gacparis andrew close - ihs · pdf fileglobal automotive seminar overview – derailment?...

Has the Current Crisis Derailed the Uptake of New

Powertrain Technologies to the Extent that CO2

Targets are in Jeopardy?

Andrew CloseSenior Technical Research Analyst - Europe

Copyright © 2009 IHS Global Insight. All Rights Reserved. GLOBAL AUTOMOTIVE SEMINAR

Overview – Derailment?

• EU CO2 Targets, Penalties and Taxation

• Current Market CO2 Landscape

• Crisis driven changes

– Segment effects

– Fuels

– Technology

• Forecast CO2 situation 2012 – 2015

• Implications for the Industry



• EU CO2 Targets, Penalties & Taxation



– Segment effects

– Fuels

– Technology


• Implications for the industry


• Finalised Target of 130 grams of CO2 /km for new cars registered in the EU.

• The ’60%’ Curve, allowing heavier vehicles to emit more CO2

• Fleet Phase in:

– 2012: 65% of all new cars from each manufacturer to comply

– 2013: 75%

– 2014: 80%,

– 2015+: entire fleet

• Penalty Phase in:

– 2012-2019 : €5 for the first average g/km exceeded, €15 for the second, €25 for the third g/km, and €95 for each subsequent g/km.

– From 2019 onwards the premium will be

€95 from the very first gram per kilometre

exceeding the target.

EU CO2 Regulation : Finalised Text

0

50

100

150

200

250

500 1000 1500 2000 2500 3000

Vehicle mass [kg]

CO

2 e

mis

sio

n lim

it v

alu

e [g/k

m]

Limit value

curve

130 g/km

The European Commission expects to consider OEM’s LOWEST CO2 vehicles sold in each state

when calculating the average

The European Commission expects to consider OEM’s LOWEST CO2 vehicles sold in each state

when calculating the average


CO2 legislation concessions• 5% CO2 discount for E85 compatible vehicles in compliant countries

• Cars emitting <50 gCO2/km shall count as 3.3 cars in 2012 progressively reducing to 1 car in 2016

• Up to 7g/km discounts available for ‘Eco-Innovations’ which reduce CO2 but are not evident on the test cycle

Emissions

• Euro5 emissions standards essentially in place already• Euro6 emissions standards require additional equipment for diesel engines,

although cost less than originally thought

Regulation : Beyond 2015• 95g/km average target for 2020.

• Details and premiums will be defined no later than the beginning of 2013.

• Possibly based on vehicle size (rather weight)• New test procedure better reflecting real driving conditions

� Implications for test ‘tuning’ of CO2 and emissions

Other EU Influences


By 2010 – CO2 Taxation

Now 15 Countries have

Announced CO2 tax(New Central Europe will be slower

so far only Romania)

= CO2 tax

Many of the2009 Scrapping & Incentive

schemes are

linked to CO2

= CO2 incentive






– Segment effects

– Fuels

– Technology




Current Market CO2 Landscape

Gasoline

CNG LPG

Diesel

E85

Europe: EU25

– Passenger Cars only

– Production Based (not sales)

– Industry wide ‘CO2 Optimisation’ of vehicle calibration and specification assisting improvement.

158 g/km


2008 Limit Value Curve

TOYOTA

FIAT GROUP

FORD

NISSAN

PSARENAULT

GM

VW GROUP inc Porsche

BMW

DAIMLER

80

100

120

140

160

180

200

220

240

1000 1100 1200 1300 1400 1500 1600 1700 1800

Production Weighted Average Mass (kg)

Pro

du

cti

on

Weig

hte

d A

vera

ge C

O2 (

g/k

m)

EU Limit Value

Curve

Group CO2: Improvement Required

How were the manufacturers placed in relation to the target in 2008?






– Segment effects

– Fuels

– Technology




Segment Mix Effect on Fleet CO2

164.5 161.1 157.8 154.6156.8

0

20

40

60

80

100

120

140

160

180

2006

2007

2008

2009

as

Foreca

st in Q

1 20

08

2009

Lat

est F

orec

ast

EU

Avera

ge C

O2 g

/km

SUV

MPV

E

D

C

B

A

credit crunch segment downsizing = 2g/kmcredit crunch segment downsizing = 2g/km


Fuel Price Effect

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

2Q20

063Q

2006

4Q20

061Q

2007

2Q20

073Q

2007

4Q20

071Q

2008

2Q20

083Q

2008

4Q20

081Q

2009

Pu

mp

Pri

ce

€/L

1998

2000

2002

2004

2006

Jan-0

8M

ar-0

8M

ay-0

8Ju

l-08

Sep-0

8N

ov-08

Jan-0

9M

ar-0

9M

ay-0

9

Gasoline

Diesel

LPG

CNG

Germany Italy

Traditional SpreadNo Spread

market looking for a cheaper alternative to

diesel

market looking for a cheaper alternative to

diesel


0%

1%

2%

3%

4%

5%

6%

2008 Forecast

2009 Forecast

CNG (right axis)

20%

30%

40%

50%

60%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EU

Pro

duction P

enetr

ation

2008 Forecast

2009 Forecast

Diesel (left axis)

Fuel Mix – A New Alternative?

EURO 6

130g/km 95g/km

EURO 4 EURO 5

Diesel Share Factors:

• Lower oil prices

• Refining capacity

expansion delay

• Scrappage

Schemes

• Model mix

• Fleet v Private

• CO2 penalty

phase-in


0%

10%

20%

30%

40%

50%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EU

Pro

duction P

enetr

ation

Technology Effect: What Can We Afford?

2009 Forecast

2008 Forecast

Start-Stop (left axis)

EURO 6

130g/km 95g/km

EURO 4 EURO 5

0%

2%

4%

6%

8%

10%

Full & Mild Hybrids (right axis)

2009 Forecast

2008 Forecast


1750

1800

1850

1900

1950

2000

2050

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

Avera

ge C

ap

acit

y (

CC

)

0

20

40

60

80

100

120

140

Avera

ge O

utp

ut

(HP

)

A – Start of the CO2 based taxation through Europe, oil price rising; diesel share increases especially in large segments.

D – Euro6, after treatment required on diesel, reducing penetration.

Best in class returns to 1.8L as diesel is more concentrated in bigger cars.

AEuro6

D

B – Recession hits, customers choose cheap cars (entry level / small engines)

C – Recovery from recession and EU legislation begins.

Diesel shares increases as does efficiency

Diesel: Downsizing �� Rightsizing

EU Production

B

C

‘right size’ becoming evident‘right size’ becoming evident


Gasoline: Downsizing is really here!

1500

1550

1600

1650

1700

1750

1800

1850

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

Avera

ge C

ap

acit

y (

CC

)

0

20

40

60

80

100

120

140

160

Avera

ge O

utp

ut

(HP

)

EU Production

A

B

D

C

A – Start of the CO2 based taxation through Europe; bigger cars focus on diesel

B – Recession hits Europe and customers choose cheap cars (entry level / small engines)

C – Recovery from recession (model mix) and EU CO2

legislation begins.

Gasoline engines are drastically increasing efficiency through Turbo-DI and VVT technologies and are slowly introduced for Euro6.

D – Post Euro6, most of the gas engine developments are targeting this time for small, high efficient engines for mass market application.

Best in class is smaller than 1.6L.

Euro6

Available Now: Strong short-term

growth forecast despite crisis

Available Now: Strong short-term

growth forecast despite crisis


Back on the rails for 2012?

• Crisis-forced Vehicle Downsizing:

– Good Practice for the market beyond 2012

– But lower margins from smaller fleet

• CNG/LPG Share: every bit helps

• Revised diesel share: hurts a bit

• Technology battle: Engineers v Accountants

– Hybrids to recover lost ground

– Conventional ICE technology making the most significant CO2 reduction

– Right-sizing / Down-sizing

S-S only real impact

Affordable Diesel, Optimised CO2

2 g/km

0.5 g/km

0 - 2 g/km

CO2 Impact






– Segment effects

– Fuels

– Technology




CO2 Forecast Process


CO2 Forecast: 2012

ElectricE85

CNG

LPG

DieselGasoline

2012

Future Situation

– Total production fleet basis

– Low volume sports cars excluded

– Penalties to be calculated on sales

–13% improvement from 2008

137.3 g/km


CO2 Forecast 2012: OEMs

EU Limit Value Curve

Total Fleet Basis

2012 Limit Value Curve

TOYOTA

BMW

DAIMLER AG

FIAT GROUP

FORD

NISSAN

PSA

RENAULT

GM

VW GROUP inc Porsche

80

100

120

140

160

180

200

220

240

1000 1100 1200 1300 1400 1500 1600 1700 1800

Production Weighted Average Mass (kg)

Pro

du

cti

on

Weig

hte

d A

vera

ge C

O2(g

/km

)

EU Limit Value

Curve


Segment Effect on Fleet CO2 in 2012

164.5 161.1 157.8

135.7137.3

154.6156.8

0

20

40

60

80

100

120

140

160

180

2006

2007

2008

2009

as

Foreca

st in Q

1 20

0820

09 L

ates

t For

ecas

t20

12 a

s fo

reca

st

2012

with

200

9 se

gmen

t split

EU

Avera

ge C

O2 g

/km

SUV

MPV

E

D

C

B

A

credit crunch segment mix still = 2g/km in 2012

credit crunch segment mix still = 2g/km in 2012


EU Penalty Forecast

• Assumes lowest CO2

cars produced sold in EU

• Fleet phase in includes best CO2 cars

• No penalties predicted

• Some breathing space available

* Excludes Porsche, Honda, Hyundai, Suzuki

Sales Basis, of EU Produced Cars*

2012-2015 Limit Value Curve - Approximate EU Average

2012

2013

20142015

80

100

120

140

160

1150 1170 1190 1210 1230 1250

Sales Weighted Average Mass (kg)

Sale

s W

eig

hte

d A

vera

ge C

O2 (g

/km

)

EU Limit Value

Curve

technology implementation to recover from crisis in time to

avoid penalties

technology implementation to recover from crisis in time to

avoid penalties






– Segment effects

– Fuels

– Technology

• Forecast CO2 Situation 2012 – 2015

• Implications for the Industry


Can We Afford a Diversified Strategy?

• Or only what we really need?

• Sales are down, model mix less favourable

• More targeted strategy required:

– Toyota: Hybrid & VVT

– Renault: turbo & EV only

– Ford: Eco-boost

– Fiat: S-S & turbo

OEMs & Suppliers

need to commit to

most efficient &

effective way to

achieve planned

improvement

OEMs & Suppliers

need to commit to

most efficient &

effective way to

achieve planned

improvement


Non-Essential to Wait or Die

• Toyota 1.6 diesel

• GM large diesels

• Honda V6 diesel

• Sports variants eg.Fiesta RS

• PSA Platform-2 hybrids

(C4/308)

• BMW CS


Wider range through turbocharging

2007 2014

Fewer, higher volume engines: e.g. PSA

hp

2.0EW10

1.0(TOY)

1.6EP6

2.0EW10

1.3EP3

1.0/1.2EB

1.1TU1

60

100

140

180

220

260

1.8EW7

1.6TU5EP61.3

TU3EP3

Engine Families with more than 25k units/year

Wider range through valve timing1.6THP– VANOS -DI

1.6VTi – VALVETRONIC -PM


Co-operate & Save

• Engine sharing: PSA/BMW, Ford/PSA• Platform Sharing: Fiat/Ford etc• Technology Sharing:

– BMW/Daimler/GM Hybrid

– Mitsubishi/PSA i-MiEV

– Li-Ion Battery OEM-supplier alliances

• Supplier based innovation: – Magna Hybrid

– ZF / Continental / Daimler Hybrid transmission

• OEM consolidation?• Impact on brand

differentiation?

Technology development shared in order to remain

on target for cost AND

timing

Technology development shared in order to remain

on target for cost AND

timing


In Summary: On the Rails, Care Required

• CO2 targets, taxation and penalties are known and here to stay

• Economic Crisis effects:

� Reduced sales = reduced development funding

� Smaller vehicle biased segment mix

� New technology delayed 2-3 years with model cycles

� Existing ‘conventional’ technology growing faster & most important

• EU CO2 penalties to be avoided thanks to Phase-In

� Technology ramp-up forecast OK

� Non-essential CO2 reduction technology delayed until >2015

• Cost pressure to remain

� Strategies to be streamlined

� Cooperation to increase

Thank You!

Andrew CloseSenior Technical Research Analyst - Europe

[email protected]

gacparis andrew close - ihs · pdf fileglobal automotive seminar overview – derailment?...

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