The projected growth for battery-powered products is outpacing traditional internal combustion engines (ICE) in multiple industries. And although ICE-powered equipment, transportation, and other products have a larger market share than “green” alternatives today, that too is changing quickly.
The automotive industry is the most visible example, as car and truck manufacturers globally have announced plans to significantly increase their fleets of electric, fuel-cell, and hybrid vehicles by 2030. And although regulations in the U.S. and abroad are driving this transition to reduce CO2 emissions, Tesla, Rivian, and other companies focused solely on electric vehicles reflect business opportunities for consumer and industrial products powered by renewable energy.
The combination of innovation, lower costs in maturing technologies (e.g., energy storage), regulatory mandates, and shifting customer preferences are paving the way for manufacturers to develop electrified products in a range of markets.
The Shift Toward Industrial Electrification
Nearly 70% of industrial executives are adopting electrification of industrial equipment, according to a recent Deloitte survey. And 55% of manufacturing leaders surveyed have board-level support for sustainability initiatives.
Although sustainability is often part of an organization’s long-term goals, the immediate need to increase efficiency and control costs are causing companies to act. Electric boilers, for example, convert electricity into heat with nearly 100% efficiency – virtually no radiation loss. And electric propulsion reduces fuel consumption because it provides tank-to-wheel energy efficiency ~70% greater than conventional engines.
Electric-powered industrial equipment and vehicles have fewer moving parts, and use fewer fluids, than ICE alternatives. They also tend to have a longer lifetime, higher fuel efficiency, a smaller physical footprint, higher process control and flexibility (e.g., the ability to optimize systems for torque, speed, and power). Although they typically have a higher initial purchase price (primarily due to energy battery and related costs), the long-term economic benefits can be significant.
These advantages create a favorable total cost of ownership (TCO) for renewable-powered products in a growing number of industrial segments and applications. McKinsey & Company reports that electrified products have a lower TCO than ICE equipment in three of the four equipment types it analyzed (two categories researched could be ~20% lower). And the analyst firm projects the fourth category to be positive around 2023.
The TCO depends heavily on the difference between ongoing energy costs to run electric equipment vs. conventional fuel equipment. Additional barriers for renewable products include the lack of at-scale charging technologies, and a limited track record, and limited product availability.
Improving Motor Efficiency Through Electrification
According to the International Energy Agency (IEA), electric motors and the systems they drive account for more than 40% of global electricity consumption. This category ranges from standalone pumps, sprayers, fans, HVAC systems, and propulsion products to automated manufacturing systems (think robotic arms assembling components as they travel along a conveyor belt).
Drilling down deeper into this category, Global Efficiency Intelligence notes that it is generally easier to electrify low- and mid-temperature processes (below 400 °C) than high-temperature processes. This includes heating applications for food and beverage, pulp and paper, and select machinery and textile industry segments.
Quietly Stand Out in the Crowded Consumer Market
In addition to sustainability, B2B companies tend to focus on economic benefits while consumers are often enticed by new features. Consumers looking for quiet performance and easy maintenance are gravitating to renewable options. As an example, the battery-powered lawn equipment sector is growing three times faster than gas according to market research firm Freedonia Group. Stanley Black and Decker estimates that sales of its electric-powered lawn equipment have grown more than 75% in North America during the past five years.
Snowmobile and watercraft brand Taiga is betting that its electric products will reach a new segment of consumers who haven’t used these types of motorized vehicles due to noise and exhaust fumes.
3 Strategies for Electrification Product Development
As manufacturers evaluate electrification, consider these approaches for design and production:
- Look beyond targeted enhancements and consider a complete redesign: Energy-efficiency efforts often target isolated areas – such as an engine. But the investment to reevaluate an entire product, vehicle, or system design can double or triple energy savings at a lower cost, according to noted energy thought leader Amory Lovins. Automaker BMW designed the i3’s body with carbon-fiber composites to reduce the electric car’s overall weight. This design and a simplified manufacturing process offset the higher costs of more expensive materials associated with electric vehicles.
- Incorporate smart, connected features: Take advantage of the smaller footprint of electric batteries, controllers, and drivers compared to ICE motors and power trains. And use the additional space to enable Internet of Things (IoT) capabilities. By implementing a digital thread between the digital product design and the product in the field, manufactures can use performance information to optimize maintenance, use real-world performance information to prioritize feature enhancements and design changes, and more.
- Adopt a hybrid approach: A dual design could be attractive for a variety of industrial applications, even though up-front investments are higher than a single setup. In some cases, full electrification may not be attractive due to high or volatile electricity costs. It can also be used to capture additional revenue sources, such as grid operators that provide financial incentives to companies that consume excess electricity generated during peak periods. Or, it could be a first step toward complete electrification, enabling industrial companies to gradually shift their energy diet.
Caterpillar, as an example, added a hybrid electric motor to its D7E Dozer. The electric drivetrain delivers roughly 35% better fuel efficiency and 10% more production capability than its ICE-powered model.
Product Optimization through Electrification
The electrification of industrial equipment is at or near an inflection point for a growing number of applications. And while the opportunity to diversify or extend product lines through renewable-powered options has significant upside, design and sourcing missteps can have a long-lasting impact on a company’s brand and profitability. This is especially true because component and product vendors in dynamic technologies like battery-powered motors and systems can have vast differences in cost, performance, availability, and potential for long-term environmental compliance.
There are multiple approaches to design (or reengineer) products for electrification. Digital manufacturing simulation can help organizations accelerate design and optimize manufacturing for performance and profit with confidence.
Design (or Re-Engineer) Your Products for Electrification
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