market trends and expectations for the uk and …...hetal shah, senior project manager, go ultra low...

SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED SMMT, the ‘S’ symbol and the ‘Driving the motor

industry’ brandline are trademarks of SMMT Ltd

New cars and their powertrains

Market trends and expectations for the UK and globally

24 September 2014

Mike Hawes, Chief Executive, SMMT

Robert Baker, Chief Economist, SMMT

Al Bedwell, Director, Global Powertrain, LMC Automotive

Hetal Shah, Senior Project Manager, Go Ultra Low

SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED PAGE 2

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SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED SMMT, the ‘S’ symbol and the ‘Driving the motor industry’ brandline are trademarks of SMMT Ltd

New cars and powertrains – where next

Robert Baker - SMMT

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A chequered past Vehicle specifications, styles & status – real alternatives

Sinclair’s C5 (C10 & C15)

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Recent legacy radical change challenging Convincing : needs, ability, willingness and confidence

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Firmer footings for the future – at 2014 More car choice, improving connectivity and convenience

PURE ELECTRIC (PI) OTHER ELECTRIC HYBRID

AUDI (2)

BMW (2) BMW (3)

CHEVROLET (1)

CITROEN (1) CITROEN (1)

FERRARI (1)

FORD (1)

HONDA (3)

INFINITI (3)

MIA* (1) LEXUS (5)

MITSUBISHI (1) MITSUBISHI (1) MERCEDES (3)

NISSAN (1) LAND ROVER (2)

PEUGEOT (1) PEUGEOT (2)

PORSCHE* (1) PORSCHE (3)

RENAULT (2)

SMART (2)

TESLA (1)

TOYOTA (1) TOYOTA (4)

VAUXHALL (1)

VOLVO (1)

VolksWagen (1) VolksWagen (1) (= no. of ranges) Based on data to August 2014 = 58% of 2004 AFV volume


Key initiatives, events and policy (1) Transport, Environment, and vehicle-based taxes

1997 to early 2000’s – voluntary EU CO2 new car reduction agreement

Powershift Programme (EST); Cleaner Vehicles Task Force; Foresight Technology Programmes visions and road maps;

Coventry & Edinburgh trials and ‘dash for gas’ (LPG)

Graduating (CO2) VED and Company Car Tax begins

Fuel Duty escalator embedded . TfL and Congestion Zone

early 2000’s to 2009 – mandatory EC CO2 new car regulations

A new approach to Transport – integrated vision, local focus.

Reporting2006/07: Stern, Eddington and King (electrification)

Road pricing a missing link. Greener Driving campaigns.

Local Transport and Climate Change Acts (2008); DECC born.

Carbon Budgets. Green Economy decarbonising transport

Fuel Duty (on-off escalators); CO2 tax parameters adapt


Key initiatives, events and policy (2) Transport, Environment, and vehicle-based taxes

2010 to date – new car CO2 target 130gm/km 2015

NAIGT - Automotive Council refreshed technology road

maps. UK Governments Automotive Sector Strategy (2013)

OLEV (1) and ULEV support package(2)

Escalating motoring taxes values now on back-burner

Campaigning continues – go ultra-low 2014

UKH2Mobility. City Car share/hire – Renault/Bollore

2015 to 2020 – new car CO2 target 95gm/km 2021

OLEV (2) and market fermenting (switching converts)

CCT regime tightens further for ULEV

Broader reform(s) of motoring taxes likely

London ULEZ 2020; other local & city-based policies revisited


UK’s rear view mirror – diesel alternative

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UK new car registrations and fuel types - number of cars

Petrol

Disesel

AFV

AFV - numbers (rhs)


Current UK trends – work in progress

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35,000 UK Alternatively fuelled cars - number of new registrations

Petrol/gas Petrol/electric Diesel/electric

Petrol/alcohol Electric


UK trends 2000-2013 – Toyota’s early lead

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35,000 UK Alternatively fuelled cars - number of new registrations

Toyota Toyota Prius HB All


Trends post 2010 – consistent growth

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UK car registrations, all cars, all AFV and Electric in AFV total: rolling year trends monthly from Dec 2007 to date

ALL CARS

AFV

PURE ELECTRIC


Uncertain road ahead – take-off possibly?

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UK new car registrations fuel types - number of cars in millions

Petrol Disesel AFV AFV - numbers (rhs)


Switching and connected future; a slow

burner or major and rapid transformation?

Synthesis of recent studies – RAC Foundation (2013)

Market Shares of new car^ sales

(spatial bases vary, ‘Europe’ typical)

Source: RAC Foundation Report Powering Ahead tables 5.1.2 to 5.1.6: Chapter 5

^ predominantly cars, some light vehicles

EV type 2020

Hybrid electric vehicles (HEV) 5% to 20%

Plug-in Hybrid electric vehicles (PHEV) 1% to 5%

Range Extended electric vehicles (REEV) 1% to 2%

Battery electric vehicles (BE) 1% to 5%

All Advanced electric vehicles (PHEV + BE) 2% to 10%

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A chequered past – more varied future real alternatives – uncertain reception

the mix of stable technologies that will gain significant market shares is very circumspect; not just hinging on comparative total ownership costs

Engineering durable, manufacturable, commercially viable – sustainable, scalable supply advantages

Strategically marketed – sustainable differentiation

Campaigning – conviction on the need to change

On-going fiscal aid balancing firmer regulation; enhanced demand management on take-up, use and reuse

Favourable and stable macroeconomic setting with a strong driver from fuel (or carbon) prices

www.lmc-auto.com © 2014 LMC Automotive Limited, All Rights Reserved.

Hybrid & EV Market Assessment UK Prospects and Projections Oxford, September 2014

Al Bedwell, Director, Global Powertrain, LMC Automotive

www.lmc-auto.com © 2014 LMC Automotive Limited, All Rights Reserved. 17

Outline

• Hybrid & EV Definitions

• UK Hybrid & EV Market Development

• OEM Activity

• Drivers

• Outlook

• Powertrain Long-Term View


MHEV: Mild Hybrid Electric Vehicle

• IC & electric motor(s) working in parallel. Not usually able to drive under electric power alone. Electric assistance greater than 5kW, but less than 30kW. Typical figure is 10kW to 15kW.

HAV: Hybrid Air Vehicle

• Similar to MHEV but rather than recovered energy being stored in a battery, it is stored as compressed air in a cylinder. It can be released as required to boost performance & efficiency

FHEV: Full Hybrid Electric Vehicle

• IC & electric motor(s) working in parallel. Can be driven for short distances under electric power alone. Electric assistance greater than 30kW. Typical electric assistance: 60kW- 165kW.

PHEV: Plug-in Hybrid Electric Vehicle

• Full hybrid electric vehicle with larger battery pack which can be recharged from the electricity grid thereby enabling a longer electric-only driving range of 30m (50Km) or more.

BEV: Battery Electric Vehicle

• There is no IC engine. Relies on energy stored in battery to provide propulsion via electric motor(s). Recharged from electricity grid or other source of electricity.

EREV: Extended Range Electric Vehicle

• A battery electric vehicle with an on-board charger (comprising IC engine + generator) for the battery pack to enable a longer range than BEV. The IC and electric motor(s) operate in series.

FCEV: Fuel Cell Electric Vehicle

• Similar to BEV but the battery is replaced by a fuel cell. The fuel (typically hydrogen) is processed on-board in a fuel cell stack to generate electricity for powering electric motor(s).

Hybrid

EV

Plug-in

Non Plug-in

Non Plug-in

Hybrid & EV Definitions


Outline



• OEM Activity

• Drivers

• Outlook



0.0%

0.5%

1.0%

1.5%

2.0%

2007 2008 2009 2010 2011 2012 2013 2014H1

BEV EREV FHEV MHEV PHEV

UK Car Market: Hybrid & EV Share by Technology Type

• 2014 has seen a significant uptick in interest

• However it is the ‘traditional’ hybrid sector that is driving recent growth

Source: LMC Automotive Global Hybrid & EV Forecast

UK: Hybrid & EV Demand Trend

23

,30

0 (

hal

f ye

ar)

16

,30

0 3

2,7

00


0%

5%

10%

15%

20%

25%

UK France Germany USA China Norway Japan

BEV EREV FHEV MHEV PHEV

Hybrid & EV Share of Car* Sales: Selected Global Markets

Some Global Context

Source: LMC Global Hybrid & EV Forecast; * US share is of LV market (cars and trucks)

• UK position is a result of incentives, OEM mix & alternatives to hybrid & EV

• Norway and Japan show what can happen!


Outline



• OEM Activity

• Drivers

• Outlook



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lvo

VW

BEV EREV FHEV PHEV FCEV MHEV HAV

Nu

mb

er

of

Hyb

rid

s &

EV

s A

vaila

ble

Major OEMs: Hybrid & EV Model Assumptions by end 2014

• We currently see an even split between plug-in and non plug-in sectors

• The full-hybrid sector makes up the biggest component

UK: OEM Product Development, Strategy

Breakdown Total models: 60 BEV: 15 EREV: 1 FHEV: 23 PHEV: 14 FCEV: 1 MHEV: 6 HAV: 0 Plug-in: 30 Non Plug-in: 30

Source: LMC Global Hybrid & EV Forecast


0.0

0.3

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1.2

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2014 2015

FHEV PHEV BEV

Shar

e o

f V

W G

rou

p L

V A

sse

mb

ly (

%)

VW Group near-term PV Hybrid & EV Plans

• More than 65% of 2015 VW group hybrid & EV output will be PHEV

• There seems to be a cautious approach to the BEV sector

An OEM View on Electrification

Total: 66,000 units

Total: 33,000 units

0.7

% o

f g

rou

p o

utp

ut

Source: LMC Automotive European Engine & Transmission Forecast

1.3

% o

f g

rou

p o

utp

ut

Hybrid & EV models: BEV E-Up! E-Golf FHEV Q5 hybrid A6 hybrid A8 hybrid Cayenne hybrid Touareg hybrid PHEV A3 e-tron Q7 e-tron Panamera S e-hybrid 1-litre (XL1) Golf GTE


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VW

BEV EREV FHEV PHEV FCEV MHEV HAV

Major OEMs: Hybrid & EV Model Assumptions by end 2017

• Plug-in grows faster than non plug-in (especially in the premium segments)

• Most OEMs will offer three or more technologies

UK: OEM Product Development, Strategy

Breakdown Total models: 137 BEV: 26 EREV: 1 FHEV: 36 PHEV: 58 FCEV: 5 MHEV: 7 HAV: 4 Plug-in: 85 Non Plug-in: 52


Nu

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Outline



• OEM Activity

• Drivers

• Outlook



Drivers • Global warming - CO2 mandate

• Air quality concerns

• Desire for sustainable mobility

• Direct/indirect incentives

• Electric operation seen as luxury feature

• Opportunity to reconfigure car architecture

• Image

• Technology enablers (vehicle & charging)

• Political will

• Halo effect for vehicle maker

• Roadmap to future technology

• Possible lower operating costs

• Reduced fuel costs

• Better performance

• Autonomous driving

UK: Why Choose Hybrid & EV (or Why Not)?

Headwinds • Model choice

• Battery capacity, range (EV)

• Recharging time (EV)

• Battery cost (EV)

• Charging infrastructure (EV)

• Only partial solution to sustainability

• Well-to-wheel gain may only be 10% over IC

• EVs may raise emissions in some areas

• Possible reduced utility

• Industry is massively invested in IC

• Battery recycling?

• Lower residual values?

• Fear of change

• Compromised design to offset cost of PT

• Question mark over EV residual values


0%

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40%

60%

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100%

low base highIC Optimisation Hybrid & EV Vehicle Measures

Inputs to 95gm/km: Scenarios • Many factors will play a part in

meeting CO2 targets

• We can make assumptions regarding the contribution of the combustion engine and transmission, the vehicle itself and of electrification

• Vehicle measures include:

• Segment changes • Trends in vehicle mass • Aerodynamics • Rolling resistance • Ability to coast • …


Closing the CO2 Gap: What Technology Mix?

127 gm/km

(2013)

95 gm/km

(2021)


Outline



• OEM Activity

• Drivers

• Outlook



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2013 2024 low 2024 base 2024 high

BEV EREV FCEV FHEV MHEV PHEV HAV

Hyb

rid

& E

V C

ar S

ale

s (‘

00

0s)

Source: LMC Automotive Global Hybrid & EV Forecast

2024 UK Outlook by Technology Type

• If our assumptions are correct, this trend will suffice for 2021 FE targets

• Battery breakthrough, lack of IC progress will increase the hybrid & EV mix

UK: Hybrid & EV Forecast by Technology

210,000 sales 8.3% share 71% plug-in 377,000 sales

14.9% share 75% plug-in

260,000 sales 10.3% share 69% plug-in

33,000 sales 1.4% share 12% plug-in


Outline



• OEM Activity

• Drivers

• Outlook



hybrid

1.3% cng/lpg/flex

0.02%plug-in

0.2%

pure diesel IC

49.8%pure gasoline IC

48.8%

UK Car Market by Fuel & Technology: 2.26mn units

• Pure IC (gasoline/diesel/other) has 98.5% of the new car market

• When will this dominance end?

UK: 2013 Technology/Fuel Mix


hybrid

3.2%

cng/lpg/flex

3.0%plug-in

7.1%fuel cell

0.4%

pure diesel IC

38.8%

pure gasoline IC

47.5%

UK Car Market by Fuel & Technology: 2.54mn units

• By 2024, pure IC still has around 85% of the UK car market

• But hybrid & EV is making significant inroads

UK: 2024 Technology/Fuel Mix – Base Case


hybrid

8.0%

cng/lpg/flex

5.0%

plug-in

25.0%

fuel cell

4.0%

pure diesel IC

23.0%

pure gasoline IC

35.0%

UK Car Market by Fuel & Technology: circa 3mn units

• Pure IC still the dominant sector, but down to below 60%

• Electrification is the big winner with 37% market share

UK: 2030 Technology/Fuel Mix – Food for Thought


Thank You

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Go Ultra Low 2015 Business Case

What is Go Ultra Low?

37

Normal not novel Campaign to raise awareness,

interest and understanding of

ULEVs, establishing ULEVs as

‘normal not novel’

One stop shop Creating a trusted, honest

gateway for ULEV information,

cutting through consumer

uncertainty and advice variability

Collaborative Pioneering a new joint govt and

multi manufacturer consortium

approach

Increased sales Widening the sales funnel for

VMs and increasing the number

of ULEVs sold, including fleets

• Increase in

campaign reach

• Increase in positive

engagement with

campaign

Campaign KPIs

38

Increase in

awareness

of Go Ultra Low

Increase in

acceptance

of ULEVs

Improvement in

perceptions

of ULEVs

Improvement in

campaign

performance

metrics

Highly Successful Campaign

40

75% of new car buyers have taken action as a result of

seeing the campaign – seeking out more information,

speaking to friends or visiting OEM website

50% of campaign recognisers are thinking about buying

an ULEV, compared to 20% of the sample of all new

car buyers

45% campaign recognition among those who consumed

relevant media - excellent for campaign level of spend

17% reduced barriers to purchase (around speed,

performance and cost)

Increased understanding of ULEVs within target audience

(e.g. 27% decrease in strongly disagrees that “there are

lots of chargepoints”)

SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED

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market trends and expectations for the uk and …...hetal shah, senior project manager, go ultra low...

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