Summary of the context and overall objectives of the project

No company in Europe has designed and sold a complete STMS solution with the intent to providea turn key solution changing the whole approach to tyre management. Our experience in working with key fleet owners and development of highly scalable systems gives us a competitive advantage compared to the encumbents in the market defined by the tyre manufacturers. As a result of the innovation project we will be able to confirm that the ability for the market to accept a total STMS solution to act as the spring board for a fully integrated distributed ledger using blockchain technology to track tyre life cycle and enable true management of ever aspect of tyre life.

Our solution is a complete system comprising sensors, inflators, cloud infrastructure and mobile apps to provide complete traceability throughout the life cycle along with operational optimization of fuel consumption and tyre life leading to an expected reduction in tyre failure and related accidents. The nearest competitive solutions in the market are the traditional TPMS solutions that are standalone and are only available on a capital purchase basis without any interconnected ability.

Legislation in the US (2008) and Europe (2014) requiring new passenger vehicles to be sold with a TPMS solution has driven OEMs and tyre manufacturers to develop basic TPMS solutions which meet the mandated need, measuring the tyre pressure. A few of the tyre manufacturers including Pirelli and Continental are actively looking to expand into a more intelligent tyre which additional sensors measuring tyre temperature, with research into self-inflating or non-pneumatic tyres. However all of the work so far has been focused on passenger vehicles and cross-brand and platform interoperability has not been part of the current approach.

The existing solutions work with active sensors and require wiring and reading devices with minimal ranges all of which makes outfitting an 18-wheel rig significantly more expensive than dealing with a passenger vehicle, even a big SUV. This cost has meant that the fuel and tyre replacement savings don’t deliver a quick time-to-benefit and traditional fleet management’s margins prohibit the type of investment necessary to increase market penetration either within the vehicle itself, increasing its cost, or in the tyres increasing their cost, or after tyre manufacture increasing the cost of managing the tyres.

The approach with the patented Silent Sensor STMS solution means a much lower cost, less required implementation for each vehicle and a much quicker time-to-benefit for the solution meaning a reasonable chance that it will succeed in market penetration where today’s traditional solutionshave not yet made headway. Today less than 2% of trucks use any type of TPMS, much less an intelligent sensor-based solution. Reducing the cost of implementation by 70% through the Silent Sensor technology makes this affordable now and should drive the uptake from 2% to 20% over the next several years and as the benefits are proven there is substantial room for continual growth. SSL is committed to investing in new printing technologies and additive manufacturing which will continue to reduce the cost of the solution over time and lead to better margins within SSL and reduced costs to customers.

The Silent Sensors system manages tyres through every stage from manufacture to maintenance and monitoring for repair, reuse and recycling. By doing so it delivers three things:

•Greater fuel efficiency – when 25% of a haulage company’s costs are fuel, small fuel savings become big. With the Silent Sensors tyre management system we estimate between 2% and 6% fuel savings.

•Increased tyre life – by managing your tyres properly, you will achieve a significantly longer life for tyres. Spread over thousands of tyres used annually in a fleet, this leads to more money retained by the business.

•Much safer tyres – 20% of road accidents are caused by tyre failures. When tyres are properly maintained by Silent Sensors systems, there are fewer failures, and much safer transport.

Silent Sensors provides an efficient, easy tyre management system at a low cost using patented RFID technology. It measures tyre pressure, tread and temperature by simply applied sensors, allowing fleet owners to better manage one of their most vital resources. It is a precise, practical and world-leading system

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

We have developed a complete end to end architecture including sensors, readers, hubs, apps, cloud infrastructure, analytics and billing. This has included a complete business model that includes all of the costs to manufacture and support the IOT infrastructure at a every stage. We have now established partnerships with the key channels to get to the market. The basic offering means that a customer can fit the sensors to a vehicle and start tracking the tyres through their lifecycle. This has led to a new portfolio of patents and trademarks. Through our engagement with SMMT (Society for Motor Manufacturers and Traders) and RAPRA (Rubber & Plastics Research Association) we have been bale to get direct access to a range of end users. We have identified fleet owners and tested our proposition with them which has led to a pricing model which is very competitive. We have test the solution in the field and we are now keen to ramp up. We have also taken part in a number of conferences in Europe and India as delegates and exhibitors. This has led to discussions that will lead to agreements in 2017 for licensing and distribution.

The upper bound of the market opportunity for our TPMS can be defined by the overall UK TPMS market. Our research estimates this will be worth c. £28.1m pa in 16/17, increasing to £56.4m pa in 20/21. This growth will be driven by growing e-commerce sales boosting the LCV/HGV market & demand for tools to reduce the CO2 & fuel consumption of vehicles. In 2014 there were 474k HGVs, 3570k LCVs & 169k buses & coaches registered in the UK. New registrations of HGVs & LCVs increased by 52k & 372k in 2015. Within this market, our target customers are the UK’s 32,475 FOs. We will focus on those that are nearing the end of their tyre management contracts or currently don’t have a TPMS installed, especially FOs with a Fleet Management System (FMS). As such, following our agreed trial with a major FO, we will target other FOs in collaboration with FMS Suppliers. We have a trial partnership agreed with Fuel Saver Technologies, a leading FMS supplier serving many prestigious UK FOs including Amey Construction and many UK councils. As part of our goto market strategy we have partnered with Getnord in Lithuania who specialize in ruggedized IP68 smartphones; the package is aimed at the professional driver and construction worker it comprises a smartphone and four sensors. This package will be launched at IFA in Berlin and Automechanika in Frankfurt Sep 2016. It is anticipated that this will create visibility in the larger European market which will lead exports throughout Europe. We'll also use trade shows & magazines to actively market the technology. This is a competitive market, however being the first mover with a low cost, brand agnostic & durable solution will have significant advantage, so impact in Y1&Y2 will be prioritised.

By Q3 we will have established low volume manufacturing in Sedgefield which will expand rapidly in 2018 thanks to the scalability of the technology we are using. A recent patent search suggests

Freedom to Operate & we have already been awarded two patents to protect our pressure measurement technology across 67% of the global markets. It is expected that further opportunities will be pursued to protect our IP as appropriate during the project, & so further protect against imitator products. Additionally, Silent Sensor has been registered as a trademark to help commercialise & protect our innovation. SSL has a growing patent portfolio covering TPMS sensors and devices. It has five patents and growing, many of which are proven in a real industrial environment. SSL will utilise all this know- how in integrating its processes on the energy harvesting substrates. CPI has IP on electronic printing technology and has a strong background in making flexible electronics at its facility in Sedgefield.

We already have a trial partnership agreed with a FO for launching our existing BLE TPMS sensor. Working relationships have also been established with FMS suppliers: (US), (UK), & (Sweden). Due to this strong initial response to our current BLE product, our EU launch is expected in Q3 17.

Progress beyond the state of the art and expected potential impact

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 reductionsof

€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.