frost & sullivan: will the electric car rule the future april2012

Will electric car rule the future?

Nicolas Meilhan

Senior Consultant, Frost & Sullivan

April 2012

2

3 major challenges we have to take into consideration to develop a

sustainable car : climatic changes, end of fossil fuels and air

pollution

Performance

• Efficiency

• Acceleration

• Top speed

• CO2 emissions

• Air pollution

Climatic changes

• CO2 emission at highest level

in the last 800,000 years

• More than 2° expected by 2100

with drastic consequences if

nothing is done

End of fossil resources

• 97% of road transportation

use fossil fuels

• Oil, which is the main driver

of our economy, might have

disappeared by the end of

the century

Air pollution

• With the rural exodus and

development of mega cities,

air pollution has reached

unprecedented levels

• Serious health diseases to

multiply drastically

Challe

nges

Constr

ain

s

Sustainable car KSF = same performance, autonomy and cost as an ICE

Costs

• Total cost of ownership

• Retail

• Recharging

• Maintenance

Autonomy

• Distance without charging

• Time to recharge

• Storage weight

Infrastructure

• Investment required to update existing infrastructure and/or build a new one

• Standards across all countries

Perform

a

n

c

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Climatic changes

End of fossil

r

e

s

o

u

r

c

e

s

Air pollution

Sustainable car = same performance, autonomy and cost as an ICE

Autonomy Infrastructure Cost

3

Up to 1910 and the Ford T revolution, most vehicles were running electrically.

Since then the batteries have never been able to fill the gap with ICE and offer

decent autonomy at a reasonable cost

1900 1910 1960 1970 2010 1995 2005

Po

wert

rain

tech

no

log

ies

E

xte

rnal

dri

vers

Henry Ford

start mass

production of

ICE Ford T

First research on fuel

cells for aerospace

applications

Apollo 13 First Oil shock

need for alternative to

fossil fuels arise

Oils rises at

150$ a barrel

• Car park is mainly

electric

• First car to reach

100km/h was

electric in 1899: la

“jamais contente”

• First in-wheel

motor by Ferdinand

Porsche

• Massive

development of

car with the Ford

T – 550$ for

70km/h vs. 2000$

for 40km/h with

electric vehicles

• Large availability

of cheap oil

• First research on automotive

applications of fuel cells

• Works on In-wheel motors

from 1980 brutally stopped in

1995

• Legislation in 1990 in

California to reduce

atmospheric pollution and

introduce 2% of EV by 1998

• Multiple trials for

electric cars both in

EU (PSA) and USA

(GM) but with no

success

• Significant investment

in fuel cell research

Hydrogen

perceived at he

best alternative

to fossil fuels

• Refocus on full

EV with Li-ion

batteries

performance

improvement

Source : Rouler sans pétrole, Pierre Langlois

4

The reason why electric vehicles never met the gap until now is that fossil

fuels have the best energy density, both in mass and volume, than any other

energy vector

Source : Pierre-René BAUQUIS

- Energetical density of energy vectors used in transport -

Fossil fuels have a mass density 100 times as high as batteries 1kg of fossil fuel contain as much energy as in 100 kg of batteries

5

If anthropogenic contribution to climate change is still being

debated, global warming is happening with up to 5°C increase by

2100 in the worst case scenarios with drastic consequences

Sources: Global change.gov

- 800,000 Year Record of CO2 Concentration -

Perform

a

n

c

e

Climatic changes

End of fossil

r

e

s

o

u

r

c

e

s

Air pollution



•The amount of carbon dioxide in the atmosphere is 30% higher than at any time in

measurable history

• It is predicted to reach from 550 to 900 ppm by 2100 – 85% to 200% increase compare to

highest concentration observed in the last 800,000 years

- Projected temperature up to 2100 -

6

Expensive oil (extraction cost)

Expensive oil (retail price)

Knowing whether we’ll still have fossil fuel in 2100 is not key – the

critical issue is how long we will have affordable oil to fuel our

economy and our cars

Source: Colin Campbell & ASPO, 2008, BP Statistical review, June 2011 * Including oil sands

Pro

du

ctio

n in

th

ou

sa

nd

ba

rre

ls o

f o

il e

qu

ivale

nt p

er

da

y

Evolution of Oil & Gas production 1930-2030

(Base case:2008)

Perform

a

n

c

e

Climatic changes

End of fossil

r

e

s

o

u

r

c

e

s

Air pollution



Proven reserves

(Gtoe)

Consumption

(Mtoe) Consumption

average growth

since 2000

Reserve in years

(constant

consumption)

Reserve in years

(growing

consumption) 2000 2010 2000 2010

Coal 505 442 2,400 3,556 4% 125 45

Oil 177* 212* 3,571 4,028 1.2% 53 41

Natural gas 143 173 2,176 2,858 2.8% 61 36

Total Fossil 825 827 8,147 10,442 2.5% 80 42

Fossil fuels reserves – From 40 to 80 years of fossil fuels left

7

0

20

40

60

80

100

60 70 80 90 100 110

Air pollution is one of the key driver for city to adopt EV cars,

especially in China. Diesel emissions (particles & NOx) are

particularly unhealthy although CO2 emissions are lower

- Particles (PM) emissions in Paris -

9th of juin 2004, 10h, atmo index « Mauvais 7 »

14th of June 2004, 10h, atmo index « Bon 3 »

Perform

a

n

c

e

Climatic changes

End of fossil

r

e

s

o

u

r

c

e

s

Air pollution



PM10 = 20 µg/m3

PM10 = 80 µg/m3

- NOx & CO2 emissions by engine technology -

Diesel

Gasoline

NO

x e

mis

sio

ns

CO2 emissions

Diesel 2005

Downsized Diesel

+DPF

DPF + NOx trap

HCCI+DPF

DPF+SCR D Hybrid

SI Hybrid

PFI 2005

PFI adv + VVT

DISI CAI

DISI NOx

trap

DISI turbo

19,000 people killed every year in Europe

because of particles from diesel cars

Source: Frost & Sullivan analysis

8

A major issue with ICE is their energy inefficiency as 80% of energy

in tank is lost; parallel diesel hybrid is twice as a efficient , Extended-

Range EV 3 times and full EV 4 times as efficient

- Tank to wheel energy efficiency of ICE and electrified vehicles -

Épuisement des énergies fossiles

Performance

Changements climatiques

Pollution atmosphérique

Autonomie Infrastructures Coûts

- ICE car - - Hybrid car -

18% energy efficiency 30% energy efficiency

Gasoline Diesel Gasoline

hybrid

Diesel

hybrid

Extended-Range EV

30 km autonomy *

Extended-Range EV

60km autonomy **

Battery

electric

Tank to wheel energy

efficiency

18% 23% 30% 35% 50% 60% 70%

1 1,3 1.7 2 2.8 3.3 4

* 60% des trajets en mode électrique, 40% des trajets en thermique

** 80% des trajets en mode électrique, 40% des trajets en thermique

Source: Hybrid Cars Now, Fuel Cell Cars Later, 2004

9

Extended-Range EVs offer the best trade-off between petroleum

consumption and Well-to-Wheel Emission

- Fuel Consumption and Well-to-Wheel GHG Emissions for Future (2035 Cars) -

Source: More Sustainable transportation: The Role of Energy Efficient Vehicle Technologies, Sloan Automotive Laboratory (MIT), April 2008

Perform

a

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Climatic changes

End of fossil

r

e

s

o

u

r

c

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s

Air pollution



Extended-Range 30 miles

10

Country electricity mix can have a huge impact on CO2

emissions of electric vehicles

- Well to wheel emissions of a battery vehicle -

•Carbon capture and storage is key to reduce transportation emissions in the long term as most of electricity form the USA (50%) and China (80%) is made out of coal

•Nuclear and renewable energies (including hydro) are the best alternatives to produce CO2 free electricity

Emissions intensity

gCO2/kWh g/km

Wind 5.5 0.9

Nuclear 15 2.4

Hydro 18 2.9

Natural Gas - CC 461 74

Natural Gas 653 104

Coal 1075 172

- CO2 emissions intensity (gCO2/kWh) -

% of CO2

free

electricity

Emission

intensity

(gCO2 / kWh)

Well to wheel

emissions of electric

vehicle* (g/km)

France 90% 75 12

Canada 59% 267 43

California 44% 470 75

US 31% 710 114

China 20% 950 160

Source: Rouler sans pétrole, Pierre Langlois, 2008

* Equivalent to an intermediary ICE car = 9l/100 km => 244g/km

Perform

a

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Climatic changes

End of fossil

r

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s

o

u

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c

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s

Air pollution



11

With 78% of electricity out of nuclear, France is one of the best

positioned country to drastically reduce its car CO2 emissions

- Well to wheel emissions of alternative vehicles -

Well to tank (g CO2/km) Tank to Wheel Well to Wheel

Gasoline/Diesel 20 to 35 130 to 180 150 to 210

Hybrid 24 104 128

Battery 10 to 14 0 10 to 14

Extended-Range EV 10 22 73 95



Source : EDF/ADEME

Extended-Range EV 60 would allow to divide by four cars emissions, which is the country

objective by 2050

Perform

a

n

c

e

Climatic changes

End of fossil

r

e

s

o

u

r

c

e

s

Air pollution



12

Extended-Range EVs are the only alternative technology able to

compete today at a global scale with the ICE on autonomy and

infrastructure investment required

Sources: Frost & Sullivan analysis, 2011

Autonomy Infrastructure

investment High Low

Distance Time to recharge Storage weight

Internal Combustion

Engine

600 km 5 min Already existing 45 kg

Extended-Range EV

600 km (20 to 60

km electric)

Already existing 2-3 hours 50 to 90 kg

Electric vehicle

60 to 250 km

electric

To be developed 4-8 hours 90 to 250 kg

Fuel Cell Vehicle

600 km To be developed 5 min 90 to 100 kg

Performance

Perform

a

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c

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Climatic changes

End of fossil

r

e

s

o

u

r

c

e

s

Air pollution



13

The main driver explaining the lack of success of vehicles with some

electrification is their cost, mainly driven by batteries

- Incremental retail price increase of current and future propulsion technologies -

Many players working on innovative business models to overpass the battery cost

challenge

Perform

a

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Climatic changes

End of fossil

r

e

s

o

u

r

c

e

s

Air pollution



Source: On the road in 2035, MIT, July 2008

* 30 miles electric autonomy (48 km)

** 200 miles autonomy (320 km)

Retail price of gasoline vehicle

in 2008 $19,600

Incremental retail price increase compared to 2008

gasoline vehicle

Diesel $1,700 +8,7%

Gasoline turbo $700 +3,6%

Hybrid $4,900 +25%

Gasoline in 2035 $2,000 +10,2%

Retail price of gasoline vehicle in

2035 $21,600

Incremental retail price increase compared to 2035

gasoline vehicle

Diesel in 2035 $1,700 +7,8%

Gasoline turbo in 2035 $700 +3,2%

Hybrid in 2035 $2,500 +11,6%

Extended-Range EV* in 2035 $5,900 +27,3%

Battery electric ** in 2035 $14,400 +66,7%

Fuel cell in 2035 $5,300 +24,5%

2008 2035

14

Extended-Range EV is expected to be competitive with the ICE by

2015 with a payback period of les than 4 years for an oil price at

2,5 €/L without any state subsidy

- Total cost of ownership of an ICE compared with a Extended-Range EV -

* Prospects for Plug-in Hybrid Electric Vehicles in the United States and Japan: A General Equilibrium Analysis MIT, 2009

** 80% of French drivers average trip per day is less than 50 km every day

- Payback period sensitivity to oil price and state subsidy -

TCO of a C-segment car ICE Extended-Range EV with 50 km

electric autonomy

Retail price (€) 14800 € (20000$) + 7400 € (+10000 $*)

Electric autonomy 0 km 50 km

Energy consumption 7 l/100km 1.4 l/100km ** & 15 kWh/100km

Annual energy consumption (14000 km) 980 l 196 l & 1,68 MWh

Annual TCO(1,75€/l & 100 €/MWh) 1715 € 343 € + 168 € = 511 €

Annual TCO(2 €/l & 100 €/MWh) 1960 € 392 € + 168 € = 560 €

Annual TCO(2,5 €/l & 100 €/MWh) 2450 € 490 € + 168 € = 658 €

Oil price 1,75 € 2 € 2.5 €

Incremental annual TCO of ICE 1204 € 1400 € 1882 €

Payback period without subsidy 6.1 years 5.3 years 3.9 years

Payback period with a €2,000 subsidy 4,5 years 3,9 years 2.9 years

Payback period with a €4,000 subsidy 2.8 years 2,4 year 1.8 years

Épuisement des énergies fossiles

Performance

Changements climatiques

Pollution atmosphérique

Autonomie Infrastructures Coûts

15

0

5Well to Wheel Emissions

Autonomy

Infrastructure InvestmentEnergy Efficiency

Cost0


Autonomy


Cost

Internal Combustion Engine

Electric Vehicle

Extended-Range EV

Fuel Cell Vehicle

Extended-Range EV represent the best trade-off for a sustainable vehicle at a

global scale in the short to medium term - up to 2030

0


Autonomy


Cost

0


Autonomy


Cost

Sources: Frost & Sullivan analysis, 2011

16

Electrification of vehicles will take place progressively starting with

Extended-Range EV whose electric autonomy increases when battery prices

decrease - up to the day when all vehicles will run electrically

• ICE will still be around for a while representing the majority of vehicle sales for another 15 years

• Hydrogen is very unlikely to be used in a car before 2025 - only an energy vector for gas or nuclear, no significant advantage over an PHEV and some investments required to set up a distribution infrastructure

• EV, which neither emits CO2 nor pollutants, still face too many challenges – cost, autonomy, infrastructure, norm standards – to have a chance to replace at a global scale the ICE before 2040.

• There is however a potential for EV and FC in local niche applications like company fleets, car sharing or bus/tramway

• Extended-range EV has both the ICE advantages – autonomy, infrastructure required, affordable cost - and the EV ones – Energy efficiency, Well to Wheel emissions without sharing their drawbacks

- Annual light-duty sales by technology type - - Annual global EV and PHEV sales -

Source: EIA 2011

17

Our economy is very sensitive to oil prices - any price increase in the last 40 years led

the global economy into recession – it is high time to reduce transportation 97%

dependency to oil by developing electric cars & CO2 free electricity generation

Car production evolution vs. GDP & oil price evolution

Incremental Worldwide GDP

Oil prices

Global car production

Global

recessions

?

1970 1975 1980 1985 1990 1995 2000 2005 2010

18

Functional Expertise

• 6 years of strategy consulting experience working with leading companies on international projects. Over 25 significant consulting projects on a Global scale. Particular expertise in:

- Strategic assessment of opportunities

- Market entry & expansion strategy

- Product portfolio management & diversification strategy

- Distribution strategy

- Economic & business modelling

- Innovation Management & Open Innovation

Industry Expertise

Experience base covering broad range of sectors, leveraging long-standing working relationships with leading industry participants’ Senior Executives

- Automotive aftermarket & remanufacturing

- Electrified Vehicles

- Renewable Energies (wind, solar, fuel cells)

- Resource Rarefaction

- Sustainable development

• Key note speaker in various conferences

• Quoted regularly in top business European publications

What I bring to the Team

• First-rate expertise in clean transportation and clean energies

• Experience in management of consulting projects across multiple sectors and regions

• Combined analytical skills, marketing and technology experience and perspective

• A creative mind and an entrepreneurial approach to business

Career Highlights

• Started to work as a structure engineer in the Automotive industry, specialised in crash tests

• Before Frost & Sullivan, work as a consultant in the leading management consulting firm AT Kearney, Paris

Education

• Master of Science from ESTP (Paris, France)

• Master of Engineering from Massachusetts Institute of Technology (Cambridge, USA)

Nicolas Meilhan

Nicolas Meilhan Senior Consultant

Frost & Sullivan

Europe

Paris, France

+33 1 42 81 23 24

[email protected]

frost & sullivan: will the electric car rule the future april2012

Technology

end of fossil fuels

transport fossil fuels

airrce sustainable car

drasticallysustainable

batteries source

offerdecent autonomy

mass density

usa batteries