ca ghg standards: can the auto industry survive pavley? k.g. duleep managing director, eea an icf...

CA GHG Standards: Can the Auto Industry Survive Pavley?

K.G. DuleepManaging Director, EEAAn ICF International Company

ICF International Inc. 2

EISA and its Effect In 2007, Congress passed EISA, requiring at

least 40% improvement over 2007 FE levels of about 24 mpg CAFÉ for Cars + Light trucks, by 2020 – about 4% per year non-compounded.

Congress also required NHTSA to make the standards “attribute” based so that manufacturers offering products with different attributes comply with different standards.

NHTSA proposed a set of standards for the 2011 to 2015 period that increase FE by more than 4% a year(?) over that period


Proposed 2015 CAFE StandardsCAFE Standard - 2015

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30 35 40 45 50 55 60 65 70

Vehicle Footprint (ft^2)

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LDV LDT


California GHG Standards California has enacted a set of GHG standards

for the 2010 – 2016 period and EPA may approve these standards soon.

Tailpipe GHG emissions are proportional to fuel consumption for a given fuel, hence the claim that California standards are fuel economy standards in disguise.

If the standard is interpreted as a tailpipe CO2 standard then the equivalent fuel economy standard is ~43mpg for cars but only 26.7 mpg for trucks


Provisions of the CA GHG Standard However, the CA GHG regulation provides

credits for air-conditioner improvements (not tested on the fuel economy cycle) and alternative fuel use.

The credits are relatively large and the AC credit alone can reduce the 2016 requirement to 40.5 mpg for cars and 25.5 mpg for trucks.

Ethanol (E85) use provides a huge 26% credit, and if 10% of new cars and trucks use E85 in 2016, standards are reduced by another 1 mpg

Unlimited trading between car and light truck GHG emissions is allowed.


Federal FE and CA GHG Standards Comparing the CAFÉ standard to the CA GHG

standard requires a number of assumptions on fleet sales mix in 2015, AC credits and Flex-fuel vehicle and EV sales.

Reasonable assumptions regarding the variables of interest show that on a car + light truck fleet basis, the two standards are not very different and can be reconciled from a FE viewpoint.

However, the CA standards do provide additional GHG benefits from AC units and encourage alternative fuel use.


Hypothetical 2015 Comparison

PC LDT1 LDT2

CA GHG STD 213 g/mi 341 g/mi

AC CREDIT 15 g/mi 16 g/mi

E85 + BEV/PHEV 7 g/mi 9 g/mi

NET CA STD 235 g/mi37.8MPG

366 g/mi24.3MPG

CAFÉ - 0.6 MPG FFV CREDIT

35.1MPG 28.0MPG


Outline of Presentation Focus of this presentation is potential to

meet the 40% improvement in fuel economy mandated by EISA by 2020.

Potential to meet interim standard that is front loaded for 2015 examined.

Principal focus is on technology availability and cost to meet standards.

Focus on consumer reaction to standards and mix shifting also briefly described.

Fuel prices assumed to be below $2.80 per gallon in 2020, per EIA 2008 forecast.


Improving Vehicle Fuel Economy

Methods to improve vehicle fuel economy are well understood from knowledge of energy loss

General methods are- improve engine peak efficiency potential- reduce losses at light load from throttling- reduce weight, drag and rolling resistance- reduce accessory load and eliminate idle


EEA/ICF Methodology We monitor technology developments

worldwide through the trade press and key international conferences.

Preliminary analysis of potential based on research papers and prototype data.

Extensive follow up on technology attributes and lead time with manufacturers and Tier I suppliers.

All cost data obtained from high level contacts at Tier I suppliers, who are now major technology developers.


Short Term Engine Technologies Technologies in the pipeline now

- Variable Valve Lift ( 2-step/ continuous)- Gasoline Direct Injection with CR increased by ~2 points (lean burn longer term for US, used in Europe)- Cylinder cutout ( V6/8 only)- Turbo- GDI- VVT combination- Reduced Engine Friction


2015 Engine Technology Potential

2 –step valve lift 4 to 5% $125 -175

Continuous valve lift

7 to 8% $300 -400

Gasoline Direct Injection (GDI)

3 to 4% $160 – 250

Turbo – GDI 13 to 15% $ 0 to 650

Friction Reduction 2 to 4% $30 to 70


Mid-term Engine Technology Most promising development is cam-less valve

actuation which offers potential to reduce throttling loss to near zero, and make Atkinson cycle possible at light load.

Cam-less engine will be key enabler for gasoline HCCI in longer term

“Half cam-less” engine will enter production in 2014/2015 in luxury cars with about 15%+ FE improvement at a cost of $500 to $700.

More advanced valve strategies may allow mixed mode 2-stroke/ 4-stroke engines by 2020.


Valeo Electromagnetic Camless Valve Actuation Schematic


2025 Engine Technology Potential

“Half cam-less” engine

15 – 16% $400 to 600

Full cam-less HCCI with GDI

19 – 22% $1000 to 1500

Advanced friction reduction

4 to 6 % ~$100

GDI lean burn 17 to 19 %

$1000 to 1500

Combination with turbo

~ 25% ? ~ $1500


Transmission Technology While more gear ratios and wider ratio range

allows better matching of engine to load, reduction of internal losses (especially in the torque converter) is also important.

Future transmission options seem to be shaping up as follows:- Six/Seven speed automatics for RWD and larger FWD cars- CVT for smaller FWD cars and small trucks- AMT (6-/ 7-speed) for sporty cars.


Transmission Technology Benefits

Six speed automatic 4 to 5 % $100 to 150

CVT (small cars) 6 to 8 % $150 to 200

AMT (sports cars) 7 to 8 % $150 to 200

Torque converter elimination

3 to 4 % ~ 0


Reducing Vehicle Energy Demand

Weight reduction is possible but quite expensive. While up to 20% weight reduction is technically possible, only 5 to 10% may be practical at reasonable cost ~ $60 per percent

Drag and rolling resistance reductions of 10 to 20% can be achieved by 2020.

Driving the accessories electrically is more efficient than belt drive, since accessories can be used ‘on-demand’. Electric Power Steering and Water Pump are the most effective.


Idle Stop- Start New “intelligent” starter motor design pre

engages engine when stopped, resulting in faster, quieter start, even with 14V system.

Electrical system must be upgraded with additional battery to withstand start cycles.

System will also require electrical AC drive and transmission pump + “hill holder” for automatic transmissions.

Electrical upgrades will facilitate electric accessories such as power steering and water pump, with additional FE benefit.


Idle Stop Start System


Maximum Potential of Conventional Technology (FE Increase)

2006 – 2015

2016 – 2025

Engine & Transmission

15 – 19 % 22 – 28 %

Weight, drag and tire loss reduction

7– 11 % 11 – 16 %

Accessories 2 – 3 % 3 – 5 %

Idle Stop 3 – 4 % 2 - 3 %


Summary of Conventional Technology Potential Overall, the sum of all conventional

technologies can lead to a 33 + 3% FE increase by 2020 and possibly, up to 50 + 5 % FE increase by 2030.

The inability of manufacturers to change technology rapidly will limit the reduction actually attainable to lower values.

Major conclusion is that hybrids and diesels are required to meet the 40% improvement goal for 2020 and will require a market penetration of 12 to 15% combined.

Of course, consumer preference changes to 2020 can help or hurt these values.


Types of Hybrids Meeting the 40% 2020 requirement and future

requirements will require relatively rapid transition to electric drive -100% by 2030?

A large number of “hybrid” designs have been unveiled, each with unique attributes.

Four types that will be in the US market and span the range of designs Belt drive Alternator Starter (BAS) Crankshaft mounted single motor (IMA) Dual Motor “full” hybrids (Prius/Escape) Plug-in hybrid vehicles.


Common Attributes of Hybrids Hybrids must fully exploit all synergies with

drive train and accessories to provide large improvements in fuel economy.

Hybrids provide large fuel economy gains only in stop-and go driving.

Benefits deteriorate in very hot/cold weather due to space conditioning needs.

Hybrids not suited for cargo hauling or high continuous load operation.

Different geographies and densities provide different opportunities for different designs.


Hybrid System Benefits BAS systems using existing 14V electrical

system can be cheap but it will provide limited FC reduction, ~ 15%

The Toyota system can be very efficient with FC reduction approaching 45% but has the disadvantages of high price, ~US$5000-7000

One- motor systems of the Honda IMA type could be more cost effective than other types while offering significant FC reduction, ~30%.

Different manufacturers have very different assesments of what will ultimately succeed.


Plug-in Hybrids Definition of PHEV varies on vehicle capability

in all-electric mode. Type, range in (semi) EV mode and battery cost

issues dominate technical debate. However, consumer acceptance and likely level

of electricity use issues are probably more important than technical issues.

At present, difficult to make any economic case for purchase even with off-peak electricity.

GHG benefits are currently quite small in the US relative to a hybrid, and de-carbonization of the electric sector needs to occur first.


Electric Vehicles Li-Ion Battery technology has now advanced to

the point where 200+km range is possible, but cost is still high. ZEV mandate requires such vehicles in large numbers by 2020.

EV costs are being driven by idea that they should replace rather complement typical cars and offer all their attributes.

City car type EV designs can be inexpensive and very efficient, and can serve urban commuters or be a rental vehicle.

However, ideal applications mirror those situations well served by mass transit. Hence, City EVs may have unintended consequences of shifting people away from mass transit!


Diesel Issues Unlike a hybrid, the diesel’s fuel efficiency

benefit is more robust across all driving conditions and under load.

Cost and benefit on cycle comparable to IMA hybrid, but GHG benefit is lower due to higher carbon content of fuel.

Terrific low-end torque makes it well suited to cargo hauling and towing .

Diesel fuel subsidy in EU and some developing countries creates incorrect incentives for light vehicle dieselization. Some studies show diesels in EU have double the VMT of gasoline!


Diesel Costs and Benefits Current diesel engines add $1500 (4 cyl.) to

3000 (V-8) for the engine alone and another $700 to $1200 for emissions after-treatment.

FE can be increased by 30 to 35% in combination with other changes.

Significant additional improvement is possible with a diesel- hybrid combination, with some cost reduction in emission control.

Diesel market in the US seems to be fading with rapidly rising diesel fuel prices.


Road Map to 40% Fuel Economy Improvement by 2020

Conventional Engine/ Transmission Improvement

21 to 24% (

Clean Diesel with Advanced

Transmission

30 to 36%

Advanced Hybrid

40 to 46%

Start / Stop

3 to 4%

Total Drivetrain

27 to 33%

Body and Tire Improvements

8 to 15%

Total Fuel Economy Improvement of 40

to 45% Accessory

Improvements

3 to 4%

80% of Market ($1,250)

10+% of Market ($3,000)

10+% of Market ($4,000)

($1,700)

($280) ($120)

($2,100)

*(Typical Retail Price Impact for a Midsize Car)


Technology Summary Conventional technology improvements for

gasoline vehicles continue to be far more cost-effective than alternatives.

Improvements of about 33% can be realized with conventional technology, which falls short of the 40% requirement by 2020

Hybrids will need to penetrate 10 to 15% of the market to meet the 40% target. The simpler Honda type system may become dominant by 2020.

Diesel LDV market faces major questions with diesel fuel price hike and we predict restricted share of about 5%.


Market Issues for 2015 & 2020 Raising prices beyond ‘free market’ levels

results in consumers moving to smaller vehicles and purchasing fewer vehicles.

Proposed DOT standards are by vehicle footprint or size so that relative stringency of standards is an issue in determining comparative costs by size.

The proposed 2015 standards for cars has a very ‘steep’ curve that requires 32 mpg to 42 mpg over a small footprint range. This could invite gaming or selling larger vehicles


Market Issues- Continued Without gaming, CAFE standards appear to

have only small effects on mix shift. On the other hand, Pavley could cause mix shifts towards larger trucks due to the easier GHG standard for these vehicles.

The last 6 to 7% FE improvement obtained from diesels and hybrids are relatively expensive and may not occur by market pull alone, requiring a subsidy.

In CA, the ZEV mandate and the LCFS provide additional complicating parameters.


Will the Big 3 Survive Pavley? Main reason behind current predicament of the

Big 3 goes back to 9/11. GM initiated a round of very deep discounts to pump up sales and Ford and Chrysler matched these discounts.

While this helped sales volume, Big 3 profits were razor thin even as industry had good times and imports were making record profits.

Erosion of brand value prevented Big 3 from raising prices in 2004-2005. When industry volumes started falling in 2006, Big 3 started making big losses.


GM & Ford: Vehicle Sales and Profits for North America

North American Operations

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Will the Big 3 Survive Pavley? While the current predicament has little to do with

regulations, future CAFÉ and Pavley regulations may affect viability.

Both CAFÉ and Pavley (and the ZEV mandate) will force diesels/ hybrids beyond free market levels and the subsidy required is a concern.

CAFÉ has an attribute based standard which is helpful, but high absolute standards for trucks which hurt Big 3.

Pavley has a single number standard which hurts but a relatively low standard for larger trucks which helps.


Summary Meeting the 2020 EISA requirements is feasible

for most full line manufacturers without heavy reliance on hybrid or diesel technology.

Overall vehicle average price increase is estimated to be about $2100 over current vehicles, which is less than value of lifetime fuel savings even with gasoline at $2.50.

Attribute based FE curve shapes will strongly influence mix shifting by consumers,

Proposed 2015 CAFE standards appear feasible for cars but are quite difficult for light trucks, given lead time and technology constraints.


Summary- Continued The Pavley standards are not that different

from CAFÉ standards (yet?) in fuel economy space

Other CA standards, notably the ZEV mandate and the LCFS, may make compliance with Pavley easier even in 2015.

Domestic industry’s survival is both hurt and helped by Pavley relative to the Federal 35 mpg mandate for 2020.

Ultimately, moving both Pavley and Federal standards to an attribute based standard may help harmonization and industry survival.

ca ghg standards: can the auto industry survive pavley? k.g. duleep managing director, eea an icf...

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