Strategic Analysis of the Medium- to Heavy-duty Natural Gas Commercial Vehicle Market in Europe 24th and 25th September 2013, Ludwigsburg

Transcription

1 Strategic Analysis of the Medium- to Heavy-duty Natural Gas Commercial Vehicle Market in Europe 24th and 25th September 2013, Ludwigsburg By Franck Leveque Vice President, Automotive & Transportation

2 Agenda Section Slide Numbers Market Overview Global Shale Production Impact 4 Comparative Analysis by Markets 5 Total MD and HD Natural Gas CV Market Technology Road Map 8 Pricing of Natural Gas Trucks 9 ROI Analysis- Western Europe 10 Market Participants and Forecast Bus Penetration Forecast 11 Key Supply Chain Participants 12 Global NG CV OEM Strategies: EU 14 Conclusion 15 2

3 European Natural Gas MCV and HCV Market - Key Influencing Trends Key Influencing Trends, Europe, Volatile Global fuel prices and Energy Security driving the market towards alternate fuel powered vehicles Regulatory environment, incentives, and tax credits from European Union paving way for green vehicles Emergence of carbon neutral Biomethane hubs across Europe Growing concerns regarding environmental sustainability around Europe have made consumers and enterprises opt for green vehicles. Potential imports and exploration of natural gas including shale will lead to delinking gas prices from oil prices Source: Frost & Sullivan analysis. < > 3

4 Global Shale Production Impact - Western Europe to realize Shale Gas Impacts on Supply Trends by Shale Gas Production Timeline Impact, Global, Total Reserves 883 trillion cubic feet Others, 185 Poland, 148 Canada U.K. Eastern Europe Russia, 285 Ukraine, 128 France, 137 U.S.A Mexico Algeria China Brazil Australia Argentina South Africa

5 Comparative Analysis by Markets - Germany, Italy, and France are leading natural gas fuel retailing in Europe. The Netherlands is set to emerge as a potential hub for LNG; bio-methane will be featured in Sweden Potential hub for bio-methane, and biomethane contributes 58% of total natural gas demand in Sweden Fuel infrastructure is gradually building up and private fleets lead in using natural gas vehicles Developing as a potential hub for LNG with private fleet using LNG for long haul applications Proactive government policies carbon levy on fuel tax will aid NGV growth Clearly defined roadmap in creating infrastructure and strong policies will ensure rapid growth of natural gas vehicles Developing as a potential hub for LNG with large availability through ports Well poised for growth due to established CNG infrastructure and active retrofit conversion industry Number of Stations: 100 and above Number of Stations: 40 to 100 Number of Stations: 1 to 40 No natural gas infrastructure in

6 Price ( /MMBtu) Natural Gas Price Overview - The price advantage of natural gas over diesel is expected to remain considerable even at an expected natural gas price of 8.3 per MMBtu in MD and HD Natural Gas CV Market: Average Retail Natural Gas Price Forecast, Europe, Frost & Sullivan Scenario Optimistic Scenario Conservative Scenario Optimistic Scenario Frost and Sullivan Scenario Conservative Scenario The average prices of CNG will be around 7.7 per MMBtu by The average price of CNG to be around 8.3 per MMBtu by The average price of CNG will be around 10.3 per MMBtu by Note: All figures are rounded. The base year is Source: World Bank, Frost & Sullivan 6

7 Units Revenue ( Million) Strategic Fact Sheet - Natural gas penetration in the European MD and HD natural gas CV market will reach 3.8%, and component revenue is expected to grow at a 29.8% CAGR. Natural Gas CV Penetration Forecast, Europe, 2011 and 2018 MD and HD Natural Gas CV Market: Component Revenue, Forecast, Europe, 2011 and , M 404, LNG CNG , CAGR 29.8% 2, % M 0.7% Total CV Production Natural Gas CV Penetration CNG and LNG tanks constitute 67% of the total system costs. LNG penetration in long haul segment to drive the component revenue from 4.7 million to million in 2018 Note: Component revenues include price of components like fuel injectors, after treatment systems, LNG/CNG tanks and fuel control modules. CV Production includes medium and heavy duty trucks and buses All figures are rounded. The base year is

8 Technology Roadmap On-board natural gas tanks are experiencing new compositions of materials and designs, and new CI engine architectures are now in focus among OEMs. MD and HD Natural Gas CV Market: Technology and Product Roadmap, Europe, Industry Trends Vertical integration with OEM SI Technology Rich mixture with EGR Stoichiometric mixture with cooled EGR Throttle body injected SI Lean Burn Mixture Direct injection 50% diesel substitution Dual fuel 70% diesel substitution Aftermarket retrofitment CI-dual-fuel Mode OEM integration Direct injection CI-HPDI System Diesel pilot 5 7% HPDI Diesel Pilot 2 3% Source: Frost & Sullivan 8

9 Natural Gas Trucks Price Premium versus Conventional Diesel Trucks - The price premium on natural gas trucks is the highest for LNG CI technology because of the high cost of the high-pressure direct-injector (HPDI), LNG tank and emissions after treatment. Ignition Technology CNG Fuel Technology Spark Ignited Dual fuel HPDI LNG Ignition Technology Spark Ignited Dual Fuel HPDI Price range 25,450 * 35,000** $72,450*** * SI engine with CNG as fuel, **CI engine with CNG as dual fuel, *** CI engine with LNG as fuel. Currently not available in Europe 9

10 Payback Period Analysis-Western Europe - Payback Period is Approximately 2 years for Most Appropriate Duty Cycle Applications When the Price Differential Between Diesel and CNG is 0.8 Euros Technology applicability Payback period PD Price Differential between CNG and Diesel per liter CNG SI Bus CNG SI Short haul LNG Dual Long haul LNG SI - Long haul CNG SI - Refuse Truck Payback period (in years) Source: Frost & Sullivan analysis. 10

11 Penetration Rate (%) Bus Penetration Forecast - SI technology is expected to remain dominant in the CNG bus space as the duty cycle requirements of the transit bus segment is a perfect match for CNG technology 12.0 CNG and LNG Technology Penetration Forecast in Bus, Europe, LNG Ignition Technology Split 2011 and CI, 0% CI 10% 6.0 CNG Ignition Technology Split 2011 and CI, 5% CI 10% SI, 100% SI 90% 2.0 SI, 95% SI 90% 0.0 CNG LNG Note: CI mentioned here refers to Dual Fuel Vehicle. All figures are rounded. The base year is Source: Frost & Sullivan 11

12 MD and HD Natural Gas CV Market - Key Supply Chain Participants Partial List of Supply Chain Participants, Europe, 2012 Pump Module Cryostar Accumulator Tank Chart Industries OEMs Early Adopters Injectors Delphi ECU Alternate Fuel Solutions LNG Tank Chart Industries Ros Roca Indox Cryo Energy Powertrain Allison Cummins- Westport Clean Air Power Daimler Fiat Power Train Daimler DAF Iveco MAN Scania Solbus Solaris Van Hool Volvo Bayer Coca Cola Magna Steyr Reading buses Sainsbury Simon Loos TMB UPS Vos Logistics FCM Delphi Hardstaff Group MAN Scania Voith CNG Tanks Westport HD ZF Dynetek Industries Lincoln Composites Luxfer Source: Frost & Sullivan 12

13 Case Study: European NG Truck Powertrain Roadmap - OEMs are concentrating on developing a Dual Fuel platform in addition to the already existing spark ignition engine platform NG Powertrain Deployment Europe : L 10 L ISL G / 8.9L, 12.8 L OM 471 LA Dual engine, hp lb-ft diesel primer 70% natural gas Daimler has entered into technology partnership with Hardstaff Group to launch Dual Fuel Engine post 2014 D 08 Dual Fuel D13 Volvo hp lb-ft 30% diesel 70% natural gas OC9 G04/ L, CAP Volvo FM hp lb-ft 25-30% diesel primer, 70-75% natural gas 8 L hp 660-1,000lb-ft M 906 LAG / 6.9L Cursor 8 / 7.8L hp 1100 lb-ft hp lb-ft hp lb-ft 5 L Cummins 279 hp 700 lb-ft 200hp lb-ft Tector L, Daimler IVECO MAN Scania Volvo 13

14 Global NG CV OEM Strategies: EU - Most European OEMs currently have SI engine platform while Daimler, Volvo and MAN have started focussing on Dual Fuel Platform Region Brand Ignition Technology SI Dual fuel HPDI Powertrain Partners Daimler Group Hardstaff Group DAF CAP, (only aftermarket) IVECO FPT Europe MAN PrinsAuto Gas Scania Scania Volvo Group CAP, Hardstaff, Westport HD Current portfolio In-development NA 14

15 Conclusion - Favorable government policies, strong OEM product portfolio, extensive network of fuel suppliers have created the successful ecosystem for adoption of NG in major European countries France, Germany, Italy, Spain, and Sweden are the key markets in CNG transit bus segment. Estonia, Slovenia, Ireland, and Poland have shown inclination towards CNG transit buses Biomethane is emerging as favored fuel for NG vehicles. BioWALK4Biofuels and Green Gas Grids are projects focused on biomethane development in Europe. Spark ignited engines to dominate the bus segment. CNG to feature in over 90% of all natural gas buses by MAN and FPT engines to feature in majority of the natural gas buses in Europe Source: Frost & Sullivan 15

16 Questions & Answers Thank you! Franck Leveque Vice President Automotive & Transportation Direct: +49.(0) Mobile: Fax: +49.(0)