Issues in Powertrain Electrification to 2030

The key to this report is not that global automakers are going electric, but how.
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Michael Jost, strategy chief for Volkswagen says their “colleagues are working on the last platform for vehicles that aren’t CO2 neutral,” as the company works on “gradually fading out combustion engines to the absolute minimum”.

There’s a sense of urgency at the Wolfsburg headquarters of Volkswagen as the automaker deploys a $50 billion war chest for a group-wide change in technology strategy. The automaker has working on a plan to decimate management ranks, slash factory costs and eliminate almost a quarter almost a quarter of the engine and gearbox variants in Europe to make that possible.

VW peers Daimler and Peugeot plan an electrified variant of all their cars by 2022 and 2025. The key here is not just that global automakers are going electric, but how.

Issues in Powertrain Electrification to 2030 examines the impact of electrification on the five major elements of the future powertrain:

IC engines

Transmissions

Control Systems

Batteries

Electric Motors

The report looks at technical trends and developments in each of these areas, and projects how they might develop through to 2025 and 2030.

The report takes a unique approach to assessing the central track of the industry’s technological roadmap – and then discusses the threats and challenges to that projection as a way of analyzing the risks and opportunities that will dominate the next decade.

In other words it establishes the consensus view, and then challenges it by identifying key uncertainties and potential disruptors.

Each chapter summarizes current developments for each of the technology areas, and then pulls them together into plausible, alternate scenarios to the central outlook to help planners “bookend” the best and worst cases.

The report builds on a series of in-depth studies of different powertrain technologies, as well as our surveys of experts.

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Table of contents

Chapter 1. Powertrain redrafted

1.1. What is Driving Change?
1.2. Scenarios and Developments –The Consensus View
1.3. Role of Technology Disruptors and Innovations
1.4. Key Questions, Uncertainties, and Trends

Chapter 2. Regulatory requirements: Real driver of change

2.1. Criteria and GHG emissions
2.2. Fuel economy and GHG Emissions Regulations
2.3. Test Cycles – The Day of Reckoning
2.4. Fuel availability and affordability
2.4.0.1. Chapter 2 Summary

Chapter 3. State of the Market for xEVs

Chapter 4. Internal Combustion Engine Developments for Light Duty Vehicles

4.1. Gasoline ICE Engines
4.2. GDI Better Fuel Economy, More Soot
4.3. Technology Map – a Quilt, not a Blanket
4.4. Gasoline Potential Disruptors and Innovations
4.5. Diesel Engine Developments for Light Duty Vehicles
4.6. Diesel Technology – Strengths and Weaknesses
4.7. Growth Constrained by High Diesel Fuel Prices and Demand
4.8. Diesel Forecasts and Trends
4.8.0.1. Chapter 4 Summary – Forecasts and Uncertainties

Chapter 5. Energy storage in Batteries

5.1. Background and Batteries – Development Progresses
5.2. Economics and Price – is $100/kWh valid?
5.3. Battery Progress and Projections
5.4. Battery Suppliers
5.5. Potential Disruptors in Energy Storage
5.6. Prices and Projections
5.7. Charging a Battery
5.7.0.1. Chapter 5 Summary – Forecasts and Uncertainties for electric battery storage

Chapter 6.Business Models that work with Electric Vehicles

6.1. Cost to Consumer
6.2. Market Models
6.3. Mobility as a Service
6.4. Personal BEVs, Fun tempered by Range
6.5. Synthetic fuels
6.5.0.1. Chapter 6 Summary – Forecasts and Uncertainties

Chapter 7. Trends and Projections – A Scenario Approach

7.1. Common Assumptions
7.2. Low Tech Scenario – Less technology and electrification than the Consensus View
7.3. High Tech Scenario – Accelerated development of high tech combustion and electrified
technologies

Chapter 8. Research Note

8.1. Commercial Vehicles Take the Lead
8.2. Automakers Exploit the Strengths of Battery Electric Vehicles?
8.3. Market Trends – China Dominates

Table of Figures

Figure 1.1: A model of competing development drivers that is no longer the sole model.

Figure 1.2: An emerging model that may be more important than the triangle model is for powertrains to balance more complex needs, especially Mobility-as-a-Service.

Figure 1.3: Data presenting Continental’s 2015 Powertrain Outlook for Global private and light vehicle
engine production through 2024, referred to in this report as the 2015 Consensus View.

Figure 1.4: Data presenting Continental’s 2017 Powertrain Outlook for Global private and light vehicle
engine production through 2030.

Figure 1.5: Data presenting Continental’s 2018 Powertrain Outlook for Global private and light vehicle
engine production, referred to in this report as the 2018 Consensus View.

Figure 1.6: The Consensus View as shown by Continental’s projections have increased their predictions of vehicle electrification by 2025.

Figure 2.1: Summary and timing of important worldwide emissions regulations.

Figure 2.2: Why Chinese regulations matter – the Chinese market is now the largest in the world and
expected to stay that way.

Figure 2.3: A concise summary of how criteria pollutants are challenging the worldwide automotive
industry.

Figure 2.4: While regulations are getting tighter, there is a limit to the effectiveness of ever stricter
regulations. This data shows how much cleaner the US EPA 2025 mandates are compared to 2015,
and in absolute terms.

Figure 2.5: US EPA CAFÉ for 2017 – 2025 adjust needed CO2 emissions (fuel economy) based on a
vehicle’s footprint.

Figure 2.6: Emissions and fuel economy regulations required a defined test procedure to ensure they
are being met and to ensure all vehicles were being judged equally.

Figure 2.7: An example of a test cycle conducted on a chassis dyno, this is the proposed worldwide,
harmonized test cycle as of 2013.

Figure 2.8: The intent is for RDE to not replace dyno tests but complement them.

Figure 2.9: Portable Emissions Measurement Systems, or PEMS, will be a key element in RDE test.

Figure 2.10: Crude oil prices adjust for inflation show a steep drop in 2015.

Figure 2.11: Sales projections from CARB using a mid-range, most likely scenario for ZEV regulatory
compliance in California.

Figure 2.12: ZEV model diversity is growing significantly through 2021.

Figure 3.1: The worldwide market for plug-ins, including BEVs and PHEVs, shows that China has
grown in 4 years to be the dominant market for plug-in vehicle volumes.

Figure 3.2: Sales of HEV vehicles sold in the US wax and wane, in concert with inflation adjusted fuel
prices among other factors.

Figure 4.1: Efficient turbocharged gasoline direct engines, GTDI, make engines more efficient over a
wider range of loads and speeds, improving fuel economy.

Figure 4.2: Note the vast differences in take rates for various engine technologies by region predicted
by IHS Automotive by 2020.

Figure 4.3: Ricardo advocates incremental costs towards achieving needed improvements in fuel
economy.

Figure 4.4: The Achates OPGCI engine prototype in a Ford F-150 shows the practicality of such advanced engines in practice.

Figure 4.5: ExxonMobil projects that commercial transport will drive future fuel demand, driving up a
demand for diesel.

Figure 4.6: Steady improvements in fuel consumption per unit of horsepower is shown.

Figure 5.1: This illustration shows the inner workings of a lithium-ion battery.

Figure 5.2: Notional diagram of battery operation for the three recognized modes of electrified powertrains, illustrating why batteries are oversized.

Figure 5.3: Specification for commercializing a suitable battery for an electric vehicle.

Figure 5.4: Using basic assumptions, $100/kWh provides cost parity to a fuel-efficient passenger car
in North America.

Figure 5.5: using the same cost model using prices average in Germany and $250/kWh seems a reasonable cost for battery storage to achieve price parity with gasoline passenger cars.

Figure 5.6: Status of energy batteries against end-of-life goals as evaluated by USABC and USCAR in
December 2015.

Figure 5.7: Lithium -ion installed battery manufacturing capacity by supplier, Q! 2017 in GWh.

Figure 5.8: Motivation for pursuing advanced electric batteries – the potential to rival gasoline energy
density.

Figure 5.9: According to Bloomberg in 2016, automotive traction battery in 2020 was estimated to be
above $200/kWh on average.

Figure 5.10: By 2018, battery price estimate for 2020 is placed above an average of $143/ kWh.

Figure 5.11: The latest calculations to date and future projections of battery costs for use in xEVs from
Bloomberg New Energy Finance.

Figure 5.12: The authors of an academic study pointed out that the future projected cost of Li-Ion batteries in 2020 will decrease over time. In this figure the prices are ranked from low to high, which also
coincides with when the price was predicted.

Figure 5.13: Current cost projections show the industry closing in on USABC EV battery goals.

Figure 6.1: In a survey conducted by Morpace, the conventional ICE engine remains consumers number one choice, followed closely by hybrids and GTDI as second and third.

Figure 6.2: Impact of government incentives can be powerful. As an example, when Norway in 2015
enacted legislation favoring plug-ins over battery electric vehicles, the vehicle mix changed dramatically.

Figure 6.3: The Rogers Innovation Diffusion curve is well accepted approach to understanding the
demographics of potential users.

Figure 6.4: Global sales of PHEVs and BEVs as a share of the market less than 1.5%.

Figure 6.5: A study by U.C. Davis showed that the same group of people in California were purchasers
of plug-in electric vehicles.

Figure 6.6: With an appropriately sized battery for a range of 150 miles, a BEV costs less to operate
than a comparable ICE powered car.

Figure 6.7: Data compiled by General Motors indicates that greater than 70% of potential EV buyers
would be satisfied with a BEV that had a range greater than 200 miles on a single charge.

Figure 7.1: Continental’s vision of a light duty market dominated by conventional powertrains by 2025
is commonly held in the industry, within certain parameters (reformatted), in millions of units worldwide.

Figure 7.2: A variant chart from the Consensus view of light duty powertrains based on a scenario with
drivers that favor lower technology powertrains, in millions of units worldwide.

Figure 7.3: An aggressively optimistic projection of electrified and high technology light duty powertrain distributions as a variant on the Consensus Model, in millions of units worldwide.

Figure 8.1: Proterra’s battery electric buses are proving to be cost competitive in terms of Total Cost of
Ownership compared to diesel buses in part because of their simplicity and ease of maintenance.

Figure 8.2: The 400-mile range R1T battery electric truck from vehicle start-up Rivian was revealed
at the Los Angeles Auto Show in November 2018. While shown here in an urban environment, its
architecture is much like an ICE powered light truck best suited for suburban or rural – following a
common trend in BEVs to mimic their ICE powered competitors rather than develop their own unique
strengths.

Figure 8.3: The very early start-up Quadrobot shows a way that a BEV can create a completely new
category of vehicle, this one aimed at local urban delivery but could easily be adapted to personal
use as an urban “errand runner.”

Figure 8.4: According to EV Volumes.com, China’s growth and dominance in electrified vehicles is
growing. These figures are year-to-year comparisons from 2017 to 2018.