It’s no longer a matter of debate, we are firmly in the Electric Vehicle (EV) age with soaring market caps of Tesla and Rivian as evidence, yet market penetration by an EV below $35,000 is scarce and hard to imagine today. This coincides with the beginning of the end of the ICE (Internal Combustion Engine) age!
A quick comparison between the market caps of late 2021 vs the penetration in each country paints an uneasy picture.
In October 2021, Tesla achieved a market cap above $1T, while the US registered just a ~2% EV penetration. With China at 6% EV penetration and India registering less than 1% in EV sales, the stats convey that the market is nascent, while paradoxically the market caps of Tesla, Rivian, and Lucid soared in 2021.
What has been a trend is that almost all automobile manufacturers, old and new, introduce new EV models in the price range of $35k-$80k and offer between 200 to 350 miles of range (320 to 560 km). While these models suffice for range requirements in most countries for both city and inter-city driving (with charging infra ramping up), they only cater to about a 20% market in US and China and less than 5% for India, at these price points.
The $5k-$35k mass-market EV segment is presently vacant, other than a few less than attractive kei (ultra-mini) car type EVs.
Let’s look at some data to get a better grip on this situation. Both Indian (2021 landscape) and a US (2022 expectations) scenario.
For India, what is actually achieved as on-road range lags far behind that as advertised, that, plus duties on imported vehicles will remain high, thus missing the affordability benchmark. US’s EPA range has better credibility, although the price points are largely in the $40k-$55k mark, which leaves a large Total Addressable Market (TAM) uncaptured in the $20k-$40k segment.
What can one change? Optimize for cost and/or efficiency?
Let’s look at batteries first. Especially, as batteries have been at the forefront of the EV revolution. Bringing down $/kWh and kg/kWh has been the holy grail pioneered historically by Tesla. LG and Panasonic drove this evolution with the leading automaker. More recently, SK, BYD, and CATL look to take a lead with cost-effectiveness, volumes, and especially prismatic/structural LFP/LFMP batteries. Sodium-ion and solid-state batteries are maturing, and while the former may lead to better unit economics, the latter is more suited to high performance and fast charging. The price of the LFP batteries is expected to come down to a nominal $85/kWh by 2024–25 timeframe, with sodium-ion chemistry proving stiff competition on the price.
Second: Optimizing motors, electronics (battery management systems, motor inverter, on-board charger, VCU, DC-DC convertor, etc) to a feasible price point for a mid-level entry car. We are reaching a steady-state curve on price, even as performance with high voltage architecture continues to pick up.
Even with the above increase in the battery pack and drive-train efficiencies and the cost drops, building a $35K car with a 500km on-road range is still quite impossible in the US and Europe.
Thus, we begin to ask ourselves:
What else can we further optimize if the top two innovations still don’t get us to a mass-market car? The answer we firmly believe lies in:
The set of questions in front of us:
“Fundamentally, why do we still insist on ferrying 75kg to 200 kg of passengers in a 2000 kg car?”
“Why should we propagate the Henry Ford era marriage of oil and steel today when the entire point of an EV is to move away from the dirty emissions of oil and steel?”
Light weighting has two straightforward advantages. It allows us to pack lower density and cheaper batteries and provides an extra range for the same battery capacity.
See below how the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) range graph moves with decreasing weight on a car. For reference, a Tesla Model 3 is about 1600kg, and a Tesla Model S is about 2200kg. The car simulated has a 60kWh battery (90% used) with a 90kW motor and a nominal Coefficient of Drag (Cd) of 0.25.
From the above graph, it’s clear that light-weighting adds between 16% to 17% additional range as the incremental dead weight is taken away.
So, for us the questions remaining to be answered were:
· How do we achieve this light-weighting, preferably at the 1000 kg mark to achieve a range of above 500km?
· What options were available without compromising on safety while meeting a goal of net-zero carbon footprint in the future?
While Steel, Aluminum, and Carbon fiber are well established within the auto industry, that isn’t the case with silica composites (popular known as glass-fiber composites). While the tensile and flexural properties are in the ballpark, the specific strength is almost 5x higher than that of steel making it a prime candidate for light-weighting, while not as expensive as carbon fiber. Secondly, glass-fiber composites offer best-in-class crashworthiness properties with their high specific energy absorption.
This selection helped us optimize for the 1000 kg weight point, with an adequate battery to provide a 500km range. This selection also helped us create a ground-up car chassis (monocoque) that is superior to steel in strength, stiffness, crashworthiness, and carbon footprint while being 100% recyclable thus being ready for the new age circular economy.
The specific strength of glass-fiber composites is almost 5x higher than that of steel making it a prime candidate for light-weighting
Enter Cell-based manufacturing and micro-factories!
Affordability is a tough challenge. Glass fiber composites have been traditionally manufactured and used in industries like wind turbine blades, construction rebar or I-beams, jet skis, and yachts and are ultra-durable (with a life of 25–40 years) with minimal issues of corrosion compared to metals. But with a part manufacturing time of 4 hours, they have been notorious for incurring high CAPEX per part.
Solving this issue required us to look at thermoforming and pulltrusion processes along with a special type of CGFRP thermosets/thermoplastic materials that brought down the part manufacturing time to 5 minutes with the use of robotics for precision manufacturing. Using a combination of these processes, we can make skins/panels, complex functional members, and load-bearing beams to be used in the EV.
This process also allowed us to think of cell-based manufacturing rather than archaic assembly line manufacturing. Multiple benefits to this approach are as follows:
Start small at just 10K unit size factory
With a cell-based approach, the size of a factory considerably reduces. One can kickstart a manufacturing unit at just 1,000 or 10,000 units. In contrast, metal stamping for traditionally manufactured automobiles requires large presses with the cost dropping marginally with every 5,000 units, necessitating operating 100,000 to 400,000 units per annum large factories to achieve an acceptable economic scale.
2. Composites with their tabletop machines approach and are fully aided by robots (cutting fabric, mould placing, thermoforming, milling, machining, and riveting) define cells capable of manufacturing 100 to 200 parts each day. Thus, scaling becomes modular and easier with the capability to trace the demand curve rather than dealing with sunk CAPEX once the market shifts.
3. Highly accurate repeatability with robots is something that is required with composites.
Upgradation or new model design changes 10x easier
4. Cell up-gradation to suit new models or design changes is 10x easier than in traditional factories as there are none of the massive changes required in metal casting/stamping/forming/welding.
High modularity, low land requirements, co-located experience center
5. High scalability and adaptability: Build for 10,000 units (a supply-chain sweet spot for component suppliers), prove the business case, and then manufacture 100,000 units. We can easily achieve scale at the same location or locate a micro-factory near a new city, where there is demand for the product. With land requirements as small as 1500–2000 square meters to build a 10k unit factory, there is virtually no need to convert large parcels of agricultural land to industrial use. We can build closer to demand generation thereby drastically reducing logistics. We can dispense with dealerships, inviting customers to the nearest micro-factory, experience the manufacturing through the glass walls, and pick up the car once ready, having played a role in customizing the configuration.
This is how we believe we have solved the issue of high CAPEX and scalability. Affordability is one step ahead.
With global outsourcing centers in India, it makes perfect sense to build with Indian ancillaries that provide a 15%-25% cost-benefit compared to their western counterparts as the labor prices remain cheap and profitability hovers in single digits. One perfect recipe is as follows:
A solution capable of producing a $20,000, 5-seater Crossover EV capable of achieving a 500km range on-road under WLTP at 85% battery charge (60kWh pack). More than twice as efficient as the Tesla Model 3 while also packing a decent acceleration of ~5.3sec, the fastest under the $40,000 category!
So this looks feasible! We asked ourselves: Can we truly build a $10,000 mass-market car and end the ICE age?
$10,000 car is the holy grail for OEMs worldwide
A mammoth challenge for all OEMs worldwide! While the LFP battery economics would be favorable at $85/kWh, it will take a combination of a few more factors to deliver a $10,000 car that can deliver a 250 km range on-road by 2025.
Critical cost targets, localized sourcing, agnostic to chemistry
A. Cost target of $85/kWh or less for LFP battery cells, with target cooling system and BMS cost below $12/kWh. Energy agnostic BMS to be able to upgrade with alternate cell chemistries. The industry is arguably headed in this direction, so this is a tick mark
Cheaper electronics, high integration, ramp up in supply
B. Cost target of Motor and invertor below $15/kW with separate/integrated differential assemblies. Removal of Onboard charger and integration into the IDM (Integrated Drive Module) to drop weight, space, and cost from the compact car. Moore’s law on power electronics and supply-chain redundancies by 2025 to make converters and chips more cost-effective.
Composites manufacturing IP that scales
C. Maturity of Fiberglass composites with a smaller hatchback structure (less material, smaller and lesser parts) with a CAPEX target of less than $100/car along with use of bio-resins and 100% recyclability for the net-zero carbon footprint.
D. Maturity and direct transferability of Software for the likes of Supervisory (VCU) Control, HMI, ADAS, and L3/L4 autonomous with partnerships instilled at the $20K car development phase.
Indian Ancillary cost advantage, without compromise on safety
E. Ancillary components: With a 15–25% advantage, and armed with ancillaries built around the Suzuki, Hyundai, TATA, and Mahindra’s ecosystem, India is hands down the best market for ancillary components for a hatchback. While the battery cells would be externally sourced, Planet Electric would deliver the composite chassis/monocoque and supervisory controls/software, with all the other components sourced from Indian local ancillaries. For example, Suzuki already sells a $5000 car of which 50% cost is of IC engine components. Imagine a 4-seater hatchback car like this with the composite structure for high range and NCAP5 safety!
Taking into consideration the above cost targets and transferability of tech from a $20K car,
If we are successful, this car would be a basis to capture the gigantic market between $10K-$20K price points. On a Total Cost of Ownership basis, a $10K car is similar to the cost of a $5K IC engine car within a period of just 5–7 years (Price of electricity at Rs 1/km vs Gasoline at Rs 7–10/km). Developing this tech gives us the opportunity to stake an early claim at the mass affordable car segment, replacing the old ICE age players and grabbing an early market share.
With this innovation, we aim to propel towards a Starship-like moment for the auto industry.
Through this memo, we posit the following:
Presenting ‘PLANET ELECTRIC — Mass Affordable Electric Mobility’
Talk to us about our work in the last 12 months, how we have solved the pressing issues of supply-chain and built confidence with structural simulations. We have already begun work towards building the first engineering prototype.
Created by the Planet Electric team, penned by Gagan Agrawal.
Bringing Space Tech to Electric Cars
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