growth and innovation strategy electric car presentation
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TRANSCRIPT
In 1900, Electric cars outnumbered gas-powered cars in NYC by a margin of 2:1
Rising Oil Prices Driving Renewed Interest in Electric Vehicles
Peaked at $147 per Barrel in July
2008
1st Wake-up Call:1973
Oil Embargo
Source: US Energy Information Administration
2nd Wake-up Call:
1979/80 Oil Crisis
Crude Oil Prices, 1960 - 2009
• The Past: Why it failed the first time
• The Present: Are we Ready?
• The Future: Jumping the Chasm
It’s been a Bumpy Road for the Electric Vehicle (EV)
Past
Present
Future
First, Let’s Go Back in Time
Source: Nova. Making Stuff Cleaner. February 2, 2011
Past
Present
Future
• In 1900, there were a total of 2,370 automobiles in New York, Chicago, and Boston
• Electric vehicles had 28% market share of the 4,192 cars produced in the US.
• There were some 12 manufacturers of electric vehicles in the US (Whitney, Pope, Baker)
• In 1906, Baker Electric made 800 electric cars, making them the largest electric vehicle maker in the world
The Automobile Market in the early 1900’s
Past
Present
Future
So Who Killed The Electric Car…the first time around?
Past
Present
Future
• Henry Ford & the Model T assembly line• Discovery of Texas crude oil in 1901 • Invention of the electric starter• Lack of the necessary widespread
infrastructure needed for recharging• Highways brought about the need for
longer–range vehicles
The Cause of Death Has been Determined
Past
Present
Future
• The Past: Why it failed the first time
• The Present: Are we Ready?
• The Future: Jumping the Chasm
It’s been a Bumpy Road for the Electric Vehicle (EV)
Past
Present
Future
Renewed Interest and the “Buzz”
Past
Present
Future
• Catastrophes (BP oil spill) affectingpolicy makers
• Growing dependency on limited supplies of foreign oil
• Spiraling gasoline prices• Increasing CO2 emission concerns and the
Green movement• Battery tech advancements
Global Energy Demand Expected to rise 44% by 2030
Source: World Energy Outlook 2009, International Energy Agency
World Energy Demand by Fuel Source(1980 to 2030)
Mill
ions
of T
ons
of O
il Eq
uiva
lent
12
Factors Details
What are the environmental benefits?
Where can I recharge my batteries?
How far can I go on one charge?
How much extra do I have to pay?
Environmental
Convenience
Range
Price
The RG Model: Dissecting the EV (Market)
Past
Present
Future
Global Oil Production Plateaus
Source: World Energy Outlook 2010, International Energy Agency
Global oil production reaches 96 mb/d in 2035 on the back of rising output of natural gas liquids & unconventional oil, as crude oil production plateaus
World oil production by type
The RG Model: Dissecting the EV (Technology)
Past
Present
Future
3 Forms of EV•BEV (purely electric, zero emission)•HEV (hybrid with extended range due to gasoline supplement)•PHEV (plug-in hybrid combines some benefits of both) Advantages•Efficient energy conversion (captures 80% mechanical energy vs. 25% -- 3x the distance)•Silent and smoother ride•Electric motors require less maintenance•Long run cost savings (affordance)•Government incentives
The RG Model: Dissecting the EV (Technology)
Past
Present
Future
Challenges•Driving range (based on battery limitations)•Recharge time (up to 8 hours)•Battery cost•Initial purchase price (affordance)•Consumer misconceptions
• Exploding battery myth• Flimsy and unsafe• Underpowered
EV Automobiles
EV Automobiles
EV Value Map Over Time (Due to Fuel Cost Savings)
Inferior SuperiorPerformance ?
Rela
tive
Price
High
Low
Economy
Average
Premium
Better Value
Worse Value
Source: http://www.teslamotors.com/roadster/
•288 hp @ 5000-6000 rpm. 215 kWh. (0-60mph in 3.7 seconds)•Range: 245 miles•Max Speed: 125 mph•Starting Price: $108,000 (qualifies for $7,500 federal tax credit)
Tesla Roadster (Supercar Redefined)
The RG Model: Dissecting the EV (Firm)
Past
Present
Future
General Motors (Chevrolet)•Ramping up in anticipation of healthy forecasts for EVs. •GM predicts it will sell 10,000 Volts in 2011 and between 35,000 and 45,000 in 2012•“Not a science experiment - but meant to be a high-volume vehicle”
Nissan•Nissan has long lines of prospective buyers - about 24,000 reservations •Nissan’s CEO Carlos Ghosn announced a $1.7 billion investment in a lithium-ion battery plant•Nissan is dropping $5 billion from 2007 to 2012 for its ambitious play to be the leader in electric cars
Nissan LEAF (100% Electric)
Source: http://www.nissanusa.com/leaf-electric-car/index#/leaf-electric-car/index
•80 kWh AC synchronous electric motor•Range: 100 miles per charge•Max Speed: 90 mph •Starting Price: $26,220 (qualifies for $7,500 federal tax credit)
Chevrolet Volt (2011 Motor Trend Car of the Year)
Source: gmvolt.com
•1.4 Liter. 149 hp. 16 kWh Lithium-ion Rechargeable Battery•Range: 35 miles on a single charge (followed by gas generator for additional 340 miles)•Max Speed: 100 mph •Starting Price: $32,780 (qualifies for $7,500 federal tax credit)
Present Day: Nissan Leaf gets99 MPG-Equivalent
Source: CNNMoney
• 80 kWh AC synchronous electric motor• Range: 100 miles per charge• Max Speed: 90 mph • Starting Price: $32,780 (qualifies for $7,500 federal tax credit)
The RG Model: Dissecting the EV (Firm)
Past
Present
Future
Standardization: A Double Edged Sword•Accelerate the growth of a huge new market for auto manufacturers •Bring greater value to the consumer •Constrains the size and configuration of batteries (swapping)•Requires major infrastructure changes•Cooperation and coopetition amongst competitors will catalyze standardization and growth of EV market•Sponsorship challenges: consumer misconceptions & battery limitations•Government is nonetheless, eager to support
Marketing Chasm
Past
Present
Future
Environmentalists
Everyone else
Market vs. Offerings
Past
Present
Future
Car Company Design Model Price
Nissan Leaf $26,220
Chevy Volt $32,780
Tesla Roadster $108,000
Source: www.generalmotors/volt, www.nissanusa.com, www.teslamotors.com
• The Past: Why it failed the first time
• The Present: Are we Ready?
• The Future: Jumping the Chasm
It’s been a Bumpy Road for the Electric Vehicle (EV)
Past
Present
Future
What’s next?
Past
Present
Future
9.9 8.6
81.5
Global Auto Market
EV MarketHybridsGasoline-powered
HIS Global Insights, 2009.
Sales of Electric and Hybrids represent 70% of New Car Sales in 2035
Past
Present
Future
Source: World Energy Outlook 2010, International Energy Agency
Multiple Strategies
Past
Present
Future
“All in” – complete line by 2012
Renault-Nissan Alliance
More conservative - one production model
Multiple Strategies
Past
Present
Future
From niche market to mass production
Will mass production be the beginning of the end for gas-power vehicles?
Overcoming objections: Battery range
Past
Present
Future
New designs:
• Gasoline-powered battery generators
• “LifeDrive” concept lightweight bodies
Getting help: Incentives, open innovation
Past
Present
Future
Government incentives:
• Pushing companies to move into market now in order to take advantage of these incentives
• But, majority of automakers believe EVs will still be too expensive for mass market for next 5 years.
• However, 68% are entering into strategic alliances with others in value chain.
Getting help: Incentives, open innovation
Past
Present
Future
• Seeing trends towards open innovation models to reduce costs, spread risk
• Evolution of the current value chain - opening up potential for others to lead with technology innovation
• Potential to disrupt currenttraditional markets (oil change centers, suppliers, etc.)
• Creating opportunityfor new support services
The EV market:What can be learned?
Past
Present
Future
• Innovative technologies never really die, they can stay dormant and activate when conditions are right
• Adoption of Innovative technology requires that internal and external factors are aligned
• Without the right infrastructure, EVs will not reach full market adoption
• The bigger the innovation, the longer it takes to adopt
• New innovations can be disruptive and create opportunities at the same time
Getting help: Incentives, open innovation
Past
Present
Future
Infrastructure?
• New opportunities for revenue at local level (re-charge stations)
• Standardizationfor automation (new technology opportunities)
Q&A
Back-up Slides
EVs reduce Emissions (Full Life Cycle)
Source: MIT Electric Vehicle Team. August 2010
Electric Vehicle (EV)Driving Distribution
Source: National Renewable Energy Laboratory. April 2010
Average Commute Distances
Source: National Renewable Energy Laboratory. April 2010
Electric Vehicle (EV)Cost Validation
Source: National Renewable Energy Laboratory. April 2010
The Rebate Plan For Electric Cars
Past
Present
Future
•The Obama administration's proposed plan gives $7,500 to electric car buyers as a rebate instead of making customers wait for a tax credit. •Qualifying plug-in cars depending on the size of their vehicle's battery pack. Businesses get tax credits from $15,000 to $100,000 for buying plug-in trucks or other electric commercial vehicles. •Under the plan makes car dealers don’t incur the cost on the forefront as the laws are structured now
$2.4B Build Factories
$2BMake batteries,
motors and other components
2009 Stimulus Package
$400MManufacture
Charging Stations and Car Testing
London Electric Car Market
Past
Present
Future
Stagnant Sales
Long charge time
2 seat limitation
40 mile range
London’s Goal to Lead Europe in Electric Cars
Past
Present
Future
Government offer subsidies up to £5,000 to encourage purchasing electric or plug-in hybrid cars Government has £250m plan to promote low carbon transport over the next five years, and £20m for charging stations and other necessary infrastructure. The Tesla Roadster and Mitsubishi i-Miev are the only vehicle eligible for the grant
Grant Requirements
60 mph high speed capability
70 mile range
Safety standard
satisfaction
India’s Contributions to the Electric Car Market
Past
Present
Future
•The ministry of new and renewable energy announced a 20% financial incentive on the price of electric cars and scooters sold.
•Under the plan every electric car sold in the next two years will be eligible for incentive.
Factory Price Reduction
1 Lakh Electric Cars
Rs60000 7 Seat 3 Wheelers
Rs50000 High-Speed Electric 2 Wheelers
Rs40000 Low-Speed Electric 2 Wheelers
The Rebate Plan For Electric Cars
Past
Present
Future
•The Obama administration's proposed plan gives $7,500 to electric car buyers as a rebate instead of making customers wait for a tax credit. •Qualifying plug-in cars depending on the size of their vehicle's battery pack. Businesses get tax credits from $15,000 to $100,000 for buying plug-in trucks or other electric commercial vehicles. •Under the plan makes car dealers don’t incur the cost on the forefront as the laws are structured now
$2.4B Build Factories
$2BMake batteries,
motors and other components
2009 Stimulus Package
$400MManufacture
Charging Stations and Car Testing
London Electric Car Market
Past
Present
Future
Stagnant Sales
Long charge time
2 seat limitation
40 mile range
London’s Goal to Lead Europe in Electric Cars
Past
Present
Future
Government offer subsidies up to £5,000 to encourage purchasing electric or plug-in hybrid cars Government has £250m plan to promote low carbon transport over the next five years, and £20m for charging stations and other necessary infrastructure. The Tesla Roadster and Mitsubishi i-Miev are the only vehicle eligible for the grant
Grant Requirements
60 mph high speed capability
70 mile range
Safety standard
satisfaction
India’s Contributions to the Electric Car Market
Past
Present
Future
•The ministry of new and renewable energy announced a 20% financial incentive on the price of electric cars and scooters sold.
•Under the plan every electric car sold in the next two years will be eligible for incentive.
Factory Price Reduction
1 Lakh Electric Cars
Rs60000 7 Seat 3 Wheelers
Rs50000 High-Speed Electric 2 Wheelers
Rs40000 Low-Speed Electric 2 Wheelers
Getting help: Incentives, open innovation
Past
Present
Future
Infrastructure?
• New opportunities for revenue at local level (re-charge stations)
• Standardizationfor automation (new technology opportunities)