R&D for New Automotive Technologies Insights from Fuel Cells IMVP Annual Meeting
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R&D for New Automotive Technologies Insights from Fuel Cells IMVP Annual Meeting October 7, 1999 Patrick P. Steinemann Massachusetts Institute of Technology Massachusetts Institute of Technology Cambridge, Massachusetts Contents Introduction Fuel Cells R&D for New Automotive Technologies – Identification of New Technologies – Technology Development – Exploitation and Technology Protection Conclusions Massachusetts Institute of Technology Cambridge, Massachusetts 1 Introduction Fuel cells for automotive propulsion – Fuel cells represent a fundamentally new powertrain technology – Fuel cells compete technically with the internal combustion engine, traditionally a core competence of automakers – Rapid progress was made in the last five years with industry investments totaling $2bn Research question: How do automakers accomplish R&D for developing fuel cell vehicles? What are the strategic questions that automakers are faced with? – How is new technology identified? – How does automaker appropriate and develop technology that is not a traditional core competence? – How can automaker derive value and keep control over technology? Massachusetts Institute of Technology Cambridge, Massachusetts Research Agenda Project duration from fall 1997 to spring 1999 Primary source of information – 25 interviews with managers at Daimler-Benz, Ford, and Ballard Power Systems Additional data for quantitative analysis – Citations in technical literature – US patent statistics from 1970 to date Final report available as IMVP Working Paper Massachusetts Institute of Technology Cambridge, Massachusetts 2 Fuel Cells for Automotive Propulsion Operating principle – Converts fuel (methanol, hydrogen) into electric power and water vapor – Low temperature electromechanical process Regulatory drivers – ZEV regulation in California – CAFE standard in the US – Climate change debate Potential advantages – Reduced air pollutants (NOx, HC) – Increased fuel efficiency (may not apply to total energy system) – Potential use of less CO2-intensive fuels Current disadvantages, uncertainties – Requires methanol or hydrogen fuel – Costs – Lack of manufacturing and practical operating experience Source: Ballard Power Systems Inc. Massachusetts Institute of Technology Cambridge, Massachusetts Fuel Cell Powertrain M ethanol Tank G as Cleaning Cooling W ater Tank Reformer + Catalytic B urner E lectrical System F uel Cells + A ir Supply Source: DaimlerChrysler AG, Communications Massachusetts Institute of Technology Cambridge, Massachusetts 3 R&D for New Automotive Technologies Automaker is faced with problem of budget constraints and uncertainty in R&D – R&D phases with decision points for further investments – Portfolio approach to identifying and exploring new technologies – Fuel cells are competing with a range of technologies: advanced internal combustion engines (spark-ignition and compression ignition), alternative fuels, electric vehicles, hybrid vehicles Challenge of new technology: Automakers had no internal competence in fuel cells, fuel cells were not part of the traditional technology portfolio of automakers – Why? Fuel cells have been developed for aerospace applications, and were initially too heavy, too expensive for automotive application – How can automakers develop mechanisms for early identification of non-traditional technologies, such as fuel cells? – How can automakers gain competence in fuel cell technology, and decide which parts to integrate vs. outsource? – How can automakers retain control over fuel cell technology and develop a position that allows automaker to exploit the future value chain of the technology? Massachusetts Institute of Technology Cambridge, Massachusetts Framework for Analysis Three phases describing the R&D process: – Identification of new technologies – Technology development – Exploitation and protection of technology Framework useful for discussion of – Threat of new technologies through competition with core competence – Technology integration / cooperation with suppliers Phase 1 Phase 2 Phase 3 Identification of new technologies Technology Development Exploitation and protection of technology Manufacturing Production Massachusetts Institute of Technology Cambridge, Massachusetts 4 Phase 1: Identification of New Technologies Fuel cells have been developed for aerospace and electric power applications before becoming feasible for automotive application – Decade-long lead times before technology becomes feasible for automobiles – Role of government support for fuel cells in space, defense and energy (NASA, DOD, DOE, Canadian DND, EC, Japanese MITI) Technological breakthrough around 1987 made fuel cells feasible for automotive propulsion – Key role of a small R&D company (Ballard) with seed money from the Canadian DND Leadership roles in automotive fuel cell technology have since then been taken by – R&D company specialized in fuel cell technology (Ballard) – Automakers with strong ties to aerospace industry and past activity in fuel cells were among the first to recognize the potential of the technology (Daimler-Benz, General Motors) Massachusetts Institute of Technology Cambridge, Massachusetts History of Fuel Cell Research 1950/60s Fuel cells for aerospace: United States •NASA •United Technologies •General Electric •Dow Chemical •DuPont Europe •ESA •Siemens •Dornier •Varta •Elenco US Fuel Cell Patents Development of fuel cells for aerospace since 1950s/60s, for electric power generation since 1970s/80s, and for automotive propulsion since 1987 US Fuel Cell Patents 15 Fuel cells for automobiles: •Ballard •Daimler-Benz •Toyota •General Motors •Honda 10 5 0 1970 1975 1980 1985 1990 200 Fuel cells for electric power generation: 150 100 •United Technologies •Siemens/Westinghouse •Mitsubishi group •Fuji Electric 50 0 1970 1975 1980 1985 1990 Massachusetts Institute of Technology Cambridge, Massachusetts 5 Critical Technological Breakthrough Breakthrough in fuel cell technology opened up possibility for application in automobiles – Reduction of platinum loading requirements of fuel cell membrane (Texas A&M, LANL) – Increase in power density of fuel cell stack (Ballard with support from Canadian DND) 2 50 0 100 P o w e r D e n s ity 1 0.1 0.01 0.001 1955 1965 1975 1985 1995 F ue l C e ll M e mbra ne [W / ft2 ] [mg platinum / cm2] Platinum Loading B a lla rd 10 2 00 0 1 50 0 1 00 0 5 00 Aer os pac e PEM fue l c e lls fue l c e lls 0 1 95 5 1 96 5 1 97 5 1 98 5 1 99 5 Massachusetts Institute of Technology Cambridge, Massachusetts Leadership in Automotive Fuel Cell Technology Early identification of the breakthrough technology gave companies a lead in R&D investment and patenting – Daimler-Benz recognized fuel cell breakthrough through Daimler Aerospace and subsidiary Dornier, starts cooperation with Ballard – General Motors revives contacts with LANL through Delphi/Delco Conclusions from R&D Phase 1 – Technologies that are not part of the traditional technology portfolio appear to be a threat to automakers – Uncertainty in R&D favors a portfolio approach to identifying and exploring new technologies – Leadership in automotive fuel cell technology has been taken by a small R&D company and automakers with strong ties to aerospace industry – Importance of early identification of breakthrough technology – Importance of technology development intelligence – Importance of bridges with related industries Massachusetts Institute of Technology Cambridge, Massachusetts 6 Phase 2: Technology Development Systems perspective in the technology development phase – Technology needs to be viewed from ‘systems’ perspective: Choice of fuel, fuel cell technology, integration into automobile – Iterations and overlap of research, development, engineering, testing, market research Technology Development Dev Res Eng Mkt Automakers take different organizational approaches to gaining competence in fuel cells: – Internal development: Toyota, Honda – Collaborative research: DaimlerChrysler, Ford, General Motors – License technology (wait-and-see): VW, small OEMs Massachusetts Institute of Technology Cambridge, Massachusetts Insights from ‘Daimler-Benz / Ford / Ballard’ Alliance Research alliance covers all technical components of a fuel cell system – Ballard responsible for fuel cell stack – DaimlerChrysler responsible for systems integration and proprietary fuel cell stack – Ford responsible for systems integration and electric drivetrain – Alliance mirrors product architecture, builds on technical complementarity Reformer Mobil Electric drivetrain Ford Motor Ecostar JV Membrane Johnson Matthey Fuel cells Ballard Ballard Automotive JV Catalysts Degussa Reformer BASF Vehicle integration Daimler Chrysler dbb JV Fuel Shell Fuel cell related patents, 1985-99 Daimler-Benz / DaimlerChrysler BASF Degussa Shell Chrysler Corp. (pre-merger) Ford Motor Co. Mobil Corp. Ballard Power Systems Inc. Johnson Matthey Total patents 22 4 2 2 0 3 0 35 12 80 Alliance provides an effective way of broadening patent portfolio Massachusetts Institute of Technology Cambridge, Massachusetts 7 Gaining Competence in Fuel Cells: Develop-or-Buy Develop-or-Buy approach to gaining competence in fuel cells: Mobil Johnson Matthey Degussa BASF Dow DuPont Chem. Amoco Ballard GM Delphi/ Delco Shell ADL Allied Signal ARCO Allison Daimler Ford Motor Ballard Chrysler Exxon Ecostar JV BA JV dbb JV Denso Toyota Panasonic JV Aisin Seiki Conclusions from R&D Phase 2 – Technology needs to be developed with a systems perspective – Different approaches to gaining competence in fuel cells: Internal development, collaborative research, licensing Massachusetts Institute of Technology Cambridge, Massachusetts Phase 3: Exploitation and Protection of Technology Ability to control the technology is crucial for exploiting the future value chain of a fuel cell system – Automakers who gained competence in fuel cells become ‘system integrators’ with control over core technology – Automakers with little competence in fuel cells remain excluded from value chain Role of suppliers in the future value chain of fuel cells – Key role of a single R&D company: Ballard – Importance of suppliers with access to key components: Johnson Matthey, AlliedSignal, DuPont, Hoechst, Siemens Massachusetts Institute of Technology Cambridge, Massachusetts 8 System Integration vs. Components Emergence of a future value chain of fuel cell powertrain – Suppliers participate in value chain according to their role as developers of components – Automakers take role as ‘system integrators,’ acquire competence in fuel cells to varying degree System Integration DaimlerChrysler Ford General Motors Honda UTC/International Fuel Cells Mitsubishi Nissan Toyota Membrane and Catalyst 3M Asahi Chemical DuPont Hoechst Johnson Matthey Fuel Processor A.D. Little DaimlerChrysler General Motors UTC/International Fuel Cells Johnson Matthey Mitsubishi Toyota Methanol Tank Gas Cleaning Cooling Water Tank Reformer + Catalytic Burner Electrical System Fuel Cells + Air Supply Fuel Cell Stack AlliedSignal Ballard Power Systems General Motors Honda UTC/International Fuel Cells Mitsubishi Electric Siemens Toyota Massachusetts Institute of Technology Cambridge, Massachusetts Conclusions Identification of fuel cells as a new automotive propulsion technology – Challenge of new technologies that are not part of the traditional technology portfolio – Portfolio approach to identifying and exploring new technologies – Early identification of breakthrough technology – Technology development intelligence, ties with related industries Technology development – Technology systems perspective – Develop-or-buy decision: Gaining competence in fuel cells through internal development or collaborative research Exploitation and Technology Protection – Future value chain of fuel cell system – Automakers can participate through systems integration – New suppliers as participants in the value chain Applicability to other cases: Electric vehicles, hybrid vehicles, airbags, ... 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