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Impact on Supplier Landscape
Serial Production of Fuell Cells
March, 10th 2016 Presentation Nationale Organisation Wasserstoff-
und Brennstoffzellentechnologie
Dr. Gerhard Nowak
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Electric and hybrid engine types will double in production, however will remain below 7% of total engines produced
14.03.2016 2
Worldwide engine type production 2016 and 2021 (Million units)
2021
+16%
6,000
1,072
101,897
108,968
94,304
3,775
540
2015
89,989
Combustion
Electric
Hybrid
Hinweis: Weltweit
Quelle: Autofacts
7%
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Realistic volumes of FCV for 2030 comprise
between 2 and 6 million vehicles produced per
year, with a center of gravity at approx.
4.7 million Fuel Cell vehicles
FCV – Volumes in Mio. FCV – Regions
The main FCV producing regions in 2030 are
expected to be EU (1.6 mill.), Japan (1.5 mill.)
and NA (1.3 mill.), followed by Korea (0.3 mill.)
and China far behind (11 k)
General consensus agrees that fuel cell vehicles will increase in market share, however to which level is hard to predict
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Hydrogen Fuel Cell Vehicles (FCV) Forecast 2030
Korea
Japan
32%
28%
6%
North
America
EU
China
0%
34%
3.0
2.0
5.0
1.0
4.0
0.0
6.0
2030 2015
FCV / yr.
Quelle: PwC Strategy& Research
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The development of the market depends on key fuel cell market drivers
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Political & Legal incentives & regulations • Subsidies for green engines, bonus/malus
• Restrictions & quotas for ZEV/ICE production
and usage
• Vehicle emission regulations for CO2/Nox/PPM
Strong influence on production and sales
1
H2 infrastructure (PC) • Network density, distance to next station
• Investor into infrastructure
Major growth lever for PC & CV
PC-BEV breakthrough • Substantial range increase
• Significant cost reduction
• Breakthrough per segment
Potential show stopper
2
3
TCO PC strong fuel cell vehicle (SFCV) • Purchasing & operating costs, insurance,
MRO…
• Stated relative to existent products
High influence for CV/OHW
4
Perception • Image of FC / H2, perceived safety
• Perceived eco-friendliness
• Customer experience, trends
Major influence for PC
PC HFCV (Hybrid FCV) growth • FC as range-extender for BEV
• Impact/availability on market
Single growth lever or additional to FCV
5
6
The key drivers are the ones with the highest mutual affinities; they also cover a wide representativeness of the various influences on the market and offer strong leverage
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Stack
• Cost decreases expected
– Decrease of catalyst load (down to 0.1 mg/cm² in 2030), use of cheaper
catalysts (e.g. noble metal alloys)
– Increase of power density (up to 1.5 W/cm² or higher) hence less MEA &
BIP area
– Optimization of BIP manufacturing and coating technologies
• Parts may be simplified (e.g. membrane technology for water separation) or
integrated, e.g. into the stack, like seen currently for the humidifier at Toyota’s
Mirai, yet no clear indication which components
• Application of components on basis of further optimized electrified auxiliary
units of ICE (e.g. ETC, electrified water pump, H2 recirculation,…)
• Cost decrease due to continuous optimization expected
• Global change towards 700 bar expected for higher fuel density/range
• Costs have to be reduced, yet approach unclear
• Cryo-compression is seen highly skeptical, attributed with high cost & weight
• Metal Hydrides interesting for material handling as counterbalance, not in other
segments
Future technology development is seen to be incremental rather than disruptive
4
Technology – System Design
Gas
storage
System
Source: PwC Strategy& Research, Expert Interviews
Experts do not expect disruptive breakthroughs in fuel cell technology but a continuous improvement of the current state of the art
14.03.2016
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Third party market interviews further point at weak market disruption from FCV by 2030
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Key findings from the third party market interviews
• From 2020-25 or 2nd/3rd generations Mirai/IX35, most OEMs will have an FCV in their portfolio, increasing subcontracting, raising competition and decreasing costs
Market OEMs
• According to a general consensus, the FCV market will grow, no doubt, but slowly until 2025, moderately between 2025-30 and more strongly from 2030 onwards
Regulations Competition
• Government push are critical for market activation: in the short term, subsidies at the end of the value chain are strongly needed to make up for high FCV selling prices
• Initially the main competition for FCV until 2025-30 are PHEV, not BEV. The use case for BEV is seen as urban/LD only with little overlap with FCV
In all likelihood, the 2030 market will comprise a variety of powertrains with increasing importance of FCVs, and regulations on a tank-to-wheel basis. I.e., full FCV breakthrough until 2030 is unlikely from today’s perspective
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The FCV powertrain contains several distinct components
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Powertrain Components
Internal Combustion Fuel Cell
Tank • Steel or aluminium • Plastic (high density polyethyle)
• Type 4 compressed gas tank @ 700 bar • Carbon-fiber-reinforced plastic (CFRP)
Engine • Cylinder block • Crankshaft • Cylinder Head • Camshaft • Connecting rod
• Housing • Rotor • Stator • Axle • Commutator
Transmission • ATM • Sequential transmission
• Max. 2-step transmission
Axle • Drive axle • Axle
• Drive axle • Axle
System/Control -/-
• Compressor, H2 recirculation/injection/sensor, intercooler, humidifier, cooling
Battery -/- • Lithium ion battery
Fuel Cell
-/-
• PEMFC (Proton Exchange Membrane Fuel Cell) • Catalyst: Platin (0,2mg/cm²) • Power: ~ 100 kW
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The supplier landscape for both technologies has limited overlaps and will therefore only effect specialized suppliers
14.03.2016 7
Components Suppliers of ICE components Suppliers of FCV components
Fuel Tank
Engine OEMs OEMs
Transmission
OEMs -/-
Axle OEMs OEMs
System/Steering1)
Battery -/-
Fuel Cell -/-
Supplier landscape ICE versus FCV
NOT COMPREHENSIVE
1) Also partial coverage
Source: PwC Strategy& Research, Company website, annual reports, Bloomberg, international press
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Impact for traditional suppliers remains limited, however digitization will become a topic of importance
8
• The market development is strongly dependent on internal
(technology development) as well as external (regulations,
break throughs in BEV or PHEV technology, perception)
drivers
• Realistic volumes of FCV for 2030 comprise between 2 and 6
million vehicles produced per year, with a center of gravity at
approx. 4.7 million Fuel Cell vehicles
• Strong competition from PHEV
• Many of the current suppliers will still play a fundamental
role in the market of FCV
• Integral components as the fuel cell will most likely stay in the
control of the OEMs
…, but hydrogen fuel cell component suppliers should seize the opportunity of digitisation and industry 4.0
14.03.2016
Implications for automotive suppliers
Market prognosis Powertrain
Influence of fuel cell serial production on current suppliers is limited due to rather small market share and powertrain similarities…
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Production processes and FCV components can participate at the advantages of further digitization efforts
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Production and Product Digitization
Production Process A FCV components B
FCV could play an important role in digitization of powertrain production processes and products towards new business models for both supplier and machine tool manufacturers
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Digitization asks for extended functionality in next generation of fuel cell component production
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Examples of Impact of Digitization on fuel cell component production
Open control
architecture to
integrate with
multiple systems
Motors
(Servo, Linear &
Torque, Spindle)
Drives
(e.g. Servo Drives) Converters
(Basic to
High Performance)
Spindle
(e.g. motorized
core spindles)
Integrate smart sensor data,
e.g. to measure tool
consumption vs. power input Increase flexibility and
performance for multiple-
axis / spindle applications
Significantly
increase
computing power
of the controller
Enable digital
connection to MES
system and other
machines Include data security
and protection
solutions against
cyber attacks
Optimize HMI
design to ease user
requirements
Integrate Quality
Control (material
and work quality)
during work cycle
1 3
5
7
8
9
10
Predictive maintenance for machine center / systems using
big data analytics
4
Optimize sensor-
based machine
monitoring for OEE,
quality etc.
6
A
2
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The machine tool ecosystem has yet mature players with own solutions for a digitized production process
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Machine Tool Ecosystem
Robots
Communication
Provider
Manufacturing Site
Operators
Communication
Service Provider
Raw Material Supplier
Industrial Site
Builders
Logistics Provider
Machine Tool
System
Machine Center
Motors & Drives Tools
MRO Provider
New Market
Entrants
Components
A
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Digitization provides vast opportunities in production automation along the entire supply and value chain
12
Maintenance • Capacity
• Spare parts
Tool management system
MES
MIS
Warehousemanagement-
system (WMS)
Logistic system (e.g. AGV)
ERP
Data Mining/Analytics
Va
lue
Ad
d S
tru
ctu
re
• Component geometry • Process parameter • Material specifications • Process parameter • ...
Customer System Environment
Production Network
Process Chain
Single Unit Machine
Components
B2B 3D-Printing
of spare parts
Cloud
Database
• Service equipment packages/ component
Capacity platform Machine capacities Tools and fixtures
Cyber Security
Collaborative
engineering
Capacity Planning Max.
Mo. Di. Mi. Do. Fr. Sa. So.
intern
Machine Tool OEM • Digital Clone
• HMI (Human Machine Interface)
DMC
…
• Order Modification/ Transparency
• Multi channel order interface
• Districted order tracking(DMC, RFID, DMG)
Statistic Process Control (SPC)
MTS
14.03.2016
A
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Example: multiple growth / value capture opportunities for Fuel Cell components supplier
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MES and
integration
Digitised single
machines
Automation &
embedded systems
Sensors &
electrical actuators
Data and planning
management
Integrated mfg. &
logistics systems
End-to-end digital
engineering/planning
ERP and business
software Big Data Management
• Data management
• Data analysis
Security solutions
• “Security as a Service”
• Forced-entry tests
Cloud services
• Infrastructure
• Implementation
Control tower
• Building automation
• Access controls
Engineering services
• Product development
for small lot sizes
Manufacturing Execution Systems (MES)
• Integration
• Data and process management
Supply Chain
Digitalization
• Sensors and
Automation
• Integrated
manufacturing and
logistics systems
• 3 D Printing
RFID data transmission
• Hardware
• Implementation services
Horizontal and vertical integration
• IT Architecture
• MES and ERP / business solution integration
• Hardware and Integration
Supply chain/
logistics
Manufacturing/
Production
Planning Product
Development
A
EXAMPLE
Vertical and Horizontal Integration
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• Focusing on making and selling
hardware, albeit with extensive
networking capabilities
• Marketing hardware as a part
of larger ecosystem by
partnering with other product
and service providers (e.g.
mobile platform providers)
• Capturing data and customer
access data from the several
sources (e.g. sensor, usage,
performance data)
• Leveraging data for direct
monetization (selling to
advertisers) or for data service
provision (e.g. cloud data
service)
• Create new business models
based on unique customer
and hardware data and insight
• Develop completely new
products and services based
on access to data and
technology
Beyond the production related digitization we see three basic positioning options for component manufacturer
14
Three Basic Positioning Options - Corresponding Ecosystem Business Models
Become an
aggregator of (big) data
Innovate around
hardware infrastructure
Transform into
service business
“Hardware Provider” “Data Aggregator” “Solution/Service Provider”
Options are complementary and not mutually exclusive –
Companies may pursue all the options at a time
New Digital Business Models
14.03.2016
B
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The development from a hardware provider to a data aggregator and solution/service provider is an opportunity
Extended Fuel Cell Components Supplier business fields
15 14.03.2016
Advanced
Algorithms
Vehicle
Component
Sensors Technology
Cloud
PDM
Production
B
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Diagnose services during
vehicle operation and
combination with information of
the traditional use cases
Enhancement of the traditional use case by aspects of digitization during the vehicle operation
Complementary use cases
3
1 Control of material flow and value creation
2 Tracking of parts / Traceability
3 Vehicle operation
Traditional use cases in
industrial controlling and
automation of production
processes
1 2
Traditional use cases Extended use cases
16 14.03.2016
B
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FC suppliers may seize digitization to significantly extend their traditional use case of production control
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Optimization potential through interconnectivity of powertrain data
Current data interconnectivity Potential optimized data interconnectivity
• Insights on cause and
effect relationships enable:
• Optimization of production
processes
• Product quality
improvements
• Fleet-wide real-time
analyses of vehicle data
allows:
• Early failure detection
• Deviation analysis
• Increased diagnostic
capabilities of workshops
• Diagnostics efficiency
• Reduction of repair times
• Customer information, e.g.
onvehicle details, needs-
based inspection intervals,
and repair time
Production
site
Vehicles Workshop
OEM
3
2
Production and vehicle operation
information
1 1
2
4
3
Workshop
Traditional vehicle diagnostic Digitalization of vehicle diagnostic Potential SIEMENS USP
Production
site Vehicle
OEM
Production
information
Vehicle operation
information
1
2
Inefficiencies to date:
1. Data analysis only during workshop
activities
2. No real-time data analysis – Simple error
algorithms with notifications (yellow/
read) inside the vehicle
1
4
End customer
Data cloud
PDM
Product cloud
B
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Types of failure patterns and opportunities for detection and early feedback
Digital applications for failure detection
Failure status
Breakdown
Time
or distance
Warning
level
red
Warning
level
yellow
Internal
warning
level
Tolerance
level
Customer-
relevant
Intern
OEM
A
C
Point in time car Point in time customer
B
Onboard notification
(HMI) Typical failure patterns (examples)
Engine failure with out prior notice
Engine failure with increasing failure
pattern
Continuous failure without
relevance
Error occurrence and detection
18 14.03.2016
B
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The extension of the traditional business models facilitates benefits for FC component suppliers and customers
Use case overview
Deviation analysis Early failure detection Return information &
regress
A B C
De
scrip
tio
n
• Extension of the traditional production related business model to a digital ecosystem
• Addition of integral solutions and digital services to the traditional hard- and software business
• Fuel cell component suppliers as data aggregator to gather and analysis data along the product life
cycle
Be
ne
fits
• Early interaction by detection of abnormities during driving mode
• Detection of failure patterns and deduction of counter measures to be implemented in serial production
• Systematic increase of product quality
• Facilitate component traceability
• Increased car availability and tailored and user specific services
Custo
mer
&
OE
M
19
FC
com
ponent
supplie
r
14.03.2016
B
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• Fuel Cell components
suppliers will have a promising
way to play and growth
opportunity by exploiting
advanced production
technologies in combination
with digitization
• Setup of advanced business
models by extending the own
production process tracking
capabilities to future product
performance tracking
capabilities and therefore
providing additional services to
OEMs and final customer
• The FCV market will increase
its share significantly, but in the
overall picture remain a “small
player” for the years to come
• Thus the supplier landscape
will not feel any drastic
changes in the near future
• The development of FCV brings
the opportunity of pushing
digitization and industry 4.0 for
powertrain production
processes and products towards
new business models for
suppliers
FCV market development will have limited impact on traditional suppliers but provides several opportunities around digitization for FC components suppliers
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Summary Outlook
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Contact
21
Partner
München
Operations/ Engineered Products & Services
T: +49 89 54525 530
M: +49 172 2719 205
Gerhard.Nowak@ strategyand.de.pwc.com
Dr. Gerhard Nowak
13.10.2015