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New Tech Electrifies the Auto Industry 

auto next gen-annual focus 2013

By Mark Kleszczewski

Are you positioned to support the next frontiers?

It wasn’t that long ago when most of the automotive industry in North America had to intently focus on boosting production efficiencies, reducing costs, squeezing suppliers and modifying product lines in order to survive a downturn in demand, along with supply chain disruptions across the globe. Costs are still a key factor, but with the sector having regained its footing, the pace of change in auto technology is accelerating, especially in response to higher safety standards and changes in consumer taste and expectations.

For instance, the integration of electronics, software and controls into vehicles is expected to keep increasing at a rapid rate. According to industry watchers, electronics account for about 25 percent of a vehicle’s value today. In the next five to 10 years, that figure will climb to 40 percent or more as adaptive cruise control, collision mitigation, self-steering and other autonomous systems continue to trickle down from research prototypes and high-end models into the mainstream.

The simultaneous upswing in sales and technological innovation is creating a whole host of opportunities for manufacturers, suppliers, researchers and the communities where they are based. Hybrid and electric vehicles in particular are poised to take off as next-generation technology becomes reality.

Short-Term Successes, Long-Term Challenges

Coming off a record-breaking year, passenger-car production rose from 62.6 million in 2011 to 66.7 million in 2012, and it may reach 68.3 million in 2013, according to London-based IHS Automotive. In the United States, consumers bought nearly 663,000 vehicles from Detroit manufacturers in August, putting the sector on pace to top 15.5 million unit sales for 2013.

“These trends may be good news for the automobile industry, which now sells a third more vehicles than just three years ago. But the same trends magnify environmental challenges,” notes Michael Renner, senior researcher, Worldwatch Institute, in a recent industry report. “Automobiles are major contributors to air pollution and greenhouse gas emissions.”

The move toward a low-carbon future — embodied in more aggressive government fuel economy standards and more stringent greenhouse gas emissions rules — is a major driver in the “greening” of automotive transportation.

“It’s not going to happen overnight, but the shift to greater automotive electrification and more EVs is inevitable because it’s the most attractive solution in terms of energy efficiency, performance, cost and sustainability. It’s a really exciting time to be in the auto industry.”- Dr. Ali Emadi, Canada Excellence Research Chair in Hybrid Powertrain and director of MacAUTO

Electrification and EVs Lead the Way

Among the most noteworthy changes occurring in the powertrain and fuels portion of the industry is the re-emergence of the electric vehicle. EV technologies becoming more prominent range from existing gasoline-electric hybrid vehicles and plug-in hybrid electric vehicles (PHEVs) to battery electric vehicles (BEVs).

Plug-in vehicles represent less than one percent of total U.S. vehicle sales, but in the last three years their numbers have grown rapidly. Sales nearly tripled in 2012 and are on track to nearly double this year, according to the Electric Drive Transportation Association.

One of the most active hotspots in next-generation automotive research is centered around the McMaster Institute for Automotive Research and Technology (MacAUTO) in Ontario, Canada. In April 2013, MacAUTO oversaw the launch of the $26 million, McMaster Automotive Resource Centre (MARC), an 80,000-square-foot research facility which is already filing discovery disclosures for innovations from electric motors to hybrid electric powertrains.

“McMaster is among the very few universities in the world where we can actually design and build an electric or hybrid car from the ground-up on campus,” says Dr. Ali Emadi, Canada Excellence Research Chair in Hybrid Powertrain and director of MacAUTO.

For automakers focused on other next-generation engineering challenges, access to MacAUTO and MARC presents a major competitive advantage. Emadi’s research also encompasses the development of advanced electric drive vehicles, power electronics and motor drives, vehicle-to-grid interface of plug-in vehicles with Smart Grid, hybrid battery/super-capacitor energy storage systems, and adaptive vehicle control and power management systems.

Emadi’s group has established an aggressive set of targets that, if successful, will see the cost of critical electric power train components drop by 50 percent or more in the next three to five years.

In nearby Michigan, multiple stakeholders are working to make the southeast part of the state a leader in the growing field of research on connected and autonomous vehicles.

“The Ann Arbor region is known as a destination for automotive research and development, and it’s a natural expansion of the industry here,” says Paul Krutko, president and CEO, Ann Arbor SPARK. “The need for safe, connected vehicle technology will lead to a highly collaborative environment between OEM’s and technology suppliers alike.”

The organization is a major supporter of the tentatively-named Connected Vehicle Test Center, which would feature a shared R&D center and test track for connected vehicles, jointly serving automakers, suppliers and related technology companies. Once built, the facility’s initial work is expected to target vehicle-to-vehicle and vehicle-to-infrastructure technologies, focused on passenger safety.

The talent — from skilled trades to engineers — in the region, combined with proximity to research through the University of Michigan, Krutko suggests, make Ann Arbor the only location in the world where this connected vehicle research could happen.

In Georgia, General Motors has already employed over 400 IT professionals to staff a new $26 million Information Technology Innovation Center it launched earlier this year just outside Atlanta. The automaker — which is bringing back much of its research and IT work in-house — expects to hire even more software developers, project managers, database experts, business analysts and other IT professionals for the center, the third of four such facilities in the United States.

In addition to state and city incentives, the local workforce and sense of community were also reasons GM chose Roswell, says Steve Stroud, executive director, Roswell (Ga.) Inc. The proximity to higher education — including Georgia Tech, University of Georgia and Southern Poly Tech — were also important assets that attracted the company, Stroud notes.

Smith Electric Vehicles Puts Theory Into Practice
Hybrid and EV passenger cars like the Toyota Prius, Nissan LEAF or Honda Fit EV have enjoyed increased adoption by the driving public in recent years, but one of the fastest-growing areas of demand and transformation in automotive electrification today is actually in delivery fleets. Smith Electric Vehicles Corp. — a leading designer and producer of all-electric commercial vehicles — believes that short-haul urban transport is the current greatest market opportunity for fleet electrification, a $40 billion worldwide market in which operator demand, logistical viability, political support and environmental benefit are all aligned. The company estimates that a significant portion of today’s medium-duty commercial vehicles service short-haul routes in urban centers, and is targeting this segment for fleet electrification. One of the latest initiatives by the Kansas City, Mo.-based company, whose zero-emission delivery trucks have been bought by customers such as Coca-Cola, Frito-Lay, Staples and the Marine Corps, is a partnership with the Houston-Galveston Area Council (H-GAC) and the Center for Transportation and the Environment (CTE) to reduce vehicle emissions from delivery trucks in the Houston-Galveston region. As part of the U.S. Department of Energy sponsored effort, local fleets will replace existing diesel delivery vehicles with all-electric, medium- and heavy-duty Smith Newton trucks for daily operations. By deploying 30 zero-emission trucks, H-GAC expects to reduce petroleum consumption by over 250,000 gallons of diesel fuel and 70 million tons of carbon equivalents per year over the two-year demonstration period. To learn more, visit Smith Electric Vehicles Corp. at www.smithelectric.com.

“Locating this center near Atlanta makes good business sense,” noted Randy Mott, CIO, General Motors, in a public statement. “We can draw from a deep pool of high-tech expertise through the surrounding colleges, universities and talent residing in the area.”

Elsewhere in the Southeast’s flourishing “Auto Alley,” auto industry executives, engineers and researchers are banding together in new ways to identify, commercialize and fund promising new technologies applicable to the automotive industry.

As the share of auto R&D by suppliers and entrepreneurs increases, one of the leading examples of this new model of innovation is autoXLR8R, an industry-focused start-up accelerator program developed by the Southern Middle Tennessee Entrepreneur Center.

“Due to the speed with which new technologies are being developed and implemented, innovation will still occur at the OEM level, but we will continue to see an increase at the supplier level as well,” says Dan Marcum, executive director, autoXLR8R. “As production is decentralized to the market where cars are sold, it’s not as efficient to wait on technology created in far-off corporate headquarters to make its way to the plant.

“One way to foster an increase in automotive innovation is to help connect entrepreneurs that have good ideas with sources of capital along with the vast array of research and industry resources that call the South home,” Marcum continues. Companies in the program were given $20,000 and participated in an intense 13-week boot camp supported by an impressive line-up of mentors to work on their technologies and business models.

“We are extremely proud of the accomplishments made these past few months,” Marcum says. “I feel confident that this cohort has many opportunities ahead and many of the founders will make a profound impact on the auto industry.”

Investing in the Next Generation

After recovering from financial constraints, market disruption and regulatory uncertainty, automakers and suppliers are not only rebounding, they’re also investing in advanced technologies like never before. The widespread push to develop the next generation of lightweight, energy-efficient vehicles is not only creating greener processes, it’s also opening up research and economic opportunities that communities can tap into, especially if they commit to a long-term approach.

“Supporting jobs in the city and surrounding areas continue to grow as the employment at GM’s center grows,” Stroud notes. “Roswell has already seen an increase in the local service sector, including restaurants, retail and health care. Because of the GM announcement, we have seen IT companies announce over 600 jobs in Roswell alone and anticipate growing our IT hub over the next five years.”

“We identified automotive technology as a key area of potential and the test center as a project that can attract and retain talent in southeast Michigan,” Krutko says. “Working initially with Walbridge, RACER Trust and Ypsilanti Township, and longer term with other private- and public-sector partners, Ann Arbor SPARK is creating a new economic opportunity for the region that has the potential to generate significant investment and jobs.”

“We’re in the midst of a paradigm shift in energy and transportation, one that will be as profound as the one we’ve already seen in information technology,” Emadi says. “It’s not going to happen overnight, but the shift to greater automotive electrification and more EVs is inevitable because it’s the most attractive solution in terms of energy efficiency, performance, cost and sustainability. It’s a really exciting time to be in the auto industry.”

For complete details on the organizations featured in this article, visit:

 Ann Arbor (Mich.) SPARK


General Motors Company


Roswell (Ga.) Inc.

Illustration by Victor Habbick at Free Digital Photos.net


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About the author: Mark Kleszczewski

Mark Kleszczewski is president and CEO of GoBusiness Group LLC and a freelance writer on critical business topics. He can be reached at mark@gobusinessgroup.net.

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