There are six big companies with "significant" R&D facilities in Michigan – the three big domestic manufacturers plus Toyota, Nissan and Hyundai – and Honda has a major facility in Ohio. On top of this, there are about 300 tech centers for suppliers in the area, so it makes sense to try and bring these players together at a conference. Adding a plug to the vehicle means involving a larger cast of characters than has been common in the past, and new relationships must be developed. This is not easy to do.
"People tended to trivialize the complexity of the industry because it's so easy to drive cars," Cole said. Not true, he said, not true at all. Read more of his thoughts after the jump.
Even though there are many plug-in vehicle start-ups in California, Michigan's automotive history made it the logical place for the federal government to spend most of the $2.4 billion it gave out earlier this year to advance plug-in vehicles. The Midwest's excellence in manufacturing was one factor in Michigan getting the lion's share of the money, and Cole said "It would be only natural" to have the money go where automotive research and manufacturing is already located.
Money from other sources, though, doesn't always easily flow to Michigan. International investors, for example, don't all have a good picture of how the auto industry in Michigan operates, Cole said. "The picture of Michigan as a traditional union state is about 20 years out of date," he said. The reality is that the relationship between labor and management is quite good, but outside investors and companies might not know this.
Another unknown is how the change in the parts used in an internal combustion engine to those used in plug-in vehicles will affect suppliers. While the interior and chassis designs of most vehicles will remain pretty much the same, powertrains are undergoing a huge evolution. Transmissions won't be the same, ICEs will be much simpler and then there's the battery. Cole said that people have overemphasized the battery compared to other advances, but there is still a lot of work that can be done on the packs. Today, for example, only about 25 percent of the mass of the battery is used to store the energy (the rest is made up of control and cooling units, among other things). From a theoretical standpoint, Cole said, batteries could one day be about 60 percent energy storage by mass. "Not you're talking about a collapse in the size of the battery and all the benefits that occur."
How suppliers and OEMs manage the changes that are happening now and coming soon is "a very tough business decision," Cole said. "As you go into electrification, now you're bringing in lots of other suppliers that have not been historic suppliers for the auto industry as well. It's going to be a very, very interesting period, to say the least."
Listen to Cole here (or download here, 9 min, 3MB):