Contrary to popular understanding, people have been making money out of electric vehicles for over 110 years. Unfortunately, there have also been bankruptcies in the electric vehicle business in most of those years.
The primary difference lies in market positioning and not in brilliant inventions, working long hours, automation of production, matching the size of your operation to the amount of business you can realistically gain – avoiding over and under-investment – or other aspects that come to mind. These are sometimes important but always secondary.
In market positioning the two key factors are avoiding excessive competition, including rigged markets, and producing what the market will want in the years to come. For example, the leaders in pure electric indoor forklifts are making good money and now that outdoor hybrid forklifts are the growing sector others are seeking to lead it rather than focussing on the saturated market.
The acid test is to ask: “What am I doing that customers will want and can afford that others either cannot do or offer?”
For example, an increasing number of car manufacturers make their own batteries and electric motors (See the Car Traction Batteries 2011-2021 report). Those seeking to supply these manufacturers are competing with their customers unless they evaluate the whole market for electric vehicles by land, water and air, and focus on what is appropriate for them.
Newcomers are usually surprised at the size and number of niche opportunities. Examples include the Northrop Grumman solar-powered electric airship being manufactured for surveillance under a $517 million order, and hybrid and pure electric super yachts costing from $25 to $65 million. Polaris Industries is set to have a business of over $500 million just in off-road pure electric vehicles – military and non-military – and range extenders for hybrid commercial vehicles. In other words, it will prosper from making both EVs and their components where it has limited competition.
For component suppliers, it is also important to avoid excessive competition, such as the rigged markets in China and competing with your customer.
For example, battery manufacturers have yet to fully understand that Toyota is filing battery patents faster than they are (see Advanced Energy Storage Technologies: Patent Trends and Company Positioning). Motor manufacturers have to face the fact that Toyota now makes advanced asynchronous and synchronous motors, using them on their buses, forklifts, cars and more.
However, even Toyota has to accept that most electric buses in the booming bus market analysed in the IDTechEx report Electric Buses and Taxis 2011-2021 will be made in China by Chinese companies, for use in China, with the government controlling the whole supply chain.
Certainly component manufacturers need to avoid technologies that are losers because they cannot serve future market needs for certain basic reasons. For example, lead acid batteries are losing market share faster and faster for all the obvious reasons but nickel metal hydride batteries don’t have the needed energy density or limited self-leakage for hybrids moving from the 50 mile (80km) benchmark to a higher electric range to save on fuel costs.
There are also too few suppliers of contrast supercapacitors (also known as ultracapacitors), which are being used in bikes, buses and military vehicles, and they are taking out too few patents as revealed in the IDTechEx report Advanced Energy Storage Technologies: Patent Trends and Company Positioning.
The new IDTechEx report Electric Motors for Electric Vehicles 2012-2022 reveals market sizes and criteria for winners and losers in this sector. Most suppliers are heading for trouble but the winner will have a very profitable, enduring business of over $2 billion by selling motors for vehicles other than just cars because that is where most of the market value and profit lies.
For example, the advantages of DC electric motors with commutators and brushes are looking less and less compelling as the vehicles themselves are being adapted for more hostile environments, including upper atmosphere aircraft, underwater vessels and vehicles in the field of combat.
Consequently, although DC brushed motors were seen as easily sourced, affordable and easily understood and integrated into vehicles, they have problems of sparks, dust, reliability and creation of electromagnetic interference and acoustic noise which makes them unviable for stealth vehicles in the military, for example.
Another problem is that commutator and brush damage also sometimes occur when reversing while it is advanced for forward rotation, which is an unnecessary problem for those that can use alternatives in electric vehicles that reverse, including those by land and water.
In motor assisted pedal bikes, commutator motors cause drag and users dislike them. The in-hub brushless motor is winning here, usually in the back wheel.
If a DC motor controller’s power stage fails, the entire battery pack voltage is applied to the motor so good circuit breakers, fuses and kill switches with good reaction time are important. Frankly, major car manufacturers betting their brand on safety and security do not want that hassle although good design can work around it. By contrast, the power stages of an AC inverter are used to generate power for the motor, not regulate it, so they are inherently safe because they simply stop the AC motor from using power.
Electric aircraft typically have high speed propellers and DC motors with brushes cannot manage very high RPM because of the limitations of mechanical contacts. This is also a problem with the often preferred high voltage, high RPM motor systems in land vehicles that can be more efficient.
The relatively short life of motors with brushes is problematic now that even civil vehicles have five year warranties. Maintenance is increasingly expensive and some Unmanned Aerial Vehicles (UAVs) and Autonomous Underwater Vehicles (AUVs) will even be deployed for five years at a time without maintenance.
Finally, motors with brushes tend to be bigger than some alternatives and this is not welcome when most applications need space saving by making components smaller, even putting them in the wheel of a bus and in steerable pods under boats.
With the right motor, even the boat generates power without a separate generator when moored in a tidal stream or under sail. The minority of motor manufacturers manufacturing what is really needed have a prosperous future in front of them.
This full picture is uniquely analysed in the IDTechEx series of reports on the different vehicles and components and in the forthcoming Electric Vehicles Land Sea Air event in San Jose California 27-28 March 2012.
Dr Peter Harrop PhD, FIEE is Chairman of IDTechEx Ltd. He was previously Chief Executive of Mars Electronics, the $260 million electronics company and Chairman of Pinacl plc, the $100m fibre optic company. He has been chairman of over 15 high tech companies. He has written 14 books on technical subjects, these being published by the Financial Times, John Wiley and others. He lectures and consults internationally on RFID, smart labels, printed/organic electronics and smart packaging.
