Society of Automotive Analysts Strategic Planning Summit... · Body Architecture Mild Steel 1 -...
Transcript of Society of Automotive Analysts Strategic Planning Summit... · Body Architecture Mild Steel 1 -...
Society of Automotive Analysts
Strategic Planning Summit Dave Andrea
Center for Automotive Research
September 13, 2016
The Center for Automotive Research (CAR)
Automotive industry contract research and service organization (non-profit ) with more than 30 years experience forecasting industry trends, advising on public policy, and sponsoring multi-stakeholder communication forums.
• CAR conducts leading edge Research that impacts
the future of the global automotive industry.
• CAR hosts Events and Conferences that engage
industry leaders in the discussion of critical topics.
• CAR’s Affiliates — automotive manufacturers and suppliers
benefit from advance access to research results, exclusive networking, and participation in working groups.
CAR Research Themes (current iteration)
• Mobility Networks- investigating passenger and cargo models for access, purchase, and operation
• Public Policy Initiatives – exploring the regulation, legislation, and economic incentives to deliver societal goals
• Industry Impact – understanding financial and human capital, global trade and investment and economic development
• Human Capital Needs – assessing the industry’s stock and future need of human talent and skills
• Product and Manufacturing Technology Requirements – evaluating future product designs, materials, engineering, procurement, manufacturing, and sales/service ……………………………….
• Industry 4.0 Futuring – mapping tomorrow’s industry, product, and manufacturing and business processes transformation
Industry Meeting Current CAFE Mandate CAGR;
It is Keeping up with the Future is the Question
18.0
26.0 27.5
33.3
55.3
19.9
36.5
17.5
20.7
39.3
18.2
26.4
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
55.0
60.0
Mile
s p
er
Gal
lon
(m
pg)
Model Year
PC Standard PC Performance LT Standard LT Performance
Source: NHTSA 2009, NHTSA 2011, and NHTSA 2014
Midterm Evaluation (MTE) Three Step Process
Final Determination due by April 1, 2018 (no joke)
Gasoline Prices (Real)
January ‘03 – June ‘16
$2.19 $2.50
$3.47 $3.49
$3.61 $4.43
$2.91 $3.11
$4.12 $4.04 $3.79 $3.68
$2.92 $2.81
$2.37
$1.00
$2.00
$3.00
$4.00
$5.00Ja
n-0
3
Jul-
03
Jan
-04
Jul-
04
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
Source: EIA
Do
llars
pe
r G
allo
n
Positive Economic Factors/CAFE Headwinds
Increase/decrease in gasoline prices by $1.00 per gallon results in an increase/decrease in the small car/EV market share 1.1 percent.
For every $1,000 increase/decrease in
PDI, small car/electric vehicle share
will decrease/increase by .50 percent.
For every 100 basis point increase/decrease in
unemployment rate, small car/electric vehicle
share will decrease/increase by .6 percent.
U.S. Light Vehicle Sales By Cars and Trucks
1976 – July 2016
0%20%40%60%80%
100%1
/1/1
97
6
10
/1/1
977
7/1
/19
79
4/1
/19
81
1/1
/19
83
10
/1/1
984
7/1
/19
86
4/1
/19
88
1/1
/19
90
10
/1/1
991
7/1
/19
93
4/1
/19
95
1/1
/19
97
10
/1/1
998
7/1
/20
00
4/1
/20
02
1/1
/20
04
10
/1/2
005
7/1
/20
07
4/1
/20
09
1/1
/20
11
10
/1/2
012
7/1
/20
14
4/1
/20
16
Cars Share of Sales Light Trucks Share of Sales
Source: BEA
Segment Breakdown - U.S. LV Sales Percent Change
July YTD 2016 vs July YTD 2015
-9.7%
-9.4%
-6.7%
-3.4%
-2.5%
4.0%
4.8%
6.1%
22.1%
38.5%
1.1%
-20% -10% 0% 10% 20% 30% 40% 50%
Middle Car
Luxury Car
Small Car
Large Car
Large CUV
Middle CUV
SUV
Pickup
Van
Small CUV
Total
Source: Ward’s Automotive Reports
SOLUTIONS ARE APPARENT TO CONSUMERS
Agencies’ Technical Assessment Report Assumptions, 2025 GHG CAFE
Turbocharged and downsized gasoline engines 33% 54%
Higher compression ratio, naturally aspirated gasoline engines 44% <1%
8-speed and other advanced transmissions 90% 70%
Mass reduction 7% 6%
Stop-start 20% 38%
Mild hybrid 18% 14%
Full hybrid <3% 14%
Plug-in hybrid electric vehicles <2% <1%
Electric vehicle <3% <2%
Environmental Protection Agency and National Highway Traffic Safety Administration Technical Assessment Report Table ES-3
2025 Pathways Diverge Between Agencies
And with Industry –
Particularly with Electrification
Industry greatly disagrees,
– expecting 5 to 10 times more electrification.
2025 Light-duty Vehicle Fleet
Advanced Gasoline Vehicle Technologies
Electrification - Strong hybrids 3% - EV/PHEVs 4%
Regulators say few electrics needed…
2.6%
0.00
1.00
2.00
3.00
4.00
0
100
200
300
400
500
600
Pe
rce
nt
of
LV S
ale
s (%
) R
eal
Gas
Pri
ce (
$)
U.S
. Ele
ctri
fie
d S
ale
s (0
00
’s)
Electrified LV Sales % of LV Sales
U.S. Electrified Light Vehicle Sales
and Take Rate 1999 – 2016 June YTD
Note: Electrified vehicles consist of BEV, HEV and PHEV
Source: Ward’s Automotive Reports, HybridCars.com and CAR Research; EIA
Gasoline Saved for Incremental Fuel Economy Improvement
And the Customer Demands a Three-Year Payback
0
20
40
60
80
100
120
140
10 20 30 40 50 60 70
An
nu
al g
allo
ns
save
d p
er
MP
G im
pro
vem
en
t
Miles Per Gallon
40 Gallons 600 Gallons 200 Gallons 100 Gallons 60 Gallons 28.5 Gallons
(area under curve represents total fuel saved for that increment per year at 12,000 miles per year)
Source: CAR Research
Technology Pathway and Relative Cost
Mild Steel BIW Mild Steel Closures
HSS BIW Mild Steel Closures
AHSS BIW HSS/Al Closures
AHSS/UHSS BIW Aluminum Closures
Aluminum Body Aluminum Closures Magnesium I.P. beam & seats
The steps get bigger
Carbon Fiber/Al. Body Aluminum/Mag. Closures Mag. I.P. beam & seats
MY 2015 Representative Vehicle
Cost ($/lb.)
NET Mass Reduction Percentage
5% 10% 15% 0%
$X
$3X
$6X
Net Mass Reduction = (Mass Reduction) – (Weight add-back)
The lightweighting cost and vehicle performance varies significantly for each of these vehicles
Which truck is more expensive to lightweight?
Model Year 2011
Curb Weight 4,800 lbs1
Platform Launch 1998
Body Architecture Mild Steel
1 - 4.3L V6 Regular Cab Short Box 2 - 4.3L V6 Regular Cab Short Box 3 - 3.5L V6 Regular Cab Short Box
Model Year 2015
Curb Weight 4,050 lbs3
Platform Launch 2014
Body Architecture Aluminum
Model Year 2015
Curb Weight 4,521 lbs2
Platform Launch 2014
Body Architecture High Strength Steel
0%
Cars – 4.71% Trucks – 4.88%
Safety Performance* Safety Performance
AVERAGE % cost reduction per year
2.45% 2.26% 1.85% 3.03%
Agency Recognition
Net Mass Reduction = (Mass Reduction) – (Weight add-back)
Weight Add-Back
*Performance – NVH, torsional rigidity, handling
Time Period AHSS/UHSS Aluminum Magnesium Composites
AVERAGE % cost reduction/year
2012-2021 0.80% 1.30% 1.13% 1.80%
2022-2027 0.56% 1.26% 0.88% 2.36%
3% / year 2% / year
Agency Recognition
Industry does NOT agree with the learning factors applied uniformly for all materials in the agency analysis
Learning Curves
Direct Manufacturing Cost Reduction between 2012-2027
Agencies OEMs
32% 10-17% Metals 26% Composites
CAR Calculated Mandate Rate = 1.86
• Retail Price Equivalent = 1.5
• Corrected for dealership gross margin rate
• Corrected for vehicle sales tax
• Corrected for incremental consumer financing
• Corrected for incremental insurance costs
There is no average…
Manufacturers are pursuing many technology pathways. No two manufacturers have the same product and technology portfolio,
nor fuel economy strategy. Therefore, applying an “industry average” for technology cost or implementation may be
misleading. Some manufacturers will bear a much greater burden than other manufacturers.
Impact on U.S. Automotive Industry, 2016-2025 Long Run Demand Impact
Baseline -1.30% -4.95% -8.60% -0.76% -4.41% -8.06% +0.82% -2.83% -6.48%
GAS Price/Cost of
FE -
$2.44/ $2,000
$2.44/ $4,000
$2.44/ $6,000
$3.00/ $2,000
$3.00/ $4,000
$3.00/ $6,000
$4.64/ $2,000
$4.64/ $4,000
$4.64/ $6,000
Total MV
Expenditure
($Billion)
$792 $782 $753 $724 $786 $757 $728 798 770 741
Impact of 2025
CAFE
($Billion)
- -10.0 -39.0 -68.0 -6.0 -34.9 -63.9 +6.5 -22.4 -51.4
Vehicle Price (2025$)
$42,491 $43,397 $45,940 $48,483 $43,022 $45,565 $48,108 $41,922 $44,465 $47,008
Light Vehicle
Sales (Million
Units)
18.64 18.01 16.39 14.93 18.27 16.61 15.14 19.05 17.31 15.76
Light Vehicle
Production
(Million Units)*
12.93 12.59 11.68 10.86 12.73 11.80 10.98 13.17 12.19 11.32
Automotive
Employment 862,000 839,100 778,400 724,100 848,700 787,000 731,700 877,700 812,800 754,900
*Include vehicles for export
20
Sources: CAR Research 2015
Thoughts and Observations
to Align Market and Policy • Raise gasoline/fuels taxes to ensure fuel economy technologies are a net benefit to
consumers and to prevent a rebound in VMT . . . All the way to consider replacing the CAFE program entirely with a sufficient carbon tax on motor fuels.
• Provide strong hybrids (HEVs) and plugin hybrids (PHEVs) sacrifice less in terms of standard vehicle attributes and may result in a larger number of miles traveled on electricity than BEVs because of their potentially higher sales volumes and travel miles per year.
• Provide additional off-cycle credits for advanced fuel economy technologies to encourage commercialization by overcoming price inflation and to support the development of new supply chains for light-weighting materials and advanced ICE and EV components.
• Provide the industry an additional five years assuming further long-term development for customer needs to accept such vehicles and the industry to produce these technologies at a more affordable cost and develop an adequate infrastructure.