When we started this company we were focussed on using the existing technology and components to make a more cost effective solution. Ironically we have progressed beyond that and are now innovating where there are gaps in the market. This could only have happened thanks to us, the team, taking a deep dive into the problem. Our initial assumptions were tested and we have come up with a solution that meets with the industries and markets approval. This project has opened up the very real possibility of becoming a supplier of the key components necessary for the Intelligent Tyre (energy harvester, storage, micro controller, radio and sensors). Intelligent Tyres have value where every tyre will have a unique identity with constant monitoring of pressure, temperature, tread depth and wheel alignment. They are also an essential component of autonomous vehicles, a business in which significant and substantial investment is being made by automakers worldwide. Compared to the current state of the art the future will make every tyre traceable in the supply chain and every operational detail a valued transaction.
Energy harvesting is the key to making these new technologies be commercially viable. The alternative, which is to manually access and change out batteries, is either impossible or prohibitively expensive. Our R&D Division is focused on bringing Energy Harvesting to market as quickly as possible. Thanks to our expertise in additive printing technology we are uniquely placed to do this.
This is not a niche business. Vehicle production is expected to grow from 88.2m to 110.8m by 2022; that for tyres from 2.25 billion to 2.72 billion in the same period, of which over 122 million will be Intelligent Tyres in 2022 and more than 215 million by 2023.
With even less than 1% of the total market potential the addressable market is a £30-40 million annual business by 2022-2023 from Energy Harvesting alone. And we plan to be a bigger player in the market than that.
We see the market for RFID tag will move quickly to a high volume, low margin business, where the price and margin of the single unit is low. NFC enabled RFID tags should extend margins for a couple of years, but not much more than that. We believe that Energy Harvesting, on the other hand, will retain its margin for a longer period as it moves from a low volume base to something more substantial, and certainly remain a high value proposition for the next five to seven years until the market matures and consolidates.
The growth of our company should lead to the creation of at least 55 full time jobs in Sedgefield by 2019. In addition additional jobs will be created in the supply chain upstream and downstream to manage the STMS product and service. We also anticipate that there will be spin-offs into other sectors as has already happened with our Hub which is finding many new application such as industrial washing machines and aircraft containers.
Wider Economic Benefits
The primary driver will be economic and environmental as correctly inflated and aligned tyres reduce fuel consumption 0.3 bar under-inflation for a passenger car tyre results in a rolling resistance increase of about 6 %. This would lead to about 1 % additional fuel consumption (TNO report 2015). The reduction in tyre replacement and repair costs will be principally achieved by the operator of the vehicle. Installing of the device will increase economic output as this will be a semi-skilled operation requiring initial training and regular monitoring. Reduction in these costs will eventually be passed on to the wider community through lower pricing of transported goods. Increased sales of tyres will have a direct economic benefit through higher wages of skilled workers, with local installation will have wider economic benefits to district level tyre fitters. Reduction in damage to road surfaces and the potential for targeted and rapid repair will improve the efficiency of road operators such as local and regional governments. In the UK SSL intends to open a factory for the manufacture of sensor devices to supply large quantities of printed devices to supply the European market.
Adopting our TPMS would allow FOs to optimise their fleet tyre management, resulting in reduced fuel costs. For example, one FO estimates that our TPMS would lead to a near-immediate fuel cost saving of 3-5%, or £2.5 million on their annual diesel bill of £58 million, or £2,197 per vehicle. This would be a significant contribution towards their target of reducing fuel costs by 15-20%. Taking a broader view, the UK has the highest fuel duty in Europe. So TPMS-supported reductions in fuel consumption by UK haulage companies would also contribute to making the road haulage component of the UK’s supply chain more competitive. Additional economic benefits will be realised by FOs adopting our TPMS through accurately monitoring tyre pressure, & extending tyre life through timely maintenance & replacement. This cost saving will be significant for individual FOs given that tyres are a major cost source within fleets, & that under inflated fleet tyres are estimated to reduce the lifetime of a tyre by 10%.
Developing our TPMS will enable us to roll out our virtual tyre exchange for the tracking, tracing & transacting of tyres. This would allow sellers & buyers of new, used, retread & remoulded tyres to securely & purchase tyres with full information on the history of the tyre’s condition. We estimate that this enhanced marketplace would be worth more than £10m after 2020, & cost £500k to develop. There will be further positive impacts on the UK economy through increased employment, as development, manufacture & service support will be UK-based, with sales targeted globally.
Wider Social Benefits (Developed and Developing worlds)
714 accidents on the UK’s roads are caused by illegal, defective or under inflated tyres. The implementation of TPMS in HGVs across Europe would reportedly have societal cost reductions of €11-58 (£8-44) million per year as a consequence of avoided fatalities resulting from single vehicle accidents. In the UK these savings could be €1-5 (£0.7-3.8) million. Therefore our TPMS can make considerable societal cost savings by improving road safety through tyre management. Our TPMS would also allow second-tier manufacturers to gain a competitive advantage in a market dominated by brand specific TPMS for first tier tyre OEMs.
The UK’s tyre manufacturing industry employs 6,365, with four major manufacturers & 36 manufacturers that are not classed as first tier. Lower transport costs will improve cost of road transport improving living standards. Roadside checks of tyres for safety can be carried out quickly and efficiently, with potential for mobile checking stations available for police and other stakeholders. (Immediate and cumulative as technology is introduced)
Wider Environmental benefits
The environmental impact of this project will be two-fold, achieved via a reduction in the production of waste tyres by extending the lifetime of existing tires, & through emission reductions, notably of greenhouse gases. Using our TPMS to reduce CO2 emissions will help FOs achieve proposed CO2 emissions legislation from 2020 onwards. For example, we estimate that emissions savings from TPMS for Turners would be 6,518 tonnes CO2 per annum based on current diesel prices, with average savings of 6 tonnes CO2 per vehicle.
Reduced fuel consumption will reduce greenhouse gases and particulates from diesel engines. Potential savings of ~20% are expected in well-maintained vehicles. Reduction in replacement of tyres due to premature failure and therefore added environmental benefits of more sustained use of resources. Reduction in road damage and use of resources in road repair. Feedback of information to MRF to improve quality and reliability of tyres and the monitoring of new designs and manufacturing processes in real environments to reduce wastage and raw materials.
As each tyre will be individually tagged the traceability of the tyre through production, use, retreading and recovery can be monitored. This will give information on the benefits of changes to development processes over time, capability of re-treading companies. Correctly inflated tyres show a fuel saving of 6% in European vehicles. Over/underinflated tyres are dangerous (588 deaths in 2012) causing pressure to the road surface leading to increased repairs.
