Dedicated e-LCV platforms are the focus as OEMs target last mile delivery for transformation and disruption
By Chandramowli Kailasam, Program Manager, Mobility & Darwin Sebas, Senior Research Analyst, Mobility
Frost and Sullivan’s recent analysis, Global Electric LCV Market Opportunity Analysis, Forecast to 2025, provides an overview of key trends in the light commercial vehicle (LCV) market, ranging up to 6.5 tons. It predicts a global market opportunity of 1.09 million units by 2025 for eLCVs, due to increasing demand, large scale infrastructure development, and aggressive launches by traditional players and new entrants.
Automakers and related powertrain component suppliers in the European LCV market are embracing a future that is electric, clean, and sustainable. Several OEMs are transforming and, in some cases, even disrupting traditional LCV platform approaches by building new paradigms from the ground up. From recent product launches it is apparent that many leading OEMs are developing dedicated eLCV platforms. The LCV market is, at the same time, being defined by the intensifying demand for high levels of customization from fleet managers and the emergence of new services-based models.
2025 Vision of LCV Powertrain Mix
Almost all OEMs have hopped onto the electrification bandwagon. For instance, brands across the VW Group are on track to adopt both a dedicated as well as flexible EV platform approach while the Renault- Nissan-Mitsubishi Alliance, PSA Group, Ford, and Mercedes already have products being sold and have concrete plans for the launch of new eLCV product lines to strengthen their portfolios.
Today, OEMs like Mercedes and PSA are approaching LCV platform development from a fresh perspective. This includes, for example, developing the ladder to unibody type and creating new electric and electronic (E/E) architecture suited for the new era of connected, autonomous, shared and electric (CASE) automotives. Simultaneously, rather than 48V, mild hybrid and stop-start, they are focusing on sustainable, long-term solutions such as battery electric vehicles (BEVs) and are also considering extended-range EVs (eREVs), especially fuel cell electric vehicles (FCEVs).
So what is the LCV powertrain mix of major OEMs likely to be in 2025? As Ford looks to slash $14 billion in costs over a 5 year period, capital investments are likely to shift from sedans and internal combustion engines (ICEs) to trucks, EVs and hybrid cars. Among the key drivers will be the impact of usage patterns which will result in Ford attempting to optimise the capacity and range offering in its xEVs. eREVs will emerge as the most efficient solution for Ford LCVs. And, as Ford moves to develop a dedicated eLCV platform, it is likely to channel part of its $11 billion EV investments into the LCV segment. The company also has a joint venture with DHL StreetScooter to annually manufacture 3500 Work XL vans on the Ford Transit chassis.
StreetScooter GmbH has disrupted the European automotive industry by offering a strong lineup of eLCVs, including the 2.2T gross vehicle weight (GVW) WORK, 2.8T WORK L, and 4T WORK XL, that cater to last mile delivery. The StreetScooter brand has been shaped by EV research initiated at RWTH Aachen University and is intended to electrify DHL’s fleet of over 70,000 LCVs that are used as delivery vehicles. After successful pilot trials with DHL’s own fleet, the company plans to expand production capacity to 20,000 units annually and plans to sell its WORK series to third party logistics companies through Ford dealerships from mid- 2018.
StreetScooter has sold more than 10,000 units to date, with 7,000 units sold to Deutsche Post alone. The company’s eLCVs have covered more than 26 million kms so far, resulting in the annual reduction of over 20,000 tonnes of CO2 emissions. With more StreetScooters on the road, the path toward zero tailpipe emissions looks bright.
The Renault-Nissan-Mitsubishi Alliance is focused on the fight against global warming. The Alliance drew up an ambitious 6-year plan in late 2017, with the aim of developing engines that reduce the carbon footprint by 25%, compared to 2010 levels. The Alliance also aims to be the first OEM group to reach EV sales of 1 million per year, with the launch of 12 pure EV models by 2022. With more than 540,000 vehicles sold in 2017, the Alliance is the highest selling EV manufacturer. The Alliance also tapped the Chinese market, the largest BEV market in the world, by creating a new company through a production partnership with Dongfeng. The Common Module Family (CMF) platform is a common dedicated platform to manufacture EVs. Most vehicle models will be built on CMF-A, CMF-B and CMF-C platforms. The Alliance plans to invest $1 billion over the next five years in electrification and autonomous technologies, with the first $50 million investment going to start-ups. Though the Alliance manufactures the extremely popular Nissan eNV200 and Renault Kangoo ZE models, achieving the 2022 target seems uncertain due to current uncertainties at the leadership level.
Mercedes-Benz is staring at a 21% CO2 improvement requirement over the next 6 years to avoid paying fines for non-emissions compliance. Going fully electric, in this context, aligns with the company’s adVANce vision. This transformation strategy envisions Mercedes-Benz transitioning from a van manufacturer to an integrated logistics solutions provider. The idea here is that the vehicle will become a digital platform that will enhance the movement of goods and people as traffic congestion in cities becomes the norm. Another factor that will push Mercedes-Benz’s LCVs towards electrification is increasingly stringent urban restrictions on ICE vehicles. This will feed into Mercedes-Benz’s ‘Van Vision’ which aims to design offerings for urban and extra urban, zero emissions driving. Daimler’s wholly owned subsidiary Deutsche Accumotive GmbH & Co, will manufacture EV battery systems that will support the company in scaling up EV production. Also on the anvil is the establishment of a giga factory to produce long range batteries and further collaboration with Chinese battery manufacturer, CATL.
PSA is focused on launching 125 new models and 40 electrified models, including passenger cars and LCVs, over the next 6 years. In this context, long range BEVs will be a good alternative as will the agreement with Dongfeng in 2016 to build a new e-CMP for all future all-electric cars. They tie up with China as it attempts to target the mass market, together with new regional plants, such as UZB in Russia. Joint e-LCV platform collaborations will be a key component of PSA’s powertrain strategies as it moves toward convergence with a common platform from 2019. PSA has developed two dedicated platforms for EVs – EMP1, a subcompact platform for entry level cars; and EMP2, a platform for mid-size cars, vans, and LCVs. PSA’s “Push to Pass” plan aims at launching 8 new models. The plan revisits the company’s city delivery vans and seeks to double global profits, including tripling sales in the EU.
Volkswagen is targeting businesses that do 70-100 kms per day in Germany, the UK, Netherlands and Sweden with its zero emissions offerings. The company aims to develop EVs, autonomous driving, and new mobility services with an investment of €44 billion through the 2019 to 2023 period to accelerate the pace of innovation. The company is likely to push the long range benefits of flat battery architecture in vans as it attempts to draw vans under the modular architecture (MEB) canopy as well. Substantial outlays, amounting to €25 billion, are envisaged for battery purchase. After 2021, VW’s e-vans are likely to transition from existing model based architecture to MEB.
Large vans with high C02 emissions and impending ICE restrictions in several urban centers in Europe have made IVECO rethink its powertrain mix strategy. Today, IVECO faces the urgent need to cut the C02 emissions of its heavy duty vans. The pressure to do so is being exacerbated by several cities, including Rome and Milan, mulling the ban of diesel engines/ICEs from 2025. A shift to BEV would allow IVECO to more rapidly attain zero emissions capability and cross pollinate such capabilities in medium and heavy duty vehicles. At the same time, it is likely to focus on ramping up its urban mobility offerings through EVs with 200 kms of range for urban and extra urban driving. IVECO patented technology is geared to support full charging of these EVs in 2 hours.
Interestingly, FIAT is not looking at electrification strategies for its cars, at the moment. The lower base of CO2 emissions in vans and the unclear regulation against diesel in Italy has translated into lower impetus for FIAT to make the switch to electrification. That said, any acquisitions made by FCA or Fiat Professional in the future could result in a turnaround in FIAT’s electrification strategy, with greater focus being placed on EVs. FIAT’s vans are likely to be mainly diesel propelled, while the share of boosted petrol and CNG engines with higher speed automatic transmissions is likely to expand.
Customization and Services Based Models
Fleet managers will push for a high level of customization, in terms of both forms and types. For example, this could range from configuring batteries based on city terrains to customizing physical elements like the length and height of the LCV and whether it should be front wheel drive (FWD), rear wheel drive (RWD), right hand steering (RHS) or left hand steering (LHS).
OEM electrification strategies will be based on urban, intercity and sub-urban requirements. This will include new services-based models like Ford Kerb side delivery which will push eREVs. Mercedes’ drone delivery will motivate the need for flexible battery architecture in the 40-60kWh range, while Chinese partnerships will be key to developing bigger and long range batteries of 80-90kWH.
Currently, the ‘sweet spot’ is the GVW class (1.8T–2.2T) which has the highest potential with 30kWh battery and 40kW motor solution. Initial applications will be in inner city delivery vans and trucks in addition to heavy duty drayage trucks since the return-to-base driving pattern of these vehicles supports the charging cycle.
Investments from OEMs and start-ups pouring into the EV space will pave the way for 100 electric LCV product launches across the globe by 2025. All major players are switching to electrification by building in-house expertise or partnering with battery manufacturers, and plan to extend passenger car platforms to eLCVs, to conserve development costs and cut down lead time.
LCV OEMs and powertrain component suppliers are geared to embrace their electric future.