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MarketStudy-OV Report Summary

Project ID: 744658

Periodic Reporting for period 1 - MarketStudy-OV (Market Research for Oceanvolt zero-carbon emission marine electric propulsion system)

Reporting period: 2016-11-01 to 2017-04-30

Summary of the context and overall objectives of the project

"Today, marine diesel propulsion follows the same principles established more than 100 years ago; an overwhelming majority of all boats and ships run on diesel fuel. However, like the current transformation happening in the automotive sector, the marine industry is about to go thru the same change to electrical motors, just a few years behind. The demand for such solutions is already emerging: running costs are lower in electric motors, regulation is increasingly strict on pollution and going green is no longer a nice-to-have but a necessity for businesses. This creates a multibillion euro opportunity for electric propulsion system manufacturers.

Oceanvolt Oy is operating in the field of electric & hybrid motor systems for sailboats and catamarans. Their patented system creates energy while sailing, is silent, lightweight and maintenance free. It can be installed to any sailboat between 20-60 ft. whether new or old. Oceanvolt is currently the #1 global provider of electric propulsion solutions to sailboats in two of the most important markets: medium sized daysailers and larger catamarans. However, this is relatively small and niche market, and there are no constraints that the company should restrict only to this. The total market for hybrid and pure electric non-military boats and ships will rise rapidly to over $20 billion worldwide by 2027. Marine electric vehicles will grow at a significant CAGR of +9,53% annually during 2016-2020.

Oceanvolt can replace small and medium diesel engines with electric propulsion technology that is free of greenhouse emissions, lightweight, reliable and maintenance free. Another key advantage for Oceanvolt´s customers is lower Total Cost of Ownership (TCO), due to decreasing maintenance expenses, higher efficiency of electrical engines, thus directly affecting the cost of transportation and boosting competitiveness. The environmental effect of the transformation from diesel engines is significant, and it may reduce yearly CO2 emissions up to 607 000 tons in early phases alone.

Purpose of this Feasibility study was to investigate new markets beyond the ones currently addressed by Oceanvolt. The aim of the study was to identify 2-3 new markets, which have significant growth potential, and which could be addressed directly with existing products or with minor modifications. The outcome includes a specific go-to-market plan, legal and regulatory landscape and freedom-to-operate analysis for identified markets."

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

This study consisted of three stages.
Stage 1 Identify new markets for marine propulsion
Stage 2 Detailed planning
Stage 3 Feasibility study

Work done in these three stages consisted of 1) workshops together with company management team and key board members, 2) customer interviews and surveys, and 3) data search from several sources. Aim of all effort was to scope the potential individual market(s).

Based on results, the most promising new market for Oceanvolt is in commercial workboats and small ferries, with total market size of 4 billion € by 2024. The technology gap from current product is relatively small, and suitable product can be developed and launched in roughly one year time. However, a successful market entry into this kind of B2B market requires wider commercialization activities, such as co-operation and piloting with boat manufacturers, ship operators, regulators, and electrical charging infrastructure providers.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Oceanvolt aims to transform marine propulsion both globally and in the EU by introducing a real, viable alternative to engines burning fossil fuels. Oceanvolt’s products comprise a range of axel and sail drive (SD) patented marine electric motors, which can replace current combustion engines with a high-torque, permanent magnet AC electric motor. The end result is a zero-carbon emission, noiseless propulsion system that requires nearly zero maintenance. Oceanvolt’s technology will help EU to achieve its clean energy and sustainable environment targets by reducing CO2, NOx, PM and other greenhouse gas emissions. In addition, replacing diesel engines with electric motors has other positive environmental effects, such as reduction of leakages of oil and fuel to the sea and prevention of small particle releases from diesel to air.

Compared to diesel engines, Oceanvolt provides their customers added value in several ways.
1) Significant and permanent reduction of CO2, NOx, PM and other greenhouse gas emissions.
2) Lower cost of transporting goods and people due to the higher efficiency of electrical engines.
3) Lower Total Cost of Ownership (TCO) of boats by negligible operative and maintenance expenses, directly affecting the cost of transportation and boosting competitiveness. Payback time for Oceanvolt product is 12-24 months.
4) Improved reliability of transportation: electric motors are more reliable than combustion engines.
5) Longer lifetime of propulsion systems. Electrical motors have a significantly longer (usually 3x) lifetime than diesel engines.
6) Reduction of noise and vibrations generated by boat engines by as much as 95%, leading to less noise pollution in urban areas.

Oceanvolt’s technology and products are able to replace a significant percentage of the diesel engines sold currently worldwide. The environmental impact of the replacement of just 120,000 diesel engines to electric propulsion systems would reduce the carbon emissions up to 607 000 tons/year, equal to the pollution from over 160,000 cars annually. This is because electric propulsion produces zero carbon emissions.

Oceanvolt has been growing with a CAGR of +475% during the last six years, and the company aims to 60M€ annual revenue and to employ several hundred by the 2020. Oceanvolt’s products comprise a range patented marine electric motors, 24/7 remote management and monitoring services and hybrid propulsion solutions. While a major part of markets resides outside the EU, Oceanvolt will be enhancing EU’s export structure, as well as manufacturing within EU. Oceanvolt will employ hundreds of new people in the EU in both white & blue collar roles and maintain EUs competitive position in the global market. Oceanvolt will also make travelling for commuters safer, more reliable and quieter in inland waterways and cities, which is the fastest growing market for marine propulsion.
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