the expectation of electrification in the north …...the expectation of electrification in the...
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The Expectation of Electrification in the North America Finding Our Place in an Electric Future
Kevin Riddell, LMC Automotive 31st Annual Automotive Industry Outlook Conference, Detroit, January 14 2018
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• Current Market Conditions
• Electrification
• Competing Technologies
• Summary
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International Challenges
Electrek.co Nov. 27, 2016
CNBC.com Oct. 2, 2017
nytimes.com Oct. 2, 2017
cleantechnica.com Nov. 18, 2017
autonews.com Sep. 7, 2017
theguardian.com Jul. 25, 2017
economist.com Sep. 14, 2017
forbes.com Oct. 16, 2017
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• No expectation of a dramatic jump in global oil prices
• No help to electrification from fuel cost perspective
Brent Crude Price per Barrel ($)
Source: World Bank
Oil Price Outlook
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02468
10121416
Global EU Japan China
Mill
ions
xHEV BEV
0
0.5
1
1.5
2
2.5
3
Global EU Japan China
Mill
ions
xHEV BEV
2016 Electrified Vehicle Sales
Electrification Outlook for Key Regions 2023 Electrified Vehicle Sales
• Japan is early adopter in electrification penetration • China took BEV sales lead from US in 2015 • EU and US have similar volumes in 2016 but CO2 requirements push
EU to higher volumes in coming years
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• Rules for 2022-2025 re-opened • Now including possible
changes in 2021
• California ARB has issued a resolution stating the regulations should remain*
Source: C2ES.org, google maps, Midterm TAR
• Likely to keep ZEV regulations regardless of National CAFE/CO2 outcome.
• California and the other ZEV states make up 25-30% of US vehicle sales.
Domestic Influences
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California ZEV Changes Significant Differences Between
ZEV standards
Source: California Air Resources Board
PZEV: Partial Zero Emission Vehicle AT PZEV: Advance Technology Partial Zero Emission Vehicle TZEV: Transitional Zero Emission Vehicle
Year ZEV RequirementMinimum Actual ZEV
Requirement (for large mfgs.)
2012 12.0% 0.79%2013 12.0% 0.79%2014 12.0% 0.79%2015 14.0% 3.0%2016 14.0% 3.0%2017 14.0% 3.0%2018 4.5% 2.0%2019 7.0% 4.0%2020 9.5% 6.0%2021 12.0% 8.0%2022 14.5% 10.0%2023 17.0% 12.0%2024 19.5% 14.0%2025 22.0% 16.0%
- 2017 2018 +
PZEV yes noAT PZEV yes noTZEV yes yes
Small Mfg < 4,500 < 4,500Intermediate Mfg 4,500-60,000 4,500-20,000Large Mfg 60,001+ 20,001+
2018 legislation changes the way credits are calculated
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• Current Market
• Electrification
• Competing Technologies
• Summary
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• Battery pack wholesale cost is reckoned to be circa $200/kWh in 2017 • Should reach IC parity by 2025, but BEVs may not be profitable by then
Pack
Who
lesa
le C
ost (
$/kW
h*)
BEV Battery Pack Price Outlook
$190 (McKinsey)
$100 (McKinsey) $100 (US DOE, Tesla)
* Price based on Li-ion battery pack produced at US-based large battery plant (3GWh)
$73 (Bloomberg NEF)
Future
LMCA
200 Incentives needed IC parity BEV profit
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0
50
100
150
200
250
300
BEV Range Outlook Av
erag
e BE
V Ra
nge
(mi)
Without Tesla
• Increasing range has helped sales of existing BEV models • In the longer term, Tesla’s range advantage will narrow
Source: LMC Automotive, fueleconomy.gov
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Electrification Snapshot - USA
2016
BEV
FCEV
HEV
48V HEV
PHEV
• Next generation of California ZEV laws start taking affect with 2018 MY
• Fuel Cell models targeted to California • Current models seeing very limited sales • Fueling infrastructure still miniscule
Source: LMC Automotive
2016 Sales 2023 SalesBEV 73,200 423,700
xHEV 424,900 1,945,200
16
26
43
30
10
20
30
40
50
BEV PHEV HEV FCEV
Num
ber o
f Mod
els
USA - Hybrid/EV Type Model Count
2017 YTD
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Electrification Snapshot - Canada
2016
BEV
FCEV
HEV
48V HEV
PHEV
• Quebec has adopted ZEV regulations • Subsidies for plug-in vehicle purchase • Subsidies for 240v home charger installation
• Potential national ZEV policy will influence
future outlook
Source: LMC Automotive, JATO Dynamics
2016 Sales 2023 SalesBEV 4,900 19,800
xHEV 36,300 183,300
1119
26
00
10
20
30
40
50
BEV PHEV HEV FCEV
Num
ber o
f Mod
els
Canada - Hybrid/EV Type Model Count
2017 YTD
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Electrification Snapshot – Mexico
2016
BEV
FCEV
HEV
48V HEV
PHEV
• No large incentives
• Fewer brands offering electrics • Fewer models available per brand • Many brands only offer a single model
Source: LMC Automotive, JATO Dynamics
2016 Sales 2023 SalesBEV 200 400
xHEV 7,400 46,100
38 6
00
10
20
30
40
50
BEV PHEV HEV FCEV
Num
ber o
f Mod
els
Mexico - Hybrid/EV Type Model Count
2017 YTD
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0
500
1,000
1,500
2,000
2,500
3,000
2012 2016 2020 2024
Sale
s (Th
ousa
nds)
Mexico Canada USA
0%2%4%6%8%10%12%14%
0
500
1,000
1,500
2,000
2,500
3,000
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Tech
nolo
gy Sh
are
Sale
s (Th
ousa
nds)
BEV FCEV HEV 48V HEV PHEV Electrified Share
North American Electrification Outlook
• The US and Canada will drive higher volumes of HEV/BEV/FCEV vehicle sales
• Mexico is expected to hold North American market share down slightly due to a much slower adoption rate
Source: LMC Automotive, JATO Dynamics
NA Advanced Electrification Vehicle Sales Advanced Electrification Vehicle Sales by Country
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0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
BEV
Sale
s Vol
ume
US BEV Sales Forecast
LMC U.S. BEV Sales forecast
LMC California BEV Sales forecast
Actual California BEV Sales
BEV Sales Distribution
Source: LMC Automotive, drivingzev.com
• In the past couple years, California made up over 50% of US BEV sales but only accounted for around 10% of total US vehicle sales annually
• Charging network • High state
incentives • ZEV credits transfer
• Other states rolling out
strategies to improve BEV environment as sales have to spread more evenly
54%
41%
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BEV Sales Distribution
Source: energy.ca.gov, google maps
Key challenge: California is still has the best charging network
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Electrification Challenges • Competition for capital
• IC development, fuel cells • Autonomous development
• Electric grid capability
• Durability issues • Questionable battery longevity • Extreme climate performance
• Capability of cars within the next few years will exceed capability of most charging stations
• Lower residuals post lease leading to higher future leasing pricing
Autonomy FCEV
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• Current Market
• Electrification
• Competing Technologies
• Summary
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• Nobody is marketing diesels right now
• Market is gradually recovering: • Chevrolet Cruze, Colorado, Equinox • GMC Canyon, Terrain • Ford Transit • BMW X5 35d, 328d, 540d • Jaguar XE, XF, F-Pace • Land Rover Discovery/Sport, Range Rover/Sport, Range Rover Velar
• Demographic is changing: • 2014 19% diesel sales were cars • 2016 1% diesel sales were cars
Any Room Left for Diesel?
Jaguar F-Pace
Ford F-150
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How About Fuel Cells? • Significant progress in development
• Improved production processes decreasing costs • Decreased size • Improved stack efficiency • Increased competition • Toyota expects fuel cell car to carry same premium as an equivalent
hybrid by 2025
• Fleets are still primarily low-volume for research
• Retail fueling infrastructure in its infancy • Should not require upgrades to fuel pumps with advances in technology
• Durability?
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%20
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
1220
1320
1420
1520
1620
1720
1820
1920
2020
2120
2220
2320
2420
2520
2620
2720
2820
2920
3020
3120
3220
3320
3420
3520
3620
3720
3820
3920
40
BEV experiencing stronger growth in later years as capabilities allow for extension into rural USA
% o
f New
Car
Sal
es
Source: LMC Automotive Forecast
32%
IC-only (diesel)
BEV PHEV
MHEV+FHEV
FCEV
10%
22%
7%
11%
IC-only (CNG/LPG)
MHEV(48V)
15% IC-only (gasoline/E85)
3%
North American 2040 Electrification/Diesel Outlook
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• Current Market
• Electrification
• Competing Technologies
• Summary
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Limited money for investments needs to be balanced with IC in short term, fuel cells and autonomy further out Back to dual standard for CO2? Infrastructure ready outside of Cali? Will national incentives end too soon? Diesel strength in large/premium could slow hybrid gains in US sales Urban sprawl in the US requires a different electrification strategy than other global regions
Expectation Risk
Massive investments in electric development continuing on a global scale ZEV and fuel economy regulations will ensure an increasing demand for electrified models outside of California Diesel is a strong option for larger vehicles, fuel cells seen as longer-term goal Significant hurdles toward widespread BEV acceptance in US still to be overcome
BEV
In Summary BE
V O
ther
s BE
V
For any further questions, please contact: [email protected]
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