Drive Green 2020 - Alternative Powertrain Forecast
Michael Omotoso Senior Manager Global Powertrain Forecasting
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
2016/2025 CAFE Standards
U.S. Market Forecast Consumer Attitudes Towards Alternative Fuel Vehicles
HEV and BEV Sales Forecast
Global Forecast
Conclusions
2
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
CAFE Standards 2025 Scenarios 2011 model year: 27.3 mpg Fleet Average 2.0 mpg Increase Over the 2010 Model Year 30.2 mpg for Cars, 24.1 mpg for Light Trucks
2016 model year: Car: 27.5 → 39 mpg Truck: 23.5 → 30 mpg Fleet: 24.6 → 35.5 mpg Cost = $1,300 → $4,000 per vehicle
3
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
YEAR
4% annual increase
6.4% annual increase
2016
35.5
35.5
2017
36.9
37.8
2018
38.4
40.2
2019
39.9
42.8
2020
41.5
45.5
2021
43.2
48.4
2022
44.9
51.5
2023
46.7
54.8
2024
48.6
58.3
2025
50.5
62.0
What Will Happen to Gas Prices? Year
2009
2010
2011
2012
2014
2016
2018
2020
2025
World oil price, Brent crude spot, $pb
$61.57 $79.55 $84.39 $85.62 $94.73 $102.20 $113.47 $127.83 $154.37
Pump prices $/gallon regular
$2.05
$2.65
$2.81
$2.85
$3.16
$3.41
$3.78
Source: Oxford Economics
Consumer behaviour changes according to gas prices, not CAFE
standards Crude oil prices are expected to remain below $100/bbl until 2016 Assuming no major increase in taxes, pump prices remain below $3.50/gal in the medium term We already experienced $4-4.50/gallon in summer 2008 – people’s behaviour changed Sustained gas prices over $4/gallon will lead to permanent change in the vehicle fleet from a size and powertrain perspective. But in our baseline scenario, nothing dramatic before 2020 © 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
$4.26
$5.15
Saving Gas Money Can be Costly Fuel Cost of Driving 12K Miles/YR for 5 Years 30,000
Total Fuel Cost
25,000
$24,000 $2.00
20,000
$3.00
$18,000
$4.00
15,000
$14,400
$5.00
$12,000
$12,000
10,000 5,000
$6.00
$10,141
$9,000 $7,200
$8,000 $6,000
$4,800
20
25
$5,070
$4,000
$3,380
30
35.5
0 15
$7,200
$6,000
$6,000
$3,600 $2,400 50
$3,000 $2,000 60
Miles per Gallon
At $6/gallon, going from 35.5 mpg to 60 mpg saves almost $6000 At $3/gallon, you only save $2000 Are the fuel savings obtained by going from 50 to 60 mpg worth the expense? Spending $10-15k on a Li-ion battery only makes sense to replace a sub 25 mpg vehicle @ $6/gal © 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
United States – Rules and Regulations REGULATION TIMELINE g/mi CO2
MPG
38
350
36
300
34 250 32 30
200
28
150
CAFE mpg g CO2/mile
26 100 24 50
22 20
0 1985 1990 1995 2000 2005 2011 2012 2013 2014 2015 2016 Year
TAX CREDITS
Vehicle type
GOVERNMENT TARGETS
Credit
Electric vehicles $7,500 Plug-in hybrids, ER-Evs $7,500 Clean diesel $900-2200 Hybrid Expired March 31, 2010 was $250 to $3400
Examples
Nissan Leaf, Tesla Roadster Chevrolet Volt, Toyota Prius PHEV BMW 335d, VW Jetta TDI Toyota Prius, Honda Insight
Some individual states also provide additional tax credits. For example, California will provide a $3.7 million fund for electric vehicle tax credits. Up to $5000 per vehicle will be provided. So potentially the first 740 BEVs sold in California will qualify for the credit on top of the $7500 federal tax credit. The state of Oregon provides a $750-1500 tax credit for BEVs, FCEVs and PHEVs. The state of Oklahoma will provide tax credits for alternative fuel vehicles starting on January 1, 2015.
6
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Policy Target
CAFE
Emissions
MY2011
2016
Miles per gallon
27
35.5
Grams of CO2 per mile
326
250
MY 2012-14: 0.01 g/mi
0.01 grams/mile
N2O CH4
A/C leakage credit Flex fuel vehicle credits
Target: 0.03 grams/mile
R-134a refrigerant
6.3-13.8 g/mi for cars, 7.8-17.2 g/mi for trucks
1993-2014 model years
1.2 mpg
MY 2015
1.0 mpg
MY 2016
No credit
U.S. Hybrid-Electric Vehicle Market: 26 Models Cadillac Escalade Two-Mode
Chevrolet Malibu hybrid
Chevrolet Silverado Two-Mode
Chevrolet Tahoe Two-Mode
Ford Escape hybrid
Ford Fusion
GMC Sierra Two-Mode
GMC Yukon Two-Mode
Honda Civic hybrid
Honda Insight
Lexus GS450h
Lexus HS250h
Lexus LS600h
Lexus RX450h
Mercury Mariner hybrid
Mercury Milan hybrid
Nissan Altima hybrid
Saturn Aura Green Line
Tesla Roadster BEV
Mercedes-Benz S400h
BMW X6 Active hybrid
Mercedes-Benz ML450h
Saturn VUE Green Line
Toyota Camry hybrid
Toyota Highlander hybrid
Toyota Prius As of 9/30/10.
7
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Q4 2010 Hybrid and EV Forecast Update Hybrid sales peaked at 353,000 units in 2007 Sales dropped to 291,000 in 2009 with collapse of auto market (10.4m LV sales) Hybrid and EV sales expected to drop to 273k units in 2010. Share drops below 2.4% of light vehicle sales (forecast 11.5m) Toyota Prius continues to dominate, accounting for 50% of hybrid sales New Honda Insight has not posed a challenge to the Prius. Honda CR-Z (sales start 8/24/10) is only expected to sell 10-15k units p.a. Hybrid sales are highly correlated to gas prices, and gas prices have been below $3/gallon all year Long term, we expect hybrid sales to exceed 1 million units by 2014 2016 CAFE requirements will help hybrid sales reach 1.4m units by 2016, representing 8.3% of light vehicle sales Over 100 HEV and PHEV models will be available by 2014 Less than 100k BEVs by 2015, but over 140k PHEVs. Unfortunately we won’t reach the government’s goal of 1 million EVs until much later Overcapacity in EV and battery production already?
8
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Q4 2010 U.S. Hybrid and Electric Vehicle Forecast Millions
20
IC ONLY
HEV/BEV
12%
Hybrid and EV share
18 10%
16 14
8%
12 10
6%
8 4%
6 4
2%
2 0
0% 2009
9
2010
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
2011
2012
2013
2014
2015
2016
2017
2020
Investment Dollars Are Flowing Michigan: The Midwestern state is providing tax breaks for companies willing to build hybrid and electric vehicle batteries GM: $106 million for battery packs for the Chevrolet Volt EREV GM: $105 million for second generation rear wheel drive electric drive systems Ford: $63 million for electric drive transaxles Ford: Partnership with Magna to build an electric version of the Ford Focus in Michigan 10
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Chrysler: $83 million to build a new vehicle electrification technology and manufacturing center in Michigan Chrysler: $365 million for a nationwide demonstration fleet of PHEVs for use by select customers and partners
Johnson Controls: $299 million for nickel cobalt metal battery cells A123 Systems: $249 million for nano-iron phosphate cathodes Fisker: $529 million to manufacture the Karma PHEV and the lower cost Nina PHEV Tesla: $465 million for the construction of an electric vehicle manufacturing plant in California
Nissan: $1.6 billion dollars for manufacture of the Nissan Leaf and EV batteries in Tennessee
U.S. Diesel Sales Outlook 12
US Diesel Car Share
3
% of US LT Sales
% of US Car Sales
3.5
2.5 2 1.5 1 0.5 0
2008 2009 2010 2011 2012 2013 2014 2015
% of US LV Sales
6 4 2 2008 2009 2010 2011 2012 2013 2014 2015
Light Truck share is significantly higher than car
US Diesel LV Share
8
US Diesel Light Truck Share
8
0
9
share; volumes 3-6x higher
7
Light duty pickups will be largest diesel segment, followed by SUV/CUVs
6 5
DPF and urea add to upfront costs, but 2016 CAFE forces the issue
4 3
Detroit 3, Nissan and Honda all delayed their diesel programs in 2009/10
2 1 0
10
2008
2009
2010
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
2011
2012
2013
2014
2015
2017
2020
Our forecast is less optimistic than a year ago, but still bullish. 7.3% share in 2016
Consumer Attitudes To Alternative Fuel Vehicles
12
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Single Greatest Benefit of a Hybrid-Electric Vehicle - Among Hybrid-Electric Non-Considerers 29%
Lower fuel costs 26%
Better fuel economy 16%
Decrease U.S. dependency on foreign oil
15%
Better for the environment 6%
Lower emissions 4%
Tax credit
“Decreased dependency on oil no matter where it comes from.” – Chevrolet Caprice owner
2%
Improved carbon footprint
“It is a win-win because it provides a lower yearly fuel cost and it is better for the environment and reduces dependency on foreign oil.” – Chrysler PT Cruiser owner
1%
Social status of being an HEV owner Able to drive in HOV lane
*
Ownership of cutting edge/new technology
*
“Lower fuel cost and usage, plus environmental and tax benefits.” – Kia Sorento owner
2%
Other 0%
10%
20%
30%
40%
Even non-considerers recognize the potential of cost savings in terms of increased fuel economy from a hybrid-electric vehicle, while environmental benefits are once again seen as less important. Note: Sum may not add up to 100% due to rounding 13
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
* Indicates less than 1%
Why Are You NOT Considering a Hybrid-Electric Vehicle? 43%
Cost premium of HEV I don't know enough about it
35%
Desired vehicle not available with HybridElectric powertrain
30%
Cost of ownership
29% 26%
Concerned about performance Longevity of battery life
23%
Unproven technology
17% 15%
Never thought about it
% Considering
14%
Not a significant increase in fuel economy
HEV – 62% FFV – 43%
Battery makes vehicle unsafe
3%
Other
CDV – 16% None – 19%
6% 0%
20%
40%
60%
Concerns with the price of the vehicle, as well as general lack of knowledge regarding the technology itself are among the most mentioned reasons as to why consumers are not considering a hybridelectric vehicle. Performance concerns and worries regarding the relative newness of this powertrain also hinder interest. Multiple Mention 14
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
All-Electric Mileage Range Expected Plug-In Hybrid-Electric Version of Vehicle Considered
- Among Plug-In Hybrid-Electric Initial Considerers Expected Average Hours for Full Charge
Conventional
80.7
STUDY AVERAGE
78.0
5.8
Pickup
77.0
5.8
Utility
76.9
6.5
CUV
75.6
6.0
Sporty*
73.8
5.8
Basic
72.1
5.5
Van*
69.8 0
20
40
5.7
5.4
60
80
100
Mileage Range Expected
Highlighting a potential issue regarding education on PHEVs, PHEV initial considerers on average expect vehicles’ utilizing this technology to run 78 miles in all-electric mode. Consumers expect this to be possible with an average plug-in charge time of 5.8 hours. * Caution: Small sample size 15
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Three out of four consumers feel that increased fuel economy warrants consideration of a clean diesel vehicle, while one-half specifically mention lower fuel costs. Traditional benefits of this powertrain regarding performance are among the least mentioned reasons for consideration.
Why Are You Considering a Clean Diesel Vehicle? 76%
Better fuel econom y 50%
Low er fuel costs 44%
Better for the environm ent
% Considering
43%
Vehicle's range on one tank Decrease U.S. dependency on foreign oil
35%
Low er em issions
35%
HEV – 62% FFV – 43%
32%
Higher engine pow er/torque
16%
Tax credit Social status of being Clean Diesel ow ner
Multiple Mention © 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
None – 19%
21%
Tow ing capability
Other
CDV – 16%
3% 1%
0%
20%
40%
60%
80%
As with clean diesel considerer concerns, higher fuel costs is the greatest contributor to lack of consideration for this powertrain, followed closely by lack of knowledge and lack of thought
Why Are You NOT Considering a Clean Diesel Vehicle? Higher fuel costs
45% 43%
I don't know enough about it Never thought about it
29%
Concerned about fuel availability
20%
Cost premium of Clean Diesel
FFV – 43%
13%
Concerned about emissions
11%
Cost of ownership
11%
CDV – 16% None – 19%
10%
Concerned about noise Not a significant increase in fuel economy
9%
Concerned about performance
6%
Other
3%
0%
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
HEV – 62%
18%
Desired vehicle not available with Clean Diesel engine
Multiple Mention
% Considering
20%
40%
60%
As pickup owners have traditionally found the most utility from diesel versions of a vehicle in their segment, these consumers are willing to pay the most for this technology. However, the increase in fuel economy expected is low, compared to other segment owners.
Fuel Economy Expected – Clean Diesel Version of Vehicle Considered Additional amount willing to spend for a Clean Diesel powertrain
- Among Clean Diesel Considerers Basic*
16.6
33.1 14.3
28.2
Conventional
$1,881
49.7
42.5
$1,684
42.4
$1,637
Sporty*
25.7
CUV*
25.4
13.4
38.8
$1,678
STUDY AVERAGE
25.3
13.3
38.6
$1,855
Utility*
22.3
Van*
22.9
0
Note: Numbers may not add up to total due to rounding Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
14.5 9.9
10
20
36.8
$1,832
32.8
$1,830
31.9
11.8
20.1
Pickup
* Caution: Small sample size
16.7
30
$2,173 40
50
60
Expected Fuel Econom y (MPG) of Segm ent Prim arily Considered (Avg) Additional Fuel Econom y (MPG) Expected from a Clean Diesel Version of Segm ent Prim arily Considered (Avg)
U.S. Light Vehicle Demand Breakdown by Fuel Type Hybrid 2.4% Diesel 2.6%
Flex 8.7%
Electric 0.02%
Hybrid 7.7% Diesel 6.8%
Flex 10.0%
Electric 0.50%
Flex 10.0%
Electric 0.90%
Diesel 8.1%
Gas 74.0%
Gas 86.0%
2010
Hybrid 9.5%
2015
Gas 71.5%
2020
Flex fuel vehicles currently have the highest share of the alternative fuel market, but consumers mostly power them with gasoline We expect about 1/4 light vehicles sold in the U.S. to be an alternative fuel vehicle by 2015 and 28.5% by 2020 Gasoline-electric hybrids are expected to grow at a faster rate than diesels Electric vehicle share is expected to remain below 1% until 2020
19
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Global Hybrid/EV Sales Millions
80
IC only
Hybrid/EV
Share
70
7%
60
6%
50
5%
40
4%
30
3%
20
2%
10
1%
0
0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020
20
8%
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Global Hybrid/EV Sales by Region Millions
Asia-Pacific
North America
Europe Big 5
Europe Other
6,000
5,000
4,000
3,000
2,000
1,000
0 2009
21
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
2010
2011
2012
2013
2014
2015
2016
2017
2020
Global Hybrid/EV Sales by Type Millions
BEV
EREV
FCEV
FHEV
MHEV
PHEV
6,000
5,000
4,000
3,000
2,000
1,000
0 2009
22
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
2010
2011
2012
2013
2014
2015
2016
2017
2020
China – Hybrid/Electric Forecast HYBRID/EV ASSESSMENT • Battery electric vehicles (BEVs) are expected to significantly outweigh the rest of the hybrid and electric vehicle options, accounting for around three quarters of all the volumes by 2020. • The total demand for hybrid/EV market is projected to reach 472,000 units by 2020, accounting for nearly 2.3% of total passenger vehicle sales. • Note that micro hybrid vehicles with simple start/stop technology are not included.
HYBRID/EV OUTLOOK Share
Sales
3.0%
500,000 BEV MHEV FCEV EREV PHEV FHEV LV Share
450,000 400,000 350,000 300,000 250,000
2.5% 2.0% 1.5%
200,000 1.0%
150,000 100,000
0.5%
50,000 -
0.0% 2010
23
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
2011
2012
2013
2014
2015
2016
2017
2020
Japan – Hybrid/Electric Forecast HYBRID/EV ASSESSMENT • Japan has been the global leader in hybrid vehicle development since the mid-90s when the first generation Toyota Prius was launched. • In 2009, Japan overtook the US to become the top hybrid market in the world with almost 350,000 hybrid sales compared to less than 300,000 units sold in the US. • Mitsubishi and Nissan are already engaged in a price war for small BEVs in Japan, and we expect the market to grow as prices drop and more models are launched. • Toyota plans to increase production by 7% in 2011 to 740,000 units globally.. Toyota’s cumulative hybrid sales in Japan exceeded 1 million units as of July 31, 2010. Cumulative global sales exceeded 2.68 million. • The plug-in market should approach 60,000 units by 2015 and 100,000 by 2020.
24
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
HYBRID/EV OUTLOOK Sales
Share
1,000,000
FHEV EREV MHEV LV Share
900,000 800,000
25%
PHEV FCEV BEV
20%
700,000 15%
600,000 500,000
10%
400,000 300,000
5%
200,000 100,000
0%
2010
2011
2012
2013
2014
2015
2016
2017
2020
Competition/Threats To The Future Of HEV/PHEV/BEV What if Peak Oil is just a scare and gas prices remain below $4/gallon long-term? We might not need diesels or hybrids, let alone electric and plug-in vehicles Initial price premium for diesel: $1,000-4,000 Initial price premium of HEV: $2,000-10,000 (mild hybrid to full hybrid) Initial price premium of PHEV: est. $15,000 Initial price premium of BEV: $15-20,000 (over $50k for the Tesla Roadster)
Conventional powertrain technology has plenty of room for improvement Engines: GDI: 8-12% gain Turbocharging: 5-10% gain Ecoboost: 15-20% gain VVT: 1-3% gain Cylinder deactivation: 5-6% gain Micro- or mild hybrid (stop-start): 7-10% gain HCCI: 10-20% gain
Transmissions: DCT: 5-15% gain CVT vs. automatic: 3-5% gain Man-5 to Man-6: 1-2% gain 6/7/8 speed automatic transmission: 3-6% gain
25
Š 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Global and US Alternative Fuel Market Summary Economic, environmental, and security concerns continue to drive the growth of hybrid, plug-in and battery electric vehicle sales worldwide. Global sales of hybrid and electric vehicles are expected to grow from 732,000 units in 2009 to over 3.4mn units in 2015 and 5.2mn in 2020. Hybrid and PHEV sales grow from 728,000 units in 2009 to 2.8mn in 2015 and 3.9mn in 2020. PHEV sales will exceed 335,000 units by 2020, while EREV sales will exceed 110,000. BEV sales grow from less than 5,000 units in 2009 to almost 650,000 in 2015 and over 1.3mn in 2020. HEVs: the US will regain the lead from Japan starting in 2012, and the US will account for 53% of global HEV sales in 2015 and 44% in 2020. Asia will account for 32% in 2015 and 33% in 2020. U.S. consumers only consider fuel economy to be very important when gas prices are high Financial constraints will limit EV production and sales in favor of cheaper solutions to the fuel economy and emissions puzzles. This benefits diesels, hybrids and gasoline ICEs Fuel cell sales are expected to remain below 15,000 units p.a. for the next 10 years. Lithium may become the new black gold; will ‘peak lithium’ replace peak oil? 2025: 45-50 mpg is a more realistic target than 62 mpg. Either way, we expect to see a significant increase in hybrid, diesel, diesel-electric, BEV and PHEV sales beyond 2020. Manufacturers will have gone through 3-4 generations of BEV/PHEV and achieved economies of scale and other cost reductions to make alt fuel vehicles more attractive to consumers. Oil prices are hard to predict, but the demand will be there in developed markets especially
26
© 2010 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.