AUTOMOTIVE THERMAL MANAGEMENT MARKET ANALYSIS

The development of advanced technologies for the automotive thermal management market requires tremendous investment in research and development. Next generation thermal management systems aim to utilize more efficient and effective cooling and heating solutions to improve vehicle performance, fuel economy and driver comfort. However, the R&D costs associated with scaling such innovative thermal technologies from concept to mass production has been a considerable barrier.

Designing and engineering sophisticated thermal architectures, innovative coolants, advanced heat exchangers, electric compressors, thermoelectric generators and cabin climate control modules necessitates multi-year project timelines and budgets that runs into hundreds of millions of dollars. Automakers have to incur these heavy costs without any guarantee of sufficient commercial returns, considering thermal systems are typically viewed as commodity components by most consumers. The financial risks increase further for disruptive thermal technologies such as phase change materials, two-phase heat transfer systems and integrated thermal-electric solutions that are still in their infancy with no established mass manufacturing standards.

The substantial capital expenditure requirements have discouraged many automakers, especially smaller manufacturers, from aggressively pursuing the development of cutting-edge thermal management technologies. They tend to focus more on incrementally improving the cost and performance of existing thermal systems through value analysis and optimization rather than embarking on high-risk R&D projects. Even large OEMs are prudent about which advanced thermal programs can securing funding approval, given budget constraints. As a result, the commercialization of profoundly innovative thermal management solutions that could substantially improve emissions and vehicle efficiency standards is being delayed.

Market Opportunities: Development of waste heat recovery systems

The development of waste heat recovery systems provides a great opportunity for growth in the automotive thermal management market. As automakers look to improve fuel efficiency and reduce emissions, recovering heat that would otherwise be lost from the exhaust and engine coolant systems can play a key role. Waste heat recovery systems capture a significant amount of energy from the hot gases leaving the engine and exhaust system. This recovered thermal energy can then be used to power ancillary systems like air conditioning, thus reducing the load on the main engine and improving fuel economy.

Recovering waste heat from commercial trucks and buses that drive long distances could see even higher benefits. With strict fuel economy and emissions regulations being introduced around the world to combat climate change, waste heat recovery presents an attractive option for automakers to meet future standards in a cost-effective manner. Regulations like the Corporate Average Fuel Economy standards in the U.S. and the European Commission's CO2 emissions performance standards for cars and vans provide the necessary policy push for advanced thermal management solutions like waste heat recovery to be widely adopted.

As automakers invest heavily in research and development to transition to electric and alternative fuel vehicles, waste heat recovery can play an important supporting role during this transition period and even in long-term. Both internal combustion and electric vehicles produce significant heat that can be captured to improve vehicle efficiency.