Wireless charging: Qualcomm and Bosch

1. Wireless charging systems for electric vehicle Business model for Q-Bo National University of Singapore MT4002 group project Anna Maria Haeggbom Johannes Noeke (jnoeke@gmail.com) Tobias Kobold (tobiaskobold@yahoo.de) Ukko Kilpinen Juilus Riikonen

2. Agenda 1. Electric Vehicle – Why does it matter 2. Wireless charging technology 5. Business model 4. Market scenario 3. Market analysis 6. Future outlook

4. Electric vehicle – Why does it matter? • Facing the climate change, reducing the carbon footprint of transportation sector plays 0 50 100 150 200 250 300 350 SUV (15l/100km) Medium Car (9l/100km) Average local bus (US) Airplane (full, Airbus 320) Small Car (6,5l/100km) Electric Car (US grid) Hybrid car (5l/100km) Transit bus (3/4 full) Electric Car (Solar) Walk/bike Gramm CO2 per passenger -kilometer

5. Electric vehicle – Battery technology can’t compete 0 5 10 15 20 25 30 35 40 0 20 40 60 SpecificEnergy[MJ/kg] Energy density [MJ/L] Energy density Battery vs. Gasoline Diesel Gasoline Lithium-Ion (Phone old) Lithium-Ion (Phoine new) • Energy density of batteries is not competitive • Average improvement rate of lithium-Ion batteries: 6% p.a. • Concerning lithium-ion batteries for EV: • The good news: The improvement rate: 19% p.a. • The bad news: The energy density in cars is even lower

6. 0 200 400 600 800 1000 1200 2010 2015E 2020E 2025E US$perkW/h Lithium battery cost to decline>50% by 2020 Batteries for EV – Recent improvements http://theenergycollective.com/onclimatechangepolicy/347491/making-low-carbon-future-better-well-cheaper http://insideevs.com/declining-battery-prices-boost-electric-car-market/ • BUT 1. improvement rate of 19%p.a. 2. Costs are dropping by 25% p.a.  How will cheaper and better batteries influence the EV market?

7. The solution: Better infrastructure • Lower energy density is proportionally linked to shorter range of EV • Beside low energy density weight of battery is also negative factor (EV around 30% heavier). • Linear improvement of batteries questionable? 0 200 400 600 800 1000 Efficient diesel car Average gasoline car Tesla Model S Mini E Toyota RAV4 BMW ActiceE Honda Fit Forda Focus VW Golf Nissan Lead Mitsubishi i km Range in km per charge The only technically and economically feasible option for the EV market in the upcoming years in order to face the low range of cars is to set up an infrastructure which allows EV to be charged frequently.

8. Electric vehicle – What is required As low energy density of batteries is the given restricting constraint, a technology system is required which significantly improves the infrastructure (charging) for EV. Affordability Energy capacity SafetySustainability Infrastructure Environmental Gasoline vs Battery

10. Types of wireless charging Technologies Radiative Micro wave Light wave Non radiative Induction Capacitive Resonantly enhanced induction

11. Most suitable technology Micro wave Distance: long Directivity: high Power: low Efficiency: low Frequency: GHz Receiver Transmitter Light wave Distance: long Directivity: high Power: high Efficiency: medium Frequency: kHz to few MHz Transmitter Resonantly enhanced induction is the superior technology Capacitive Distance: very short Directivity: low Frequency: kHz to few MHz Antenna: Electrodes Induction Distance: short Directivity: low Frequency: kHz to few MHz Antenna: Wire coils Resonantly enhanced induction Distance: mid range Directivity: low Frequency: MHz to GHz Antenna: tuned wire coils

12. Resonantly enhanced induction 1. Magnetic field similar to induction 2. Resonance of two coils with the same impedance 3. Due to resonance greater distance is possible + up to 6.6 kilowatts of power + “transparent” to magnetic fields: wood, gypsum wall board, plastics, glass, brick, and concrete are + Efficiency up to 95% https://www.qualcomm.com/products/halo/features

13. Application Set up of driving lane • New infrastructure: power rails embedded underground • Estimated cost for new system: less than 0.4 million $/km (Huh et al., 2011) Problem: charging proportional to the time above the wire coils. wireless charging on high ways and fast lanes is inefficient. Cars stand a long time on parking places so charging stations are more cost effective than road integrated charging

14. It will get cheaper! 2. 1. Repeater like in a Wi-Fi network 1. One charging station per parking lot RepeaterMain charging unit Transmitter + Repeater 2. With the repeater technology it is possible to charge several (in this case 3) parking lots with only one main charging station. That saves a lot of investment cost.

15. Wired vs. Wireless Type of Charing station wired Wireless number of parking lots 6 6 number charging station 6 2 Cost of the station 2,000 3,000 total investment cost 12,000 6,000 Absolute Cost difference 0 -6000 Relative cost difference 0 -50% Example calculation RepeaterMain charging unit Transmitter + Repeater Technology is superior and economically feasible Source http://www.leonardo-energy.org/blog/cutting-cost- wireless-charging-electric-vehicles http://cleantechnica.com/2014/05/03/ev-charging-station- infrastructure-costs/

17. Market Size – Electric vehicles Current (2014) Future (2020) Number of EV’s 700 000 20 000 000 Annual sales of EV’s 300 000 6 000 000 CAGR Around 70% https://www.iea.org/publications/globalevoutloo k_2013.pdf http://cleantechnica.com/2015/03/28/ev- demand-growing-global-market-hits-740000-units/ http://www.iea.org/evi/Global-EV-Outlook-2015- Update_1page.pdf

18. Market Size – Wireless car charging Current (2013) Future (2019) Market Size ( M USD) 1,7 4600 Annual sales (Units) 350 000 Solutions • Aftermarket solutions • No Built-In OEM solutions • Dynamic applications will start to emerge CAGR Around 200%  Market is growing rapidly offering huge opportunities for companies http://www.mynewsdesk.com/us/pressreleases/global-wireless-car-charging-market-at-1-7-million-will-reach-4-6-billion-by-2019-1240570 https://www.navigantresearch.com/research/wireless-charging-systems-for-electric-vehicles https://storify.com/jayshripatil/global-wireless-car-charging-market-will-be-4-6-bi

19. Key success factors Success Partners Economy of scales Standard technology

20. Inductive charging is most attractive new charging methodology All other manufacturers but Ford and Mia are showing interest towards wireless charging. Wireless charging is found more attractive than competing methods (DC Charging or Combo charging)

22. Conclusions based on market studies • The EV market is growing rapidly. • As energy density of battery and, thus the range of EV will not improve significantly, the need for a higher density of charging stations is given. • Due to EV’s lower the carbon footprint, the government will subsidize the market. • Charging stations must to be up-to-date and must charge in a more convenient way than the existing one. • -> Wireless charging technology is chosen • Need for standard to keep the market alive

23. Market scenario • To promote EV and its infrastructure the government has announced the following action plan BOT-model to promote the infrastructure of charging station The government will partner with a company to set up a build-transfer-operate (BOT) model. 10% rule for Public sector and private companies Institutions and companies having parking lots with more than 50 lots are required to equip at least 10% of the lots with wireless charging station Adaption obligation for EV car manufacturer EV car manufacturer have to ensure that all newly built EV can be charged by the wireless charging technology Tax restitution for wireless charging The government will refund the tax for both wireless charging stations and EV with wireless charging technology

24. Simplified value chain Technology Manufacturing/ Sales Operation Cities/ Government Wireless charging stations EV Owners Car manufacturers EV Parking lot owner Legend: Manufacturing process Car equipment Charging station Charging station & equipment

26. Introduction of Q-BO Company • Company: Q-BO Joint venture of Qualcomm and Bosch • Technology supplier and manufacturer, both for charging station and for the EV charging equipment • Operation of charging station Q-BO

27. Introduction of Q-BO Company – competitive advantage of Q-BO • Strong relationship to car manufacturer • Experience in car charging station • “German” engineering quality • High venture capital and market power • Experience in wireless technology • Patent for wireless inductive charging • Research alliances with car manufacturer

28. Introduction of Q-BO Q-BO’s unique selling proposition Technology Manufacturing/ Sales Operation Cities/ Government Wireless charging stations EV Owners Car manufacturers EV Parking lot owner Legend: Manufacturing process Car equipment Charging station Charging station & equipment Q-BO Q-BO Q-BO

29. Customer selection Customer selection Cities/ Government Wireless charging stations EV Owners Car manufacturers EV Parking lot owner Legend: Manufacturing process Car equipment Charging station Charging station & equipment Q-BO As Key customer selected - Car manufacturer - Cities/Government - Parking lot owners EV owners as final customers - Decision maker over the whole success of the value chain - Challenge: Less direct influence

30. Customer selection Customer selection Segment Need Car manufacturer • Acquiring new customers for EV’s • Meeting governmental requirements • Reliable partnerships • Manufacturing cheaper EV’s cars Private users • Easier, faster and safer way of charging • Convenience of charging at home Cities and Government • Promotion of EV • Better and more convenient infrastructure • Reliable partner and operation Parking lot owners (those which have or operate a parking lot with > 50 parking slots) • Meeting governmental requirements • More convenience for customers / employees • Opportunity to attract new customers segments • Opportunity to enter new business models • Reliable partner and operation What needs does wireless charging satisfy? Car unit customers Charging station customers

31. Value proposition Value Proposition Design: How to Create Products and Services Customers Want (Strategyzer) Paperback – October 20, 2014 by Alexander Osterwalder (Author), & 4 more Value proposition – manufacturers Acquiring new customers for EV's Offering a high density of charging stations Meet requirements from the government BOT and cooperation with government securing their standards NEEDS VALUE PROPOSITION

32. Value proposition Value Proposition Design: How to Create Products and Services Customers Want (Strategyzer) Paperback – October 20, 2014 Value proposition – car owners Convenient, fast charging automated charging Easy payment Payment will be electronically Cost savings due to a smaller battery high density of charging stations NEEDS VALUE PROPOSITION

33. Value proposition Value Proposition Design: How to Create Products and Services Customers Want (Strategyzer) Paperback – October 20, 2014 by Alexander Osterwalder (Author), & 4 more Value proposition – cities & government Promotion of EV vehicles Well expanded network of charging stations Protection against vandalism Damages to the Under ground charging unit are nearly impossible Low maintenance/operating effort Service contract under ground equipment is protected from weather impacts Low investment costs More cost effective due to the repeater technology NEEDS VALUE PROPOSITION

34. Value proposition Value Proposition Design: How to Create Products and Services Customers Want (Strategyzer) Paperback – October 20, 2014 by Alexander Osterwalder (Author), & 4 more Value proposition – parking lot owners Low investment costs more cost effective due to the repeater technology Attract customers Charging station that are well integrated with their customer needs Low maintenance/operating effort Service contract under ground equipment is protected from weather impacts Meeting government requirements Q-Bo and close collaboration with government NEEDS VALUE PROPOSITION

35. Development roadmap Q-BO’s road map for successful future Win cities for BOT Standardization and network effects Keep winning without patents and subsidies

36. First Phase First phase: Entering the market Win cities for BOT Standardization and network effects Keep winning without patents and subsidies

37. First Phase Where to make revenue Technology Manufacturing/ Sales Operation Cities/ Government Wireless charging stations EV Owners Car manufacturers EV Parking lot ownersQ-BO Q-BO Q-BO SALES OPERATING

38. First PhaseValue capture of the different streams Q-BO (manufacturing) Sales (EV equipment) Sales (Charging stations) Operation Mark-up Subscription / Pay as used

39. First PhaseSoA - Manufacturing Q-BO – full vertical control Technology Raw materials Vendor parts Manufacturing Sales After-sale service Full: Qualcomm’s technology patent Full: Qualcomm’s semiconductor Partwise: Qualcomm’s & Bosch’s existing supply chain Full: Bosch’s production site Full: Bosch’s distribution channels Full for public stations: Q-BO as Operator Wireless charging systems Level of ownership Supplychain Revenue?

40. First PhaseSoA - Sales: electric vehicle equipment Technology Raw materials Vendor parts Manufacturing Sales After-sale service Q-BO supply chain Technology Vendor parts (car manufacturer) Manufacturing/ Assembly Sales After-sale service (EV owner) Raw materials Electric vehicle Sales: Why Q-BO?  Bosch / Qualcomm - Excellenct supplier - Existing relationship - Existing knowledge

41. First PhaseSoA – Sales & Operation: Public charging station Technology Raw materials Vendor parts Manufacturing Sales After-sale service Q-BO supply chain Energy supply Operation (Cities, parking lot owner) Marketing Maintenance (Cities, parking lot owner) Property Charging station OPERATION: Why Q-BO? • Technology know- how as operator - Lower downtime - Higher efficiency • Market leader - Better promotion of stations

42. Second phaseWhats coming next? Free market Win cities for BOT Standardizat ion and network effects Keep winning without patents and subsidies BOT ends Standardization Network effects

43. Second phase Network effects •More charging stations •More value of having an EV •More people will buy an EV •Charging stations more occupied and thus more profitable >Economics of scale< Network effects Charging stations Valueforuser This network effects is connected to the technology and will increase value for buyer and seller at the same time Entrance Barrier for competitors Critical mass for good service

44. Second phaseStandardization Broad integration of the wireless charging systems efficient infrastructure • low cost manufacturer could enter market • Growing competition will shrink Q-BO’s margin • BUT: R&D and improvements are necessary to maintain market position • If another standard wins, huge loss for Q-BO – huge cab to catch up to be able to compete • BOT: Government choses Q-BO’s successful technology as a standard • Q-BO has technology know-how and experience thus is the preferred partner • Competitors have to prove feasibility of their technology to enter the market • revenues from license Patent • Exporting standard – new global markets requires standardization as it maximizes compatibility requires a standard

45. Second phaseStrategic control – 5 Forces Rivalry among existing competitors Bargaining power of buyers Bargaining power of suppliers Threatof substitute products Threatsof new entrance • Several companies offering WC • First Entrance barrier high because of no existing market • Entrance barrier will drop when patent expired • Cheap low-tech equipment • All made of standard parts (integrated circuits, amplifier, cables, etc.) • Can be purchased from several suppliers • fierce competition on WC market • Car manufacturer/ car parking place owner could chose other products • Substitute is the wired charging station • Could have a higher gradient of cost reduction high low low highlow

46. Second phaseStrategic control – What’s important? Business model has to be modified Dropping entrance barrier Cheaper low tech products will be available Unique value proposition is important Strategic alliances are necessary Differentiation strategy

47. Second phase 2nd Phase – Market changes lead to new value capture Q-BO manufacturing Sales (EV equipment) Sales (Charging stations) Operations Licensing High end equipment sales Operation will decide about a successful business model

48. Second phase Improving the business model R&D, Premium cars and licences R&D and premium cars • New innovations with premium car manufacturers • Premium market = chance for higher margin • New patents Licences • Providing standarized technology for other manufacturers • Taking money out of competed, low margina but huge market Technology Vendor parts Manufacturing/ Assembly Sales After-sale service Raw materials Electric vehicle

49. Second phase Improvement for existing and new stations Energy supply Operation Marketing Maintenance Property Charging station • Long term offtake contract for energy with utility company • Q-BO is market leader and market will increase  Q-BO has high bargain power • Utility companies want to have a share of the growing EV market • Getting cheaper energy  higher commisions while operating

50. Second phase Facing the future Setting up more charging stations • Alliances with largest parking lot owners • Property (thus fixed cost/risk) are split • Stations are operated by Q-BO • Advantages for Q-BO: - Expanding the station network - More revenues - Higher convencience for customers • Advantages for parking lot owners: - Get a share of the revenue - Profit from Q-BO customer base - No worries about operation Energy supply Operation Marketing Maintenance Property Charging station

51. Second phase Marketing to set up new opporunities • Cooperation with rental company Q-BO can offer customers with subscription plan lower rates for rental for long distance journeys. • Release of Q-BO app - App will show all locations of public charging station - Subscribed customers can monitor their accounts - “Q-BO” community feeling • Access to private stations - Private owners of the charging station offer their station to public via app - Private owners can set their price for charging by themselves - Q-BO will receive small commission Energy supply Operation Marketing Maintenance Property Charging station

52. Second phase Improved subscription model for higher value capturing • Core business model of the operation • Goal: long-term customer relationships Subscription type Payment method Requirements Features Standard •Monthly fixed rate •Fare for every charge •Access to every Q- BO station •Customer account Gold •Higher monthly fixed rate •Reduced fare for every charge •Minimum purchase of energy per month •Discount for rental cars

54. Future outlook App/Smart charging • Smart charging, measuring electricity prices and charging when low • Value for the customer as the car loads when it’s most economical Technology improvement • Charge while driving  Lane charging

55. Thank You, lah! Q&A

Wireless charging: Qualcomm and Bosch

Jeffrey Funk Business Models

Wireless charging: Qualcomm and Bosch