U.S. Fuel Economy and Fuels Regulations and Outlook

Transcription

1 U.S. Fuel Economy and Fuels Regulations and Outlook An Industry Perspective Mike Hartrick Fuels2018 May 23, 2018

2 Topics Market Perspective Regulatory Perspective What Could Changes in Fuel Economy Regulations Mean Parting Thoughts

3 Market Perspective

4 U.S. Powertrain Technology Production Share (2012 vs. 2017) Turbo GDI VVT VVL Cyl. Deac. Stop Start >5 spd ATX Non HEV CVT Mild HEV Strong HEV Source: Novation Analytics; 2017 based on mid year data

5 Fuel Efficiency Availability High Mileage Vehicles Plug In and Hydrogen Vehicles 30+ MPG (Highway) 40+ MPG (Highway) 50+ MPG (Highway) PHEV BEV FCV MODELS MODELS MODELS MODELS MODELS MODELS Source: FuelEconomy.gov (May 18, 2018)

6 Fleet Average Fuel Economy Combined City / Highway Adjusted Fuel Economy 25.2 Miles per Gallon 13% Source: U.S. EPA 2017 Fuel Economy Trends Report

7 Regulatory Perspective

8 Three Agencies One National Program ARB Advanced Clean Cars U.S. EPA NHTSA One National Program GHG (GHG and Fuel Economy) GHG (GHG, Fuel Economy) CAFE (Fuel Economy, GHG) LEV III (Ozone, criteria Emissions) Tier 3 (Ozone, Criteria Emissions) ZEV (Ozone, GHG, Fuel Economy)

9 Future Light Duty Vehicle Greenhouse Gas Standards Equivalent Miles per Gallon % Average 4% per year Actual values will vary depending on future fleet mix Source: Based on U.S. EPA _Production_Summary_and_Data_with_Definitions.xlsx Nov (most recent available)

10 Recent Events in the U.S Greenhouse gas and fuel economy requirements set for (up to six years into future) 2012 Greenhouse gas and fuel economy requirements set for (up to 13 years into future) CAFE standards for not considered final until a new rulemaking scheduled for 2018 GHG standards subject to a midterm evaluation scheduled for EPA concluded midterm evaluation over a year in advance of schedule under Obama administration NHTSA rulemaking not coordinated to EPA efforts Trump administration withdrew the midterm evaluation to continue data acquisition and assessment 2018 EPA concluded standards are not appropriate and initiated rulemaking to coordinate with NHTSA fuel economy efforts Stakeholders and public will have an opportunity to comment on all regulations prior to finalization

11 Recent Events in the U.S Greenhouse gas and fuel economy requirements set for (up to six years into future) 2012 Greenhouse gas and fuel economy requirements set for (up to 13 years into future) CAFE standards for not considered final until a new rulemaking scheduled for 2018 GHG standards subject to a midterm evaluation scheduled for 2018 The process for setting standards for has only just started Automakers have not even seen a draft of the rule 2017 All will have opportunity to comment on proposed rules EPA concludes midterm evaluation over a year in advance of schedule under Obama administration NHTSA rulemaking not coordinated to EPA efforts Trump administration withdrew the midterm evaluation to continue data acquisition and assessment 2018 EPA concluded standards are not appropriate and initiates rulemaking to coordinate with NHTSA fuel economy efforts Stakeholders and public will have an opportunity to comment on all regulations prior to finalization

12 Upcoming Rulemaking Equivalent Miles per Gallon Automaker Positions: Continue year over year improvements Align standards more closely to market Include California A potential range of standards is under consideration U.S. EIA AEO2016 basis Actual values will vary depending on future fleet mix Source: Based on U.S. EPA _Production_Summary_and_Data_with_Definitions.xlsx Nov (most recent available); various media reports on potential proposed rule content

13 Q. What impacts might changes in U.S. standards have on technology adoption and fuels? A. Perhaps not as much as you might think * Views reflect those of the author and are not necessarily reflective of the Alliance of Automobile Manufacturers or its members.

14 Manufacturer Performance to Standards Overall Fleet Passenger Car Equivalent Miles per Gallon (proj.) Performance Standard Eq. Miles per Gallon Eq. Miles per Gallon (proj.) Light Truck (proj.) Source: EPA 2016 GHG Compliance Report; 2017 projection by Novation Analytics based on mid year data

15 Automaker World Wide Goals for Electrification BMW: 100,000 Electric Vehicle Sales Volvo: Every new model launched with an electric motor Mazda: Adding a hybrid vehicle to its lineup and introduce a battery driven car Mazda/Toyota: Joint plant to develop and assemble electric vehicles & technology Ford: 13 New Electric Vehicles (approximate year) Mitsubishi: 12 new electric models Toyota: Electric car powered by a new type of battery BMW: 12 all electric cars and 13 hybrids BMW: 80 electric vehicles JLR: New Jaguar Land Rover vehicles launched will be offered with an electrified powertrain GM: 10 electric and gasoline electric hybrid vehicles in China BMW: Mass Produce Electric Vehicles Ford: First all electric car built to be electric from the ground up FCA NV: Half of the lineup to be electrified VW: 80 models of EVs to be available Mercedes Benz: Electric model of all of its vehicles GM: Annual NEV sales are expected to reach 500,000 units Source: Manufacturer press releases

16 Electric / Plug in Hybrid Vehicle Sales And Model Availability EV & PHEV Sales Represent A Very Small Slice Of All Sales Total Models ,944,752 90, ,981 99,142 All Other Sales Electric Sales Plug in Hybrid Sales Source: Wards Automotive

17 Fuels From a Fuel Economy Perspective Higher Octane Fuels Enable higher compression ratio Indifferent to pathway (e.g. ethanol or other) assuming other properties not adversely effected Fuel and vehicles should be regulated as a system How much still a question Low Carbon Fuels Useful for on road improvements to greenhouse gas emissions Automaker support may depend on EPA regulatory treatment for compliance Alternatives Charging infrastructure critical to support growing market of electrified vehicles Hydrogen fuel cells are on the market already, but with nascent infrastructure in limited locations * Views reflect those of the author and are not necessarily reflective of the Alliance of Automobile Manufacturers or its members.

18 Parting Thoughts It appears change may be coming to the U.S. fuel economy and GHG standards, but how much and what type is still a question Drive to innovate and improve efficiency will continue, regardless of standards Internal combustion engines will remain important for many years Electrification is here to stay Regulatory pressures will continue to increase during the transition to a low or zero carbon transportation future * Views reflect those of the author and are not necessarily reflective of the Alliance of Automobile Manufacturers or its members.

19 Parting Thoughts It appears change may be coming to the U.S. fuel economy and GHG standards, but how much and what type is still a question Drive to innovate and improve efficiency will continue, regardless of standards Internal combustion engines will remain important for many years Electrification is here to stay Regulatory pressures will continue to increase during the transition to a low or zero carbon transportation future The U.S. light duty vehicle standards may change, but automakers commitment to fuel economy improvements and to One National Program have not * Views reflect those of the author and are not necessarily reflective of the Alliance of Automobile Manufacturers or its members.

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