PSA’s Hybrid Air – A low cost technology for the post-crisis rebound
Writing in December about past lessons on innovation for the post-crisis rebound, I relayed Marc Giget’s view that crisis have proven to be a fertile ground for innovation as long as it is frugal. Cost-efficient products, whether in terms of acquisition cost or running costs or both, are the typical winners that lead the way out of the crisis. This lesson casts some doubts on the short term viability of Renault-Nissan’s drive for full electric vehicles, but vindicates the ultra-low-cost strategy that they pursue through their Dacia subsidiary.
Yesterday, another great example surfaced: troubled French car manufacturer PSA (owner of Peugeot and Citroen brands) unveiled its Hybrid Air technology, which seems particularly fit for the post-crisis rebound.
Low acquisition cost. The principle of the Hybrid Air technology is simple: the braking energy is used to compress air (in fact, nitrogen) in a cylinder. When acceleration is required the air is decompressed to provide full or extra power to the train. There is nothing fancy or expensive in this technology: no rare earth, no heavy metals to optimise the performance of a battery. Just a basic cylinder full of air! The extra cost compared to a normal car is bound to be minimal.
Low running cost. In a typical urban driving cycle with frequent acceleration and braking, the energy recovery is around 40%, which translates into the same amount of fuel economy and emission reduction. In the European small and medium size segments, this can bring the fuel consumption down to 2.9 litre per 100km (or 80 miles per gallon).
The Technology scores high on both acquisition and running costs, and I suspect on maintenance costs too (as a gas cylinder is likely to be a lot easier to maintain than an electric battery), thereby delivering an outstanding Total Cost of Ownership proposition. It is expected to be commercialized from 2016. Despite its current trouble, PSA might find itself well positioned for the post-crisis rebound.