Union Budget 2023 Focuses on Capex

News: Power Systems Research

2023-02-17

Union Budget 2023 Focuses on Capex

INDIA REPORT
Aditya Kondejkar

As part of its 2023 Budget, the government has reiterated its focus on capital expenditures, the vehicle scrappage policy, and a reduction in customs duty for electric vehicle components that is designed to stimulate new vehicle sales. A reduction in customs duties and a plan to replace older, polluting vehicles will boost the adoption of green mobility.

“The increase in capex on infrastructure and the emphasis on green growth will help the mobility sector,” said Sudarshan Venu, MD, TVS Motor Company. “This budget gives something to everyone, from rural India and start-up India, to middle-class India and digital India. It is about inclusive growth and building on the recovery we are seeing after the pandemic. It strikes a fine balance between growth and fiscal prudence.”

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2023-01-22

Are Hydrogen Engines in Your Future?

Guy Youngs
Guy Youngs

According to newly published research by Interact Analysis, hydrogen internal combustion engines (H2 ICE) are forecast to be sold in 220,000 vehicles in 2035.

On the plus side, H2 ICE vehicles have some notable advantages. The engine technology is reasonably similar to diesel engines, enabling use of existing knowledge, design and production vehicles. The vehicles can deliver high power, work with impure fuel, work in dirty and dusty conditions and refuel quickly.

On the downside, there is no hydrogen infrastructure in place in almost all locations in the world, there is a lack of awareness about the technology and limited development so far. Most importantly, the current cost of hydrogen fuel is high – it will need a big reduction before the vehicles can become competitive. Even at half the cost of today, H2 ICE vehicles do not have a good total cost of ownership. The cost of the engine is not substantial, but the cost of the tanks adds a lot to the cost of the vehicle, then there is infrastructure and above all hydrogen fuel.

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Hyster Begins Pilot of Hydrogen Fuel Cell Powered Container Handler

Hyster Company is testing a top-pick container handler powered by hydrogen fuel cells (HFC) at Fenix Marine Services in the Port of Los Angeles.

Based on the  standard Hyster H1050-1150XD-CH top-pick container handler design, the truck is powered by two 45kw hydrogen fuel cells from Nuvera, a wholly owned subsidiary of Hyster parent company Hyster-Yale Group. The HFC-powered top pick is designed to provide the zero emissions benefits of a battery electric option, with enough capacity to keep operators moving and avoid the need to stop in the middle of a shift to refuel or recharge.

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U.S. Economy Faces Multiple Problems

NORTH AMERICA REPORT
Jim Downey

SUMMARY. Many of the biggest challenges facing the U.S. economy in 2022 are continuing into 2023. These problems include supply chain disruptions, the migration of production and use of internal combustion engines to alternative drive types, uncertainty of inflation and rising interest rates, and the war in Ukraine.

There were also positives which came out of 2022, including a return to more face-to-face business transactions and meetings. Trade shows made a big comeback in 2022, and this trend will continue in 2023 as the huge CONEXPO-CON/AGG will be held in March in Las Vegas.

The push towards electrification is not all negative either. Innovation and action around alternative drive types will continue to grow.

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FPT Developing Ethanol or Biomethane Engine in Brazil

FPT, Mahle and Brazilian universities are working to develop an FPT F1C Bi-Fuel engine to meet Brazilian transportation needs using Ethanol, or Biomethane and Hydrogen for use in hybrid vehicle applications.

The project involves the creation of mathematical models, which will be used to characterize and predict the behavior of the engine operating with ethanol and biomethane, assisting in the development of components and hardware, and testing the equipment at Mahle’s technology center in Jundiaí (SP).

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PSR Analysis. Brazil and much of South America have extensive renewable sources  for fuel. FPT and Mahle are betting on alternatives that cost effectively meet the decarbonization needs consistent with infrastructure restrictions.   PSR

Fabio Ferraresi is Director Business Development-South America for Power Systems Research

Brazil Moves Forward on Truck Fleet Renewal Program

BRAZIL/SOUTH AMERICA REPORT  

In December 2022, the Brazilian Government published regulations for the Fleet Renewal Program authorized by the law that was published in H1 2022. Under this regulation, truck owners may receive the old truck market value from companies in the Oil and Gas exploration chain, provided that they prove the truck was taken out of circulation, disassembly and recycled. The program is voluntary, both for owners selling the old truck and for O&G companies designating resources for the program in exchange for a reduction of duties on O&G exploration contracts.

Source: M&T     Read The Article

PSR Analysis. Preliminary analysis suggests the program won’t be very effective, since significant recycling and paperwork efforts are required to sell the old truck at market prices. It seems this is a regulation published to show environmental efforts, but one that will have limited effectiveness. No impact is seen in the Truck Market now unless market conditions change drastically. PSR

Fabio Ferraresi is Director Business Development-South America for Power Systems Research

Cost Increases Cause Losses at HanseYacht Group

EUROPEAN REPORT 
Natasa Mulahalilovic
Natasa Mulahalilovic

Cost increases in several areas caused HanseYachts AG to report a loss of EUR 20.72 million (US$25 million) for the fiscal year 2021/2022 ended June 30, 2022. However, because of the great demand during the pandemic for sailing boats and fully complete order books, production increased from 446 to 568 boats, compared to the previous year.

Revenues totaled EUR 132,38 million, an increase of 22.8% compared to the previous fiscal year. But, at the same time, costs of materials increased 40.7%, personal expenses climbed 22% and other operating costs increased 58%. All this led to a net loss higher by 130.5% compared to the previous fiscal year.

The recent Covid-19 shutdown and worker absenteeism heavily impacted the finances of the group for fiscal year 2021/2022.

HanseYacht Group said it will not exhibit this year at BOOT, the biggest indoor pleasure boat trade show held in Dusseldorf, Germany.

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2023-01-20

Electric Light-Duty Trucks Must Meet 5% METI Goal by FY2030

FAR EAST: JAPAN REPORT
Akihiro Komuro
Akihiro Komuro

The Ministry of Economy, Trade and Industry (METI) now requires shippers that transport a large volume of freight to set a target of using 5% electric light-duty trucks by FY2030, which includes EVs and fuel cell vehicles (CVs), but not hybrids.

They will also be required to submit periodic reports on their progress toward this target. If the efforts are significantly inadequate, the committee can make recommendations to shippers and publicly announce the names of the companies involved.

Of the 800 major manufacturers, retailers, and other companies with large annual transportation volumes, those that are also involved in their own transportation or those that request exclusive transportation from a specific company are eligible for the program.

Source: The Nikkei

PSR Analysis: The fact that hybrids are not included in this goal effectively means that the next-generation development of light-duty trucks has been narrowed down to BEVs or FCVs. However, FCVs still lack hydrogen stations, and the construction cost of hydrogen stations is higher than that of EV charging stations, so the shift to EVs will be promoted first. Light-duty trucks are numerous and can be said to be the artery of domestic logistics. With about seven years to go until 2030, the number of vehicles that will be replaced by EVs will increase every year. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

Hyundai Plans $14.7 Billion for Software Development

FAR EAST: SOUTH KOREA REPORT
Akihiro Komuro
Akihiro Komuro

Hyundai Motor Company is getting serious about developing the software needed for automated driving, etc. It has decided to invest $14.7 billion by 2030 and has begun building a development structure and embarking on M&A.

Hyundai Motor Company has achieved record profits through a shift in strategy in conjunction with a generational change. The company plans to further improve profitability in the software field, where customers can add functions to their cars after purchase. But acquiring human resources will be an immediate challenge for Hyundai.

The “Over the Air (OTA)” function, which updates the latest software via the Internet, will be standard on all new models released in 2023 and after. The plan is to establish a system that allows users to be charged according to function updates. The company will first introduce content such as car navigation systems, audio, lighting, and remote-control functions, and then expand into peripheral areas such as auto insurance policies, to diversify and upgrade services in response to customer needs.

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EV Purchase Subsidies Planned To Promote Sales

SOUTHEAST ASIA: 6 MAJOR COUNTRIES REPORT
Akihiro Komuro
Akihiro Komuro

Indonesia plans to introduce a subsidy program to encourage the purchase of EVs starting in 2023. The goal is to increase the number of EV users to 2.5 million by 2025 and reduce air pollution. The EV purchase subsidy program will be added to the list of EV policies introduced by President Joko Widodo over the past year.

Transportation Minister Boudi Karya Sumadi said the government is also considering subsidies for retrofitting internal combustion engine vehicles, but the government is carefully considering this plan because it would bring major changes to the labor-intensive auto industry. The Ministry of Transport plans to approach existing Indonesian automakers, such as South Korea’s Hyundai Motor and China’s BYD, to create an EV ecosystem for Borneo’s new capital city, he said.

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