Future trends of hybrid vehicles with the new energy subsidy policies

On 24th, June, the UK Advanced Engineering 2010 China Showcase Event, which was organized by UK Trade & Investment Department (UKTI) was held in Shanghai. Gasgoo.com interviewed the Technical Manager of the Advanced Powertrain Projects of Mira, Derek Charters, who talked with us about the development trends of hybrid vehicles and electric vehicles under the new energy subsidy policies and the low-carbon technology's application in the auto industry.

Gasgoo.com: As far as you know, recently, the China government just published the subsidy policies for the renewable energy vehicles, as project leader of this power train system, do you have any of your personal views about the future of the automobile industry? 
 
Derek Charters: I think, as BYD said that hybrids of some description will be standard in 2020. The type of hybrid will vary depending on size of vehicle but we will have electric drive train as standard as the starting point, anyway.

That being said, one of the main problems will be heavy duty vehicles, and I believe heavy duty vehicles will still need to have a liquid hydrocarbon fuel. It may be diesel, it may be petrol, it may be something different. But one thing I would say is that the liquid hydrocarbon fuel will be made synthetically. Again, I think BYD mentioned that first generation of bio-fuel doesn't work because of the need for food crops to be used, but I am now of the opinion that the second generational, or that say, the third generation bio-fuel will start to fill up the fossil fuel gap .what do I mean by that is that second and third generation bio-fuel uses waste products to make fuel or you could use land which is no good for growing edible crops, so you need to increase the use of waste products in making fuel, you need to increase the use of soil to grow basically weeds, which you then turn it to fuel.

Gasgoo.com: what kind of technology can promise hybrid a bright future?

Derek Charters: The difficulty is that there is going to be so many vehicles needing electricity in addition to the industrial and domestic requirement of electricity. You will have nothing electricity for the vehicles. Now I think there will be a mix: so you have your plug-in hybrid, which will be doing short journeys, and that is excellent, a very good way of using electricity and using electricity vehicles, and we then need to move those vehicles longer distances, and I think when they move the longer distances, they will use second or third generation of bio-fuel, and why I call it synthetic fuel is that if I can define the fuel very precisely, my colleagues, my engineers will be able to produce engines that I used to work loosely, because it could be all sorts of different engines that can use this fuel very much more effectively than they currently use petrol and diesel. So synthetic fuel means purity, quality, a very nice fuel to burn, and therefore, I can improve the efficiency of the primary engine while sort of improve the efficiency of the hybrid electric vehicles. So it is important as those two together: electricity, synthetic fuel engine.

Gasgoo.com: As you mentioned earlier that you still believe that hybrid will have a market for a long time, now in China, actually, the incentive policies by the government for the plug-in hybrid and EV is very different, the gap actually is very big. Do you believe in China the future technology trend will be more focus on the pure EV? And also GM has a mix strategy, develop both, hybrid and EV, but Nissan, the Japanese company, develop pure EV. What's your view on the future trend in China and Europe?

Derek Charters: A plug-in range extended EV has to be a good EV. You start off with a good electric vehicle and your range extended, now at the moment, hybrids tending to be as the simplest way of showing green credentials. I believe that by doing electric vehicles, by chasing a good electric vehicle either through incentives or design or engineering is necessary, because once you get the electric vehicle working properly, get everything in a good condition, you can then, and in fact, you need the electric vehicle to be hybridized. If you take an existing vehicle and hybridize it, you don't do fine enough. And now I think at this moment in time, the incentives of electric vehicle is very important so that we move from money being invested to money being made, we got to make a market for these vehicles, we need a market led by policy because technically, I have got motors, which is good enough, batteries, which are good enough, engines, which are good enough, and vehicles, which are good enough, so I can actually make the vehicles that the market would want if the market wants it. So we are in a situation where we are ready to start selling cars, but is the market ready to buy cars? And I think this is what all about it. In the future, you have to buy electric hybrid vehicles because they are going to be so much more fuel efficient. But when people want to buy them, it will be too late to develop them. You need to develop them now, so when people have to buy them or want to buy them, they are available, so you need this kicked off. It is what we call pump-priming, and these incentives are extremely important for market generation. It allows us to sell vehicles into the market place and then develop the vehicles that we sold into the market place. We need to get into the second generation vehicles. At the moment, we are selling first generation vehicles, we need to make money on the first generation vehicles so that we can develop the second, the third generation, the fourth. We got to go to the next level.

Gasgoo.com: So is it right that now the hybrid technology is more mature than the EV's technology?

Derek Charters: Yeah, the trouble with the word hybrid is that there are too many variations, anything from an integrated started generator through to a power assist on a gearbox, through to Toyota pure hybrid combining gearbox, through to my range extended EV, and each one of those has different maturity levels and different abilities. The one thing you can say about an electric vehicle is electric vehicle isn't an electric vehicle as very much easier to define. And I think one of the challenges for car companies and for engineers is that we are in that state of flux ——a state of change, we are here, we want to be there, but nobody knows how we are going to get there. I think using market forces and a little bit of foresight is an interesting dilemma, government around the world knows that we have to be here, but they know we are here, and we know the customer isn't going to change, because he is happy with the car he has got, it is a good car. We have been working on them for hundreds years, why should the customer change, so you got to change the attitude of that customer through financial incentives, through education to say yes, that is a very good car, it is exactly what you wanted to do. But look, if we are going to make the world a better place------ we want to be there, how do we get there? I think you said GM is going a motor way and Nissan is going an electrical vehicle way. We really don't know the future and I think it is exciting, exciting times we are living in, one of the Chinese expressions. The one thing I would say is that however you get there, there will be electric drive train in place, and most people are developing electric drive train perhaps on the back of an electric vehicle, knowing for well, that if things change, just take a few batteries out, put a range extended in it, the job is good.

Gasgoo.com: You are looking to find some good partners in China, do you have a plan to introduce the good technologies or suitable technologies to China and to provide services to OEM?

Derek Charters: The simple answer is yes, the more complicated answer is that I have a lot of contacts worldwide, including UK and America and Europe. There is becoming a clearer market for components and sub systems, such as motors and batteries, I believe China well already have good motors and good batteries. They have already got good car factories, they got population, well-educated, bright, and intelligent, I mean to some extent China is well positioned to leap frog the rest of the world, moving directly from a situation of a few cars to situation of lots of cars, and those many cars are already low-carbon vehicles. So I hope Mira can act as a technology provider to find the best technology, to independently assess that technology for the OEM, to work with the OEM and the component supplier to ensure both parties win from the contract. China is in that very good position of having the raw material for the next generation of vehicles. They got access to lithium, to thulium, to all the raw material needed to make large quantities of low carbon vehicles. And the new market that China is creating could be created in any direction. It is a good time for China to start to consume, if China started consuming maybe ten years earlier, you would have started consuming all technologies, now I think you got the opportunity to consume new technologies.

Gasgoo.com: What are your company's competitive advantages?

Derek Charters: One is experience, to some extent, that experience is both of the new technology and the automotive world, we have been designing and developing cars for 60 years, and the process of developing cars isn't going to change, they still gotta to do the same job. Now we can offer that to any companies in China, we can do an extremely good job for them. The experience of the new technology is also something we bring to the table, and I have to emphasize Mira's independence, and that sounds rather a weak proposition, but there are a lot of people selling products in the low-carbon vehicle industry, which I have to say doesn't work, they don't work, they are new, they are naive, in the respective of what they expect they can make them do, so Mira's position is we know how to do it and we know what you should use, well, we don't know what you should use to make it happen, that sounds rather too behaviour?. I am always looking for new technology, but when I find that new technology, I analyze it for truth, for capability. Once I find that technology, I can use it. What I am worried about is people getting excited over new technology, which doesn't work, and I think Mira, we can guide people, both guide people who are making products for OEMs, so that their products meet the OEM's requirement, which is very strict, very difficult to make an automotive product to the correct standards, and also we can guide the OEMs to look at new technology, which we know works. So those two things will speed up the process, would make the product better, easier to sell and then unlikely to break down.