FEV Completes Phase 1 of EPA-Funded Project to Understand Incremental Manufacturing Costs of Advanced Powertrain Technologies
FEV Inc, (FEV) a developer of advanced powertrain and vehicle technologies, has completed the first phase of a project under contract to the United States Environmental Protection Agency (EPA) to determine manufacturing costs in the development and operation of fuel-efficient, lower-emitting powertrain technologies.
The program involved determining the incremental direct manufacturing costs for a set of advanced light-duty vehicle technologies. The study was also done in conjunction with Munro & Associates, a predictive engineering firm that subcontracted to FEV on the project.
A fair question is whether there is a true understanding of the cost implications for these green technologies. Our work with the EPA will determine the realistic, long-term costs associated with these technologies based on specific, scientific costing methodology. It’s the first step in determining whether these costs can be brought into line with what consumers will accept.
—Gary Rogers, president and CEO of FEV
The technologies selected for cost analysis are on the leading edge for reducing emissions of greenhouse gases in the future, primarily in the form of CO2 emissions. Such emission reductions translate directly into fuel economy improvements.
For the project, FEV developed a methodology following EPA guidelines which would identify all cost elements such as material, labor, manufacturing burden, and mark-up, as well as allow for quick updates for sensitivity evaluations on key costing elements.
After selecting leading edge hardware for a selected technology configuration and vehicle class, the FEV/Munro project team conducted a detailed teardown analysis identifying all component differences between the new and baseline technology configurations, followed by a comprehensive cost analysis on the components that were identified as different as a result of the new technology adaptation.
The costing methodology is based on a ground-up approach, ensuring all levels of costs are captured. Using comprehensive databases for materials, labor, manufacturing, overhead, and mark-up costs, the overall cost to manufacture individual parts are calculated and summed into final results. For new technologies under development, FEV can now assist its customers to make design and manufacturing decisions that offer the greatest possible value. The costing approach ensures that costs are considered at all vehicle hardware levels:
Component level: Crankshafts, Connecting Rods, Pistons, etc.
Assembly level: High Pressure Fuel Pumps, Turbochargers, Hydraulic Pumps, Electric Motors, High Voltage Batteries, etc.
Subsystem level: Engine Fuel Induction Subsystem, Engine Air Induction Subsystem, Battery Subsystems, etc.
System Level: Engine Systems, Transmission Systems, Electrical Power Supply Systems, Electric Distribution and Controls System, etc.
This marks a departure from FEV’s traditional services, which provides innovations to existing and future propulsion systems, including ICE, DDI, GDI and HEV propulsion.
This provides an opportunity for FEV to illustrate its capabilities regarding developmental and operational costs of a powertrain project. By determining the cost structure of the various leading edge technologies, we can then work with our customers to assess cost versus function tradeoffs as they develop their propulsion system strategies. The ‘should cost’ methodology FEV employs is also useful for purchasing departments as they negotiate prices with their suppliers.