IHS AUTOMOTIVE Catching A Falling Star: Will U.S. Automakers Keep xevs Powered In A Low-Oil Price Environment Presentation IHS Automotive Conference Tokyo March 5, 2015 ihs.com Devin Lindsay, Principal Analyst - North America Powertrain, +1 248 465 2811, devin.lindsay@ihs.com
IHS Automotive Conference Spring 2015 Contents INTRO SIX STARS OF ALIGNMENT XEV CURRENT MARKET STATUS Volume BRIGHTEST STAR: LEGISLATION OR OIL PRICE? CAFE Impact on xev forecast ZEV Mandate California Dreaming or Market Mover? TOP OEM XEV FORECAST WHO ARE THE XEV CUSTOMERS MOVING PAST EARLY ADOPTERS CONCLUSION Final Highlights 2
IHS Automotive Conference Spring 2015 Which Way To Go? 3
IHS Automotive Conference Spring 2015 Photo By: Devin Lindsay Government / incentives Oil prices Products Six Stars of Alignment Battery evolution Infrastructure Consumer Photo By: Devin Lindsay Photo By: Devin Lindsay Photos by: Devin Lindsay 4
Brent oil price ($/barrel) Falling Star Creating Black Hole? 160 140 120 100 80 Oil Prices 60 40 20 Source: IHS Connect 5
IHS Automotive Conference Spring 2015 Contents INTRO SIX STARS OF ALIGNMENT XEV CURRENT MARKET STATUS Volume BRIGHTEST STAR: LEGISLATION OR OIL PRICE? CAFE Impact on xev forecast ZEV Mandate California Dreaming or Market Mover? TOP OEM XEV FORECAST WHO ARE THE XEV CUSTOMERS MOVING PAST EARLY ADOPTERS CONCLUSION Final Highlights 6
Thousands Thousands IHS Automotive Conference Spring 2015 North America vs. Global Market Outlook Production Forecast 800 700 600 500 400 300 200 100 0 1200 1000 800 600 400 200 0 BEV Europe Greater China Japan/Korea North America South Asia PHEV Europe Greater China Japan/Korea North America South America 2015 2020 2025 2015 2020 2025 2014 IHS Production Powertrain Forecast January 2015 7
Millions Millions IHS Automotive Conference Spring 2015 North America vs. Global Market Outlook Production Forecast 3 2.5 2 1.5 1 0.5 0 FHEV Europe Greater China Japan/Korea North America South Asia 2015 2020 2025 5 4 3 2 1 0 MHEV Europe Greater China Japan/Korea North America South Asia 2015 2020 2025 2014 IHS Production Powertrain Forecast January 2015 8
IHS Automotive Conference Spring 2015 Global Outlook Production-Based Powertrain Forecast Percent Share 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2014 2015 2016 2017 2018 2019 2020 2021 Electric Fuel Cell Hybrid-Full PHEV Hybrid-Mild ICE ICE: Stop/Start Production Powertrain Forecast January 2015 9
IHS Automotive Conference Spring 2015 North American Outlook Production-Based Powertrain Forecast Percent Share 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Electric Fuel Cell Hybrid-Full PHEV Hybrid-Mild ICE ICE: Stop/Start Production Powertrain Forecast January 2015 10
IHS Automotive Conference Spring 2015 Contents INTRO SIX STARS OF ALIGNMENT XEV CURRENT MARKET STATUS Volume BRIGHTEST STAR: LEGISLATION OR OIL PRICE? CAFE Impact on xev forecast ZEV Mandate California Dreaming or Market Mover? TOP OEM XEV FORECAST WHO ARE THE XEV CUSTOMERS MOVING PAST EARLY ADOPTERS CONCLUSION Final Highlights 11
IHS Automotive Spring Conference / March 2015 Could ZEV Be Delayed Or Adjusted & What About CAFE? 12
IHS Automotive Spring Conference / March 2015 U.S. CAFE Fuel Economy Status and Targets Car Fleet 13
IHS Automotive Spring Conference / March 2015 U.S. CAFE Fuel Economy Status and Targets Truck Fleet 14
Benefits of Advanced Clean Cars Program? IHS Automotive Spring Conference / March 2015 Fight Smog 75 percent reduction in smog-forming emissions from new vehicles by 2025 (compared to 2014 levels) Create Jobs additional 21,000 jobs in California in 2025, rising to 37,000 in 2030 Consumer Savings California drivers will save $5 billion in operating costs in 2025, and $10 billion by 2030 Fight Climate Change Greenhouse gas emissions from new cars cut 34 percent from 2016 levels. By 2025, greenhouse gases will be reduced by 52 million tons, the equivalent of taking 10 million cars off Deliver Next-Generation Cars ZEVs or PHEVs will account for one in seven new cars sold in California in 2025 >1.4 million zero-emission and plug-in hybrid vehicles will be on the road in California by 2025. 15
OEMs Heavyweights Vs. Middle Weight Champs Large Vehicle Manufacturers Transitioning LVMs (2016-2018) <20,000 Vehicles Other Intermediate Vehicle Manufacturers ARB: September 2013 16
Travel Provision or "Section 177 States" Section 177 of the federal Clean Air Act allows other states to adopt California motor vehicle emission standards including the ZEV regulation Fuel cell vehicles: Travel provision allowed until sufficient complimentary policies established in S177 states 17
Thousands IHS Automotive Conference Spring 2015 California Zero Emission Vehicle Credit Balances as of September 2014 1.60 1.40 ZEVs TZEVs 1.20 1.00 0.80 0.60 0.40 0.20 0.00 Source: http://www.arb.ca.gov/msprog/zevprog/zevcredits/2013zevcredits.htm 18
IHS Automotive Conference Spring 2015 Contents INTRO SIX STARS OF ALIGNMENT XEV CURRENT MARKET STATUS Volume BRIGHTEST STAR: LEGISLATION OR OIL PRICE? CAFE Impact on xev forecast ZEV Mandate California Dreaming or Market Mover? TOP OEM XEV FORECAST WHO ARE THE XEV CUSTOMERS MOVING PAST EARLY ADOPTERS CONCLUSION Final Highlights 19
Thousands Thousands Ford IHS Automotive Conference Spring 2015 400 350 300 250 200 150 100 50 0 2014 2015 2016 2017 2018 2019 2020 2021 PHEV Hybrid- Full Fuel Cell Electric 200 Mile BEV will rival GM Bolt Strong FHEV focus FHEV F150 pick-up truck late 2018 on 3.5L EcoBoost - 500 400 300 200 100 Top Volume By 2021 Fusion C-Hybrid Escape Fusion PHEV F-150 SuperCrew 20
INCOME UNDER $15,000 - $19,999 $20,000 - $29,999 $30,000 - $39,999 $40,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $124,999 $125,000 - $149,999 $150,000 AND OVER Thousands General Motors 300 250 200 150 IHS Automotive Conference Spring 2015 Hybrid- Mild PHEV Hybrid-Full 100 Fuel Cell 50 0 2014 2015 2016 2017 2018 2019 2020 2021 Electric 30% 20% 10% 0% Significant PHEV emphasis Does the 200 mile range Bolt set a new standard? eassist continues to lose power Estimated Household Income Personal Registrations: Dec 2014 YTD* 21
Thousands Fiat-Chrysler IHS Automotive Conference Spring 2015 180 160 140 120 100 80 60 40 20 Hybrid- Mild PHEV Hybrid-Full Electric 0 2014 2015 2016 2017 2018 2019 2020 2021 Possible late-launch next-gen Ram 1500 48V MHEV Significant 48V MHEV volume possible but is there a risk? PHEV minivan still planned so will Honda and Toyota wait or compete? 22
48V Systems* Non-Hybrid Applications IHS Automotive Spring Conference / March 2015 Hybrid Applications 0% 23% 53% 54% 59% 61% 100% 77% 47% 46% 41% 39% 2015 2017 2019 2021 2023 2025 *Europe Only 2 nd Quarter 2014 23
Thousands German OEMs (BMW, Daimler, VW) IHS Automotive Conference Spring 2015 250 200 Hybrid- Mild 150 PHEV 100 Hybrid-Full 50 Electric 0 2014 2015 2016 2017 2018 2019 2020 2021 Significant 48V MHEV volume possible starting with Audi brand Aggressive roll-out of PHEVs 24
Thousands Honda 250 200 150 100 Dedicated BEV returning E-REV will rival Chevy Volt More FHEVs from Acura brand? IHS Automotive Conference Spring 2015 Hybrid- Mild 50 0 2014 2015 2016 2017 2018 2019 2020 2021 Hybrid- Full Photo Taken By: Devin Lindsay 25
Thousands Hyundai/Kia IHS Automotive Conference Spring 2015 120 100 PHEV 80 60 Hybrid-Full 40 20 Electric 0 2014 2015 2016 2017 2018 2019 2020 2021 Very competitive xev models Soon following similar pattern if special green model in various configurations Fuel cell Tucson improves score on ZEV scoreboard Photo Taken By: Devin Lindsay 26
INCOME UNDER $15,000 - $19,999 $20,000 - $29,999 $30,000 - $39,999 $40,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $124,999 $125,000 - $149,999 $150,000 AND OVER Thousands Nissan IHS Automotive Conference Spring 2015 200 150 100 Hybrid-Mild 50 0 Electric 2014 2015 2016 2017 2018 2019 2020 2021 30% 25% 20% 15% 10% 5% 0% Commitment to EVs Lack of SUV penetration in market Very positive ZEV position Estimated Household Income Personal Registrations: Dec 2014 YTD* Photo Taken By: Devin Lindsay 27
Thousands Toyota IHS Automotive Conference Spring 2015 Mirai Fuel Cell Commitment to BEVs? Success of the Prius 400 350 300 250 200 150 100 50 0 2014 2015 2016 2017 2018 2019 2020 2021 PHEV Hybrid- Full Electric Photo Taken By: Devin Lindsay 28
INCOME UNDER $15,000 - $19,999 $20,000 - $29,999 $30,000 - $39,999 $40,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $124,999 $125,000 - $149,999 $150,000 AND OVER Thousands Tesla 60 50 40 30 20 10 0 60% 50% 40% 30% 20% 10% 0% Model 3 Model 3 CUV Estimated Household Income Personal Registrations: Dec 2014 YTD* 2015 2021 Model 3 Roadster Model S IHS Automotive Conference Spring 2015 Model X Shows that competition is really good for the marketplace Model S proves that EVs are not just for A & B Segment vehicles Will production delays effect long-term viability? 29
Tesla and Upcoming Competition IHS Automotive Conference Spring 2015 i8 918 Spyder Supra NSX R8 Model S $ 135,700 (USD) $ 845,000 (USD) $ 150,000 (USD estimated) $ 70,000 (USD) - 5 10 15 20 25 Thousands 2019 2017 2015 Photo Source: Devin 30 Lindsay
APSS New Scenario Assumptions Rivalry Timeline IHS Automotive Conference Spring 2015 Ongoing vehicle/ powertrain downsizing wave Limited PHEV/BEV sales due to new technology production ramp-up PHEV/BEV become economically competitive with ICE vehicles Other disruptive technologies such as fully autonomous vehicles emerge; enabling further CO 2 emission reductions 2015 2020 2025 2030 2035 2040 Move towards a vehicular CO2 linked taxation system in many markets Variety of government stimulus aimed at promoting electrified vehicle solutions Rising new ICE vehicle retail prices due to efficiency standards Potential for new standards and procedures concerning vehicle homologation and crash test processes 31
IHS Automotive Conference Spring 2015 Contents INTRO SIX STARS OF ALIGNMENT XEV CURRENT MARKET STATUS Volume BRIGHTEST STAR: LEGISLATION OR OIL PRICE? CAFE Impact on xev forecast ZEV Mandate California Dreaming or Market Mover? TOP OEM XEV FORECAST WHO ARE THE XEV CUSTOMERS MOVING PAST EARLY ADOPTERS CONCLUSION Final Highlights 32
State Consistency? IHS Automotive Conference Spring 2015 Polk Insights, February 2015 33
United States: xev* Age Breakdown Personal Registrations: 2012 vs. 2013 20% % Change IHS Automotive Conference Spring 2015 15% 10% 5% 0% 18-24 YRS OLD 25-34 YRS OLD 35-44 YRS OLD 45-54 YRS OLD 55-64 YRS OLD 65-74 YRS OLD 75+ YRS OLD -5% *MHEV/FHEV/PHEV Polk Insights, January 2015 34
IHS Automotive Conference Spring 2015 United States: Electric Vehicle Consumers Age Breakdown Personal Registrations: 2012 vs. 2013* 345% % Change 295% 245% 195% 145% 95% 45% -5% 18-24 YRS OLD 25-34 YRS OLD 35-44 YRS OLD 45-54 YRS OLD 55-64 YRS OLD 65-74 YRS OLD 75+ YRS OLD Polk Insights, January 2015 35
$15,000 - $19,999 $20,000 - $29,999 $30,000 - $39,999 $40,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $124,999 $125,000 - $149,999 $150,000 AND OVER INCOME UNDER $15,000 IHS Automotive Conference Spring 2015 United States: Consumers Estimated Household Income Personal Registrations: 2012 vs. 2013* 15% 10% 5% 0% -5% -10% % Change 400% 300% 200% 100% 0% Polk Insights, January 2015 36
IHS Automotive Spring Conference / March 2015 Loyalty Percentage Select Brands By Ethnicity 40 35 30 African- Americans Asian 25 20 15 Eastern European Hispanic 10 5 0 VOLT LEAF MODEL S PRIUS Middle Eastern Western European Loyalty Insights, February 2015 37
IHS Automotive Conference Spring 2015 Contents INTRO SIX STARS OF ALIGNMENT XEV CURRENT MARKET STATUS Volume BRIGHTEST STAR: LEGISLATION OR OIL PRICE? CAFE Impact on xev forecast ZEV Mandate California Dreaming or Market Mover? TOP OEM XEV FORECAST WHO ARE THE XEV CUSTOMERS MOVING PAST EARLY ADOPTERS CONCLUSION Final Highlights 38
Competing Conflicts IHS Automotive Conference Spring 2015 CO2 Infrastructure More Charging Stations Road Funding Air Quality Lower Emission Vehicles Infrastructure Charge Everywhere HP Better Roads Reduced Fuel Cost Vehicle Choice New Technology Technology Cost New Amenities Vehicle Cost 39
PRESENTATION NAME / MONTH 2014 Key Takeaways Electrified vehicles are never sustained directly by oil prices, but its velocity is controlled by oil price Legislation determines technology winners and losers Automakers are beginning to choose its technology of choice to meet CAFE and ZEV regulations xevs are still very immature in the market with many unreached consumers and low-penetration in most states. 2014 IHS 40
Catching A Falling Star: Will U.S. Automakers Keep xevs Powered In A Low-Oil Price Environment Devin Lindsay Principal Analyst - North America Powertrain IHS Automotive IHS Customer Care: Americas: +1 800 IHS CARE (+1 800 447 2273); CustomerCare@ihs.com Europe, Middle East, and Africa: +44 (0) 1344 328 300; Customer.Support@ihs.com Asia and the Pacific Rim: +604 291 3600; SupportAPAC@ihs.com 2014 IHS. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent, with the exception of any internal client distribution as may be permitted in the license agreement between client and IHS. Content reproduced or redistributed with IHS permission must display IHS legal notices and attributions of authorship. The information contained herein is from sources considered reliable but its accuracy and completeness are not warranted, nor are the opinions and analyses which are based upon it, and to the extent permitted by law, IHS shall not be liable for any errors or omissions or any loss, damage or expense incurred by reliance on information or any statement contained herein. For more information, please contact IHS at Customer Care (see phone numbers and email addresses above). All products, company names or other marks appearing in this publication are the trademarks and property of IHS or their respective owners.