Welcome. This page is an addendum to a paper “A Strategic Model of Innovation” in the March 2021 edition of the International Journal of Systematic Innovation. The purpose is to provide a detailed case study of the use of the IDEF0 model of innovation. The “box model” as we call it can be used to contextualise the state of innovation in a sector, supporting decision making through foresighting. To demonstrate how, we are looking at the passenger vehicle segment and understanding the extent to which electric vehicles are likely disrupt the market.

There is a lot of detail here, and it is a long read. But the bottom line is that EV’s are likely to penetrate the market more quickly than many industry commentators have suggested. It is also worth pointing out that the original research for this project was conducted for a client in 2018 and some data has been excluded for confidentiality reasons. Some more recent information was included when writing the original conference paper in 2019. Recent developments in the electric vehicles market tend to support the findings in this foresighting analysis, but have not been taken into account. This analysis should be read as if it was being written in 2018/19.

Introduction

The IDEF0 methodology is built from a hierarchical construction of boxes and arrows. Each box contains a verb that describes a process. ‘Innovate’ is a verb and is therefore a valid process for IDEF0 definition and modelling. All processes have Inputs, Controls, Mechanisms(Means) and Outputs. (ICOM). Arrows are used to describe these interactions between processes, and at increasing levels of decomposition must maintain logical consistency. 

At the highest hierarchical level, the A-0 context diagram for the ‘innovate’ process including the ICOM arrows has been described as:

Pasted Graphic 2.pdf

Further explanation of the IDEF0 model construction is contained in the main paper.  The remainder of this document shows the use of the model as an “innovation canvas” to evaluate the automotive sector with respect to the potential transition to electrification.

Electric Vehicles

An important question for many over the past few years is “will electric vehicles take over the market, and if so when?”  In 2013 the EU published a forecast (European Commission 2013) of energy and transport trends for 2050.  Their reference assumption was that battery only EV’s would “emerge around 2020”, and that EV’s, including hybrids would be 8% of the total stock of cars in 2050. This is well short of the mark. (although they chose to use a low end forecast option). Forecasting disruptive shifts is notoriously difficult.

The literature contains many historical studies of fundamental industrial shifts.  Incumbent technology has un-depreciated capital in operations infrastructure, high efficiency, economy of scale, established distribution, routes to market and customers who are also invested in the current technology. A disruptive shift is a threat to this status quo with significant risks and penalties for the incumbents, which is why it is often new entrants that introduce truly disruptive shifts. There have been many attempts to introduce EV’s including in the 1800’s. General Motors introduced the EV1 in 1996 (Wikipedia – Who killed the Electric car).  GM concluded that EV’s were uneconomic and crushed all the vehicles – to significant public and celebrity consternation. Small startups have attempted and failed over the years too, but of course Tesla are the new entrant and counter to many predictions survive. But will they fail? Will EV’s remain a niche in a more diversely powered fleet, or will the industry electrify entirely? This has implications for many – but most clearly for companies that supply into the auto industry.

The above graphic is a typical historical landscape of many industries, utilising TRIZ ideality /S-Curve theory. The black curve is the incumbent technology used to provide the main useful function, the blue curves are innovation attempts that fail, or only find a relatively specialised niche. The red curve is the next disruptive shift, which initially may look like the many blue curve attempts. Despite initially suffering from significant downsides this has the fundamental capability to more ideally address customer needs and finds sufficient early commercial traction to take the market. The question then, is if the above graphic is representative of the state of the sector, are EV’s the automotive red curve?

To help answer this question, we can interrogate each of the arrows of the IDEF0 innovation box model in turn to get an understanding of the propensity of the the industry to make this shift.

Controls

Controls are those things that defines good output, and the innovation box model identifies three categories – consumer, technology and business.

Customer / Consumer – Here, we are establishing the “voice of the customer” and in TRIZ / TrenDNA terms we are looking to identify consumer trends, jobs people want done (functions) and problems to solve (contradictions).

Generally, customers want vehicles to be quick, quiet, refined, easy to drive and comfortable with low running costs and sufficient space to carry passengers and luggage. EV’s have fundamental advantages in many of these performance characteristics. Safety of EV’s has been a concern (fires /electrical safety). But the main useful function is to travel from A to B and the key concern for EV’s is that you won’t get to your designation in time, or at all – known as ‘range anxiety’. The majority of car journeys are less than 100 miles, and the majority of charging is done at home, overnight. It is longer journeys where range anxiety comes into play.  The first use case is being able to reach a destination without charging and to be able to charge at destination ready for the return journey.  At an average speed of 70mph, 3 hours of driving would be 210 miles and get you from London to Manchester, or Paris to Brussels. For longer distances, having to charge en-route, four hours of driving with a 40 minute stop would seem acceptable and the charging experience needs to be free of frustration.

If we look at penetration of pure EV’s into the Norwegian market, (approx 30% in 2019) the practicality of EV’s already appears good enough for many, but range / charging anxiety remains a significant factor that needs to be addressed.

The BBC reports that a recent study found that only 1 in 4 UK motorists would consider an EV citing issues with purchase price, range, lack of national charging infrastructure and living on a street without access to an electrical point (BBC 2019). The same study is reported 50% would buy with a range of 200 miles (320km) rising to 90% at 300 miles (480km). 

We can identify the key contradictions for consumers as:

journey distance vs charging time

vehicle range vs price

Intangible factors include associating with brand values, and the issues of feeling, or looking “green”. The Tesla brand is not for everyone, but automotive brands are rapidly entering the EV market expanding choice. Amongst early adopters there is much excitement and commitment to electric driving. Only 1 in 10 would go back to ICE according to a recent survey (Motoring Research 2019). Outside of suitability for long journeys, there appears to be little evidence that consumers will not switch, and manufacturers have taken heed of customer needs as demonstrated in the following graphic

Technology – here was are looking to identify the most important technology trends and challenges to be addressed, best described in the form of a contradiction. Often the sore point of an industry, such as strength vs weight, or speed vs precision.  These technology challenges are usually prioritised by an understanding of the voices of the customer and business.

A litre of standard gasoline provides 9.7kWh of energy. The 90 kWh battery pack in the Jaguar I-PACE, one of the largest on the market contains the equivalent of only 9.3 liters of petrol, and weighs 603kg vs 7kg for the equivalent petrol and takes up significant space. However electric motors used in EV’s are typically 90% efficient, offer instant torque from rest, and powerful, giving surprising acceleration performance. Electric vehicles convert around 60% of grid energy to power at the wheels, whereas conventional gasoline convert around 20% of the energy in the fuel for the same metric (fueleconomy.gov). A Tesla model S long range expends around 3kWh per mile – giving a range of over 350 miles. Most lower cost EV’s offer typical ranges of 120 to 180 Miles.

Considering the fundamentals of charging an electric vehicle. The maximum charge rate varies, but is currently 150kW for the vehicle itself (Audi e-tron) and more typically limited to 50kW at rapid chargers in the UK / EU. Filling a 60 litre tank of petrol is transferring around 580kW of energy in around 5-10 minutes per stop and say 450 miles of range. Applying the equivalent of 200 kWh for a battery. A charge rate of 800kW would provide around 270 Miles of range in 10 minutes.

The key technical contradictions at the vehicle level are :

Battery capacity vs weight

Battery capacity vs size

Battery charging speed vs temperature

Battery capacity vs cost

Battery performance vs longevity

Battery performance vs safety

Clearly, the success of EV’s is dependent upon advances in battery technology.  

Business – profitability of EV cars vs ICE is not known at the detailed level, and this has been a constant issue with Tesla. However, the fundamental cost for everything other than the battery can be considered to be lower through significantly reduced part in EV’s count and lower manufacturing complexity. It is forecast that EV costs will gain parity with ICE in 2025.

In addition to financial incentives to go electric in the form of grants, subsidies and road tax exception, changes are happening in the legislative framework. The Automated and Electric Vehicles Act 2018 covers the responsibilities of insurers, charging and general requirements. A new EU Directive requires the use of ‘acoustic vehicle alerting systems’ (AVAS) on electric vehicles when traveling below 12 mph.

In July 2018 the UK government enacted a policy to address four grand challenges set out in Industrial Strategy, including future mobility:

‘Under this challenge, the UK government has committed to low carbon vehicles. A mission has been set “Put the UK at the forefront of the design and manufacturing of zero emission vehicles, with all new cars and vans effectively zero emission by 2040”. Also set out an ambition to have: “…at least 50%, and as many as 70%, of new car sales and up to 40% of new van sales being ultra low emission by 2030”

The industry is being nudged towards ultra low emissions / EV’s, but this will be difficult if car companies cannot financially accept the penalties of the change. Model development plans are usually fixed for 3-5 years, and indicative for 3-10years. Adapting to this change requires very careful management of risk to prevent financial collapse. Former Ford CEO Mark Fields is recently quoted

“I think the industry is going to be under a reckoning over the next 2 to 3 years,” Fields said Tuesday at the EcoMotion mobility conference here. “My view is that yes, electrification is going to grow over the years, but it’s not going to grow to the extent all the experts are telling you.”

“They are going to have to first restructure the margins of the business and on top of it you’re going to have to incentivize demand,” Fields said. “If you throw in, during that time period, a recession that’s going to happen at some point, that’s going to put a lot of pressure on the OEMs.”

At the sub system level however, the rewards for suppliers of improved battery technology, especially solid state are substantial. However, there have been many false dawns over the years in translating promising lab results into real world product. This will offset some of the economic disruption to suppliers of engine related components if pure EV’s replace hybrids.

In the energy sector there will also be commercial opportunities for those able to solve problems in the grid, and again this will place the focus on energy storage, including battery technology.

 

Inputs

Available Knowledge / IP – looking at patent trends in the plug-in EV classification we see that activity peaked in 2013 and is in decline. This suggests that the development at the system level is mature and towards the end of the S-curve.

Either the industry is moving away from EV development, or focus has moved into the sub system level, which we would expect to be battery technology as in fig 

The industry is focusing on the things that one would expect, and has possibly reached its peak in 2018 in terms of patent numbers. Further analysis would investigate trend jumps along the TRIZ trends of evolution and significant steps forward in breaking the contradictions relating to specific energy density, volumetric energy density, charging speed or cost. Patents connecting promising battery chemistry with mass manufacturing would also be worth investigating. We should also bear in mind that this is available knowledge, much work is possibly being done in secret.

Natural Resources / Energy – EV’s are intimately entwined with the energy market. They are on trend with the move towards a net zero carbon world. BMW and Tesla amongst several other are investing in manufacturing batteries and EV’s in factories powered by renewables, and ensuring that the supply base follows suit.

Supplies of Lithium, cobalt and rare earth metals are restricting capacity of battery manufacture and leading to increased materials costs that are offsetting economies of scale. There are also concerns around the environmental impact of mining these materials. Attempts are being made to minimize use of these materials or avoid them all together by developing chemistries such as sodium-ion.

Investment  It is reported that the automotive industry is investing $90 Billion in EV development and the trend is still growing (Reuters 2019). Additionally, the UK government is investing £400 million in a charging infrastructure investment fund, £246 Million in the Faraday battery challenge.

Means / Mechanisms

People – One can make a good argument that many of the worlds disruptive shifts have relied on figurehead heroes – such as the rivalry of Nikola Tesla and Tomas Edison or Steve Jobs and Bill Gates.  There are also the less visible, introverted personalities such as Sir Tim Berners-Lee. Behind both personality types there are teams and organisations, the capabilities and skills of which will determine the success or otherwise of the disruptive shift.    

For the EV’s themselves, there are many extrovert heroes, such as Elon Musk, Sir James Dyson and Henrick Fisker. Plus a great many characters within the automotive community, in Toyota, VW, Mercedes, Honda, Jaguar Land Rover and so forth. There are many talented champions of EV’s

At the battery level, there are few specialist heroes, although Dyson, Musk and Fisker all herald their commitment to development of battery technology. However, one person deserves a mention – Professor John B Goodenough – who is largely credited with the invention of todays Li-ion technology in the 1970’s and 80’s. His team have recently developed a promising glass based solid state technology over the last decade.  Goodenough is still working at the age of 96!

Together with many startups such as BroadBit (broadbit.com), mainstream companies including Toyota, Panasonic and LG Chem are all known to have promising developments behind closed doors, targeting the technical contradictions addressing the needs (controls) of consumers and business. We can conclude that the world’s best people are working on this problem.    

Infrastructure – The infrastructure to design, develop and manufacture vehicles may be considered to be in place – being that it merely requires an alternative propulsion system.  However, it is reported from several manufacturers that battery manufacturing capacity is the current bottleneck to sales of EV’s.  However the investment appears to be available to address this shortfall.

Electrification of transport requires sufficient electricity generation, grid distribution, charging infrastructure and demand management. Already, some countries are 

Tools / Methods – There appear to be no gaps in the methods / tools required to commercialise the technologies required to bring EV’s into production. In fact, due to the inherent simplicity of electric propulsion compared with the internal combustion engine, the existing methods of product development honed over many years in the highly complex world of automotive engineering can be considered more than capable of dealing with the challenge. The only area that would require further investigation concerns the testing and modeling methods for specific new battery chemistries and architectures.

Outputs

Here, we identify the resulting outputs of the innovation process, new knowledge / IP, Impact and value added.

New Knowledge / IP – Throughout the S-Curve, knowledge, knowhow and IP is developed and accrued. It is this knowledge, throughout the supply chain that results in the embodied physical object. The difficulties of the early stages of “production hell” experienced by Tesla during Model 3 introduction is a well documented case study and typical of the early stages of an S-Curve. This experience, though painful to those involved, results in experience and learning, and not exclusively within Tesla itself or kept exclusively within the supply chain. Many staff have left to join mainstream automotive companies, or to form new startups – for instance Lucid Motors (www.lucidmotors.com). Companies such as Nissan, Toyota, Honda, General Motors have launched cars in order to gain knowledge of EV development, production and marketing. Taken together, we can see that at the industry level, there is an ever increasing body of knowledge disseminating within the industry, and the trend appears to be showing no signs of reversal.

Impact – Steve Jobs is famously quoted as saying that through Apple he wanted “to put a ding in the universe” – to leave a legacy, to make an indelible impact. Here we classify these impacts as both tangible, intangible, positive and negative. It is a good way to understand the ideality of the system in comparison with others, including the incumbent.

TangibleIntangible
+veLower carbon emissions
Zero tail pipe emissions
Air quality
Performance
Running costs
Mechanical complexity
Reliability
Brake wear
Lack of engine noise / vibration
Home charging
Running costs
Delight
Surprise
Pride
Eco-badge
-veVehicle purchase Price
Tyre road wear particles
Lack of engine noise / vibration
Charging time (long trips)
Trailer towing efficiency

Range anxiety
Degradation anxiety
Fear of change
Frustration (charging)
Lack of engine character
Impact of EV adoption compared to Petrol / Diesel

Added value – this is the financial return of the innovation. For the manufacturer, the primary measure is profitability which is influenced by selling price and manufacturing cost