powertrain & exhaust aftertreatment scenario. raghunandan b (ihs markit).pdfconfidential. ©...

Confidential. © 2018 IHS MarkitTM. All Rights Reserved. Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Powertrain & Exhaust Aftertreatment

Scenario ECMA 2018

25-26 October 2018

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Contents

2

ECMA 2018

1. Market drivers for powertrain production

2. Implications for exhaust aftertreatment

3. Supply base opportunity


Market drivers for powertrain production

3

Regulations Urbanization

Oil price/ economy

Competition

Impact events

Local incentives

ECMA 2018


European CO2 regulation beyond 2020

4

Evolution of CO2 emission targets for new registrations

© 2018 IHS Markit

Notes: Post-2021 CO2 emission targets with no more absolute values given the New European Driving

Cycle (NEDC) to WLTP switch

Source: IHS Markit

60

70

80

90

100

110

120

130

140

2010 2015 2020 2025 2030

95g

NEDC

The Worldwide Harmonized Light Vehicle Test Procedure

(WLTP) CO2 emissions shall be monitored for all new

registered vehicles beginning on 1 January 2018

For each manufacturer, the average-specific emissions

based on WLTP CO2 values shall be determined starting

on 1 January 2018

Beginning on 1 January 2021, those average-specific

emissions shall be used to determine the manufacturer‘s

compliance with its specific emission target

Target CO2 emission reduction of 15% by 2025 and 30%

by 2030 for passenger vehicles and vans

Manufacturers achieving a 15% share of zero- and low-

emission vehicles (FCEV, BEV, PHEV, REEV) by 2025 will

receive an easier CO2 target for the rest of their fleet. This

share will be raised to 30% by 2030. Zero-emission

vehicles will count more than low-emission vehicles.

CO

2 e

mis

sio

n t

arg

et

NEDC WLTP

-

30%

-

15%

ECMA 2018


European homologation test cycle evolution

5

Impacts of the transition from NEDC to WLTC on the CO2 road to target

© 2018 IHS Markit

Notes: Road load comparison between NEDC and WLTP – Source IHS Markit

Simulation result comparison shows an estimated 20% average gap between WLTP CO2 and current NEDC CO2

This will certainly make the OEMs’ path to compliancy even harder

Source: IHS Markit VPaC EU © 2018 IHS Markit

ECMA 2018


Emissions monitoring and real driving emissions (RDE) introduction How does the wish to fill the gap between certification and reality impact OEMs?

6

Overview of the requirements for exhaust emissions in Europe

© 2018 IHS Markit

RDE NOx coefficient factor

Growing concerns toward cities’ air quality and local pollution matters have driven new European policies.

This includes Particulate Numbers (PN) and Nitrogen Oxides (NOx) real-time monitoring through the RDE test cycle.

Despite making exhaust emissions much cleaner, this framework will highly weaken diesel in Europe.

Air quality measurements from European Air Quality Index 1.5 2.1

Source: European Environment Agency,

http://airindex.eea.europa.eu/ © 2018 IHS Markit

ECMA 2018

http://airindex.eea.europa.eu/


[CELLRANGE]

[CELLRANGE]

[CELLRANGE]

0%

10%

20%

30%

40%

50%

60%

70%

80%

BMW Renault/Nissan Toyota

2015 2017 2020

Consequence of fast-moving markets: Dramatic fall of diesel shares

7

EU28 (PV only) diesel sale shares actuals in post diesel-gate era

© 2018 IHS Markit

Quantification of the diesel demand fall by OEM shows fragmented landscapes, but an undeniable trend.

The 2017 EU sales actual decrease clearly highlights the irreversible consumer perception turnaround.

Source : Data ACEA 1990–2017 Diesel Sales share

EU28 2017 average diesel

Source: IHS Markit VPaC 2018H1 (preliminary)

44%

ECMA 2018


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Ma

rket p

en

etr

ation

of te

ch

no

logy

Year

ICE ICE: Stop-start Mild hybrid Plug-in full hybrid Full hybrid Electric Fuel cell

8

Industry landscape Change is on the way

Source: IHS Markit

Global powertrain production forecast to 2025 (including LCVs)

© 2018 IHS Markit

ECMA 2018


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Ma

rket p

en

etr

ation

of te

ch

no

logy

Year


Source: IHS Markit


© 2018 IHS Markit

One in seven

vehicles is set

to be full

hybrid or

electric by

2025.

Industry landscape Lots of interest and hype surrounding the ―one in seven‖

9

ECMA 2018


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Ma

rket p

en

etr

ation

of te

ch

no

logy

Year


Source: IHS Markit


© 2018 IHS Markit

19 in 20

vehicles will

still require an

ICE by 2025.

Industry landscape In the grand scheme of things, healthy powertrain demand exists

10

ECMA 2018

Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 11

0

20

40

60

80

100

120

140

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Millio

ns

Electric No Electric Yes Fuel Cell Hybrid-Full No Hybrid-Full Yes Hybrid-Mild ICE ICE: Stop/Start

Source: IHS Markit

Global powertrain production forecast 2015-2028 (including LCVs) – Total Volume

© 2018 IHS Markit

Industry landscape Demand still growing for (some form of) internal combustion engine

ICE

Growth

Po

we

rtra

inn

pro

du

ctio

n v

olu

me

by

Pro

pu

lsio

n S

yste

m

ECMA 2018


Indian powertrain production forecast The irreversible retreat of the diesel fuel-based engines

12

ECMA 2018

0%

10%

20%

30%

40%

50%

60%

70%

80%

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Chart Title

DIESEL

Electricity

GAS

GAS-CNG

CNG

Indian Market penetration by fuel-type, 2017-30

Source: IHS Markit © 2018 IHS Markit

Effect of BS VI

BS VI regulation highlights the 10 ppm limit on sulfur content of

gasoline and diesel fuels. High cost of engine aftertreatment control technologies required for BS VI diesel engines will find

market preference shifting towards gasoline engines, along with rising interest in powertrains driven by CNG and Electricity.


Indian powertrain production forecast Gasoline market to dominate diesel from 2021

• Gasoline Mild-hybrid will find

popularity in the Indian market

from 2021, replacing ICE engine

options under Diesel and

Gasoline

• Diesel decline to begin from 2020,

impacted by BS VI introduction

• Diesels will have 20% market

share by the end of the next

decade

• The EV market is expected to

capture 3% of market share by

2030

13

ECMA 2018

0%

10%

20%

30%

40%

50%

60%

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Chart Title

Gasoline_Hybrid-Mild

Gasoline_ICE

Gasoline_ICE: Stop/Start

Diesel_Hybrid-Mild

Diesel_ICE

Electric

Indian market penetration by propulsion design, 2017-2030



Regulatory summary Tightening, increasingly harmonized regulation

14

Summary of major international emissions standards, 2015–16

Country/

region

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Euro 6b Euro 6d-TEMP/WLTC+RDE Euro 6d Euro 7/

Tier 4/LEV

IV/

China 7/

Proconve

L8?

Tier 2 Tier 3/LEV III

LEV III

JC08 WLTP

China 4/China 5 China 6

KLEV II KLEV III/Euro 6b

Bharat IV Bharat VI

Proconve L6 Proconve L7


• Until regulations potentially align around 2025, differences will exist in major markets.

• Other markets are typically deploying European regulations, but with lower standards.

• Cost synergies will dictate OEMs‘ strategy. IHS Markit component forecasting

horizon Unknown, but likely to

come forward

ECMA 2018


Contents

15

ECMA 2018





Implications for exhaust aftertreatment OEMs will deploy a selection of the following technologies

Exhaust

manifold

Three-way

catalyst

(TWC)

Gasoline

particulate

filter

Exhaust cold

end

Exhaust

manifold Diesel

oxidation

catalyst

Diesel particulate

filter

Exhaust cold end Selective catalytic

reduction

Lean NOX trap

Exhaust gas recirculation (high

pressure/low pressure)

Emissions

compliance

Emissions

compliance

Secondary air

injection

Exhaust gas recirculation (high

pressure/low pressure)

Gaso

lin

e

Die

sel

Exhaust aftertreatment sensors

Exhaust aftertreatment sensors

The supply chain provides a variety of technical solutions for myriad engine technologies to help OEMs meet

emissions standards in different markets around the world.

Source: Shutterstock

ECMA 2018


Vehicle production Vehicle sales


DOC

EXH MAN

DPF Exhaust

cold end

Sensors

SCR+urea

DOC

EXH MAN

DPF Exhaust

cold end

Sensors

Vehicle A, OEM A, diesel, Euro 6–compliant

Vehicle A, OEM A, diesel, Euro 5–compliant

Implications for exhaust aftertreatment Different component configurations heading to different destinations


ECMA 2018




TWC

EXH MAN

Exhaust

cold end

Sensors

TWC

EXH MAN

Exhaust

cold end

Sensors

TWC

Vehicle B, OEM B, gasoline, Euro 6–compliant

Vehicle B, OEM B, gasoline, SULEV/LEV III–compliant

Implications for exhaust aftertreatment Different component configurations heading to different destinations


ECMA 2018


ECMA 2018

• Key Developments

• Material change

• Cylinder head integration

• Combination with Catalytic Converter: ‗Maniverter‘

• Key requirements driving development:

• Weight Saving

• Thermal retention properties

• Turbocharger response time

• Package Space

Focus: exhaust manifold Factors influencing forecast

19


0

5

10

15

20

25

30

35

40

45

50

2016 2017 2018 2019 2020 2021 2022 2023

Mil

lio

ns

Cast Iron Fabricated Steel Integrated

Global Demand – Exhaust Manifold

© 2018 IHS Markit

Un

its

Year

Note: Integrated Exhaust Manifold volume not included in IHS Markit SupplierInsight

Source: IHS Markit

Focus: exhaust manifold Forecast findings

TWC EXH MAN

TWC

EXH MAN

Exhaust Manifolds will increasingly be cylinder head integrated for cost, weight, thermal and packaging reasons

20

ECMA 2018


Focus: exhaust manifold Forecast findings

Growth opportunities remain in South American and Indian powertrain markets. Progression towards manifold integration,

coupled with diesel decline in (predominantly) Europe, highlights a declining market in larger, established markets

0

1

2

3

4

5

6

7

8

9

2016 2017 2018 2019 2020 2021 2022 2023

Mil

lio

ns

ASEAN China Europe India

Japan North America South America South Korea

Regional Demand – Fabricated Exhaust Manifold

© 2018 IHS Markit

Un

its

Year

Note: data shown relates to Engine Production Region rather than Vehicle Production Region

Source: IHS Markit

21

Growth regions:

ECMA 2018


Key developments:

• Need for >1 per exhaust branch

• Closer coupling through move upstream

(underfloor to close-coupled, close coupled to

amalgamated) or manifold integration

Key requirements driving development:

• Optimised integration

• Thermal insulation and/or heating

• Particulate filter integration

• Use of >1 in series

• Vee engine designs typically more stubborn in

terms of integration & approach

• Precious metal thrifting

Insulation

packaging

Catalyst

substrate, with

catalytically

active material

(washcoat)

Stainless steel catalytic

converter body

Heat shield

Oxygen

sensor

Major reactions:

1. CO + NOx = CO2 + N2 (TWC)

2. CO + ½ O2 = CO2 (TWC, DOC)

3. H4C2 + 3O2 = 2CO2 + 2H2O (TWC, DOC)

HC, CO, NOx

H20, CO2, N2

Focus: catalytic converter Factors influencing forecast

Source: Getty Images

ECMA 2018


TWC

EXH MAN

TWC

TWC

EXH MAN

Focus: catalytic converter Forecast findings

The catalytic converter market is growing, driven by increasingly stringent legislation and in spite of downsizing.

Source: IHS Markit

Source: IHS Markit

© 2018 IHS Markit

© 2018 IHS Markit

0

20

40

60

80

100

120

140

160

180

2016 2017 2018 2019 2020 2021 2022 2023

Millio

ns

Vehicle production Catalytic converter production

Notes: Vehicle production volumes excludes battery electric vehicles (BEVS), Regional coverage excludes ASEAN & MENA

Source: IHS Markit

Catalytic converter global demand

© 2018 IHS Markit

Un

its

Year

ECMA 2018


Focus: catalytic converter Forecast findings

Some modest growth remains in European catalytic converter volume. Notable growth regions (in order) are China,

South America and India

0

5

10

15

20

25

30

35

40

2016 2017 2018 2019 2020 2021 2022 2023

Millio

ns

China Europe India Japan

North America South America South Korea

Catalytic converter regional demand

© 2018 IHS Markit

Un

its

Year

Note: data shown relates to Engine Production Region rather than Vehicle Production Region

Source: IHS Markit

ECMA 2018

Growth regions:


Exhaust gas including

PM10, PM2.5

Alternatively

open/plugged

passages

Particle filtration (and

catalyst reaction if coated)

Key developments:

• Deployment on Gasoline DI engines

• Declining diesel demand

• Upstream positioning and improved integration

• ‗Make it fit‘ for now on many gasoline applications


• Improvements in filtration efficiency

• Regeneration improvements (diesel applications)

• Optimization for cold start performance

• Use of catalytic washcoat

• Potential application to multipoint fuel injection –

‗cautious‘ OEMs

Focus: particulate filter Factors influencing forecast


ECMA 2018


Focus: particulate filter Forecast findings

Europe leads in GPF roll out, dictated by Euro 6d Temp legislation. Exponential growth forecast in Greater

China with advent of CN6b. DPF decline aligned to diesel volume in Europe, growth in China LCV applications

0

2

4

6

8

10

12

14

16

18

20

2016 2017 2018 2019 2020 2021 2022 2023

Mil

lio

ns



Regional deployment of GPF

© 2018 IHS Markit

Un

its

Year

Note: data shown relates to Engine Production Region

Source: IHS Markit

0

2

4

6

8

10

12

2016 2017 2018 2019 2020 2021 2022 2023

Mil

lio

ns



Regional deployment of DPF

© 2018 IHS Markit

Un

its

Year

Note: data shown relates to Engine Production Region

Source: IHS Markit

ECMA 2018


GPF

EXH MAN

TWC

TWC GPF

EXH MAN

Catalyst-integrated—close-coupled

Catalyst-integrated—underfloor

GPF

EXH MAN

Standalone—underfloor

TWC

TWC

Focus: particulate filter Forecast findings

OEMs, led by Volkswagen, will aim for close coupling of the GPF, preferably integrated into the catalyst can. Package restriction on existing vehicle platforms will restrict particular OEMs to underfloor locations

0

2

4

6

8

10

12

14

2016 2017 2018 2019 2020 2021 2022 2023

Millio

ns

Catalyst Integrated-Close Coupled Catalyst Integrated-Underfloor

Stand Alone-Underfloor

Gasoline particulate filter "position" trend

© 2018 IHS Markit

Un

its

Year

Source: IHS Markit

ECMA 2018


Focus: selective catalytic reduction Technical overview

Daimler OM 654 engine

Source: IHS Markit Source: IHS Markit © 2018 IHS Markit © 2018 IHS Markit

Key developments:

• Declining diesel demand

• Lack of regulatory clarity in India, but unlikely to be

mandated


• Increasingly integrated AdBlue delivery module

• Closer coupling of SCR substrate, ideally

amalgamated into engine envelope

• Improvements in AdBlue utilization

• Optimization for cold start NOx conversion through

careful size selection and filter integration

ECMA 2018


Focus: selective catalytic reduction Forecast findings

European demand for SCR systems is expected to plateau in 2021. Some growth in India post-Bharat IV

introduction in India for larger diesel engine applications.

0

1

2

3

4

5

6

7

8

2016 2017 2018 2019 2020 2021 2022 2023

Millio

ns



Selective Catalytic Reduction global demand

© 2018 IHS Markit

Un

its

Year

Source: IHS Markit

ECMA 2018


Contents

30

ECMA 2018





Supply base opportunity Some key statistics

USD400 mil. Increased annual revenue opportunity in the catalytic

converter market between now and 2023

157% Compound annual growth rate (CAGR) of the gasoline

particulate filter market between now and 2023

4.9 million Increase in the number of particulate filters canned by

Faurecia per annum between now and the end of 2019

USD155 mil. The value of the diesel particulate filter business with the

Volkswagen Group globally in 2023

Despite the current focus on electrification and hybridization within the automotive industry, exhaust

aftertreatment continues to grow as a component business area.

ECMA 2018


Supply base opportunity How will the industry continue to move forward?

• For OEMs to turn a profit and achieve return

on investment, ICE must continue to evolve.

• Exhaust aftertreatment is a key part of this.

• Increased regulatory focus and diverse OEM

strategies result in opportunities for suppliers.

• Regulatory framework will continue to be key.

• Increasingly complex aftertreatment in a

greater number of global regions means

increased business potential

• Growing demand of traditional EGR components

• Canning of ‗mini‘ particulate filters

• Potential applications for steel tubing products

in cooling systems for Hybrids and EVs

• Despite the current industry focus surrounding

electrification, the requirement for internal

combustion engine power is still growing out to

2030

• Timeframe for diversification isn‘t imminent, but

makes sense to be considering it

32

ECMA 2018

IHS Markit Customer Care

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ECMA 2018

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