in car electronics amongst others. In a similar fashion, Electronic devices and recording devices faced decline in sales by 20.5% and 26.1% to 166.1bn (US$1.7bn) and 209bn (US$2.14bn) from the previous fiscal years sales. Others sector includes all TDK products which are not included in the above three sectors. This sectors sales increased 38% from 122.3bn (US$1.23bn) to 168.8bn (US$1.73bn). This included the net sales of the EPCOS Group of 67.9bn (US$698m). Geographically, overall sales declined in Japan, America and Asia except Europe where sales increased due to the recording devices and others sectors. Japan observed a drop in sales by 27.4% to 283.2bn (US$2.91bn) from 390.3bn (US$3.93bn) in 2008. In America, sales were down by 17.7% from 103.2bn (US$1.04bn) to 84.9bn (US$872.8m). Similarly in Asia, sales declined by 15.4% to 583.5bn (US$5.9bn). However, Europe observed a whopping increase in sales by 75% to 95.1bn (US$977.7m) from 54.4bn (US$548.4m). For fiscal year 2010, TDK has forecasted 1.3% rises in sales to 717.8bn from 727.4bn (US$7.47). The operating income forecasted at 13.5bn compared to the operating loss of 54.3bn (US$558.2m). TDK forecasted net income for fiscal year 2010 to be 5.2bn compared to the net loss of 63.1bn (US$648.7m) in 2009. The company has prepared its sales plans for electronic materials and electronic devices assuming lower year-on-year demand for key finished products such as PCs, mobile phones and automobiles. Year Sales (bn) 727.4 866.28 862.02 795.18 657.85 Sales (US$bn) 7.47 8.73 7.31 6.76 6.11 Operating Income (bn) (54.3) 87.17 79.59 60.52 59.83 Operating Income (US$m) (558.2) 878.8 675.0 514.4 556.4 Net Income (bn) (63.1) 71.46 70.12 44.10 33.30 Net Income (US$m) (648.7) 720.4 594.7 374.8 309.7 R&D Expenditure (bn) 57.64 57.38 50.1 45.52 36.34 R&D Expenditure (US$m) 592.6 578.4 424.9 386.9 338 No. of Employees 66,429 60,212 51,614 53,923 37,115 No. of Employees 66,429 60,212 51,614 53,923 37,115
2009 2008 2007 2006 2005 Year
2009 2008 2007 2006 2005
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Outlook TDK has been improving its profitability every year since 2003. The company is striving to consolidate its position in the market. TDKs capacitor sales remained flat this fiscal year, but both the new plant commencing production from March 2009 and the new acquisition of EPCOS AG will help the company to increase the profitability in the electronics material and component segment. The company has a unique position in the hybrid electric vehicle market supplying electric inverters and converters. But for growth, the company needs to increase its customer base to include major OEMs Overall sales did not increase significantly but the amount of investments the company has made to strengthen its core electronic component business might prove to be profitable for the next financial year. The increasing demand for capacitors as the hybrid market is increasing will add on to the existing 94.4% share of the net sales for electronics materials and component business.
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Toyota Industries
Power electronic devices
Address Toyota Industries Corporation 2-1 Toyota-cho, Kariya-shi Aichi-ken 448 8671 Japan Tel: +81 566 222511 Fax: +81 566 275650 Internet: http://www.toyotaindustries.com Senior Officers Tadashi Ishikawa, Chairman Tetsuro Toyoda, President Akira Imura, Executive Vice-President Norio Sato, Executive Vice-President Tatsuo Matsuura, Executive VicePresident Masafumi Kato, Senior Managing Director Toshiyuki Sekimori, Senior Managing Director Shigetaka Yoshida, Senior Managing Director Yasuharu Toyoda, Senior Managing Director Yutaka Murodono, Senior Managing Director Kazunori Yoshida, Senior Managing Director Kosaku Yamada, Senior Managing Director Kimpei Mitsuya, Senior Managing Director Hiroshi Sakai, Senior Managing Director Plants Automotive: China (4), Germany, India, Japan (6), US (4) Products Batteries, DC-DC converters, DC-AC inverters, electric motors, power control units Sales Group: 1584.25bn (US$16.28bn, 31 March 2009) (Year to 31.03.09) Automotive: 755.9bn (US$7.77bn, 31 March 2009) (Year to 31.03.09) Employees 39,916 (March 2009)
Toyota Industries is a leading supplier of automotive components, including hybrid vehicle components. In 2009, the automotive segment generated 47.7% of the total sales.
The companys operations include five major divisions: Automobile (generated 47.7% of 2009 net sales), Materials Handling Equipment (39.1%), Logistics (5.9%), Textile Machinery (3.3%) and Others (3.2%). The Automobile segment is further divided into four divisions: Vehicle division Vitz (Yaris outside Japan), Mark X Zio and RAV4 Engine division Diesel & gasoline engines Compressor division Air-conditioning compressors for conventional vehicles and hybrid vehicles as well Electronics division Automobile-related electronic components and devices, such as DC-DC converters for hybrid vehicles and vehicle-mounted AC inverters In the financial year 2009, Toyota Industries generated 69% of total sales from Japan, 12% from North America, 16.44% from Europe and 3.41% from rest of the world. Toyota Industries largest customer is Toyota Motors which accounts for most of its hybrid component sales. Recent Developments Corporate strategy Toyota Industries is focusing on the development of new products and technologies to meet the requirements for hybrid vehicles. Toyota Motors is one of the important OEMs for the company in the hybrids market. The company is focusing on the development and manufacturing in the car electronics business segment as it caters to the hybrid vehicle market which is expected to grow even in the present situation of global downturn. Along with this the company plans to supply lithium-ion battery packs for plug-in cars to other OEMs like GM, Nissan and Ford. These battery packs developed by the Toyota and Panasonic joint-venture, Panasonic EV Energy Co, were supplied exclusively for the Toyota cars, but as the economic slowdown hit the automotive industry the company is in search of additional opportunities by which selling to competitors seems to be a viable decision. Investments In September 2008, Toyota announced that it will start production of batteries for its hybrid vehicles in North America. The OEM, to date, produces batteries for hybrids in Japan. Toyota will start production of its hybrid vehicle, Prius, at Mississippi (US) in 2010. Through a manufacturing presence in the North American market, Toyota is aiming to reduce its production costs and at the same time improve its profitability. In May 2008, Toyota announced its plans to build two new plants and expand an existing facility along with its JV partner Matsushita Electric. Toyota will spend 70bn (US$677.46m) on the capacity expansion. The company will establish a new facility in Shizuoka (Japan) to produce the next generation lithium-ion batteries, while the second facility will come up in northern Japan to make nickel metal hydride (NiMH) batteries. The company will also expand its existing facilities in Shizuoka that produces NiMH batteries. In November 2006, Toyota Industries subsidiary, Panasonic EV Energy Ltd, started the construction of a new factory in Kosai (Japan). The facility started operations in March 2007. Panasonic EV Energy supplies nickel metal hydride batteries and lithium ion batteries for hybrid electric vehicles (HEVs) and pure electric vehicles. Panasonic EV Energy in turn has an agreement with Cobasys Corporation for battery technology information. New Product Developments In 2009 Toyota Industries spent 23.61bn (US$242.74m, 31 March 2009) on research and development activities. Toyota Industries has developed DC-DC converters for Prius and Camry
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hybrid models for Toyota. The DC-DC converter converts high voltage DC current from the main battery to a lower voltage to recharge the auxiliary battery and supply power to the lights, wipers and horn. Toyota Industries has developed a compact, low cost DC-DC converter for electric power steering (EPS) systems for hybrid cars which are installed in Toyota Harrier Hybrid (RX 400h) and Kluger Hybrid (Highlander Hybrid) models. In 2006, Panasonic EV Energy launched prismatic nickel metal hydride (NiMH) batteries for the Toyota Camry hybrid, Lexus GS450h and Hino Dutro hybrid models. In September 2005, Panasonic EV Energy launched a Ni-MH battery pack system for Hyundai/ Kia MC/JB hybrid and for Daihatsu HIJET Cargo hybrid vehicles. In March 2005, Panasonic EV Energy developed Ni-MH battery system for Toyota Rx400h and Toyota Highlander Hybrid models. At CeMAT 2005, an international trade fair for intra logistics held in Hanover, Germany, Toyota Industries exhibited the Toyota FCHV-F lift truck, which incorporates fuel-cell hybrid system. The truck was jointly developed by Toyota Industries and Toyota Motor Corporation.
Financial Overview For the financial year ended 31 March 2009, Toyota Industries sales decreased by 21% to 1584.25bn (US$16.28bn,) compared with 2,000.53bn (US$20.16bn, 31 March 2007) in the previous year. The company recorded operating loss of 6.62bn (US$68.06m) compared to operating income of 96.85bn (US$976.40m) in the previous year. Toyota Industries recorded extraordinary losses arising from losses on impairment of property, plant and equipment due to a decrease in production volume as well as from losses of discontinuing production electronics parts. This led to a net loss of 32.7bn (US$336.19m) in 2009 compared to 80.46bn (US$811.16m) in the previous year The Automobile segments sales decreased by 22% to 755.9bn (US$7.77bn) compared with 969.2bn (US$9.77bn) in the previous year. Vehicle business decreased 24% to 378.1bn (US$3.88bn) as the unit sales of Vitz (Yaris Overseas), RAV4 and Mark X Zio decrease. Engine business decreased 12% to 156.6bn (US$1.61bn) as the unit sales of AD diesel engines installed in RAV4 declined. Car air-conditioning compressor business decreased 26% to 186.3bn (US$1.91bn) due to decrease in production volume by automakers in North America, Europe and Japan. The companys forecast for the second quarter ended 30 September 2009 has been revised. The companys projected net sales amounts to 620bn, operating loss might increase to 15bn. Net loss is projected to amount to 9.5bn. The companys forecast for fiscal year 2010 might amount to decrease in net sales to 1,300bn. Operating loss might increase to 10bn and net loss might decrease to 10bn. Year Sales (bn) 1,584.25 2,000.53 1,878.4 1,505.95 1,241.54 Sales (US$bn) 16.28 20.16 15.93 12.80 11.54 Operating Income (bn) (6.62) 96.85 89.9 64.04 53.12 Operating Income (US$m) (68.06) 976.40 762.4 544.7 494.05 Net Income (bn) (32.76) 80.46 59.4 47.07 43.35 Net Income (US$m) (336.81) 811.16 503.7 400.3 403.1 R&D Expenditure (bn) 23.61 22.36 34.54 31.12 30.05 R&D Expenditure (US$m) 242.74 225.42 292.9 264.7 279.4 No. of Employees 39,916 39,528 36,096 32,977 30,990 No. of Employees 39,916 39,528 36,096 32,977 30,990
2009 2008 2007 2006 2005 Year
2009 2008 2007 2006 2005
Outlook Toyota Industries is optimistic about the hybrid markets, as the demand for HEVs is increasing globally. The association with Toyota Motor is expected to be beneficial for the company. Toyota Motor commands more than 50% of the global hybrid market, and this figure is expected to grow further in the mediumterm. Considering the strong relationship between Toyota Industries and Toyota
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Motor, the future is likely to be strong for Toyota Industries. The companys decision to open new plants in America and expand its facility in Japan is a step forward into the hybrid market. The company will also benefit by supplying its battery packs to other OEMs. This will increase its market share and bring it closer to achieving its targets and market share. By 2010, the company expects to see itself as leading manufacturer of power electronics devices and systems for hybrid vehicle. The company has consistently developed innovative technologies for the hybrid markets and continues to do so. Toyota Industries has already established itself as a leading supplier of hybrid components. Its efforts to now produce key hybrid components apart from auxiliary components should enable it to expand its market share globally.
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UQM
Electric Power Systems
Address UQM Technologies, Inc. 7501 Miller Drive, PO Box 439 Frederick, Colorado 80530 USA Tel: +303 278 2002 Fax: +303 278 7007 Internet: http://www.uqm.com Senior Officers William G Rankin, President & CEO Donald A. French, CFO Ronald M Burton, Senior Vice-President, Operations Jon Lutz, Vice-President, Technology Products Control systems, converters, electric motors/generators, inverters Plants USA Sales US$8.72bn (Year to 31.03.09) Employees Full-time 59 (2009) UQM has developed propulsion systems for hybrids ranging from power levels of 0.5kilowatt to 120kilowatt which are suitable for passenger cars, large trucks and military vehicles. The company is also working with customers in the bus and truck market to develop hybrid propulsion system. Divestments In February 2004, UQM announced that it has completed the sale of its 38.3% interest in Taiwan UQM Electric Co Ltd to a private investor for US$0.4m. Joint-ventures In February 2007, UQM formed a strategic alliance with Altair Nanotechnologies Inc., a supplier of advanced novel and ceramic nanomaterial, to jointly develop technologies in advanced transportation and other high potential markets. The alliance pairs UQMs electric motor, power generator and power electronic products with Altairnanos NanoSafe battery packs. Contracts Golden, C.O. based Proterra LLC, with funding from the Federal Transit Administrations National Fuel Cell Bus Program, is using a UQM 150 kW permanent magnet propulsion motor to power a fuel cell hybrid electric bus. The 150 kW system was specifically designed to meet the higher power requirements of larger vehicles, such as this bus. There are two buses that have been powered by UQMs PowerPhase propulsion systems. In February 2009, EcoRide BE35 battery-electric transit bus was showcased in a four city California clean bus tour starting from San Jose, California (US). In May 2009, FCBE 35 transit bus was tested by Pennsylvania Transportation Institute at Pennsylvania State University to measure its fuel economy equivalency which resulted in to 20 miles per gallon. In December 2007, UQM announced a contract with Flint Michigan Mass Transportation Authority for a hybrid bus development project. The company will supply 150 kW propulsion system for the project. In July 2007, UQM
UQM Technologies manufactures electric motors, generators and power electronic controllers. The company is also active in developing electric power systems for battery management, hybrid electric and fuel-cell electric vehicles.
UQM operates in two business segments: Technology (76% of 2009 net sales) and Power Products (24%). The Technology segment does core research for the development of companys technologies, applications, software and product engineering while the Power Products segment manufactures magnet motors and electronic controllers. The company supplies its products mainly to the commercial vehicle industry with a number of truck and bus builders as its customers. Recent Developments Corporate strategy The company is focusing on commercialisation of its various hybrid technologies in both existing and emerging segments for electrically powered propulsion systems and auxiliary systems for hybrid vehicles. The company is trying to make its presence in all the hybrid vehicle market, be it the electrical vehicles or hybrid transit buses. The company has a constant watch on the hybrid vehicle market and analyses the performance and growth of the market. Currently, the company is involved in vehicle electrification programs in order to replace internal combustion engines (ICE) with full electric propulsion such as in a battery or fuel cell powered vehicle. This includes development of technologies in the area of parallel hybrids, series hybrids and plug-in hybrids.
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announced that its 150 kW propulsion system will be used in fuel cell hybrid electric bus under development by Mobile Energy Solutions, LLC. In May 2007, UQM won a contract from Denver Regional Transportation District for 35 kW UQM generators and two UQM power electronic motor controllers to be fitted in hybrid electric mall shuttle buses to control the operation of the electric propulsion motors already installed in each bus. In October 2006, UQM announced that it had received a follow-on production order worth US$3m for the supply of vehicle electric auxiliary motors. The new order is in addition to the previously announced orders for 30,000 motors. The name of customer was not disclosed. In August 2006, received a contract from Chitron Inc, to supply UQM propulsion systems which will be used by Chitron in its advanced vehicle development program, to develop a hybrid electric bus in China. In July 2006, UQM announced that it has received an order from Phoenix Motorcars, Inc for UQM PowerPhase 100 propulsion system for a freewayspeed all-electric pickup truck program. In June 2006, UQM received a production order worth US$1.9m for electronic auxiliary products for hybrid electric vehicles. The name of the customer was not disclosed. In March 2006, UQM announced that it had received a contract from General Dynamics Corporation, to supply motors and electronic controllers, to be used in the hybrid electric reconnaissance, surveillance and targeting vehicle (RSTV). In September 2005, UQM received an order for additional UQM permanent magnet generators from DRS Technologies Inc, for use in technology demonstration hybrid electric High Mobility Multipurpose Wheeled Vehicles (HMMWVs). In August 2005, UQM announced that it had been awarded a contract by UT-Battelle, LLC to develop advanced traction motor for the US Department of Energys (DOE) Freedom CAR and Vehicle Technologies Program. In August 2005, UQM received an order from Regional Transportation District (Denver RTD) for UQM generators and motor controllers to retrofit seven hybrid electric mall shuttle buses. In July 2005, UQM won an order for permanent magnet motor and control systems from Eaton Corporation for integration into Eatons hybrid electric propulsion systems for trucks and other heavy duty vehicles.
New Product Developments In 2009, UQM spent US$593,209 on research and development activities compared with US$461,791 in the previous year. In April 2009, UQM announced release of a new motor/generator system for use in electric propulsion applications. The new PowerPhase 145 system extends the peak power available in the companys smaller 280 mm diameter frame size from 125 kW to 145 kW, has a continuous power rating of 85 kW, delivers peak torque of 400 N-m and weighs only 50 kg. It was developed for high performance passenger automobiles and has proved to be an ideal generator for hybrid electric and plug-in hybrid electric vehicles In June 2007, UQM introduced 150 kW propulsion system suitable for high performance automotive applications and heavy-duty commercial and military vehicles. UQM has developed a technology for electrification of the engine driven auxiliaries such as engine belts, pulleys, alternators and gears. The company has developed a UQM generator and has also introduced power generators for hybrid vehicles. The company has introduced higher power parallel hybrids which incorporate regenerative braking, automatic engine shutdown and electronic propulsion. The company is developing series hybrids with greater propulsion from electrical power when compared to parallel hybrids. A series hybrid vehicle has battery charging capacity to be self sustaining, which in turn eliminates the need to plug the vehicle to an electric power grid.
Financial Overview For the financial year ended 31 March 2009, the groups consolidated net sales increased by 16% to US$8.72m compared with US$7.5m in the previous year. The positive result was due to the increase in product sales. Net loss decreased to US$4.4m compared with US$4.58m in the previous year. The decrease in net loss was mainly due to higher levels of product sales revenue, expanded gross profit margins on product sales, and lower selling, general and administrative expenses.
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In the same period, Technology segments sales increased 52.2% to US$2.73m compared with US$1.79m in the previous year. This was due to increased shipments of low volume propulsion systems, while the sales of Power Products segment increased 5% to US$3.27m compared with US$3.11m in the previous year. This was mainly due to increased shipments of DC-to-DC converters and electric propulsion systems. Year Sales (US$m) Income from continuing operations (US$m) (4.57) (3.4) (2.8) (1.8) Net Income (US$m) (4.40) (4.58) (3.43) (2.78) (1.86) R&D Expenditure (US$ ) 593,209 461,791 321,160 241,563 171,918 No. of Employee s 59 54 53 47 39
2009 2008 2007 2006 2005
8.72 7.50 6.65 4.32 4.76
Outlook UQMs future growth is dependent on advancement and commercialisation of its technology. The company is expected to gain from the hybrid markets, in the face of rising prices of fossil fuels and stringent regulations to lower vehicle emissions. The company is also positive about the growth prospects for DC-to-DC converters since nearly all electric and hybrid electric vehicles need one or more DC-to-DC converters. The companys electric propulsion systems are gradually picking up pace in the hybrid markets. They have a number of contracts in their hand for their PowerPhase propulsion systems especially for hybrid buses and trucks. The company is slowly penetrating into various niche markets such as trucks, offroad-vehicles, military vehicles, aircraft, aerospace, boat and marine markets.
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Visteon
Interiors, climate, electronic and lighting products
Address Visteon Corporation One Village Centre Drive Van Buren Township Michigan 48111 USA Tel: +1 800 847 8366 Fax: +313 755 7983 Internet: http://www.visteon.com Senior Officers Donald J Stebbins, Chairman & CEO, President & COO William G Quigley, Executive VicePresident, CFO John Donofrio, Senior Vice-President Joy M. Greenway, Vice-President, Climate Product Group Michael J. Widgren, Vice President, Corporate Controller & Chief Accounting Officer Products Battery management modules, alternators, starters, hybrid powertrain cooling systems Plants Argentina (2), Belgium, Brazil (2), Canada, China (24), Czech Republic (4), France (8), Germany (3), Hungary, India (5), Ireland, Japan, Korea (6), Mexico (10), Poland, Portugal (3), Slovakia (2), South Africa, Spain (6), Thailand (3), Turkey, UK (6), US (20) Sales Group: US$9.5bn (Year to 31.12.08) Employees Group: 31,000 (2008)
Visteon is one of the worlds largest automotive component suppliers, including hybrid powertrain cooling systems. The company serves both OEMs and automotive aftermarket.
Visteons business is categorised into the following four divisions: Climate (30% of 2008 sales): manufactures air handling modules, powertrain cooling modules for hybrid and conventional vehicles, heat exchangers, compressors, fluid transport and engine induction systems. Electronics (32.6%): produces audio systems and components, infotainment, driver information, powertrain controls and lighting. Interiors (27.6%): develops instrument panels, cockpit modules, door trim and floor consoles. Others (5.1%): supplies fuel products, chassis products, powertrain products, alternators, starters and products for the automotive aftermarket. Services (4.7%): provides various transition services in support of divestiture transactions, mainly related to the ACH transactions and Chassis divestiture.
In 2008, the company achieved 24% of the consolidated sales from North America, 41% from Europe, 30% from Asia and the remaining 5% from South America. With corporate offices in Van Buren Township, Michigan (US), Shanghai (China) and Basildon (UK), the company employs about 33,500 people. In May 2008, Visteon, along with some of its US units, filed for Chapter 11 protection with the Bankruptcy Court for the district of Delaware. The companys UK unit, Visteon UK Ltd, had filed separately for bankruptcy protection in April 2009 resulting in the closure of three plants. The companys major customers include BMW, Ford, GM, Honda, Hyundai, Mazda, Nissan, Peugeot, Renault, Toyota and Volkswagen. Ford is one of the largest customers of the company for hybrid products. Product sales to customers other than Ford were 66% of total product sales for the year ended 31 December 2008. Recent Developments Corporate strategy Visteons current strategy is primarily focused on lowering manufacturing costs and restructuring its business by identifying under-performing and non-strategic businesses to improve profitability. In 2006, Visteon started a multi-year improvement plan to restructure its business, which was later modified in 2007. Earlier, the company had announced a list of 23 facilities which were to undergo restructuring. In 2007, Visteon increased the number of these facilities to 30. The multi-year improvement plan was completed during 2008 and addressed a total of 30 facilities and businesses, including seven divestitures and 14 closures. With growing popularity of hybrid vehicles, Visteon intends to expand its presence in this sector. The company has a strong presence in hybrid powertrain cooling systems. Visteon is currently developing future applications for supporting hybrid vehicles and is also working with various OEMs to develop a modular compressor, which can be easily adapted to mild and full-hybrid applications. Visteon, along with some of its US units, sought the Chapter 11 protection in May 2008. The companys UK unit had filed separately for bankruptcy protection in April 2009. After being spun off from Ford, Visteon found it hard to maintain a strong grip as an independent company in the market, and has found itself having to deal with mounting debt. Ford remained one of the company's key OEMs, which acted as a backbone for Visteon. The company managed to carry on under the 2005 bailout agreement. The agreement incorporated Ford utilising most of Visteons North American factories as well as hourly employees represented by the United Auto Workers (UAW). Since then, Ford has tried to sell off the properties, whereas Visteon tried to secure customers to replace its losses. The company tried to return to profitability but failed in doing so and added additional debt into its account.
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In March 2009, Visteon managed to avoid bankruptcy by making a US$16m interest payment. The interest payment was made for bonds worth about US$450m, which mature in 2014. In May 2009, Ford provided financial assistance in the form of a revolving line of a credit from its lenders, worth US$163m. In line with the agreement, Visteon was required to maintain at least US$264m in cash or cash equivalents. However, this was not sufficient for the supplier in the wake of the ongoing credit crunch. Joint-ventures In August 2005, Visteon formed a partnership with Chinese automaker, ChangAn. The joint-venture (JV), Chongquing ChangAn Visteon Engine Control Systems develops engine management system and manufactures electronic control units, air-induction systems, intake manifolds and various powertrain components. In June 2005, Visteon formed two 50:50 JV with Tata AutoComp Systems (TACO) of India. Taco Visteon Automotive Products (TVAP) manufactures lighting systems, powertrain components and air induction systems, while Taco Visteon Engineering (TVEC) provides Computer Aided Design (CAD), Computer Aided Engineering (CAE) and other engineering services for Visteon's global operations. The two ventures were started with an investment worth US$12.5m. In August 2004, Visteon announced an 80:20 JV with Halla Climate Control Dalian Company to build a compressor factory in Dalian (China) with an investment of US$80m. The facility started operations in May 2006. Investments In March 2009, Halla Climate Control, a subsidiary of Visteon that manufactures automotive climate control systems and components, opened a testing laboratory in Shanghai. With this new facility, Visteon and HCC offer automakers full components testing capability in China, helping reduce product development cycle time. The lab is adjacent to Visteons China Technical Center. The 400m2 laboratory has four major pieces of advanced testing equipment. It include two air flow test stands one for heating, ventilation and air-conditioning and one for cooling modules; one sound room for noise vibration and harshness tests; and testing equipment for evaporator, heater, and airflow development (EHAD). In October 2008, Visteon Climate Control (Nanchang) Co., Ltd (VCCN), a JV between Visteon and Jiangling Motors Company Ltd. (JMC), announced plans to expand its Nanchang (China) plant to accommodate the growing needs of locally based vehicle manufacturers. The collaboration manufactures climate control systems components such as automotive fluid transport and airconditioning assemblies. The plant expansion allows VCCN to double its yearly production capacity and better service customers such as JMC, ChangAn Ford, Geely, Dongfeng Nissan and Beijing Benz Daimler Chrysler (BBDC). In October 2008, Visteon opened an office in St. Petersburg (Russia) in an effort to expand its services to its customers operating in the Russian market. Key priorities for the office are to provide Visteons customers with a local interface to Visteons global engineering and manufacturing resources, and to be a centre for new business development activities. Visteon is also in the process of building a manufacturing facility in the Kaluga region in Russia, scheduled to start production in 2010. In February 2007, Visteon invested HUF1bn (US$5.1m) in expanding its production and technological base in Szekesfehervar (Hungary). Visteon Hungary produces instrument panels, fuel injection systems and compressors for climate control systems. The company also has an R&D centre in Hungary. In March 2006, Visteon started production at its facility in Gebze, Kocaeli province (Turkey). The plant produces automotive climate control components and systems and is operated by Visteons affiliate Halla Climate Control Corporation (HCC). In August 2004, Visteon announced the opening of a new automotive technical centre and office facility in Chihuahua (Mexico). The 5,000 m2 facility designs vehicle components and also carries out administrative operations in the region. In July 2004, Visteon opened a technical centre with an investment of US$1.5m for developing climate control and engine cooling components located at its Czech subsidiary Autopal in Novy Jicin (Czech Republic). In August 2004, Visteon opened an air-conditioning and engine cooling modules manufacturing plant, Visteon Climate Control (Beijing) Co. Ltd in Beijing (China), with an investment of US$29.8m. This facility strengthens
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Visteon's position in China as a climate control supplier. Visteon owns 80% of the facility and Beijing Automotive Industry Holding Corporation (BAIC) owns the remaining 20%. Divestments In December 2007, Visteon closed its facility in Connersville, Indiana (US). The Connersville facility produced automotive heating and cooling systems. In September 2007, Visteon completed the sale of Visteon Powertrain Control Systems India (VPCSI) to Adyar River Ltd. The agreement includes VPCSI operations in Chennai (India) which produces starters and alternators for global car makers. This divestment was part of the companys restructuring operations to focus on its key products and core technologies. Contracts In June 2004, Visteon entered into a contract with Ford, to supply components and systems for the Escape Hybrid, the first hybrid-electric vehicle introduced by Ford. Visteon currently supplies navigation systems to the Ford Escape Hybrid. New Product Developments During 2008 Visteon spent US$434m on its research and development (R&D) activities compared with US$510m in the previous year. Some of its recent developments are as follows: In November 2008, Visteon developed an internal heat exchanger (IHX) that increases cooling power in a vehicle up to 14%. It uses coaxial tube design integrated in the refrigerant circuit for enhanced automotive air-conditioning system performance and efficiency. The new internal heat exchanger, which replaces a part of the suction and liquid refrigerant lines in a traditional R134a system, exchanges energy in a counter-flow arrangement. In October 2008, Visteon supplied its electrically driven air-conditioning compressor to BMW's hybrid demonstration vehicle, first presented at the 2008 Paris Motor Show. It fits into the package space of a belt-driven compressor used in conventional powertrains, which helps OEMs to minimise the complexity of integrating the electric compressor into hybrid derivatives. It also provides full thermal occupant comfort in hybrid vehicles during engineoff modes. The modular approach allows the same basic packaging dimensions for the electric motor and power electronics to be designed for either 120V DC or 288V DC applications, making Visteons compressor suitable for mild (lower voltage) or full/plug-in hybrid (higher voltage) applications. Visteon will start series production end of 2009. In September 2007, Visteon launched R744 (CO2) climate technology which consumes less fuel and enables a reduction of CO2 tailpipe emissions while operating the air-conditioning system. In the North American International Auto Show, held in January 2005, Ford Motors unveiled its 2005 Scientific Research Vehicle. Visteon provided an air cleaner system for the 2.7-liter, twin turbo hybrid electric vehicle. Visteon integrated two mass air flow sensors to function as one which delivered the required engine performance.
Financial Overview Visteon Corporation has reported a higher net loss of US$663m for the financial year ended 31 December 2008, compared with a loss of US$372m in the previous fiscal. The company witnessed a 15.9% decline in net sales from US$11.3bn to US$9.5bn. Operating loss widened from US$168m to US$403m. Nearly half of the companys full-year loss was reported in the fourth quarter only. During the quarter the company reported a net loss of US$323m, the tenth straight quarterly loss, on net sales from continuing operations of US$1.7bn, down 43% over US$2.7bn in 2007. The net loss includes a non-cash asset impairment charges of US$200m recorded in the Interiors business division. The fourth quarter sales were impacted by widespread cut in vehicle production in all major markets. Full-year product sales at US$9.1bn, was down by around US$1.6bn from 2007, primarily due to divestures and closures of facilities under its three-year restructuring plan which was completed during the fiscal. Services sales declined by US$87m to US$467m. As on 31 December 2008, the company had a cash balance of US$1.18bn compared with US$1.76bn in 2007. In 2008, the companys product sales were down across all regions including 33% in North America, 11% in Europe and 4% in Asia. The companys product sales in
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North America were significantly impacted by lower Ford and Nissan production in the region for 2008. In Europe, the companys product sales were significantly impacted by lower PSA production in the region for 2008. The decline in the companys product sales for Asia was primarily due to overall softening of the global economy driven by the global credit crisis. Like many other US suppliers, Visteon has not provided any outlook for the current financial year ending 31 December 2009, in light of the ongoing industry slowdown worldwide. The company will continue to implement its cost-saving plans in response to the current business environment. In 2008, the company laid off 9,300 manufacturing jobs. In 2009, the company will cut 1,000 salaried jobs (of the total 5,900 at the end of 2008) which would result in annual savings of US$90m. Visteon has reported lower sales for the quarter ended 31 March 2009. Sales declined to US$1.35bn in the latest quarter, down 53% from US$2.86bn in the first quarter of 2008. However, operating income for the quarter stood at US$67m compared with an operating loss of US$15m. Net income also turned positive to US$2m compared with a net loss of US$105m in the same period last year. Sales in the first quarter were negatively affected by the global reduction in vehicle production. Divestments, facility closures and foreign currency movements reduced sales by US$380m. During the quarter, Visteon placed its subsidiary, Visteon UK Ltd., into administration including three UK based facilities. The company recorded lower sales in all geographical regions. However, Visteon won contracts worth US$240m in new business in the latest quarter. The majority of new business wins came from Europe and Asia with a combined share of 73% while North America accounted for 27% of the new business. Visteon had a cash balance of US$767m as of 31 March 2009. The cash balance included US$163m of restricted cash. Year Net Sales (US$bn) 9.5 11.3 11.4 16.9 18.6 Operating Income (US$m) (403) (168) 29 (58) (488) Net Income (US$m) (663) (372) (163) (270) (1,536) R& D Expenditure (US$m) 434 510 594 804 896 No. of Employees 31,000 41,500 45,000 49,000 70,200
2008 2007 2006 2005 2004
Outlook Visteon does not expect its finances and profitability to turn positive in the near future. The bankruptcy protection recently sought by the company will worsen its financial condition. The company is in the process of expanding presence in the emerging countries, such as Asia and eastern Europe, which in turn are expected to develop their market presence and help it get new contracts from OEMs in these areas, including Japan. Rapidly expanding auto demand in the region led by China and increased investments in the Asia region can help the company offset declining automotive sales in Europe and North America. In the future, Visteon is expected to grow its presence in the hybrid market. Although hybrid sales are currently very small in numbers, considering their growth potential, this segment is expected to yield significant results in the long-term. Visteon is designing plans to work with OEMs to develop future technologies for hybrid applications.
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Yazaki
Wiring Harnesses
Address Yazaki Corporation 17th Floor, Mita Kokusai Building 4-28, Mita, 1-chome, Minato Ku Tokyo 108 0073 Japan Tel: +81 3 3455 8811 Fax:+81 3 3455 8808 Internet: http://www.yazaki-group.com Senior Officers Yasuhiko Yazaki, Chairman Shinji Yazaki, President Volker Heuzeroth, CEO, Yazaki Europe Ltd Max Yamashita, Chairman, Yazaki North America Inc. George Perry, President & CEO, Yazaki North America (YNA) Nobuhiro Onishi, Executive VicePresident, YNA, President, Business Unit Bob Crumley, Vice-President, Technology, Engineering and Advanced Development, YNA Bryan Jinnett Executive Vice-President, Operations & Quality, YNA Products Wiring harnesses, High Voltage Components and Systems Plants Argentina, Australia, Brazil (2), Bulgaria, China (8), Columbia, Czech Republic, Germany (2), Japan (13), India (2), Indonesia (5), Lithuania, Mexico (11), Morocco, Nicaragua, Philippines (4), Portugal (2), Romania (2), Samoa, Slovakia (2), South Africa, , Taiwan, Thailand (4), Turkey (2), UK, Ukraine, Uruguay, USA (4),Vietnam (2) Sales Group: 1,447.5bn (US$11.75bn, 20 June 2007) (Year to 20.06.07) Employees Group: 200,073 (June 2007)
Yazaki holds a leading position in the global wiring harness market. In the hybrid segment, the company offers specialised high voltage cable assemblies, connectors and other products for high voltage electric vehicles.
Yazakis business is mainly organised into two segments: Automotive and Environmental Systems. The Automotive segment is further divided into High Voltage Components and Systems and Wire Harness which caters to the hybrid market. The Environmental Systems manufactures gas equipment, air-conditioning and household equipment. In fiscal 2007, Yazaki generated 84.1% of total sales from Automotive Parts, followed by Electrical Cables at 11.2%, Gas Equipment at 3.7% and Airconditioning at 0.8%. Remaining 0.1% was made up by Other business. The company has manufacturing operations in 29 countries employing 200,000 people and 13 R&D offices. Yazaki supplies components to BMW, Chrysler, Daimler, Ford, GM, Honda, Mitsubishi, Renault-Nissan, Toyota and Volvo. Recent Developments Corporate strategy In order to combat the recession in the market, Yazaki has taken restructuring measures. Recently, in January 2009, Yazaki laid off 469 workers in Romania due to a 20% fall in orders at its unit in the country. The auto industry is facing a slump in demand forcing OEMs to resort to production cuts which is impacting on suppliers. Due to the credit crisis, Yazaki is being vigilant regarding its capital, as in May 2009 Yazaki corporation appeared on the list of Chryslers top 19 unsecured creditors in southeast Michigan (USA). Chyrsler owes Yazaki Corporation US$18.3m.. However, Yazaki has obtained assurance from the federal government as a back-up in case Chrysler defaults to pay the supplier. Simultaneously, Yazaki is investing and expanding its facilities in Uruguay, Gafsa (Tunisia) and Turgovishte (Bulgaria) despite the current financial crisis. The move has been taken to meet the current demand and strengthen its foothold in the market. Yazaki is streamlining operations through relocating some of its operations to low cost countries. In 2007, the company shifted its two facilities from the US to Mexico in a bid to reduce manufacturing costs. It also established new plants in low cost countries such as Bulgaria and Slovakia. In the wiring harness business, Yazaki is working on reducing wire diameter. This would help carmakers to deal with space related issues and reduce vehicle weight and ultimately costs. The company also works in collaboration with vehicle manufacturers to shorten production lead time. Yazaki is focusing on the hybrid electric vehicle (HEV) market. As a strategic move, the company shifted its high voltage manufacturing base from Japan to the US. This is expected to help the company establish a stronghold in the HEV market in North America. The company already has supply agreements with Ford for components used in HEVs. It has also secured another order for high voltage connection system and wiring for the 2009 Ford Fusion Hybrid. Acquisition In December 2005, Yazaki acquired a 25% interest in Hesto Harnesses (Pty) Ltd, an operating subsidiary of Metair Investments Ltd., based in South Africa. Yazaki paid around 380m (US$3.3m, 31 December 2005) for the stake.
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Divestments In January 2007, Yazaki decided to close its two injection moulding plants in southern America. The first one, which is under Elcom Inc., closed operations in El Paso, Texas (US). The second plant in Griffin, Georgia (US) closed in 2008. Production at both plants is being shifted to a new facility in Durango (Mexico). In January 2007, Yazaki Wiring Technologies started curtailing its operations in Lithuania and relocating its businesses to Turkey and Bulgaria. Investments In December 2008, Yazaki set up a production plant in Uruguay despite the financial crisis. The new company will be known as Yazaki Uruguay S.A. It will make electronic auto parts to export to Mexico and Brazil. The company invested US$4.3m. In August 2008, Yazaki set up a second facility in Turgovishte (Bulgaria) to manufacture equipment for Renaults Mgane brand of cars. The leading electrical components and automotive spare parts manufacturer is investing 8m (US$, 27 August 2008) in the plant which will become operational in the summer of 2009. In July 2007, Yazaki announced investments of SKK1.75bn (US$71.7m, 30 July 2007) in Slovakia to increase the production of wiring harnesses by 2009. The facility is expected to employ 531 more people by 2011. The output of the upgraded facility is projected to be SKK17.7bn (US$71.6m) during 20082016. In May 2007, Yazaki started construction of a car cables facility in Yambol (Bulgaria), with an investment of 31.8m (US$42.73m, 31 May 2007). In January 2006, Yazaki announced completion of the second phase of its three-phase plan to transfer its high-voltage production and manufacturing capabilities from Japan to North America. The transfer is aimed at building on its leadership in Japan of high-voltage connection systems and components for HEV, in the North American market. In January 2004, Yazaki began production at its Gemlik facility in Turkey. This plant is operated by Yazakis subsidiary Yazaki Otomotiv, which invested 5,471.2m (41.6m, 31 January 2004) in Turkey. The plant employs 2,500 people and most of its output is exported to Europe. Contracts In January 2007, Yazaki was awarded the contract to supply high voltage wiring for the 2009 Ford Fusion Hybrid vehicle. Yazaki has been supplying electrical components for Ford vehicles such as 2006 Ford Fusion, Ford Escape Hybrid and Ford F150 over the last three years. In February 2006, Yazaki signed a contract to supply wiring for the Toyota Camry hybrid. In January 2006 Yazaki won a contract to supply high-voltage electrical distribution system (EDS) for 2006 Mercury Mariner hybrid to Ford Motors. The Yazaki EDS components are used for point-to-point transfer of power and data to the entire vehicle electric powertrain. In October 2004, Yazaki won a contract to supply electrical components for the 2005 Ford Escape Full Hybrid Technology gasoline-electric vehicle. The components include two four-pole high-voltage connection systems and an adapter terminal. The two connection systems include wiring harness connectors, electromagnetic interference (EMI) shielded copper cables and header connectors. The systems connect the vehicles battery pack and DC-DC converter to the transaxle unit that provides power to the vehicle. In March 2004, the company began supplying wiring harness, two-pole inverter connection system, service plug and virtual instrument cluster for the Toyota Prius gasoline-electric hybrid. New Product Developments Yazaki has two primary research centres located in Japan and USA. The company does not disclose its annual expenditure on R&D. Some of its recent developments include: In October 2006, at the SAE Commercial Vehicle Engineering Congress & Exhibition held in Chicago (USA), Yazaki displayed high-voltage under-floor, motor and generator cables which featured integrated shielding from electromagnetic interference (EMI) and durability in environments with high voltage and high currents. In January 2005, Yazaki launched automotive high-voltage products that include connection systems for motors, inverter, battery packs, service plugs, battery bus bar modules, high-voltage cables and high-voltage junction blocks. These components are used in gasoline-electric hybrids and other vehicles
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employing electric drive technology. In Convergence 2004, held at Cobo Conference and Exhibition Center in Detroit (USA), Yazaki displayed its HEV technology, which was used in Toyota Prius and the 2005 FHT Ford Escape model.
Financial Overview For the financial year ended 20 June 2007, Yazaki reported net sales of 1,447.5bn (US$11.75bn) compared with 1,281.2bn (US$10.37bn, 20 June 2006) in the previous fiscal. Sales in Japan amounted to 653.5bn (US$5.29bn), up 10.5% from 590.6bn (US$5.11bn) in the preceding financial year. However, overseas sales recorded higher growth of 15.1% to 794.7bn (US$6.43bn) over 690.6bn (US$5.98bn) in 2006. Automotive segment is the largest product segment for the company contributing 84.1% to the total sales in fiscal 2007, compared with 86% of 2006 sales. As Yazaki is a privately-held company, it is not mandatory for the company to disclose full financial information. Detailed financial results for the company are not available. Outlook Yazaki has taken steps to help it to sustain its level in these uncertain times, as the slump in the demand is affecting the companys growth. However, Yazaki is sanguine in its future prospects and is investing to expand its operations. Simultaneously, Yazaki is exploring business opportunities in the overseas market as the domestic market becomes less attractive. This includes the latest move to shift high-voltage production base from Japan to the US which is likely to help the company in the future. The company aims to explore the HEVmarket, especially in North America which is expected to grow. Yazaki has the opportunity to form ties with the carmakers in North America, including the Japanese OEMs such as Toyota, Nissan and Honda, who are developing plug-in hybrid vehicles. Yazakis business is also expected to grow on the back of increasing electronic content per vehicle globally. The company hopes to realise higher growth in China and European markets. It has also shifted some production in the low cost locations in Europe such as Bulgaria, Romania and Slovakia which will help it to become a more cost-effective supplier.
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ZF
Hybrid systems & components
Address ZF Friedrichshafen AG Graf-von-Soden-Platz 1 88046, Friedrichshafen Germany Tel: +49 7541 770 Fax: +49 7541 77908000 Internet: http://www.zf.com Senior Officers Hans-Georg Hrter, CEO Willi Berchtold, Executive Vice-President Finance, Controlling & Information Technology Michael Paul, Executive Vice-President, Technology (Research and Development, Production, Quality), North America, Electronic Components Business Unit Products Car transmissions, chassis technology, commercial vehicle special transmissions, off-road driveline technology, powertrain systems, electric power steering systems Plants Algeria, Argentina, Austria (2), Australia (2), Brazil (5), Canada, China (20), Czech Republic (2), France (7), Germany (31), Hungary (2), India (4), Iran, Italy (3), Malaysia, Mexico (4), Russia, Slovakia (3), Spain (5), South Africa (5), South Korea (2), Taiwan, Thailand, Turkey (2), UK (3), USA (15) Sales Group: 12.5bn (17.6bn, 31 December 2008) (Year to 31.12.08) Employees 61,156 (31 December 2008)
ZF Friedrichshafen is a leading manufacturer of chassis components, transmissions, steering systems, axles and complete modules for the automotive industry. In the hybrid segment, the company supplies hybrid drive systems and components for passenger cars and light commercial vehicles.
The company operates through three sectors sectors: Cars and light commercial vehicles 56% of 2008 sales Commercial Vehicles 29% Construction and agricultural machinery, Marine craft, Aircraft, Special and Rail Vehicles 15%
The company has a global presence. Geographically, ZF earned in western Europe (63.8% of 2008 sales), eastern Europe (5.2%), North America (NAFTA) (10%), South America (4.5%), Asia-Pacific (15%) and Africa (1.5%). For hybrid electric vehicles (HEV), ZFs product portfolio includes brake and electric auxiliaries. ZF operates at 125 plants in 26 countries worldwide. The companys main automotive customers include BMW, Chrysler, Nissan, Iveco and Volkswagen. Recent Developments Corporate strategy The ZF group, as part of its corporate strategy, will continue to expand and maintain its grip in the market. The group recently signed a jointventure agreement with Continental Automotive Systems on the development and production of commercial vehicle hybrid drives. The company is also partnering with a number of OEMs such as Chrysler, Nissan, Futon and Iveco for hybrid development projects. Despite the turmoil in the auto industry and weak economy, ZF is continuing to invest in the future of its business. ZF inaugurated its first European manufacturing facility in 2008. The group will continue making necessary investments in research and development in order to strengthen the strategic position as a technology leader. ZF has taken measures to restructure by withdrawing unprofitable products from the markets. Currently, ZF is scrutinising the situation for plant closures and site mergers as well. Capital expenditure and cutbacks are going to be a priority for the company since they have a direct impact on the liquidity level. ZF is concentrating on the development of hybrid technologies and hybrid modules consisting of electric motors, clutches and vibration dampers. The company plans to launch a hybrid drive system within the next few years. In its hybrid activities, ZF focuses more on the mild and full hybrids where the electric drive is integrated into the driveline as opposed to micro hybrids. With a complete product portfolio, ZF extends its lead as hybrid technology supplier for commercial vehicles. The spectrum ranges from the core hybrid component, ie., the electric motor, to complete hybrid systems.
Joint-ventures In April 2009, Continental and ZF concluded an agreement to cooperate in the the development and production of commercial vehicle hybrid drives. Under the terms of joint-venture, ZF will develop and produce the drive system and be in charge of the system integration for the hybrid system. Continental will supply the energy accumulator and system electronics. Volume production is scheduled for 2011. In December 2007, Continental and ZF Sachs announced their decision to jointly develop hybrid drive systems. The two suppliers have selected
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SupplyOn AG for web-based collaboration solutions. In September 2005, ZF and Continental formed a consortium to jointly develop hybrid vehicle technology. The focus is on production of systems and components involving hybrid technologies for passenger cars and light commercial vehicles.
Investments In October 2008, ZF Friedrichshafen AG started construction on an engineering centre in Shanghai (China). The centre plans to start operations in 2009 and has been set up with an investment of CNY150m (US$21.98m, 22 October 2008). In May 2008, ZF inaugurated Germanys first production location for the industrial production of hybrid drive modules. ZF launched volume production in Schweinfurt (Germany) from the fourth quarter of 2008. The company plans to supply the products to car, bus and delivery vehicle manufacturers. Mercedes-Benz is the first customer and ZF is the first European automotive supplier to produce hybrid modules in volume production. In November 2006, ZF set up a new research and development centre in Miskolc (Hungary). In December 2005, the company expanded its engineering centre in Shanghai (China). The number of employees will be increased from 22 to 70 by 2010. This technical centre mainly meets the demands of the domestic vehicle manufacturers in China. Contracts In April 2009, ZF secured a contract from BMW to supply 8-speed automatic transmission to feature in the BMW 760i. The transmission covers all the functions of a mild and full hybrid with an electric motor which is incorporated in the same installation space. On 9 April 2009, the OEM introduced two new sedans, 760i and 760Li, as part of its 7 series line-up. The new transmission enhances fuel economy by 6% over ZFs second generation 6-speed transmissions and by 14% over the 5-speed automatic transmissions. The 8-speed automatic transmission can also be used on hybrid vehicles, by replacing the torque converter with an electric motor. Apart from hybrids, BMW intends to introduce the new transmission on its other vehicles by 2011. In September 2008, ZF signed an agreement with Beiqi Foton Motor Co. Ltd. on strategic cooperation in China. The agreement incorporates ZF to supply driveline technology for a newly developed delivery truck which is expected to be launched in the Chinese market in 2009. Moreover, the agreement is planned for further commercial vehicle projects. In the context of the agreement, cooperation is also planned for automated transmissions and hybrid vehicles. In September 2006, ZF announced that for the hybrid concept of the Mercedes-Benz Sprinter, it is providing a module ready for installation that integrates clutch, actuators, and electric motor. In October 2006, ZF was awarded a contract by Nissan to propose plans for a hybrid variant of Nissans 3-liter Cabstar truck. ZF also supplies clutch actuators and control software. In January 2006, ZF and Continental won a contract from Volkswagen for the development of hybrid drive module consisting of an electric drive including power electronics. Volkswagen plans to introduce a hybrid version of its Jetta model in the USA. New Product Developments In 2008, ZFs total R&D expenditure was 697m (US$982.5m). The company employs around 1,537 people for ZF Research and Development worldwide. The main R&D centres are located in Friedrichshafen, Dielingen, Passau, Schweinfurt and Schwbisch Gmnd (Germany), Czech Republic, Shanghai (China), Tokyo (Japan) and Northville (USA). In September 2008, many commercial vehicles exhibited ZFs driveline and Chassis technology at the 2008 IAA International Motor Show in Hanover (Germany). MAN TGL equipped its new distributor truck with ZF HyTronic. The new distributor truck celebrated its world premier at IAA. The hybrid transmission is based on the ZF-AS Tronic lite and is supplied as a package including ZF energy management. Inside this automatic transmission, an electric motor with 60KW supports the combustion engine. The overall system consists of transmission, electric motor, inverter, high-voltage battery, and power routing. Simultaneously, Mercedes Benz Citaro G Blue Tec-Hybrid is equipped with the independent wheel suspension RL 75 EC and the ZF
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electric portal axle. Another OEM, Nissan, displayed a total number of two hybrid transmissions based on the eTronic by ZF. The hybrid transmission offers all of the functions of a full hybrid system and has been optimised for use in light commercial vehicles in delivery traffic. In September 2008, ZF Sachs offered hybrid modules with the product DynaStart at IAA Commercial Vehicles 2008. With up to 120 KW, this main component of a parallel hybrid drive is very powerful and provides an additional torque of up to 1,000 Nm. ZF has extended its lead as hybrid technology supplier for commercial vehicles. The groups performance spectrum ranges from the core hybrid component i.e. the electric motor to complete hybrid systems. At the IAA Commercial Vehicles in Hanover, ZF displayed, for the very first time, hybrid transmissions ready for volume production. The hybrid version of the eTronic has been optimised for use in light commercial vehicles in delivery traffic. Such advantages are also offered by the HyTronic, the hybrid variant of the ZF-AS Tronic lite for light trucks. ZF hybrid transmissions fully cover all functions of a full-scale hybrid system. In July 2008, ZF Passau GmbH, the ZF Off-Road Driveline Technology and Axis Systems division developed electrically driven low-floor axle for city buses with serial hybrid drive. Two electric motors are integrated into the axle and simultaneously used for energy recuperation during braking. Hybrid drives are economical and resource-preserving alternative. In July 2008, ZF planned to offer automatic 6-speed transmissions - EcoLife for commercial vehicles as well as hybrid version. The automatic 6-speed transmission which is utilised in city buses, buses in line service and other transportation modes, has optimally adapted to higher torque. It transmits torque up to 2,000 Nm and will soon be available as a hybrid version. ZF is in the process of developing a hybrid version of EcoLife Transmission. Instead of the torque converter, hybrid module will be integrated into the converter housing. And the electric motor will provide an additional power of up to 120KW. In September 2007, ZF announced that its new 8-speed automatic transmission which was introduced in May 2007 can be combined with hybrid modules for greater fuel efficiency. Additionally, ZF is developing the operational functions for the hybrid transmission with the electric motor, clutch, torsional damper, dual-mass flywheel, and hydraulics. In March 2007, Continental and ZF announced development of power electronics modular systems for hybrids. The modular system can work in hybrid drive systems with different power ratings, from high voltage applications to those using less than 60-volts. In September 2006, ZF developed a new generation of 6-speed automatic transmissions, which reduce fuel consumption. It is available for BMW 3Series coup and X3 SUV models. In September 2006, ZF developed a hybrid system in collaboration with Nissan for a 3-litre version of the Nissan Cabstar light duty truck that combines an eTronic transmission with a 40 kW electric motor. The system reduces the overall operating costs and allows the vehicle to be powered entirely by electricity. In September 2006, ZF designed a hybrid system for vans and light commercial vehicles, based on an eTronic automatic transmission system and a dual clutch full-hybrid module. In the IAA Commercial Vehicle Show held in September 2006, in Hannover (Germany), ZF presented the parallel hybrid concept for commercial vehicles. The system is based on electrodynamic starting element (EDA).
Financial Overview ZF Friedrichshafen reported a 1% sales decrease in 2008 to 12.5bn (US$17.6bn) ended at 31 December 2008. The market remained positive in the first nine months of the year, but the car, truck and construction machinery markets declined significantly in the last quarter of 2008. The operating income of the company was 768m (US$1,082.6m) compared with 917m (US$1,350.6m) in 2007. After-tax net profits declined 19.3% to 434m (US$611.8m) down from 518m (US$762.9m) the previous year. Sales from the automotive industry decreased to 10.62bn (US$14.97bn) from 10.87bn (US$16bn) in 2007. The share of the passenger car business in group sales fell 62% in 2007 to 56% in 2008, while that of the commercial vehicle business rose to from 24% to 29%. Car Driveline Technology sales were down 3% to 2.01bn (US$2.83bn), Car Chassis Technology sales were down 15% to 1.95bn (US$2.74bn) and Commercial Vehicle & Special Driveline Technology sales increased 7% to
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2.23bn (US$3.14bn). Powertrain & Suspension Components sales were the same at 2.38bn (US$3.35bn) and Steering Technology sales were marginally down at 1.29bn (US$1.81bn).. The world economic crisis is expected to lead to a decline in business for ZF in 2009. The company anticipates a significant reduction in sales and earnings in 2009. Year Net Sales (bn) 12.5 12.6 11.7 10.8 9.90 Net Sales (US$bn) 17.6 18.5 15.4 12.8 13.5 Operating Income (m) 768 917 668 512 440 Operating Income (US$m) 1,082.6 1,350.6 882 606.4 600.3 Net Income (m) 434 518 296 247 231 Net Income (US$m) 611.8 762.9 390.8 292.5 315.2 R&D Expenditure (m) 697 694 606 550.0 525.0 R&D Expenditure (US$m) 982.5 1,022.16 800.1 651.4 716.3 No. of Employees 61,156 57,372 55,050 53,940 54,587 No. of Employees 61,156 58,000 55,050 53,940 54,587
2008 2007 2006 2005 2004 Year
2008 2007 2006 2005 2004
Outlook In 2009, ZFs core industries are in a deep recession. Since the fourth quarter of 2008, the markets have entered in a phase of economic downturn across all industries, with an unexpectedly sharp decline. The sectors most severely affected by this downturn are the truck and construction-machinery industries. In this critical environment, a decisive competitive factor is to maintain financial stability for the better prospects and healthy running of the business. For future sustainability, ZF is relying intensively on an environmentally-friendly product portfolio and focusing on innovations that provide great customer benefit. ZFs focus on developing hybrid transmission systems is expected to increase the companys presence in the growing hybrids market. The companys venture with Continental to develop commercial vehicle hybrid drive is expected to benefit both the players in the long-run. The venture is likely to expand their hybrid technology product line at a faster pace. The difficult economic situation facing the global economy in 2009 will also translate into a sharp decline in business for ZF. For the current year, ZF is assuming substantial downturn in sales and results.
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Hybrid Report 2009

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THE HYBIRDS REPORT

Published by SupplierBusiness Ltd, An IHS Global Insight Company

The Hybrids Report

SupplierBusiness Ltd 2009

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Steppermotors; SlowspeedACsynchronousmotors;and Switchedreluctancemotors.

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The Hybrids Report

Asimpleinverter(noshootthrough); o Onlyfourmosfetsperthreephasesispossible ifonlyusedasamotor.