Axalta

Well, yes – more than ever before. In the autumn once every two years the Germans trade body VDA holds a passenger car show ‘IAA’. Alternately the same thing happens for commercial and passenger carrying vehicles. The last show was in 2019 in Frankfurt – where nearly half the halls were empty – and the show director resigned during the first press day. Still, a half empty IAA is still 100% better than Paris.

Highlights? Well, of course the Mercedes-Benz stand which usually took three to four months to build inside a six plus storey high ‘Festival Hall’. One memorable year, in order to show just how ecologically aware Mercedes-Benz were, they flew in a dance troupe from New York, who performed with branches made from pure glass fibre against a four-storey high LED display. So Green!

The show, against all the odds, has taken place in Munich – just in time for ‘Oktoberfest’. What joy. 

Manufacturer manifestos

Germany loves to think it is uber efficient and has a long tradition of making a little go a long way. In automobiles that characteristic is laid bare:

Aerodynamics. German style is to forgo everything for the sake of clean air flow, which grudging concessions for space including accommodation of 2m tall people wearing hats. Yes, when was the last time you sat in a German designed car with poor head room? Precisely.

Performance. Using the above, uber tall gearing and infeasibly small engines achieve huge top speeds relative to the power output. Only, it might take more than 100 km of Das Autobahn to build up to that speed, and it will fade at the slightest incline, but it will be efficient. Contrast that with Pacific and North American regions where if the user does not get neck strain from 0 to 50 km/h, the vehicle is ‘useless’. What happens after 50 km/h is left for boasting in bars, since it will rarely be verified, especially in dense city traffic.

Air conditioning. Here the German’s and the rest of the world approach is stark. Starting in the Pacific and North American regions, if the AC can’t get towards frost bite after five minutes of running in 40°C ambient (with recirculation on, of course) then it’s not working. Oh – did I mention this has to apply to convertibles too? The German approach is more ‘efficient ‘: A weedy little system that will chill after several hours of sweating.  

The efficiency first approach has merit and is seen in varying degrees across most vehicle manufacturers, but those who know their customers also know there are some things that simply must happen – even if it is not ‘efficient’.So, consider this approach as manufacturer after manufacturer publishes stories about how they are going to save the world. There is a huge push towards electrification from NGO’s and Governments, especially in North America, Europe, and Australia. The pressure to be seen to do the right thing and so prevent further punishment from Governments whilst trying to stay in business is the biggest challenge to the entire automotive business.

As Germany chucked money down the gullet of start-ups around the world, it became the biggest consumer of solar panels in the world. Of course, the maths was incomplete – in the same was the EU subsidises Germany’s economy, thanks to a lower-than-expected currency exchange (the Euro). When the maths was done, it was realised some citizens got solar systems that were not only energy intensive to create, barely lasted two decades so failed to repay the true investment – but were also all but un-recyclable. Oh dear.

It’s just maths, pure and simple. The disruption often touted by USA’s other banking sector, Silicon Valley, is all about finding a story, amplifying the story to highlight the negatives and then steam in with a solution. For electrification, and especially pure electric vehicles, this comes in a never-ending barrage of insults. Consider Silicon Valley lecturing Toyota and more that they are ‘dinosaurs’, and they ‘don’t know how to build vehicles’. Tesla is popping the champagne having passed 0.5 million vehicles per year, heading towards 0.75 million vehicles per year (a massive achievement) – as Volkswagen Group and Toyota each build circa 10 million vehicles a year. 

The automotive business dwarfs the up-starts, and whilst they have to be agile – as all good businesses should be – it’s not a given the up-starts will suddenly make 10 or 20 million vehicles per year by 2025, 2030 or even 2040.  But this does not matter.

 

Australia UK
Data Source ABS, 31/01/20 SMMT, for 2020
Total No of  Vehicles 19.805 million 40.350 million
Of which are cars 14.697 million 35.081 million

 

The new vehicle sales in the UK vary between 2 and 2.7 million units per year, and due to combinations of impending inflation combined with recession conditions, will probably remain at 2.3 million units per year. It has taken 10 years for the total number of vehicles to increase by five million units … so, we nearly have a static market.

 

The end of internal combustion engines

Most of the NGO and governments pushing for ‘green’ technology sees anything with an internal combustion engine as transient, with the declared aim to stop all passenger car sales with any form on internal combustion engine by 2030 to 2035, and for commercial vehicles by 2040. Let’s look at the maths.

A fully fitted out four-cylinder turbocharged 16V petrol engine (reasonably complicated), crated for shipping, costs the manufacturer between US$500 and US$900. The transmission will work out at US$300 for a manual, rising to US$400 for an automatic. So, the entire powertrain costs up to US $1400 with a further US$200 for the fuel system, exhaust system, intake system and engine management module. 

The cheapest battery technology costs circa US$80 per kWh, so replacing an entire powertrain with just the battery gives us            20 kWh. The vehicle will need a power controller, on-board charger, electric motor with special core, cooling system, possibly a heat pump and of course significantly greater amount of copper in the electric harness. If we replace the entire powertrain with the entire required system, we can ‘afford’ a 15 kWh battery.

That simply does not work. Forget transition from petrol to diesel with ranges of 500km+, a 15 kWh battery will be nearly useless unless commuting a few blocks in a major city is what we need. No, the consensus is 50 kWh is where the pure electric vehicle will give real world performance on a par with a fossil fuelled vehicle – so the vehicles are built at a higher like-for-like price, at a loss, or both. 

The magic money tree, again…

The maximum conversion rate of vehicles to pure electric power, in the UK for example, is circa 2.3 million units per year. This means it would take 15 years just to convert the passenger car parc. Should the UK, for example, decide it has simply not accumulated enough record debt due to Covid-19 and embark on a ‘give away’ – that’s where our tax money is splashed around for us to repay at a later point – then the process could be shortened. 

In addition, policy changes to effectively price road users off the roads could also accelerate this trend, except that in the UK all levels of Government have failed so far to deliver a viable alternative regardless of cost. Destruction and compromise of trains, trams and buses has been on an industrial scale over the past four decades.

Power banking

The bottom line is the current pure electric vehicle model does not work, and if we are not going to see an implosion in new vehicle builds then something has to give. The answer? 80 per cent of the benefit for 10 percent of the investment with mild hybrid (MHEV) and hybrid (HEV) vehicles. This transition technology delivers real world emission reductions for a fraction of the cost of pure electric drive systems.

Then there’s the question of electric power supply. Pure electric vehicles cannot only accept power but release power back to the grid. This technology has existed for some years and means the fears there ‘is not enough’ power generation are partially mitigated by banking power during low demand periods and harvesting from electric vehicles during peak demand. To enable this, there must be an upgrade to the state/federal power distribution system, and charge points everywhere imaginable.

What’s in it for us?

NGOs and Governments may posture that the public will stop needing personal mobility (they won’t), that autonomous vehicles are just around the corner (they are not), that we can be happy owning nothing (according to the World Economic Forum) and that ‘Zil lanes’ (lanes for exclusive use by elected representatives and other ill-defined elites) are a fact of life. They are not.

This vision is laughable

Even if a government, in a hissy fit, demands an end to internal combustion powered vehicle immediately, the automotive support network, the power of the aftermarket commerce and the demand from the greater public will ensure the current parc will live for a very long time. Further, the NGO and Government arguments for ‘Green’ are deeply flawed, inherently un-profitable for vehicle manufacturers which is damaging for many national economies. 

Next time some over-confident unheard of rises up at the World Economic Forum to lecture us about how ‘have nothing and enjoy life’, remember it’s just noise. The collision repair business will blossom as this new stream of technology variation continues to make each repair unique, challenging, and profitable.

For our elected leaders, this is a King Canute moment. The Public will not be commanded by an elite. Our dollars, our way.

Auto Industry Consulting is an independent provider of technical information to the global collision repair industry via EziMethods, our online collision repair methods system. For more information please visit the website: www.ezimethods.com

 

By Andrew Marsh