powertrain & exhaust aftertreatment scenario. raghunandan b (ihs markit).pdfconfidential. ©...
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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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
Market drivers for powertrain production
3
Regulations Urbanization
Oil price/ economy
Competition
Impact events
Local incentives
ECMA 2018
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
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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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
[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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
Source: IHS Markit
Global powertrain production forecast to 2025 (including LCVs)
© 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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
Source: IHS Markit
Global powertrain production forecast to 2025 (including LCVs)
© 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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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.
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
Source: IHS Markit © 2018 IHS Markit
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
Source: IHS Markit © 2018 IHS Markit
• 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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
Contents
15
ECMA 2018
1. Market drivers for powertrain production
2. Implications for exhaust aftertreatment
3. Supply base opportunity
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 16
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 17
Vehicle production Vehicle sales
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
Source: IHS Markit © 2018 IHS Markit
ECMA 2018
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 18
Vehicle production Vehicle sales
Vehicle production Vehicle sales
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
Source: IHS Markit © 2018 IHS Markit
ECMA 2018
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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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 22
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 23
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 24
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:
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 25
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
Key requirements driving development:
• 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
Source: IHS Markit © 2018 IHS Markit
ECMA 2018
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 26
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
China Europe India Japan
North America South America South Korea
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
China Europe India Japan
North America South America South Korea
Regional deployment of DPF
© 2018 IHS Markit
Un
its
Year
Note: data shown relates to Engine Production Region
Source: IHS Markit
ECMA 2018
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 27
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 28
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
Key requirements driving development:
• 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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 29
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
China Europe India Japan
North America South America South Korea
Selective Catalytic Reduction global demand
© 2018 IHS Markit
Un
its
Year
Source: IHS Markit
ECMA 2018
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Contents
30
ECMA 2018
1. Market drivers for powertrain production
2. Implications for exhaust aftertreatment
3. Supply base opportunity
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 31
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
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
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
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ECMA 2018