Friday, 7 October 2011

Micro Level Trends - Electric Vehicles – 'Range Extending' the Business Distance Rhetoric

The electric car has over the last 20 years been proclaimed as a magical panacea for the ecological worries set about by the 'Climate Challenge' agenda which emerged in the popular consciousness during the mid 1990s.

That apparent 'panacea' was once again showcased recently with the heralding of Rolls-Royce's Phantom EV and the Parisienne 'Autolib' EV rental scheme: which seeks to replicate the much vaunted Velib bicycle scheme. The former is most definitely in the singular, whilst the latter seeks the numerous, starting with 66 cars now, 250 by year-end and citing 3000 by 2012-end.

This news arrives on the back of Robert Bosch GmbH stating during the Frankfurt Motor Show that it seeks its future in the EV, a very bold move given its general dependency on the ICE powered vehicles manufactured by its clients. Investment-auto-motives' believes the statement was made to keep in step with German government policy announcements, to return procurement-pricing pressure tactics upon its current VM clients who've gained much input price reduction over the last 18 months, and to keep in step with the ideology of the seemingly permanent EV ideology from both strategic and CSR perspectives. But ultimately, given Bosche's electrical heritage such a grand statement of intent was always to be expected.

Yet the real-world EV picture is far less 'cut and dried' than as portrayed by the press or PR centric company statements.

With a touch of irony, the EV is seen by constituent players from two groups that ordinarily sit at logger-heads; or more accurately commodities 'logging-heads'. However, with regard to this issue environmentalists view this mode of automotive propulsion as their preferable 'dark-green' option which can 'save the planet', whilst portions of the investment banking world believe that such a “disruptive technology” can offer a completely new automotive economic platform (within the green economy).

The 'Rainbow Warrior' mindset sees a healthy world of zero-emission, quiet 'paradise-like' urban life. The 'Progressive Wall Street' mindset foretells of new, alternative business streams. Streams gained from dramatically reduce product production costs (electric motors [excluding battery chemistries & costs] technically simpler than ICE), and the creation of through-life rental-use models. So providing for theoretically both enlarged margin at point-of-sale, and an on-going steady-rate margin from (ideally life-time) 'service contract' deployment.

The originating business model was of course that of the mobile phone, and the ideology was born at a time when the mobile phone's provision and popularisation were in the ascendency. But it as witnessed, the mobile phone model has been over the course of the last decade heavily diminished. The relatively low barriers to sector entry encouraged high rates of incoming new competition, thus squeezing margins, whilst traditional phone communications providers created 'bundled' multi-service packages adding greater pressure. Within an historically short time-frame market saturation at the functional level appeared, with profitability declines forcing both M&A and geographic expansions to scale-up the surviving businesses. To attract customers the pace of technological development has surged to metaphorically that of 'light-speed', whilst ever bigger alliances have been formed to try and leverage a mix of market penetration and technological edge.

Thus the very business model that the EV dream was based upon has shown itself to be less than sustainable over the long term; necessitating capture of scale and so leading to market domination by the relatively few. Whilst the low technical barriers foster the excitement of numerous new participants, many of those would & will ultimately fall by the wayside. This is what of course typically happens as a new market develops and the mix of consumer preference and scale economies are under-pinned by allocated capital from discerning investors.

Yet perception is everything, and some of those more 'business savvy' and fiscally astute business people – arguably with little true 'green aspiration' - saw the large opportunities to ride the EV wave and attract government funding through importing typically low-quality (often questionably unsafe) vehicles from China, as part of what was supposed to be meteoric rise into the future. This ilk best exemplified by Californian companies that leveraged the impetus of federal state CO2 policy directives, available funding packages and direct shipping lines from China.

There were those however who genuinely believed & believe in the product concept prospects and accordant business prospects of the pure EV.

Many of these new recruits emerged across a 15 year timespan from the early 1990s to late 2000s, but have (as of yet) failed to create tenable EV businesses, with only a few emergent brand-known names still effectively upon life-support from investors.

The majority were typically reliant initially upon VC monies, superseded by national and local government funding incentives, then upon private and/or public share sales.

The start-up process is known to be tentative and exceedingly fragile, funding often scant when considering the true establishment costs (facilities, overhead, personnel costs) and monies often short-lived when maintaining the cash-burn of a lengthy gestation period (ie R&D, prototyping, production set-up, marketing, possibly political lobbying, enhanced personnel costs etc). Thus, the business models of typical of start-ups are based upon the founder's willingness to work for basic subsistence living expenses (in expectation of reaping the potentially massive rewards tomorrow), the ability to attract replacement re-financing arrangements and the need to ensure successful product and business gateways so as to try and attract next-round support. Given the multi-party interests involved - possibly conflicting interests – this becomes a very fine business development balancing act.

This crop of recent (and indeed not so new) companies is chronologically exemplified by the following (non-exhaustive list) much of this surface observation derived from wikipedia and company websites, the former typically with 'pro' (self or 'agent' written bias) or possibly by those with counter interests:

1991 - 'TH!NK Global' (Norway), initially PIVCO later TH!NK, bankruptcy in 1999, bought by Ford with short run production until 2002 for US/UK, sold to KamKorp of Switzerland with focus on EV mini-bus sector but 2006 bankruptcy, sold to Norway's InSpire Investment Group and led by original founder and given present name, in 2008 GE & A123 Systems enter partnership for 'globalisation' and 'battery supply', late 2008 financing distress, early 2009 bridging loan supplied by EnerDel. 2009 recapitalisation from Ener1 (US)/ Rockport Capital (US)/ Element Partners (US) / Kleiner Perkins (US) / Valmet Automotive (Denmark). Early 2010, Production starts in Denmark & Indiana USA but halts in March 2011, bankruptcy in June 2011. Sold to EMS AS, new production cited for early 2012. (Four bankruptcies in 20 years).

2000 - 'Loremo' [with EV & ICE options] (Germany), presently run by Thomas Zollhoefer, originally conceptually powered by small cc ICE, replaced by EV powertrain in 2009 within unorthodox vehicle package (neither fish nor foul). Company reported closed in mid 2010, yet re-established in late 2010, presently seeking investors.

2003 - 'Tesla' (USA), backed by Elon Musk (re-instated as present CEO), Vantage Point, Draper Fisher, Bay Area Equity, Valor Equity, Compass Venture. Wikipedia article (seemingly written by Tesla) shows a total of eight private funding rounds to date: series-A: $7.5m by Musk, series-B $13m, series-C $40m, series-D $45m, series-E $40m, series-F $465m by US Dept of Energy as low interest bearing loan, series-G $85m, series-H via IPO of $226m. Thus in total raising $921m. In May 2009 Daimler took a 10% stake for $50m so valuing the company at $500m. The article shows that by Jan 2011, 1500 units of the (modified Lotus Elise) Roadster had been delivered, with the 'S' variant now produced. The 'Model S' sedan is being developed. The apparent business model also includes strategic e-powertrain deals with Mercedes-Benz and Toyota and the sale of accrued zero-carbon credits to VMs such as Honda.

2007 - 'Mindset' (Switzerland), backed by Spirit Avert AG and led by ex-Daimler & VW designer Murat Gunak. It originally sought $152m, latterly ran into funding problems, sought financing from the Turkish government which was later denied, and recently acquired by MIA Electric (see below). The vehicle itself was packaged as a EV & PHEV and mixed aesthetics of a Karmann Ghia coupe, dune buggy and shooting-brake.

2007 - Gordon Murray Design (UK), backed by Davidnow Ventures, Capero Group, the renowned vehicle designer created an alternatively packaged 3-seat micro-car which houses EV & ICE powertrains (T25 & T27) and has been constantly tracked by the UK auto-press. The product was created in tandem with a re-deployed 'yesteryear coachbuilt' build system (ie platform[variant] + body[variant]) named iStream®. The T27 EV will be produced by a partnership of GMD & Zytec, an EV integrator. However, this now appears to have been paralleled by development of a mid-engined EV sportscar for Toray Industries Inc, seemingly seeking to replicate / better the Tesla Roadster.

2007 – Bollore-Pininfarina (France & Italy), an obvious JV between Bollore conglomerate led by Vincent Bollore and the design and production house Pininfarina. This has produced the shared basic vehicle of the Bollore Blue and Pinifarina B0, with individual styling alterations to suit seperate market requirements. The Bollore Blue aimed at the EV rental sector, the B0 to be sold privately.

[NB see Autolib Paris Scheme mentioned below].

2010 - MIA Electric (France & Germany), backed by Prof Edwin Kohl (of Kohl Pharma) and acquired from the niche car builders Hueliez. MIA combines Hueliez work in the form of the primary vehicle the mini 'micro-bus' EV (available in SWB 3-seat, MWB 5-seat and MWB van configurations) and the aforementioned 'Mindset'

Additionally, mating EV and ICE technology with plug-in charging capability is the PHEV, this perhaps best seen by Toyota's own PHEV Prius, but additionally the favoured route for previous start-ups; Fisker the most high profile:

2007 – 'Fisker Automotive' (USA), co-founded by Henrik Fisker (present CEO) (ex BMW & AML designer) and Bernhard Koehler (COO) co-running Fisker Coachworks which heavily modifies BMW 6-series vehicles on a BTO basis. Fisker Automotive is co-owned by Fisker Coachworks and Quantum Technologies - a fuel metering and energy storage company. It was initially additionally backed by Kleiner Partners and Caufield Partners. Presented the PHEV Fisker Karma sports-luxury sedan in 2008, presently being engineered for stated production at Valmet in Finland. Originally intended for customer receipts in 2009, funding problems delayed to reported late 2011. Karma S convertible hardtop showcased in 2009, due for release in 2012, with Fisker Surf (shooting brake) showcased in 2011. Reports cite that Fisker aimed for 200 dealership across N.America and Europe by YE2011. The website shows 37 intended US dealers, 3 in Canada, and 8 in Germany, 6 in France, 3 in Italy, 1 in Belgium, and similar singles elsewhere. .

General Business Model Observations -

If the TH!NK experience is examined for practical investment guidance, then the city-car EV business model appears to attract interest on a 'chronological & geo-political' basis. Attractive to PE especially when government or state policy decisions create an external climate for the funding of zero-CO2 vehicle initiatives, with the ambition to kick-start new sustainable green business ventures for the nation or region. The process allows for a build-up of an EV-honed asset-base and development progression of new or existing vehicle(s). However, typically when support funding diminishes as a result of government spending cuts, the financial lifeline to the company is severed, and without a self-sustaining business model bankruptcy administrators dispose of the accumulated assets and inventory to typically a PE company located elsewhere with new assisted eco-funding on the horizon.

There is of course nothing immoral nor illegal about such activities, and indeed are wholly market-led, but simply highlight the schism between what is usually short-termist reliance upon achieved or expected public funding to provide a new lease of life for both old assets and newly established company. It has been this 'swings and roundabouts' experience that has given “arrested development” to both specific EV programmes and the EV genre in general.

The erratic TH!NK story is seemingly countered by the high profile stories of the apparently 'successful' few such as Tesla and Fisker, companies which maintain a high PR quotient to carve a place in the popular consciousness.

As a Palo Alto company the ownership and administrative centre of Tesla Motor was intentionally born into a very different funding environment; Silicon Valley's co-existence of IT orientated thinking, large scale VC backing and wealthy company owners then the seeming perfect 'hot-house' for the apparent technology-disruption intent of other sectors. Yet Tesla Motor is not the conventional niche car manufacturer, infact it does not manufacture, and could be argued as not even outsourcing 'its' vehicles. Thus far the business model has been to integrate a battery and control system into another company's vehicle; its Roadster born from this philosophy with cosmetic adaption of the Lotus Elise. Thus unlike its aforementioned counterparts (TH!NK, GMD, et al) it exists effectively as a brand-led virtual car company, with additional business income streams such as sale of zero-carbon credits to other car companies.

This then allows it to avoid sinking sizeable monies into a typically capital intensive production site, plant buildings, tooling, production line equipment and 'end of line' test equipment. It did infact purchase, at a 'drastic firesale' price of only $42m, an ex-NUMMI plant(GM-Toyota) in California to reportedly build the future Model S with Toyota support. It also avoids the growing trend toward manufacturers sharing supplier development and tooling costs. As such it is easy to note how it was born from the Silicon Valley attitude of outsourcing the lower order aspects of the value-chain, growing mass-exposure for the brand and focusing upon funding issues and the end customer.

Thus Tesla looks to be very much a brand-led 'Funding Vehicle' accessing advanced technology solutions by leveraging other companies' products and manufacturing processes). The company was not designed as a car company in the traditional sense – as seen elsewhere – but moulded effectually around building a company that could meet high-expectation, new business model demands of the investment community and latterly stock market.

Thus whereas conventional valuation measures can be placed upon other 'normal' car-makers, the fact that Tesla has positioned itself in an unconventional operating space / position makes direct valuation all the harder. The old market measurement perspective creates the view of absolute abhorrence that a company with little direct asset-base, absolute reliance on outsourced whole-car providers and their supply chain, having delivered less than 2000 can infact command a valuation of $2.8bn (its share-price rising from $24 to $27 over the last 2 days whilst this web-blog was being compiled). But then again, the company is not a standard car company its works as an apparent technology provider to VMs and offers synergistic by-products in zero-carbon credit to off-set others, this no doubt ironic given that it does not physically make its cars. But stock markets even in today's dour times, have ostensibly become gauges of sentiment and expectation, not Victorian value 'fundamentals'. Silicon Valley could be said to have been born from Wall Street, and thus has been Tesla Motor.

[NB The eventual delivery of the promised 6,000 Model S cars will undoubtedly help crystallise perceptions to the benefit of Tesla, though it appears that technical integration, manufacturing processes and plant support will be the responsibility of Toyota. Exactly how this arrangement will evolve remains unclear.

The reported production rate of 20,000 vehicles in 2013, and even up to 450,000 vehicles thereafter should be presently inferred as pure ambition].

Fisker Automotive was formed from Fisker Coachwork, a company cited the major potential for a market in 'coachbuilt' products. It used using heavily modified base cars platforms from the Mercedes SL and BME 6-series, thus able to pragmatically immediately access premium chassis, powertrain and systems technologies whilst offering unique exterior & interior finishes, However reports suggest that only 14 SL based Tramontos were delivered, whilst the newer 6-series based Latigo CS is limited to150 units (possibly as a result of the BMW sourcing agreement if directly procured), delivery numbers and so turnover etc unknown. Fisker Coachbuilt also designed a mid-engined vehicle with for Germany's Artega, itself seeking to compete against Tesla. Thus it also performs as a outsourced design and engineering house for worldwide vehicle start-ups.

What is of interest but cannot be viewed is exactly how the 2 companies are entwined, investment-auto-motives presumes the initial Coachbuilt division (established in 2005) was effectively rolled into the newer Automotive division (est 2007) as part of a partial asset-backed funding agreement, though not known, or with the alternative possibility that Kleiner Partners and Caufield Partners took separate interests with the general intention that the Coachbuilt arm contractually services the Automotive arm. Trying to read 'between the lines' with limited information is hard, but the ambition seems to have been to initially develop exterior and interior engineering and production skills using the base car structures, then once assured for A-surface quality, closure gaps, lighting units etc, develop the understructure capability with advanced lightweight materials. Thus in effect designing the car 'outside-inside' using the VM cars as the benchmark quality base – this then an effective method to create an all new vehicle seeking to try and mimic premium VM quality standards. Adding to theoretical profitability margins, the application of naturally occuring 'non-perfect' leather skins for interior trimming means that it can procure far cheaper animal hides – compared to quality perfect quality hides as is the norm – and sell that as an eco-luxury USP; thereby boosting margins at procurement and retail levels. The company stated in January 2011 that deliveries would commence “within weeks”, little is known as to how many cars have been delivered.

Thus, Fisker looks to be very much an 'Operational Vehicle' for internal and external client niche model development

Expectation -

It is proposed by investment-auto-motives that the 'Funding Vehicle' Tesla Motor will, in the medium term if not before, strike an accord with the 'Operational Vehicle' that is Fisker Automotive.

This done to 'piggy-back' its technology platform for future Tesla models, with the Karma offering the Karma's 'carcuss' for the Model S sedan, and its Surf 'carcuss' for the Model X cross-over, and the SunSet 'carcuss' for a retractable hard-top variant There is of course a close technical coupling between Tesla's Model S and the Fisker Karma as Fisker Automotive was contracted to design the Model S but was accused of 'taking the best' of that design for its own Karma creation. A law-suit entailed and Tesla was required to pay Fisker over $1m. Such a re-formed business relationship as client and contract manufacturer would then provide Tesla with an almost immediate 3 variants of its Model S: sedan, x-over and convertible

Overview -

The EV and PHEV worlds are new, and they apparently offer the panacea of 'eco guilt-free motoring' if the concern of the traditional 'well to wheel' equation is subsumed by the not so 'free lunch' of nuclear/gas/coal/oil 'generator to e-motor'.

The emergent business space has thus developed new (or renewed) thinking both technological and business model realms, perhaps even multiplying the potential for financial reward if the two can be combined.

The accompanying graphic depicts very generalised views of the business models that have been formed to explore and ideally conquer the sector. The graphic (top right) consists of a 3x3 matrix conveying funding levels (low, medium, high) against chosen approach (traditional Product Self-Build, Flexible Product & Process Case-Specific Application, Virtual Car Company – Outsouring of all with Financing & Brand focus)

Headwinds -

But what of the real-world customer reaction to the EV? That will be very much on a product by product and brand by brand basis, but for the moment the following cars and schemes face respective challenges.

Tesla Roadster & Model S :

The Roadster looks like a sports-car and has the driving dynamics of a sports-car, but does not have the visceral sensuality of sports-car. There are no gear-changes in the traditional manner (or even 'flappy-paddle' manner), nor the marque-characteristic exhaust notes which are intrinsic to PorschePorsche, Ferrari, Lamborghini, Bentley, Aston Martin, and the 'lower-order' makers such as Ginetta. Thus there is far less physical engagement with the vehicle compared to conventional sportscars.

The car was / is priced in super-car territory yet could not offer either the real-world driving range nor high-speed upper limits, limited at 125 mph, presumably because of battery energy exhaustion rates. The battery pack is expected to last 7 years with a replacement cost of $33,000 (but$12,000 if order with the car), and is expected to hold 70% charge after 5 years. This then exhibits a more apparent powertrain performance decline than with ICE systems.

The new Model S sedan looks to have typically 'amazing' 0-60 mph EV performance but when produced is destined to be an urban runabout given lack of infrastructure. As with Roadster the top speed will require restricting. Thus 'off the line performance' will no doubt win many (inappropriate) quarter-mile drag runs between traffic lights in the US or Middle East, but in far more congested UK, European, Japanese streets even that thrill may be often negated.

Rolls Royce 102EX :

Rolls-Royce is presently exhibiting its own EV concept, the 102EX, via a world-dealership and events tour. It displays a beautiful illuminated “Spirit of Ecstasy” upon the Palladian nose (very much in the 1920s Rene Lalique radiator mascot style) and offers a seemingly retro-moderne alternative merging the 1920s & 2020s.

On paper the silence of e-propulsion is perfect for the Rolls-Royce brand, a virtue that has been engrained since its earliest days of the first Ghost. Indeed, some years ago investment-auto-motives provided a blog comment on that e-propulsion would be perfect for Rolls-Royce.

[NB Turan Ahmed initiated the idea of the car's floating R-R wheel-hubs as part of a personally created skunk-works proposal for R-R's re-birth when at BMW-Rover during the mid 1990s. The floating hub to primarily provide for a 3rd long-lived marque USP accompanying proprietary palladian grille & 'flying lady', but also for the functional and visual delight possibility of utilising hybrid and e-drive axle for 2WD and 4WD modes, the hubs illuminated with the R-R logo when powered].

Yet upon later consideration, that original quietness that was and is a hallmark of Rolls-Royce is a consequence of its crafted engineering of an ostensibly noisy power unit. That USP of 'near silence' from the 1907 Silver Ghost onward has a direct corollary with the usual rumble of ICE. The Ghost was the very opposite of 'Chitty Chitty Bang Bang'.

But that achieved silence becomes a lost USP within the EV world, since all other EVs of whatever ilk and price – including golf carts - can claim similar levels of powertrain refinement. Thus the EV solution for Roll-Royce, when sat amongst the broad EV crop, could be argued as a liability.

It has been argued that e-propulsion would be an natural solution since it is assumed that most Phantoms are used for city centre and short-hop travel for luxury shopping and evening leisure pursuits such as the theatre or opera. And this may well indeed be the case, especially of course for hotel tenders such as the Phantom at The Ritz or Hyde Park Hotel here in London.

Yet those cars are also driven, albeit infrequently, out of the city centre to social events such as Royal Ascot, Cheltenham, Henley Regatta, Glyndebourne et al. Thus the 125 mile range of the e-power-pack of the 102EX does not suffice and may only serve to aggravate the (near) assured arrival time, the courtesy of providing another with a 'lift', wishing to explore the country-side or the often required flexibility of short-notice travel.

It may also be argued that the actual CO2 output from such typically small annual mileage may in fact be less than that of the standard mid-size 'company car' saloon which trundles the commuter run and across the nation's motorway network.

The 102EX looks a wonderful machine, but will very probably lead to the emergence of Hybrid powertrain variants of Phantom & (new) Ghost which allows R-R to directly access BMW's R&D activities and more directly reduce its overall CAFE rating.

Paris Autolib :

On Sunday (02.10.11) Paris saw the launch of an automotive equivalent to the Velolib bicycle rental scheme. Whilst the bike scheme is run across many cities and towns, Autolib will for the near and mid term be concentrated upon Paris.

The scheme looks to be in the French grand tradition of technology inspired 'socialist experiments', exemplified by the Eiffel Tower, TGV rail system and Millau 'skyway' road bridge, and is the apparent shared brain-child between the Parisienne Mayor Bertrande Delanoe and industrialist Vincent Bollare (of Bollore Group & Bollore Investissements SA), so a Public-Private Partnership deal.

As stated previously, Bollore formed a JV with Pininfarina SpA. The agreement that the French company supplies the solid-state lithium polymer battery-pack for the shared new vehicle project, whilst the Italian company develops a singular vehicle base providing for 2 car variants.. Bollore to receive a basic no-frills product designed for rental 'hard-knock' use, whilst Pininfarina would obtain a more up-scale car for private sale.

The Paris scheme has the cost city-centre administrators and surrounding 'arrondisement' councils approximately Euro 200m to erect the complimentary infrastructure equipment needed to service the cars. Initially 66 vehicles have been released from 66 parking/docking spaces, with an expected 250 cars by December, ramping up to 2000 - 3000 cars by YE2012 – highly ambitious. Criticism has come from some public and commercial quarters stating that the eventual 12.5km of allotted Autolib spaces critically undermines already tight parking availability for private drivers.

This then is a progressive effort to cut the city's congestion levels, CO2 levels and create a more socialist 'caring & sharing' environment, based upon an almost utilitarianist economic theology.

Yet it will undoubtedly also be a prime target for crime, just as the French Velib scheme and other bike-hire schemes have proven; London loosing over 14,000 bikes since inception to theft, vandalism or irreparable damage. As neither respected privately owned items, nor 'nailed down' publicly owned items, the vehicles will undoubtedly be stolen for their parts content: wheels, tyres, lights, wipers, seating, dashboard instruments and metal content scrap values (under the plastic skin). Thus a constant monitoring of the fleet with emergency response teams looks necessary, but if the scheme has priced in loss and vandalism coverage, any losses will simply be recovered or possibly sought from the city's coffers itself if contractually obliged.

An admirable scheme to change the personal transport face of Paris, especially during this period of economic contraction so providing an alternative cost-effective method for city drivers. But previous precedents indicate that the car-share scheme will not be the long-term antidote Bollore publicly hopes, the opportunity for abuse may only serve to add new income streams for the criminally minded, and the eventual economic upswing will diminish participation in public vehicle hire.

In the meantime though Bollore's industrial interests will have scaled-up its battery production base and presumably helped prove and develop the technology. Providing a new opportunity to service Renault & PSA within France and possibly serve FIAT in Italy.

The public's partial financing of Autolib then could well act as the public springboard for one of France's largest private industrial concerns, from which it will seek to serve other niche manufacturers and 'electrified' VMs.

London, we recently saw the 'Ecovelocity Show' held in literally within the shadow of Battersea Power Station – the underlying sub-text obvious! It was a display of the recent crop of EV, ULEV and LEV vehicles, ranging from multi-billion dollar though scantily seen range-extender GM Volt to the wholly frugally developed efforts such as the Westfield EV. Yet it must be noted that such cars were mirrored by a raft of more conventional Hybrid and low CO2 ICE cars.

Thus we clearly see that the fact remains that over the last 100 years and still today modern transit is dominated by the massive 'energy enablement' that oil provides. We undeniably live within a powerful auto-centric world, in which the triumvirate sectors of automobiles, petroleum and insurance act as massive interdependent economic generators. It is a seemingly irresistible force that now has grip over the EM world, the scale economies generated therein perhaps only serving to add an even greater impetus to the conventional technology model, as even higher volume platforms and engine families are devised to satiate the now truly coupled global economy. That in turn adds greater weight to the aforementioned economic triumvirate, spreading ever broader and deeper tentacles throughout horizontal, vertical and diagonal value-chains. From the oil well to refinery to retailer's tank to pump-nozzle and within the global insurance sector where the modernisation of EM road networks to match that of western infrastructure effectively allows for 'mimic-modelling' of risks and premiums seen in the western past and applied to the EM future.

Yet perhaps, if western nations are truly serious about trying to deliver lower emissions immediately, the UK and Europe and indeed North American should look to the USA example of in the 1970s.

[NB another age in which the EV was said to be a soon dominant force].

It was during that era, after the 1973-4 oil crisis scare that Washington passed legislation to reduce the national speed limit to 55mph (and later re-rate gasoline octane chemistry). That singular initiative undoubtedly improved real-world fuel efficiency rates and saved the national atmosphere from the exponential CO2 emission typically experienced at increasingly higher speeds.

The investment community must continue to seek out new solutions in answer to the CO2 challenge, and the business world must identify opportunities therein. Opportunities that range from overtly pragmatic 'in the box' thinking (such as ICE cylinder de-activation) to seemingly remote 'out of the box' thinking (such as community shared vehicle schemes).

But the real challenge as ever will be to identify the winners from losers amongst the plethora of technological solutions and allied synergistic business models. And critically to remember, that given the historically imposed macro-level PESTEL boundaries present, even the radically micro-level 'change the world' youngster typically matures to meld into the slowly evolutionary conservative centre ground.

In the meantime a host of concepts, prototypes, and limited edition models will keep emerging from start-ups, M&A-driven PE and VMs. This all then sets to repeat the “survival of the fittest” - or rather read that as: “survival of the richest” since that is the true determinant - and continues to makes for a generally bumpy but interesting low emissions ride into the future.