International Automotive Congress 2014 CO 2 Technology Strategies for OEM in Europe until 2025 Shanghai, December 9 th 2014 Dipl.-Kfm. Ingo Olschewski, Dipl.-Ing. Dipl.-Wirt. Ing. Christian-Simon Ernst fka Forschungsgesellschaft Kraftfahrwesen mbh Aachen Christian Harter M.Sc. Institut für Kraftfahrzeuge, Aachen Slide No. 1
Agenda Challenges for the Automotive Industry Status quo of European CO 2 legislation Strategies for CO 2 Target Compliance Deduction of Fields of Action for OEM Summary Slide No. 2
Global CO 2 Targets until 2025 Global CO 2 targets The CO 2 limit values are defined for different test cycles, but it is possible to normalize the target height on a NEDCequivalent value, to assure the comparability of the target values. Empiric data Official targets 220 CO2 emission target in NEDC equivalen nts [g CO2/km] 210 200 190 180 170 160 150 140 130 120 110 100 90 2000 2005 2010 2015 2020 2025 The different base levels of the CO 2 emission in the compared countries are attributed to the difference in fleet composition and used fuels. Up to 2021 the EU will have the strictest targets on CO 2 emissions (95 g) followed by Japan. The US targets are less stringent. 1 Values for BRIC-states are not directly comparable due to their completely different composition of their national fleet. 1 ICCT (2014), DOT (2011), METI (2011) Slide No. 3
CO 2 Legislation in the EU Target Curve and Additional Provisions Target Curve Avg. CO 2 emission in 2010: 141 g CO 2 /km Fleet specific CO2 targets until 2021 for passenger cars defined according to EU regulation 443/2009. Target 2015 M1 = 130 a (M M 0 ) a = 0,0457 M = Avg. Mass in running order [kg] M 0 = 1.372 kg Reference mass M 0 is adjusted to the average fleet weight every three years Target 2021 M1 = 95 a (M - M 0 ) Reduction of slope: a = 0,0333 Phase-in In the years preceeding the target years 2015 resp. 2021, the CO 2 emission is calculated on base of the most fuel efficient share of each OEM s fleet. CO2 emission [g CO2/km] 150 100 50 0 141 65% 2010 12 75% 80% 13 14 130 100% 15 95% 20 95 100% 21 CO2 emission [g CO2/km] 250 200 150 100 50 0 141 g 130 g 95 g M 0 =1.372 kg 0 1,000 2,000 3,000 Range of 65 68 g CO 2 /km under discussion for 2025. Supercredits Vehicles with CO 2 emissions of less than 50 g have more weight when calculating the OEM fleet average CO 2 emission by using production multipliers. Multiplier [-] 4 3 2 1 0 3,5 2012 3,5 13 2,5 14 1,5 15 1,0 16 Σ max. 7,5 g CO 2 2,0 20 1,7 21 1,3 22 1,0 23 Eco Innovations Technologies which verifiably reduce CO 2 emissions in real-world usage of the car but are not captured in the standardized driving cycle (the NEDC) can be accounted for up to a total of 7 g per vehicle. The Eco Innovations have to be officially certified by the EU Fines for non-compliance: 95 for each gram CO 2 above the target, multiplied by the fleet size. Slide No. 4
Agenda Challenges for the Automotive Industry Status quo of European Automotive Industry Strategies for CO 2 Target Compliance Deduction of Fields of Action for OEM Summary Slide No. 5
Status Quo of CO 2 Emission by Group/Brand 150 Status quo of the CO 2 emission in 2013 for Volume OEM Groups 140 130 130 g CO2 em mission [g CO2/km] 120 110 100 90 80 70 126 g 95 g Indicative Target Range 2025: 65 g 78 g 60 0 M 0/EU = 1,372 kg M 0/2013 = 1,391 kg 0 1,100 1,200 1,300 1,400 1,500 1,600 1,700 Vehicle mass M [kg] CO 2 Reduction Requirements Specification of OEM-specific CO 2 targets, based on the average curb weight of their new registered passenger vehicles in each year. In average, the CO 2 target of 2015 (130 g CO 2 /km) is already being met in 2013, whereas all OEM have to decrease their CO 2 emission in order to meet the 95 g target curve in 2021. Target 2025 under discussion: Range between 65 g to 78 g CO 2 /km. Source: EEA (2014) Slide No. 6
Agenda Challenges for the Automotive Industry Status quo of European CO 2 legislation Strategies for CO 2 Target Compliance Framework and Assumptions Strategies for OEM Deduction of Fields of Action for OEM Summary Slide No. 7
Systematization of Strategies Strategies for CO 2 target compliance Demand Pull Technology Push OEM Pooling Re-positioning by changing the portfolio, e.g. by entering the small car segment Shift in fuel types, e.g. by increasing share of vehicles powered by diesel fuel or natural gas Technological reduction of CO 2 emissions of vehicles by: Conventional technologies Hybrid technologies (Mild-, Full-Hybrid) Plug-in-Hybrids BEV Eco innovations Formation of CO 2 emission pools within the framework of the European legislation Success depends on customer acceptance, energy prices etc. Companies internal success factors: Technology, competitors etc. 1: Technology Focus of this research. 2: Pooling Slide No. 8
Specification of Abstract OEM Specification of Abstract OEM For the further analysis, three abstract OEM are defined, each with a different focus in their product portfolio. CO2 emission [g CO2/km] 150 140 130 120 110 100 90 80 70 60 0 0 1,100 1,200 FIAT RENAULT HYUNDAI FORD TOYOTA 1,300 MAZDA HONDA GM VW PSA 1,400 1,500 BMW DAIMLER 1,600 1,700 1 Assuming constant avg. fleet weight 2 Assuming constant slope of target curve (0.0333) and constant avg. fleet weight and 78 g as the overall EU target Vehicle mass M [kg] Small car OEM (Year 2010) Volume OEM (Year 2010) Premium OEM (Year 2010) 14% 8% 62% 16% CO 2 emission 125 g Avg. Mass 1,133 kg Target 2021 1 87 g (-30%) Target 2025 2 70 g (-44%) 32% 32% 8% 27% CO 2 emission 139 g Avg. Mass 1,379 kg Target 2021 1 95 g (-32%) Target 2025 2 78 g (-44%) 19% 9% 27% 44% CO 2 emission 170 g Avg. Mass 1,631 kg Target 2021 1 104 g (-39%) Target 2025 2 87 g (-49%) Small Car Diesel Small Car Petrol Medium Car Diesel Medium Car Petrol Large Car Diesel Large Car Petrol Slide No. 9
Agenda Challenges for the Automotive Industry Status quo of European CO 2 legislation Strategies for CO 2 Target Compliance Framework and Assumptions Strategies for OEM Deduction of Fields of Action for OEM Summary Slide No. 10
Strategy 1: Technology Push Methodological Approach 1 Technology Identification 2 Technology Evaluation Engine Technology, e.g. Downsizing e.g. 4 Cyl., 1,4 l. 3 Cyl., 1,0 l Drivetrain Electrification, e.g. Full Hybrid Transmission, e.g. Double clutch Trans. Overall Improvement, e.g. Auxilliaries Each of the identified technologies is evaluated in terms of CO 2 reduction potential [%] Production costs on vehicle level [ ] Weight effect on vehicle level [%] and under consideration of technological progress. 3 Technological progress 2025 2020 Technology Assessment Technology CO 2 reduction potential [%] Consolidation in Technology Packages Prioritization of the technological options Production Costs [ ] Weight Effect [%] Driving Resistance Reduction, e.g. Lightweight Design TP1 TP2 TP3 TP4 Conventional Technologies TP1 TP2C TP3C TP4C Homogenousdirect injection TP1 TP2C TP3C Downsizing& turbo (Step I) Downsizing & turbo (Step II) Downsizing & turbo (Step II)I High load exhaust gas recirculation Variable valve timing (VVT) Variable valve timing lift Aerodynamic design Variable compressionratio Micro-Hybrid(Start-Stopp) Cylinder deactivation Lightweight design -strong(bodywork) Exhaustheat recovery (Rankine) Lightweightdesign components 7/8/9gear automatic transmission Downspeeding (strong) Drivetrainfriction reduction Thermal management Lightweight design -medium Electrification of auxilliaries (bodywork) Lowrolling resistance tires Lightweight design -components Aerodynamic optimization Hybrid Technologies Lightweight design -light (bodywork) TP2H TP3H TP4H TP2C TP3C TP4C Mild hybrid Full hybrid Full hybrid Plug-in Hybrid Technologies TP2PHEV TP3PHEV TP4PHEV TP2C TP3C TP4C Plug-in hybrid Plug-in hybrid Plug-in hybrid Identification of interactions Development of technology packages Conventional Mild and Full Hybrid Plug-in Hybrid Source: ika (2012) Slide No. 11
Strategy 1: Technology Push Roadmap of Innovative Technologies Technologies for CO 2 reduction after 2020 Even in the timeframe after 2020, innovative technologies in various vehicle domains are expected to enter the mass market: They allow for a further reduction of CO 2 emissions, beyond the improvement potentials of existing technologies (e.g. supercharging or friction reduction). Driver assistance systems have the potential to reduce CO 2 emission on the road, but are not captured by the concept of the NEDC. Combustion engine Closed Loop Control Comprehensive Measures Exhaust heat recovery (Rankine) Driving resistances Strong lightweight design (components) Driver assistance systems Intelligent navigation EGR (High Load) Variable compression ratio predictive cruise control HCCI / CAI Exhaust heat recovery (thermoelectric generator) Strong lightweight design (bodywork) V2X communication Niche technologies Additional technologies may enter the market until 2030 but will not be relevant for the mass market. Combustion concepts: 2-stroke/4-stroke process Lambda split process Hybrid 11 concepts: Hydraulic hybrid Flywheel hybrid Range extender concepts: OPOC engine Wankel engine Stirling engine Gas turbine Fuel cell 2020 2025 2030 Slide No. 12
Strategy 1: Technology Push Composition of Technology Packages Developed Technology Packages Medium vehicles (petrol) TP1 TP2 TP3 TP4 Conventional Technologies TP1 TP2C TP3C TP4C Homogenous direct injection TP1 TP2C TP3C Downsizing& turbo (Step I) Downsizing & turbo (Step II) Downsizing & turbo (Step II)I High load exhaust gas recirculation Variable valve timing (VVT) Variable valve timing lift Aerodynamic design Variable compression ratio Micro-Hybrid(Start-Stopp) Cylinder deactivation Lightweight design - strong (bodywork) Exhaust heat recovery (Rankine) Lightweightdesign components 7/8/9 gear automatic transmission Downspeeding (strong) Drivetrain friction reduction Electrification of auxilliaries Low rolling resistance tires Aerodynamic optimization Thermal management Lightweight design -medium (bodywork) Lightweight design - components Hybrid Technologies Lightweight design - light (bodywork) TP2H TP3H TP4H TP2C TP3C TP4C Mild hybrid Full hybrid Full hybrid Plug-in Hybrid Technologies TP2PHEV TP3PHEV TP4PHEV TP2C TP3C TP4C Plug-in hybrid Plug-in hybrid Plug-in hybrid The technology packages (TP) are being built upon the best cost-benefit ratio. The next TP always includes the prior TP. Further generations of technologies always replace the entry technology. In total, 4 TP generations and 10 total options are derived from the complete options list. Slide No. 13
Downsizing& turbo (Step I) Downsizing & turbo (Step II) Downsizing & turbo (Step II)I High load exhaust gas recirculation Variable valve timing (VVT) Variable valve timing lift Aerodynamic design Variable compressionratio Micro-Hybrid (Start-Stopp) Cylinder deactivation Lightweight design -strong (bodywork) Exhaustheat recovery (Rankine) Lightweightdesign components 7/8/9gear automatic transmission Downspeeding (strong) Drivetrainfriction reduction Thermal management Lightweight design -medium Electrification of auxilliaries (bodywork) Lowrolling resistance tires Lightweight design -components Aerodynamic optimization Mild hybrid Full hybrid Full hybrid Plug-in hybrid Plug-in hybrid Plug-in hybrid Strategy 1: Technology Push Results for a Volume OEM OEM definition Small car OEM (Year 2010) 14% 8% Technology evaluation Technological progress 62% 2025 16% 2020 Technology Assessment Technology CO 2 emission 125 g Avg. Mass 1,133 kg Target 2021 1 87 g (-30%) Target 2025 2 70 g (-44%) CO 2 reductio potential [%] Technology packages TP1 TP2 TP3 TP4 Conventional Technologies TP1 TP2C TP3C TP4C Homogenousdirect injection TP1 TP2C TP3C Hybrid Technologies Lightweight design -light (bodywork) TP2H TP3H TP4H TP2C TP3C TP4C Plug-in Hybrid Technologies TP2PHEV TP3PHEV TP4PHEV TP2C TP3C TP4C Technology strategy, Volume OEM, 2025 The OEM optimizes its technology strategy by implementing technology packages in vehicles of the different segments and fuel types. Economical 8,000 efficient Technological 7,000 feasible Average additiona al production costs per veh hicle [ ] 6,000 5,000 4,000 3,000 2,000 1,000 0 PHEV PHEV PHEV 78 g (HEV) 68 g (PHEV) HEV HEV 78 g (PHEV) 95 g (Conv.) 95 g (PHEV) Conventional Conventional Target 95 g Target 78 g Target 68 g 20 30 40 50 60 70 80 90 100 110 120 130 140 CO 2 emission [g CO 2 /km] Conventional Status quo 2010 Technology Strategy for Volume OEM, 2025 The defined volume OEM can theoretically reduce its CO 2 emissions to ca. 84 g by using conventional technologies, to ca. 69 g by using HEV technologies (Mild-, Full-H.) and to ca. 35 g by using PHEV in the complete fleet. Even by optimizing the technology strategy, CO 2 reduction costs rise exponentially at low CO 2 targets. It is more cost efficient to partially introduce PHEV into the fleet instead of applying very progressive conventional technologies. Slide No. 14
Strategy 1: Technology Push Potential of Eco Innovations Eco Innovations Technologies which reduce CO 2 emission on road but are not captured by the NEDC can be accounted for up to a total of 7 g per vehicle. The effectiveness of these technologies is evaluated in a standardized certification process. Technological areas of Eco Innovation applications Engine encapsulation Less cold-start situations High Efficiency Alternator High efficiency factor Implication on CO 2 target Eco innovations reduce the CO 2 reduction requirements on cycle-based technologies by 7 g CO 2 /km per vehicle. CO2 C emission [g CO2/km] 150 100 50 0 139 Volume OEM 37 7 95 Status Cycle-based Eco Target quo technologies Innovations 2021 LED exterior lights Solar roof Reduced power consumption, compared to halogen and xenon lights Battery charging, using solar energy. Navigation based battery charging Coasting Navigation based optimization of battery charging strategy for hybrid vehicles. Coasting with engine turned off. Implication on Technology Push strategy For low CO 2 targets, costs for reducing an additional unit of CO 2 rise exponentially. In 2020, each gram CO 2 reduction equals to ca. 50 of additional production costs. Some eco innovations show a superior cost efficiency. Eco-innovation based on software (e.g. navigation based) are avaible at minimum production costs. Costs for LED lights may be beared by the customer since they provide additional functionalities. Eco Innovations be part of the cost efficient technology push strategy. Slide No. 15
Strategy 2: OEM Pooling Framework Legislative Provisions Opportunity to form bilateral or multilateral OEM pools, stating to jointly fulfil CO 2 targets. Comprehensive assessment of the CO 2 emissions, but OEM can remain independent legal entities. OEM Pool Type 1: closed pool of OEM already connected in a group Access can be denied to other OEM Economic Rationale Medium Car Petrol / Diesel Manufacturer A Small Car Petrol / Diesel Large Car Petrol / Diesel OEM Pool Medium Car Petrol / Diesel Manufacturer B Small Car Petrol / Diesel Slide No. 16 OEM Pool Type 2: open pool of completely independent OEM Have to grant non-discriminatory access to other OEM on economically reasonable terms Large Car Petrol / Diesel By integrating two or more OEM, the strategic scope for CO 2 target compliance is widening. One OEM may miss the target when the other OEM over-fulfils its target proportionally. Cost savings for one OEM overcompensate additional costs for the other OEM Inequalities are adjusted by compensation payments, so that each OEM draws a benefit from the pooling agreement. Theoretically, the optimum result is achieved when each OEM has the same slope of its cost curve (equal marginal cost).
Agenda Challenges for the Automotive Industry Status quo of European CO 2 legislation Strategies for CO 2 Target Compliance Deduction of Fields of Action for OEM Summary Slide No. 17
Deduction of Fields of Action for OEM Cost efficient CO 2 target compliance 2025 The CO 2 strategy has to be individually elaborated and evaluated for each OEM, since different market positions, technical properties and strategic opportunities do not allow a generalized strategy. Analysis Evaluation Strategy deduction Technology Identification Transmission, e.g. Double clutch Trans. CO2 emission [g CO2/km] 150 140 130 120 110 100 90 80 70 60 0 0 1,100 Legislation 1,200 FIAT RENAULT FORD 1,300 HYUNDAI TOYOTA PSA MAZDA VW 1,400 Vehicle mass M [kg] HONDA GM 1,500 BMW DAIMLER OEM Portfolio Analysis Small car OEM (Year 2010) 14% 8% 62% 16% 1,600 1,700 CO 2 emission 125 g Avg. Mass 1,133 kg Target 2021 1 87 g (-30%) Target 2025 2 70 g (-44%) Technology and Costs CO 2 reduction potential vs. production costs Interdependecies Progress Technological progress 2025 2020 Technology Assessment Technology CO 2 reduction potential [%] Production Costs [ ] Weight Effect [%] Technology Strategy Cost-efficient Technology paths for CO 2 target compliance Make-or-buy strategy Market and Pooling Strategy Vehicle segment strategy Fuel mix Strategic alliances (OEM pools) for CO 2 target compliance Supplier cooperation in development or procurement Individual Compliance Strategy Methodological Competences by fka Technology Roadmaps CO 2 Emission database Technology Databases for EU / USA Tool for Scenario Calculation Tool for OEM Strategy Optimization Slide No. 18
Agenda Challenges for the Automotive Industry Status quo of European CO 2 legislation Strategies for CO 2 target compliance Deduction of Fields of Action for OEM Summary Slide No. 19
CO 2 Technology Strategies in Europe until 2025 Summary CO 2 legislation until 2021 (95 g) and beyond (2025: 65 78 g) requires further CO 2 reduction efforts in order to mitigate high non-compliance fees. An optimum CO 2 strategy consists both of a technology and a market / pooling strategy. Electrification of the vehicle fleet by the introduction of PHEV is more cost efficient than introducing the most advanced technologies for conventional powertrains. Eco innovations may be a part of a cost efficient technology push strategy, providing additional technology options. Cost efficiency is depending on the specific technology. Forming CO 2 emission pools may be an beneficial option for OEM of all segments, in case corresponding compensation payments can be arranged. An optimum CO 2 strategy has to be elaborated individually for every OEM since there is no general optimum strategy. Re-evaluation of results necessary when Worldwide harmonized driving cycle (WLTP) in introduced. Slide No. 20
Contact Dipl.-Kfm. Ingo Olschewski Forschungsgesellschaft Kraftfahrwesen mbh Aachen Steinbachstraße 7 52074 Aachen Germany Phone Email Internet 49 241 8861160 olschewski@fka.de www.fka.de Slide No. 21