Connected Cars- Revolution coming to everyone

As electric cars gain momentum another type of revolution is hitting automotive industry. That revolution is connected car revolution. It may not be talked about as much as electric cars but this revolution will come to all cars faster than electric technology. Although the economics of electric car are becoming viable, it is still a long way to go before 100% of cars produced will be electric. But I can see in next 10 years all cars will have intelligence for Car to Car communication. This will be a huge deal for automotive industry as cars will communicate to each other and share sensor data and avoid collisions, address traffic congestion and assist in emergency response by informing authorities automatically.

Readers can go to MIT review of the technology to gain more understanding of the concept.

https://www.technologyreview.com/s/534981/car-to-car-communication/

This technology has various applications that can save millions of lives, reduce greenhouse gas emissions and improve driving experience.

Collision Avoidance

As cars start talking to each other and start transmitting speed, direction and navigation info over secure network of car to car communication, computer can intelligently detect potential collision and alert the driver or apply brakes to avoid accident. This will reduce number of collisions that happen due to driver error, vehicles in blind spot and accidents due to unauthorized turns. Currently lot of cars already have frontal crash detection and avoidance technology that uses radar to detect obstacle in front of the vehicle and applies brake to avoid accident.

Bicycle and Pedestrian Safety

Now a days smartphone has reached a large number of people and imagine the car to car communication integrates smart phone signals to avoid pedestrian and bicycle accidents. A lot of people get injured while crossing streets or due to collision with cars. In cities this is a major problem as population density is higher. Taking signals from non car devices will help map out pedestrians on the road and then the car can transmit this over car to car network to alert other cars.

Traffic Congestion Reduction

Imagine a situation where car navigation system is integrated with car to car communication. Cars ahead can warn about traffic congestion by looking at speed of car itself and cars around it. Intelligent system can reroute incoming cars with different route to reduce traffic and reduce amount of fuel wasted. Traffic police can control all the cars with a simple signaling system that allows cars to move safely and reduce congestion.

Hybrid and Electric Vehicle integration

The opportunity becomes even more attractive with introduction of hybrid vehicles. Traffic light can actually communicate to all the cars 5 seconds before turning green and hybrid car with start stop technology can start the engine without owner doing any decision making. This technology alone can dramatically reduce idling fuel wastage. This technology can be easily extended to trucks and buses to reduce idling diesel emissions. Electric vehicles can transmit availability of charging infrastructure and whether the charging station is available when owner gets to the location.

Public Service Announcements

Currently there is no way for police and ambulances to communicate with cars to give right of way. People get out of the way when they hear siren. But that is a challenge as lack of attention may cause accidents. Car to car communication can enable emergency response vehicles to provide signal of their movement way before people hear vehicle sirens.

Intelligent Cars

Cars of the future should be intelligent and should be integrated with consumer’s lifestyle. Gone are the days where car is just a tool of mobility. Car is more than just traveling from point A to point B. So features like automated parking, intelligent navigation that is integrated with your phone, mood based music, unlocking by biometrics, eco routing to improve efficiency,

These car to car technology will provide immediate benefit and reduce number of accidents and deaths on road. Specially for country like India where road deaths are a huge problem, this kind of technology needs to be deployed as soon as possible.  

Model 3 - Industry changing event

As long as you are not living under a rock you must have heard about Tesla Model 3. The hype and excitement about the launch was unprecedented. If you are regular visitor to this blog then you must be aware of the huge impact Tesla has made over past few years on the whole automotive industry and announcement of Tesla Model 3 will be the iPhone moment in the car industry.

Tesla Model 3: Source Tesla.com

Never before in the auto industry, people have formed lines to get inside show rooms and waited hours to see a new car launch. Companies pay money for presenting their cars at the auto show to get some attention and Tesla on other hand attracted the whole world to its facility to see industry changing Model 3.

WIth all hype aside, I am going to analyze the Model 3 as an engineer and as a industry professional who works with lithium ion batteries.

In the short time after the launch I was thinking of significant impacts Model 3 will have on the industry. So let us start with introduction of the Model 3. In a typical Elon Musk presentation, Tesla presented the company vision and mission with Roadster, Model S, Model X and under cover Model 3 pictures.

You can watch the event summary prepared by www.theverge.com here.

So now you have an idea of what the car offers and what a giant leap it is compared to other cars currently available.

Everyone is talking EV

With 215 mile range, 0 to 100 kmph in 6 seconds, beautiful design, $35,000 price and strong Tesla brand, Tesla will eliminate any excuse for not buying an EV.  Now the buyers will not question whether electric car is feasible but will discuss which car to buy. Now buyers have strong options of Nissan Leaf, Model 3, Chevy Bolt, BMW i3 and many other cars that will be launched as a response to Model 3.

Model 3 price point will force other vendors to either match the design and technology or lower the price which means we can look at 200 mile electric vehicles at $25,000. Any price higher than that and you are competing with strong brand of Tesla. This will be transformational for the industry.

Range Anxiety is thing of past

With 215 mile minimum electric range and Supercharger capability, Tesla model 3 will have the most robust electric vehicle ecosystem. I have always mentioned in my blog posts that to defeat gasoline cars you have to create electric ecosystem and Tesla is on the cusp of achieving that. 215 miles is a lot of range. Average driver in US daily drives around 60 miles. 215 mile range means you do not need to charge everyday, this is huge. It also makes long distance driving a possibility.

Competition will respond

BMW, General Motors, Toyota and Honda are not going to keep quiet and allow Tesla to capture all the market. These companies may not be as cool as Tesla but they are in this business for decades and have solid engineering teams. These companies are going to respond with strong product offerings. They will leverage their manufacturing capacities, strong dealership networks and consumer brand loyalty to challenge Tesla.

Driverless cars are coming

Tesla Model 3 is going to come standard with Tesla Autopilot feature. This is another huge technological breakthrough. Typically lane departure warning, blind spot detection and other safety and driving assistance features are reserved for luxury segments but with launch of Model 3, Tesla will bring those features to mass market. The amount of data that will become available to Tesla by all Model 3, Model S and Model X driving around with this feature on the road will add tremendous value to their driverless car project.

Lithium battery will win the market

Tesla’s focus on controlling supply chain and building massive lithium ion battery manufacturing will help the complete lithium ion supply chain. More investment will flow in downstream mining, transport and manufacturing of lithium ion base materials. As car competitors are going to respond by building electric cars, battery manufacturers are going to respond by adding investment in their battery manufacturing capacities. LG chem, Samsung, BYD and others are going to double down on manufacturing lithium ion batteries. This will reduce the battery cost and which in turn will improve the deployment across multiple applications.

As an engineer I am trained to be conservative about future. So putting my critic hat on, not all about this announcement is rosy. There are multiple challenges that are facing electric vehicle industry.

Execution is key

Tesla has already received reservations for 200,000 cars. Elon Musk has promised cars will start delivery at the end of next year. That will put tremendous pressure on Tesla’s manufacturing team. Model S and Model X launches were delayed due to difficulties in manufacturing. Tesla has never made 200,000 cars per year. Delay in shipment may lead to disappointed customers which will not be healthy in the long run. Ramping up production will also mean retooling of factories which inturn will mean more downtime for Model S and Model X production.

Profitability

Tesla may be doing cool stuff but they lost more than $450 million last year and will lose more money this year as they ramp up the Model 3 production. Although there is no immediate danger of having a cash crunch, you cannot continue to lose money if you want a sustainable business. People compare Tesla to Amazon but Amazon makes tremendous amount of money on their cloud business. Tesla does not have that high margin product to support electric car business. General motors have gone through one bankruptcy and same is the story with other auto makers. So Tesla will need to focus on profitability very quickly once Model 3 hits the road.

Dealership network

Disrupting the industry is great but that also means you have far more enemies than friends. Tesla’s constant fight with dealership networks means that they will face resistance in expanding all across US. Running company owned stores is manageable when you have  1000 or so stores but Tesla will need 10s of thousand of dealerships to leverage the potential of Model 3. So they will have to find a way to work with dealership industry.

Lithium battery pricing

People like to use Moore’s law for price of battery to predict $100/kWh. But you have to realize that batteries are not semiconductors. Batteries require advancement in chemistry and material science to achieve lower cost, this will take time. Commodity pricing of copper, aluminum and steel may rise in the future as world economy grows which will increase the battery cost. That poses a risk to Tesla as they are taking reservations at $35,000 for their car.

Wild Card of Apple

Rumor mill is on for a long time that Apple is building electric car under project Titan. Tesla may have fans but if Apple enters the market then it will be a different game. Apple will not care about losing money for few years as their iPhone and Mac business brings in profit and competing will be tough for Tesla. Apple has tremendous brand loyalty, brand recognition and manufacturing capabilities.   

These challenges are not trivial but we have seen Elon Musk drive past many such challenges. As an industry participant, I congratulate and admire energy and dedication of the company to make electric car for everyone. Next few years will be exciting for the industry and I will like to wish Tesla best wishes. Tesla’s success is critical for entire electric vehicle industry.

Open Letter to Facebook

First few things about me.

I am an engineer by training and working in the cleantech industry, so directly I do not participate in the business of internet, apps or services but I have a strong opinion about net neutrality and power of the internet to all. I am generally not vocal about my views as I always feel there is another side which is partially correct so voicing strong opinions don't help the process of the collective good.

Recent events have changed me from a mute spectator to someone who is vocal about his/her views in public. The introduction of free internet plans was one such issue where I could not just keep quiet and watch on. I posted publicly many times my opposition to such services and grave danger to future of the internet as we know it. The same internet where I am posting this review without any fear and with same visibility and presence as any top world leader. Anyone in the world can read this and can either agree or disagree with the content. People can reply, abuse or admire based on their choice. This choice is what it is all about. Choice of using the internet the way you want it. So this prompts me to write this open letter to Facebook.

Indian telecom authority just issued an order that ends any practice of preferential treatment to any data or service over the internet. The regulator also put an end to any service that offers differentiated pricing for content. TRAI (Telecom Regulatory Authority of India) thinks that limiting or providing selected access to the internet will have a negative impact in the mid to long term on usage profile of the consumer which is bad for internet ecosystem.

I wholeheartedly support this decision. I think TRAI has taken a good decision which will set up a marker for all other emerging countries. Poor people need connectivity, they do not need exploitation by big corporations in the name of social welfare. People who cannot afford internet connectivity need access to limitless opportunities of the web not a mix of cobbled together services which serve one and only one purpose - keep users locked on to one platform. The reason I write this open letter is not to express support for TRAI decision. Activists and people who have a far bigger stack at this than me will do that. My goal is to highlight the response to this decision from Facebook and urge them to make a course correction.

I admire Mark Zuckerberg, he has achieved a lot and will achieve even greater things but I am worried about his response to the decision.

“While we're disappointed with today's decision, I want to personally communicate that we are committed to keep working to break down barriers to connectivity in India and around the world. Internet.org has many initiatives, and we will keep working until everyone has access to the internet.”

The statement is really a confused one. Mark is personally committed to breaking down barriers to connectivity in India and around the world. A great statement to make but won’t free basics create a walled garden that you can and will control? Will you ever allow Google search in free basics? Will you ever allow Linkedin or Twitter to be a part of free basics? If your answer is no then you are not committed to breaking down the barriers. Facebook can always hide behind the statement that free basics is a platform and any developer can submit an application to be a part of it, but to be realistic, do you think Google, Twitter, Linkedin or any other big company will like their content to be at the mercy of facebook for few million dollars. My guess the answer will be a resounding no. Facebook, Whatsapp and Instagram may have a billion users each but that does not mean that represents internet. Unless Facebook acknowledges this fact there is no meaning in internet.org initiative.

So this brings me to the second part of the statement which talks about internet.org. Internet.org may have many initiatives to bring the internet to the world which is commendable and I will support the efforts any way I can, but don’t mix two things to divert the attention from the key point. It is easy to confuse internet.org’s other efforts with free basics. Free Basics is not the internet. Did I say this before maybe yes, but let me say this again Free Basics is not the internet. Unless Facebook comes out of this bubble that its services mean the internet and that is the only thing people need, it will never succeed in its mission.

If Facebook’s mission is to bring connectivity to this world then it should think about the internet that helped Facebook to come under existence. Imagine if Myspace had Myspace basic that blocked Facebook and offered free usage to Myspace only. Facebook succeeded because it had an open internet to innovate and people connecting to the internet had a choice. When you try to eliminate choice, you move towards an authoritative and restrictive society that stifles new innovations and progress.

A strong analogy to end my letter, our iconic leaders like Gandhiji and Sardar Patel would have lived a happy life in British Raj but they chose struggles to give us our freedom, ability to choose who governs us. Freedom and choice were far more important to them than comforts of the walled garden of British Raj. So why any country or community choose limiting choice for few dollars of internet.org.

I am no one to give advice to Facebook’s CEO, my achievements are nothing and I am not a scholar who has core domain knowledge about this, but I still have a choice to express myself. If Facebook’s mission is to connect people then it should put 100% of its energy in connecting people. Playing games with revenue models and monthly active users with the help of schemes like free basics will help in boosting short-term profits but will certainly dilute the mission. So if Facebook is thinking of reworking the scheme and come back with another idea similar to free basics, it will only signal its downfall. But if it swallows its pride and focuses its energy on really empowering people and connecting them, it will make a huge impact on the development of communities across the globe. At the end, it does not matter how much money you make but what matters is how many people you empower, how many lives you change.   

Signing off

Nikhil  

Cheap Oil and Electric Vehicles

With crude oil prices tumbling to $30 per barrel, immediate questions are raised about momentum of electric vehicle and effects on cleantech industry. During the peak of 2008 the crude oil was close to $150 which is almost five times today’s prices. Doubters will start to write doomsday stories about electric vehicle and renewable energy in general. But those two markets use totally different form of carbon as energy. Energy and transportation both use carbon as their primary source of fuel but automotive industry is dependant on fossil fuels while energy sector is dependant on coal and natural gas. So this drop in crude oil price will have more impact on electric vehicles than on solar/wind power generation.  

Crude oil price graph over last 10 years.

Many people have raised the voice for carbon tax as a mitigation of lower crude oil prices but I think we are still far away from getting an agreement on some kind of carbon tax. I totally support it but still think we don’t have correct measuring mechanism to implement that.

I think the discussion has moved from whether electric vehicle is a solution to how to integrate electric vehicles as a solution. With beginning of a new year, war against pollution is gaining momentum. Delhi has started with a positive move to address the desperate situation of air pollution. But more things will be needed to get the pollution down to manageable levels. Low crude oil price has adversely affected the return on investment in electric vehicles. But reduction in battery cost and improved cycle life has reduced the cost of electric vehicle operation. This will help in keeping the momentum going on electric vehicles.

Vehicle pollution is a major contributor to PM2.5 and PM10 pollution. CO2 emissions are important for fighting climate change but immediate issue facing all major cities around the world is PM2.5, PM10, NOx and unburnt fuel emissions. Electric buses have paved the way of electric mobility in China. India can learn a lot from China, India faces similar problems of crowded cities, large number of vehicles getting added on roads every day and reduced quality of life because of pollution.

Indians currently buy more than 200,000 cars a month. That means every year we are adding 2.4 million cars on roads. Number of motorcycles will be almost two times that number. India also faces unique challenge of old buses and trucks still running on road. Indian government has started FAME India scheme that will encourage electric vehicles. Making a dent in sale of gasoline cars is going to be a challenge as electric vehicle charging infrastructure is almost non-existent. Launching an electric bus project in parliament is a great start as it gives a much needed publicity to electric vehicle market.

Indian Prime Minister Narendra Modi launching KPIT Built Electric Bus.

Electric bus provides a great use case. The routes are fixed, the buses are parked in defined spots in depots. This will enable setting up a charging infrastructure and reduce major contribution of Diesel emissions of NOx, PM2.5 and PM10 emissions.

Although diesel prices have reduced, electric buses are still cost effective as kmpl of average city bus with lot of stop and go traffic condition is very low. Using electric buses as a starting point helps in two ways. One, it introduces electric vehicle technology to masses. People who cannot afford to buy a car or two wheeler can still experience electric vehicles and second, it will eliminate cars on roads. A bus carrying 40 people can reduce 10 cars from road. So deploying electric buses will add double benefit to fight against pollution.

Low crude oil price may not last for long as it's a very cyclical industry. Government should take advantage of money saved on importing crude oil and invest almost all of it in renewable energy and electric vehicles. India currently imports more than 3.2 million barrels of crude oil per day. With this reduction in crude oil price, India is saving $30 billion in spending. That is a massive amount of money. Instead of letting it pass on to consumers, Government can easily spend that money on long term strategic investments like Solar Power and Electric vehicle charging infrastructure. Even though the crude oil price is at $30 per barrel, we should not forget that fossil fuel is limited resource and price of that commodity will surely increase when demand meets the production capacity.

So governments all across the world should think of this dip in crude oil price as great investment opportunity in renewable energy and electric vehicle infrastructure. Money not sent to oil producing countries can be deployed in securing long term energy access for poor. We have to look at the dip in crude oil price as an opportunity to invest money in securing future energy and double down on fight against pollution.