Thursday, May 27, 2010

On electric vehicle

Advanced countries agreed to reduce greenhouse gases by 80% by 2050 in last year’s G8 Summit. Clearly, this is not a target that can be achieved easily. However, the two driving force are helpful to realize this difficult-to-achieve target. They are electric vehicle (EV) and photovoltaic generation. It is vital to restructure a society using these two technologies that have unlimited potential, and the restructuring asks consumer-electronics makers to expand their business domains. It may become a reality that the largest home electric appliance is an EV some time in the future.

Low entry barrier
There are about 60 million vehicles in Japan and more than 1 billion vehicles in the world today, and they all are supposed to be replaced by EVs in several decades. EVs can contribute to the reduction of CO2 emissions if photovoltaic generation and wind generation are used for charging. In the days of gasoline vehicles, entry barrier is really high because lots of investments are needed for manufacturing plants and development costs. However, EVs do not large amount of investments, and venture companies and home electronics makers can find business opportunities. Tesla Motors in the U.S. succeeded in mass production of its roadster in 2008, just five years after the company was founded. Mounting a Japanese lithium iron battery, it has better acceleration than a Porsche.

Tesla’s innovation
Tesla achieved two innovations. First, they changed the structure of the auto industry from integration to assembling. Tesla roadster is assembled using parts coming from various parts of the world. The auto body comes from England, battery from Japan, and motor from Taiwan. And the roadster is assembled in California. Second, they established the combinatorial technology. Although they do not have their own elemental technology, they constructed an inexpensive and highly reliable battery system by developing the control technology using the general-purpose battery stored in a notebook PC. They also employed a general-purpose tri-phase current induction motor instead of a permanent magnet synchronous motor that uses an expensive scarce resource neodymium.

Competitors in the market
A Chinese battery maker and a Korean vehicle make also move into the EV market. Japanese automakers are also active, and Nissan is scheduled to launch its electric vehicle Leaf coming October. From a comprehensive viewpoint, Japanese auto makers excel the three companies mentioned above. It took Tesla two years to ship 1,000 roadsters, while late entrant Mitsubishi Motors needed only half a year to ship 1,000 EVs. Nissan plans to ship 50,000 Leaf EVs in the initial year. Actually, Nissan is most active in developing EVs. Nissan decided to invest US$1,700 million to build a new plant to produce batteries for its EV “Leaf.” Nissan already received 13,000 advance orders for Leaf. Toyota announced the capital and business alliance with Tesla Motors. Nissan believes that EVs will account for 10% of vehicles on the earth, saying that it costs US$50 to fill a gasoline tank of a standard car, but it costs only US$3 to charge an EV. The difference is enormous. Nissan announced that it opened up the way to develop a lithium ion battery that has two times as much capacity as the exiting product. It allows an EV to travel 300 km that is double the distance the existing car can cover in one charge.

Moves of Japanese home electronics makers toward electric vehicle
As contrast to auto makers, home electronics makers are somewhat quiet. Lithium ion battery is the most critical part of an EV. Japanese home electronics makers, such as Sanyo, Sony, and Panasonic, have an established position in the production of lithium batteries. Tesla admitted that it employs a Japanese lithium ion battery for its roadster, though it declined to disclose the name of the producer. It is vital to employ a highly reliable lithium ion battery to achieve success in the EV business. Home electronics makers seem to have great potential of success in finished EV production. No Japanese home electronics makers have branched out into EV production, but leading home electronics makers have been playing a leading role in the development of EV.

Panasonic supplies lithium ion batteries to Toyota’s plug-in hybrid EVs. It developed a new battery module that uses lithium ion battery in October 2009. This battery module contributes much to the increase of travel distance and reduction of the production cost of an EV. In November 2009, Sanyo made it public that it would commercialize the battery module that Panasonic developed. Sony is a leading lithium ion battery producer worldwide. The company once announced that it would not produce batteries for cars, but it has decided to produce batteries for EVs judging from the growing popularity of EVs. It will invest 100 billion yen to build the system for mass production. Sony is reportedly negotiating with several auto makers.

Hitachi does not build a completed car by itself, but it has been producing lots of auto parts. It first succeeded in producing domestic electronic components for cars for the first time in Japan in 1930. It expanded the auto-related business constantly, and span off the lithium ion battery production division in 2004. Hitachi has competitive edge in the production of power semiconductors and the ability to prepare in-house core parts and components for EVs.

Home electronic makers’ efforts to associate EVs with smart grid
Besides being involved in the EV business, home electronic makers can help conserve energy by constructing efficient equipment for transmission and transformation of electricity. The smart grid is to reform the power grid to be more efficient and decentralized using information technology and allow for energy exchange between households and power plants. That is, the concept of smart grid covers solar house, mega solar, wind generation, existing power plants, and small regional power plants for emergency use. Actually, lots of business opportunities are available for home electric makers. In this sense, EVs may be built by home electric makers in the near future. Auto makers and home electronics makers will compete in the EV market. Be alert! Competitors come in from the unforeseeable business arena.

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