Car electronics to become a complex commodity, experts predict

Nissan forges ahead with volume e-car
MUNICH, Germany — Which type of motor will suit best future mobility requirements against the background of tighter climate gas emission regulations? This question is fiercely discussed within the automotive industry: While the traditionalist faction believes that conventional combustion engines still offer a large potential to improve efficiency and thus significantly reduce pollutant emissions, others call for radical moves towards a zero-emission vehicle which — of course — will be driven by an electric motor. At the Euroforum conference on automotive electronics in Munich, both groups lifted the lid on the things to come over the next few years.

Tier ones catering real-world car makers these days have to be conservative and progressive at the same time. While the lion's share of their business is designing and selling electronic systems for the existing market of combustion engines, they have to watch out to make sure they don't miss future business opportunities. However, conventional cars still represent a much bigger market opportunity than e-cars. "Today it is more cost efficient to invest a given sum to further develop combustion engines than to drive hybrid or all-electric concepts," said Herbert Demel, COO Vehicle and Powertrain for tier one Magna International.

In any case, energy efficiency remains to be the dominating innovation driver. By 'electrifying' ancillary units one by one they can achieve significant improvements in overall efficiency; some experts said the efficiency benefit will be between 20 and 30 percent.

At the convention, it again became obvious that the German automotive industry is more conservative than its Far Eastern counterparts when it comes to the 'combustion-versus-electric' question. While German OEMs in the best case provide a roadmap towards electric cars, some Japanese vendors move much faster towards rolling out volume e-cars for the masses. "Electric vehicles are affordable and producible", claimed Florian Wunsch, business development manager for Nissan International. The Japanese OEM staging global sales start for an electric middle-class vehicle in already 2012.

Since the expensive lithium ion batteries will continue to represent a high value, ways are discussed to hide the battery costs from the customer and in order to foster e-cars market acceptance. Nissan's Wunsch, for instance, believes the battery will not be sold along with the car but instead be leased to the car buyer. This would permit the car vendors to exclude the battery from the vehicle price and thus avoid deterrent price tags for electric vehicles. Also, this scheme would avoid that the unavoidable battery degradation is perceived by the customers as a negative factor. According to Nissan's ideas, used e-car batteries will have a second life after they have degraded too much to serve in normal person cars. "After their first life, they can be reused in forklifts or similar vehicles, or assume stabilizing functions within smart grids", Wunsch said.