Q2 2018 Executive Summary • Major developments in the second quarter of 2018 have seen the largest on-highway truck manufacturers accelerate their electrification plans. Daimler and Volvo have both launched electric trucks for regional and short haul applications. Daimler has also created a dedicated division to develop electrification across all its truck brands. • Volvo Penta, a major supplier of engines to marine and industrial applications, also announced that it would deliver hybrid and full electric solutions by 2021. Again, this represents a major strategic shift for Volvo Penta as it begins to transition away from diesel. • Volkswagen Truck & Bus will rebrand as TRATON. Whilst there is no immediate outlook for electrification, the rebranding exercise is ahead of an IPO to raise additional funds. A focus for ‘TRATON’ will be sustainable transportation and it seems reasonable to assume further announcements on electrification and autonomy investments can be expected. • Kubota has released a micro-hybrid product for the off-highway sector. Featuring a down-sized diesel engine, it has the same form factor as an existing engine and servicing requirements. It is aimed at differentiating Kubota from its competitors and providing machine builders with an ‘easy’ path into emission compliance and electrification. • Major new electric truck and bus projects have been confirmed over the last quarter. Major fleet operators and vehicle rental agencies are amongst the new customers, as well as public transport operators. A significant ramp in volumes is now anticipated before 2020. • Chinese electric vehicle manufacturers are positioning themselves to be able dominate global markets. Nearly 100,000 battery electric buses were sold in China in 2017. Companies like BYD, Dongfeng, Shandong and FDG are investing in electrification technologies across their organisations and are increasingly winning business in global markets. Confidential. © 2018 Interact Analysis. All Rights Reserved. 1 Specifications of recent electrified off-road vehicles (1) Vehicle/Brand Year Introduced Weight (ton) Powertrain Architecture Battery Type Battery Chemistry Applications Artisan Z40 2018 40 Electric Lithium LiFePO4 Underground haul Artisan A4 2017 9.5 Electric Lithium LiFePO4 Underground load/haul/dump (LHD) DEUTZ 2018 Various Hybrid Electric Lithium LiNiMnCoO2 (NMC) Various Cummins 2018 Various Hybrid Electric Lithium LiNiMnCoO2 (NMC) or Various LixNiO2 (eLNO) Mecalac e12 2018 9.7 Electric Lithium LiFePO4 Excavator Loader NASTA/SINTEF 2017 30 Electric Fuel Cell Unspecified and hydrogen Unspecified Excavator Pon Equipment/CAT 323F 2018 25 Electric Lithium Unspecified Excavator JCB 19C-1 E-TEC 2018 1.9 Electric Lithium LiNiMnCoO2 (NMC) Mini-excavator Kobelco SK210HLC-10 2016 20 Hybrid Electric Lithium Unspecified Excavator MacLean BT3 2016 13.6 Electric Lithium LiNiMnCoO2 (NMC) Underground LHD Sandvik – LH307B 2016 22 Electric Lithium Li2TiO3 (LTO) Underground LHD Atlas Scooptram ST7 2016 21.5 Electric Lithium LiFePO4 Underground LHD Saminco/Highland 2016 (trial) Not specified Electric Molten sodium SoNICK Underground LHD Confidential. © 2018 Interact Analysis. All Rights Reserved. 2 Specifications of recent electrified off-road vehicles (2) Unspec Li + H NASTA/SINTEF Unspec Li Hybrid Kobelco SK210HLC-10 Unspec Li Pon Equipment/CAT 323F LTO Sandvik – LH307B LiFePO4 Artisan A4 Mecalac e12 Atlas Scooptram ST7 Artisan Z40 Cummins NMC Hybrid NMC Electric JCB 19C-1 E-TEC MacLean BT3 DEUTZ SoNICK Saminco/Highland 0 5 10 15 20 25 30 35 40 45 VEHICLE WEIGHT (T) Confidential. © 2018 Interact Analysis. All Rights Reserved. 3 Intermat 2018 – Review of electrification news (1) Engines Kubota showed a micro-hybrid engine. It’s a slightly down-sized engine with a very small electric motor attached. It’s their plan for targeting Stage V emission standard – it’s a relatively low cost solution and the low voltage level meaning that technicians can work on the engine without additional training. Kubota also announced a new, defined unit for developing engines for the European market. Kohler had no electrification products on show. In fact, it’s tagline was “diesel is not dead” (or similar). Volvo Penta did not showcase any hybrid or electric products (this has obviously been superseded by the recent Penta announcement; however, could indicate that the products were not ready for external viewing). Scania engines was not showing any electrification products. Cummins was showcasing its range extended solution. DEUTZ was showcasing its hybrid solution. Yanmar did not showcase any hybrid or electric solutions, instead focusing on its most power diesel engine to date No Chinese hybrid or electric solutions FPT did not showcase any hybrid or electric solutions Confidential. © 2018 Interact Analysis. All Rights Reserved. 4 Intermat 2018 – Review of electrification news (2) Machines Kobelco might be struggling with sales of its hybrid machine in Europe. It is heavily subsidised in Japan but receives no such rebate in Europe – it has a very high list price (by comparison to standard machine) and fuel savings are not making an impact. Komatsu introduced two new hybrid machines. Volvo EX2 concept machine actually has 2 batteries, one of which can be replaced with a hydrogen fuel cell or small diesel engine, making a hybrid machine possible. Volvo EX2 machine has zero hydraulics. OK for digger operation, but cannot use any standard hydraulic tool attachments. Some industry participants think actuators will never take off, some think within 5 years. Dealing with hydraulics will be an important engineering consideration for CE electrification. Mecalac e12 machine has two electric motors – one for drive, one for hydraulics. It can only get energy recuperation through drive motor. Target start of sale for end of 2019. CIFA (Zoomlion) were showcasing Energya, the plug-in mixer truck (only mixer drum is electric, drivetrain is ICE). CNH/Iveco not showcasing any electrification productions Doosan not showcasing any electrification products Volvo not showcasing any electrification products, although this has been superseded by recent announcement. No Chinese vendors showing electrification products. Multiple electric AWPs and micro-excavators on display Confidential. © 2018 Interact Analysis. All Rights Reserved. 5 Electric Vehicles by Horsepower (1) 1200 Size of bubble is number of motors 1000 Tesla 300, 4 Nikola 1 and 2, 6 Tesla 500, 4 800 Freight Toyota (Project Portal), 2 600 Port Drayage Kenworth T680, 1 BYD T9, 2 Volvo FE Electric, 2 Urban Peak Horsepower Peak 400 Cummins Aeos, 1 Peterbilt 520, 1 BYD T7, 1 Refuse Volvo FL Electric, 1 200 Fuse eCanter, 1 MB eVito, 1 VW e-crafter, 1 0 0 100 200 300 400 500 600 Maximum Battery Capacity (kW) Confidential. © 2018 Interact Analysis. All Rights Reserved. 6 Electric Vehicles by Horsepower (2) Scaled Comparison of hp, battery capacity and no. of electric motors Fuse eCanter Nikola 1 and 2 Peterbilt 520 Tesla 500 Cummins Aeos Tesla 300 Kenworth T680 Scaled Motor Number Scaled Peak Horsepower Volvo FE Electric BYD T7 Scaled Battery Capacity BYD T9 VW e-crafter Toyota (Project Portal) MB eVito Volvo FL Electric Confidential. © 2018 Interact Analysis. All Rights Reserved. 7 Electric Vehicles by Horsepower (3) • Long haul and port drayage vehicles typically use in excess of 500 peak horsepower. From a design perspective, most are using 2 or more electric motors for the drivetrain with the Nikola One and Two using 6. It is interesting to note that the Kenworth T680 fuel cell truck is only using one electric motor. It is using a dual rotor electric motor, presumably to reduce component/integration cost from the use of one motor versus 2, 4 or 6. However, this does represent a single point of failure and the technology is ‘newer’ in this application and there could be design challenges in the future. • The rationale from Tesla for using 4 electric motors was partly redundancy and partly cost. The truck can still be driven if 2 motors fails and the motors themselves are the same as used in the Model 3, meaning that some degree of purchasing scale will bring costs down. • Urban electric trucks are typically 200 hp or less and only require 1 electric motor for the drivetrain. The Volvo FL truck has a higher maximum battery capacity than other urban vehicles. It can be used as a refuse truck – requiring more power – or a longer range vehicle too. • The Toyota, Kenworth and Nikola trucks are hydrogen powered. The Toyota and Kenworth trucks have relatively small batteries, offering limited range before the hydrogen fuel cells need to be used. The Nikola trucks have a far larger battery meaning that longer battery range can be achieved before the fuel cells need to be used. This means the trucks can operate when hydrogen fuel is not available. Confidential. © 2018 Interact Analysis. All Rights Reserved. 8 Will Chinese brands dominate commercial vehicle electrification? Confidential. © 2018 Interact Analysis. All Rights Reserved. EVHA Newsletter Q2 2018 / June 2018 Will Chinese brands dominate commercial vehicle electrification? (1) Recent news from both Daimler and Volvo revealed that they are to put considerable focus on commercial vehicle electrification. As two of the largest manufacturers of commercial vehicles, this is a strong signal that the market will shift towards electrification to meet more stringent emission regulations and the requirements of low and zero emission zones. However, will Daimler, Volvo and others be able to compete with bullish