1 CO 2 reduction potentials for passenger cars until 22 Management Summary 11351
3 Table of Contents 3 Table of Contents 1 Summary Introduction and Methodological Approach Automotive Environment Analysis (WP1) Technological and Economic Potential Analysis (WP2) Development Scenarios of CO 2 Reduction Potentials (WP3) Technology Scenarios for the Development of the Reference Vehicles Lower Technological Limits of the Fleet CO 2 Reduction Potential Validation of Results by Expert Interviews (WP4) Derivation of CO 2 Targets (WP5.1) Strategic Implications for the German Automotive Industry (WP5.2)... 19
4 1 Summary 4 1 Summary In accordance with the objectives of the European Commission, the CO 2 emissions in Europe should be reduced from 141 g CO 2 /km in the year 21 to 95 g CO 2 /km in 22. This corresponds to a reduction of overall 32.6 % or 4.6 g CO 2 /year and represents a challenge for the European automotive industry. The present study investigates which CO 2 reduction potential can be achieved in the European new vehicle market in light of a technical and economical realistic background. Furthermore, measures and instruments which are necessary to prevent possible conflicts of interests are identified. In a first step, the European passenger car market was analysed and the composition of small (SEG-1), medium (SEG-2) and large sized cars (SEG-3) as well as the concerning drive train version, like gasoline, diesel, LPG/CNG and electric, were determined as status quo and the change until 22 was forecasted. Till the year 22, forecasts show a market share of battery electric and plug-in hybrid vehicles, which will change the market composition with an impact on the CO 2 fleet emissions. In the next step, all technological measures to reduce the CO 2 emissions were analysed and aggregated to technology packages gradually building upon one another with and without electrification of the drive train, in consideration of the reciprocal effects. Since the corresponding costs for the technology packages can t be charged completely to the vehicle manufacturers, they have to be passed on to the end customers. The performed cost/benefit analysis shows for the private and commercial end users the timeframe, when an amortization takes place, considering the individual driving performance and the corresponding fuel savings per technology package. As long as the amortisation is reached within 5-7 years, it is expected that the customers will decide for this technology. Within this study, the different framework conditions are considered within a conservative, a realistic and a progressive scenario. These differ especially concerning the development of fuel prices and the relation of the market price of the technology to the manufacturing costs. Within the realistic scenario, the expected CO 2 fleet emissions reach the level of g CO 2 /km. Thereby, the end users invest in average approx. 1,9 (market price) in technologies, which amortise after a holding period of 6 years. The resulting gap of 8 to 13 g CO 2 /km needs to be reduced by the industry e.g. using eco innovation or flexibility measures. The additional cost to meet the 95 g CO 2 /km target value totals to approx. 65 to 95 (manufacturing cost level) for the vehicle manufacturers. In the conservative scenario, this means a below-average fuel price development and an unchanged market distribution towards 21, the cost/benefit relation for the end user is lower, so that the target value of 95 g CO 2 /km would clearly not be reached. Whereas, in the progressive scenario, based on an above-average fuel price increase, a compliance of the 95 g CO 2 /km target is possible. The remaining gap would amount up to approx. 8 g CO 2 /km and could be closed for example with eco innovations.
5 1 Summary 5 The assumption of an equipment rate of 1 % for the most developed technology packages with the highest costs and the forecasted market distribution for 22 shows the theoretic maximum achievable CO 2 reduction potential. For the conventional technology path (3C), the emissions could be reduced to 9 CO 2 /km on average and for the hybrid technology path (3H) to 78 g CO 2 /km. The average technology manufacturing costs (material, manufacturing and development without distribution and VAT) per optimized vehicle aggregate for the conventional path to 2,687 on average and for the hybrid path to 4,981. Taking only the technical measures with the best cost/benefit ratio into account, it is possible to achieve the 95 g CO 2 /km target value for 2, of additional manufacturing cost. All in all, from the technological and economical considerations regarding the CO 2 reduction potentials it becomes apparent, that it is possible to reach the target value from a technological perspective using diverse technologies. However, the achievement of the needed high market penetration of fuel saving technologies will be particularly an economical challenge. Since the targets set by the EU clearly place the automotive industry under pressure, and since the pressure is not equally effecting all industry players, selected flexibility measures offer the opportunity to accelerate the development of needed technologies and incentivize advanced innovation. Here, super credits, eco-innovations, the credit/debit system and banking/borrowing, as well as emissions certificates can be taken into account. Additionally, the passenger car market can be controlled by various fiscal measures related to CO 2 emissions.
6 2 Introduction and Methodological Approach 6 2 Introduction and Methodological Approach In the white paper entitled A Roadmap for Moving to a Competitive Low Carbon Economy in 25, the European Commission (EC) defined its future vision for a sustainable and environmentally-friendly economy. The white paper specifies five core measures which will help to realize this vision, essentially focusing on emission reductions and efficiency improvements in all sectors of the economy. A central lever for the measures is the reduction of carbon dioxide (CO 2 ) emissions, which contribute to global warming. Following the energy and manufacturing sectors, road traffic currently produces approx. 23 % (14 % passenger and 9 % freight traffic) of all CO 2 emissions in the European Union (EU). In the year 21, the CO 2 fleet emissions were recorded for the first time by the European Environmental Agency and determined to 141 g CO 2 /km. The CO 2 limits for passenger cars started to gradually come into effect on January 1, 212. By 215, the average CO 2 emission levels for the new passenger car fleet in Europe must be reduced to 13 g CO 2 /km (-7.8 % to 21), and an average level of 95 g CO 2 /km is under consideration for 22 (-32.6 % to 21). The actually CO 2 target values a vehicle manufacturer has to keep is coupled to the average weight of its vehicle fleet. If an OEM exceeds the mass specific limits, penalties are imposed due to the level of overrun. In Germany, the automotive industry typically offers of a very wide portfolio of vehicles, so that large, heavy and highly motorized vehicles cause the highest pressure to act on emission reduction. In order to assess which CO 2 levels for the new passenger car fleet in Europe are realistic from a technical and economic point of view and which measures and instruments are necessary to avoid conflicts of interests, the Federal Ministry of Economics and Technology in Germany (BMWi) assigned the Institute for Automotive Engineering at the RWTH Aachen University (Institut für Kraftfahrzeuge ika) to perform the study at hand. The methodological approach is structured in different working packages (WPs). In WP1, the environment of the automotive industry is analysed and a detailed overview of CO 2 emission regulations for passenger cars in Europe, the USA and Japan is presented, along with the current and expected future development of the EU market size and the corresponding fleet composition. In WP2, the status quo of technologies is defined. Therefore, a portfolio of measures to reduce the CO 2 emissions for gasoline and diesel drive trains is created. Based on that, the single measures are analysed due to possible interactions with each other (WP3) and assembled to development scenarios stepwise building up on each other, according to the expected technological and economical application probability. For the validation of the results (WP4), interviews with experts of the automotive industry, as a primary data collection, are performed. Concluding (WP5), the CO 2 fleet emissions for the year 22 are derived, taking the technical and economical realistic framework conditions into account. Based on these results, strategic implications for the European automotive industry and politics are derived.
7 3 Automotive Environment Analysis (WP1) 7 3 Automotive Environment Analysis (WP1) The automotive industries in the core markets, Europe, USA and Japan, need to adapt to tighter CO 2 emission and fuel consumption regulations in the future. The official limits have to be considered relative to their appropriate test cycle. A standardized driving cycle is currently being developed through the work on the Worldwide Harmonized Light Duty Test Procedure (WL). Globally, the European Union has the most ambitious future targets for fleet CO 2 emission requirements. Japan closely follows, however the USA lags behind. The analysis of the current market composition shows that the percentage of small vehicles is higher in Europe than in Germany. The expected trend for both markets is a further shift towards small vehicles. Otherwise, a slight growth is expected for SUVs and vans. As for fuel types, the EU has a significantly higher share of diesel vehicles than Germany, which is however expected to exhibit growth in the share of diesel vehicles by 22. As for electric vehicles, it is estimated that approx. 5 % of the vehicles sold in Germany, and approx. 6 % of those sold in Europe in 22 will have electrified drive trains. These percentages include plug-in hybrids and electric vehicles with range extenders, in addition to battery-powered vehicles. The average CO 2 emissions of new passenger cars sold in Europe in 21 was 141 g CO 2 /km. While analyzing the CO 2 emissions of vehicles in Europe, it emerged that the sports, luxury, SUV, and upper-class vehicle segments were still far from meeting their respective 215 CO 2 limits. OEMs with fleets mainly in the smaller and medium-sized vehicle segments are relatively closer to meeting the limits. However, OEMs which have a broad fleet portfolio as well as those with a focus on the medium- and large-sized segments are further away from meeting their emission targets. Taking the OEMs planning horizons and required development times into consideration, a European regulation for 22 should be defined between five and ten years in advance. Production cycles have significantly shortened in the past years, and are mainly dependent on budget, resources and economic conditions. A change of the vehicle platform occurs every six to eight years, while drive train cycles last between 1 and 15 years. The introduction of vehicle models and engines is postponed to reduce complexity and reduce the possibility of mistakes. From a technological point of view, the timeframe needed to realize series production and vehicle launch in the market strongly depends on complexity, and ranges between 18 months and five years. Therefore, all OEMs still have in general at least one model-cycle before the regulations come into effect. The key results from WP1 are graphically summarized in Fig. 3-1.
8 3 Automotive Environment Analysis (WP1) 8 Distribution of Drive Concepts Distribution of Vehicle Segments SEG-3 13% 11% SEG-2 ( Status quo 21 9% 3% 1% 1% 25% 11% Status quo 21 27% SEG-1 ( 6 % 5 % 3 % 1 % 3 % 1 % 1 % 1 % 1 % 3 % 8 % 11 % A B C D M J E F S Total SEG-1 SEG-2 SEG-3 Legend: Consolidation and Forecast 22 SEG-1 SEG-2 SEG-3 21 Consolidation and Forecast Legend: Gasoline Diesel 22 Gasoline Diesel Electric Other 24 % 2 % 18 % 27 % 43 % 4 % 45 % 6 % % 6% 88 % 3% 86 % 5% 39% 75 % 79 % 81 % 45% 7 % 54 % 59 % 52 % 52% 35 % 5% 58% 4% 38% SEG-1 (A, B) SEG-2 (C, D, M, J) 55% 4% 22 Electric Other 41% SEG-3 (E, F, S) CO 2 -Emissions 21 CO2-Emissions [g/km] Note: The circular area of a segment correlates with the market volume. SEG-1 (122 g CO 2 /km) A 1.5 B M C S SEG-3 (18 g CO 2 /km) M SEG-2 (15 g CO 2 /km) D E J F Mass M [kg] Fig. 3-1: Key findings of the environmental analysis for Europe [Reference: refer to full report]
9 4 Technological and Economic Potential Analysis (WP2) 9 4 Technological and Economic Potential Analysis (WP2) In the second working point, a meta-analysis is performed on the technological potential of individual measures to reduce CO 2 emissions along with their respective costs. The results are presented and quantified for six reference vehicles with gasoline and diesel engines, in three consolidated segments, according to Fig Segment SEG-1 (A,B) SEG-2 (C,D,M,J) SEG-3 (E,F,S) Market share 21* 36 % 57 % 4 % Share Weight Fuel type in SEG [kg] Consumption [l/1km] CO 2 [g/km] Cylinder capacity [l] Engine 69 % Gasoline 1, cylinder - 31 % Diesel 1, cylinder x 33 % Gasoline 1, cylinder - 67 % Diesel 1, cylinder x DI Transmission Manual, 5-Gear Manual, 5-Gear Manual, 6-Gear Manual, 6-Gear 25 % Gasoline 1, cylinder x Automatic, 6-Gear 75 % Diesel 1, cylinder x Automatic, 6-Gear Power [kw] Fig. 4-1: Technical specifications of the reference vehicles [Reference: refer to full report] * Gas-powered and electric vehicles (BEV & PHEV) not included Measures affecting fuel consumption can be split between those which reduce road resistance and others which increase the efficiency of energy conversion. Rolling-resistance reducing tyres, aerodynamic measures and lightweight design reduce the driving resistances, while engine-related measures such as drive train electrification and gearbox optimization increase the efficiency of energy conversion. Engine-related measures can be further split according to the technical conditions of gasoline and diesel engines. Moreover, overall measures which are independent from engine type were identified, specifically those related to thermodynamics. Analyzing these measures shows that not all technically options have an impact within the New European Driving Cycle (NEDC). This creates a limited future possibility for further Eco-innovations. In addition to the measures mentioned so far, the electric drive trains of battery-powered vehicles and plug-in hybrids are considered in a scenario analysis in the coming segments of this study. The technologies which are described in detail in the final report are summarized in an aggregated overview showing potential, costs, and effect on weight per segment in Fig. 4-2 and Fig The results stemming from the technological and economic potential analysis form the basis of the calculations regarding the overall CO 2 emission reduction potential by 22.
10 4 Technological and Economic Potential Analysis (WP2) 1 Engine Electrification Gearbox Comprehensive measures Driving resistances Technology Savings [%] Cost [ ] Weight [%] Gasoline Technologies SEG-1 SEG-2 SEG-3 Savings [%] Cost [ ] Weight [%] Savings [%] Cost [ ] Weight [%] Direct injection, homogenous Direct injection, Stratified fuel charge Downsizing (Step 1) Downsizing (Step 2) Downsizing (Step 3) Cooled-/ High-load- EGR HCCI / CAI n/a n/a n/a Variable Compression 7. 5 n/a n/a 7. 6 n/a Valve control - variable (VVT) Valve control - fully variable Cylinder deactivation Micro-Hybrid Mild-Hybrid 13. 1, , ,5 3. Full-Hybrid 25. 2, , , 8. Gearbox optimization / Downspeeding Automated transmission Continously variable transmission (CVT) Dual clutch gearbox /8/9-Gear automatic Friction reduction in the drive train Electrification of auxiliaries Thermal management Heat-energy recovery (Rankine-Cycle) Heat-energy recovery (Thermoelectric generator) Tyres with reduced rolling resistance Aerodynamic optimisation Aerodynamic design Lightweight constr. - light (body) Lightweight constr. - middle (body) Lightweight constr. - strong (body) , ,2-12. Lightweight constr. - components Development state: Series development available by 214 Series development Pre-development Fundamental research 222 Fig. 4-2: Overview of technologies to reduce CO 2 emissions from gasoline vehicles [Reference: refer to full report]
11 4 Technological and Economic Potential Analysis (WP2) 11 Engine Electrification Gearbox Driving resistances Comprehensive measures Technology Savings [%] SEG-1 SEG-2 SEG-3 Cost Weight Savings Cost Weight Savings Cost [ ] [%] [%] [ ] [%] [%] [ ] Weight [%] Downsizing (Step 2) Downsizing (Step 3) Combustion control EGR - improved cooling and flow Variable Compression 4. 5 n/a n/a 4. 6 n/a Cylinder deactivation Valve control - fully variable Micro-Hybrid Mild-Hybrid 9. 1, , ,5 3. Full-Hybrid 22. 2, , , 8. Gearbox optimization / Downspeeding Automated transmission Continously variable transmission (CVT) Dual clutch gearbox /8/9-Gear automatic Friction reduction in the drive train Electrification of auxiliaries Thermal management Heat-energy recovery (Rankine-Cycle) Heat-energy recovery (Thermoelectric generator) Tyres with reduced rolling-resistance Aerodynamic optimisation Aerodynamic design Lightweight constr. - light (body) Lightweight constr. - middle (body) Lightweight constr. - strong (body) Lightweight constr. - components Development state: Series development available by 214 Diesel Technologies , , Series development Pre-development Fundamental research 222 Fig. 4-3: Overview of technologies to reduce CO 2 emissions from diesel vehicles [Reference: refer to full report]
12 5 Development Scenarios of CO2 Reduction Potentials (WP3) 12 5 Development Scenarios of CO 2 Reduction Potentials (WP3) The goal of WP3 is to deduce the CO 2 reduction potential of the new passenger car fleet in Europe by 22, based on the environmental and technological analyses conducted in the previous working points. 5.1 Technology Scenarios for the Development of the Reference Vehicles As a first step, the previously-identified technologies are evaluated and clustered into Technology Packages () based on a structured methodology. The evaluation criteria are CO 2 reduction potential, manufacturing costs based on series production levels in 22 and the temporal availability of these technologies. The technologies are initially assessed by cost and CO 2 reduction potential (left part of Fig. 5-1). Next, they are clustered into five s based on their efficiency and temporal availability. The temporal availability is assessed based on the stages of development, where each of series production and predevelopment have two s, one for conventional and another for hybrid technologies. After clustering, it became clear that the mild- and full-hybrid technologies trail behind conventional measures from a cost-efficiency point of view. They achieve similar CO 2 reduction potentials, however at a higher cost than the combination of several smaller conventional measures, as shown in the rightmost graph of Fig Methodology Result Cost Cost E 1 > E 2 > E 3 E 3 E 2 E 1 1 2C 3C 2H 3H CO 2 -Reduction CO 2 -Reduction 1) Primary selection of technologies with high cost efficiency 2) Stepwise expansion of the balance shell of a up to higher cost 3) Consideration of the temporal availibility and technological interactions Evolutionary technologies 1 Temporal availibility 2C 2H 3C 3H Revolutionary technologies Fig. 5-1: Methodology and qualitative results of the formation of Technology Packages Eq. 5-1 allows the assessment of the individual reduction potential percentages of the s. This calculation methodology is also applied in similar studies. The product of the deltas of the relative CO 2 reduction potential is taken into account in the calculation. The different effects of the technologies (such as synergies and reduction effects) are considered by a cor-
13 5 Development Scenarios of CO2 Reduction Potentials (WP3) 13 rection factor α. The results of the calculations are validated by comparison with vehicle prototypes and expert interviews which were conducted. n P i = α i [1 j=1 (1-δ j )] Eq. 5-1 P i : CO 2 reduction potential of α i : Correction factor (dependent on and fuel type) δ j : Relative CO 2 reduction potential of a technology n: Number of technologies in the The results of the iteratively-performed calculations for the reference vehicles are mapped in Fig The mapping shows the possible technological developments for the reference vehicles SEG-3 Gasoline SEG-3 Diesel SEG-2 Gasoline SEG-2 Diesel SEG-1 Gasoline SEG-1 Diesel X % Market share EU 22 (forecast) 14 % SEG-2 Base Gasoline 1 % SEG-3 Base Gasoline 2 % SEG-3 Base Diesel CO2-Emissions [g/km] C G 2, C G 1, % 3H G 3C 4,585 D 2,35 1, SEG-1 Base Gasoline 1 G 1,425 2H G 3,15 1,5 12 % 2C D 1,49 1,1 SEG-1 Base Diesel 3C G 1 D 78 2H D 2,15 3H D 4,345 1,15 2,295 3,45 2H G 3,415 1,2 1,25 2C G 3H G 5,535 1,3 1 G 1,145 3C D 2,69 1,35 Mass [kg] 1,4 1,45 2C G 2,675 3C G 3,595 2H G 3,75 1 D 2C 85 D 3H 1,69 G 6,7 3H D 5,185 2H D 3C D 2,815 3,115 1,5 1,55 1,6 1 G 1,425 SEG-2 Base Diesel 2C D 1,975 1,65 3H D 5,64 35 % 1 D 1,35 1,7 a 1=.457 2H D 3,1 a 2=.333 1,75 1,8 Fig. 5-1: Visualization of the CO 2 reduction potentials based on vehicle mass and segment 5.2 Lower Technological Limits of the Fleet CO 2 Reduction Potential After the technological potential for the defined gasoline- and diesel-powered reference vehicles has been defined and examined, the results are be projected to the overall European market. The goal of this process is to define the limits of the CO 2 reduction potential as a maximum theoretically achievable fleet potential, assuming a 1 % market penetration of the defined Technology Packages. It is assumed overall that the OEMs will select the most cost-efficient technology configurations. The defined s therefore reflect the most probable average con-
14 5 Development Scenarios of CO2 Reduction Potentials (WP3) 14 figurations of heterogeneous OEMs. The scenarios are calculated for both, the current overall market in 21 as well as the expected market in 22. For 21, a base value of 141 g CO 2 /km is considered. Only taking the expected market changes into account, and without any technological measures, the CO 2 emissions are going to decrease to 132 g CO 2 /km by 22. This is based on the expected trend of shifting to smaller cars as well as a 6 % market share of electric cars and plug-in hybrids. The lowest limit of technologically feasible CO 2 reduction for 22 is 9 g CO 2 /km for cars with conventional drive train technologies (3C) and 78 g CO 2 /km for cars with Hybrid technologies (3H), assuming a 1 % implementation of the Technology Packages and the realization of the expected market composition. The average technology production costs (consisting of manufacturing, development and overhead costs) would be 2,687 for conventional drive trains and 4,981 for Hybrids. Market composition constant (21) Market scenario 22 CO2-Emissions [g/km] % 22, % 2 1 % 2, , , Conventional 98 12,5 path 81 1, Hybrid path 7,5 5,29 2,971 5, 95 2,5 1,879 2,713 Base Temporal availibility Ø Production cost per vehicle (gasoline+diesel) [ ] CO2-Emissions [g/km] ,5 (141) 1 % 1 1 % 2, 2 1 % , , Conventional 12,5 93 path 78 1, Hybrid path 7,5 4,981 2,942 5, 939 2,5 1,853 2,687 Basis Temporal availibility Ø Production cost per vehicle (gasoline+diesel) [ ] Market 21 Gasoline Diesel Others Electric Total SEG-1 25 % 11 % 2 % % 38 % SEG-2 19 % 38 % 1 % % 58 % SEG-3 1 % 3 % % % 4 % Total 45 % 52 % 3 % % 1 % Market 22 Gasoline Diesel Others Electric Total SEG-1 25 % 12 % 3 % 1 % 41 % SEG-2 14 % 35 % 2 % 4 % 55 % SEG-3 1 % 2 % % % 4 % Total 4 % 49 % 5 % 6 % 1 % CO 2-Emissions (conventional path) Ø Production cost per vehicle (conventional path) CO 2-Emissions (hybrid path) Ø Production cost per vehicle (hybrid path) Fig. 5-2 Development scenarios with 1 % Technology Package Implementation in 22
15 6 Validation of Results by Expert Interviews (WP4) 15 6 Validation of Results by Expert Interviews (WP4) In order to validate the interim results of working points 1, 2 and 3, interviews with experts from the German automotive industry were performed. The interviewed OEMs and suppliers verified the core results themselves, while their opinions on the details varied. The interviewees assessed the Technology Packages themselves, as well as their overall CO 2 reduction potential. They specifically reviewed the individual technologies and measures regarding their effectiveness and impact. It was noticed that each interviewee followed a company-specific technology strategy which was in line with his/her individual position and respective company s strengths. The interviewees deemed the specified time-horizons for series production and the temporal availability of the s to be realistic and achievable. Opinions on the manufacturing costs however varied among the interviewees. The costs of 1 were valued at slightly lower or slightly higher than the ones presented to them in the interview, whereas the costs of 2C and 3C were estimated to be almost equal to, or slightly higher than the ones presented to them. However, all interviewees from German car manufacturers gave significantly higher costs for the hybrid drive train s. Regarding the future market shares of the vehicle segments in 22, the average replies of the interviewees varied only slightly from the status in 21. There was a high level of uncertainty regarding the drive train technologies. This uncertainty became obvious by the large amount of different responses given, some of which even clearly contradicted the others. The main uncertainty shown by all interviewees was regarding the actual market success of electric vehicles. The interviewees currently don t see the need to change the load distribution between massand premium-manufacturers, and as such the 95 g target should be set with the same framework as the 13 g limit. According to the interviewees, this target should be accompanied by some flexibility measures in order to provide incentives to develop and introduce low-emission and electric vehicles into the market early on. The most important flexibility measure would be a credit/debit system which promotes the early adoption of CO 2 -saving technologies. Moreover, super credits for electric vehicles should be valid for longer than they are currently planned. Based on the results of the expert interviews, the identified Technology Packages are kept unchanged for the following calculations, along with their total potential savings and total production costs. The retention of the results refers to the whole European car fleet with a mix of German and non-german car models as well as a volatility in technology costs. However, the higher costs for hybrid technologies in premium vehicles, which were indicated by the interviewees, will be reflected in the strategic implications for the German automotive industry (WP5).
16 7 Derivation of CO2 Targets (WP5.1) 16 7 Derivation of CO 2 Targets (WP5.1) As part of the derivation of the CO 2 emission targets, an economic model was developed to estimate the market penetration of fuel-saving technologies as a function of the key framework parameters. Customers will therefore be presented with all possible technology combinations, from the basic configuration to highly optimized hybrid vehicles. To represent the different development possibilities of the influencing parameters, three different development paths stem out of a scenario analysis. The two extreme factorcombinations form the conservative and the progressive scenarios, while the current trends form the realistic scenario, as represented in Fig Present Empirical data Future Energy and mobility costs Climate change and CO 2 -emissions Positive scenario Progressive scenario Trend scenario Realistic scenario Time Social development Information networking Negative scenario Conservative scenario Conservative scenario Lower fuel prices Market shares fixed to 21 status, without E-Mobility Higher production costs Interpretation: The low fuel prices slow down the market penetration of E-Mobility. This hinders the recovery of development costs, therefore increasing the price of such technologies. Realistic scenario Average fuel prices Market shares 22 forecast, including E-Mobility Average production costs Interpretation: Average fuel prices lead to a subdued demand for E-Mobility and fuel-saving technologies. The development will take place as expected. Progressive scenario High fuel prices Market shares 22 forecast, including E-Mobility Lower production costs Interpretation: The high fuel prices lead to increased demand for fuel-saving technologies. Through increased production, more learning effects can be achieved and passed on to the customers. Fig. 7-1: Overview of the different scenarios In the realistic scenario, given the expected market development, it would be very difficult to reach the 95 g CO 2 /km target with a 1,372 kg reference mass for the entire EU vehicle fleet, as represented in the centre graph of Fig Considering the 4 % to 8 % difference between the retail price and production cost (ΔPC in the graph), a difference of 8 to 13 g CO 2 /km from the target limit results. The technology combinations entailed by the realistic scenario result in an average cost increase of approx. 1,9 for end customers. The difference is small enough to be further reduced by the introduction of eco-innovations and flexibility methods. In the calculation of the difference, the reference mass M was adopted. If the mass is not continuously adjusted, the difference would increase even further.
17 7 Derivation of CO2 Targets (WP5.1) 17 If the given target values have to be achieved, then the gap of 8 to 13 g CO 2 /km needs to be closed with technological measures. Taking only the technical measures with the best cost/benefit ratio into account, it is possible to achieve the 95 g CO 2 /km target value for 2, of additional manufacturing cost. Since the end customers won t take over the complete cost, the additional cost to meet the target in the amount of 65 to 95 (manufacturing cost level) per vehicle need to be covered by the vehicle manufacturers. Thereby, the vehicle manufacturers with a product portfolio composed by rather large vehicles would have to cover higher costs in average. In the past ten years, an average of 3.4 g CO 2 /km was saved per year. The realistic scenario assumes that this average improvement in efficiency can carry on yearly until 22. It should however be noted that the effort required to maintain this yearly level of improvement does not remain constant, but rather increases with time. Conservative scenario Development of fuel prices in line with forecast study CAGR ca. 2.7 % B 22=1.84 B 23=2.41 D 22=1.78 D 23=2.35 Market shares fixed to 21 levels Higher production costs: PC 4 1 % Realistic scenario Development of fuel prices based on a constant CAGR of 4.7 % to 5. % B 22=2.38 B 23=3.8 D 22=2.25 D 23=3.77 Market shares in line with 22 forecast Average production costs: PC 4 8 % Progressive scenario Development of fuel prices based on a progressive CAGR of 6.5 % B 22=2.71 B 23=5.9 D 22=2.39 D 23=4.49 Market shares in line with 22 forecast Lower production costs: PC 2 6 % CO 2 fleet values [g CO 2/km] CO 2 fleet values [g CO 2/km] CO 2 fleet values [g CO 2/km] Ownership period in years Ownership period in years Ownership period in years PC 1% PC 8% PC 6% PC 4% PC 2% PC % Fig. 7-2: Results of the scenario analysis In the conservative scenario, the 95 g CO 2 /km target could not be reached (leftmost graph of Fig. 7-2). This is caused by the lack of vehicle electrification, low fuel prices and the therefore higher costs of fuel-saving technologies. The difference of approx. 16 to 37 g CO 2 /km would not be eliminated through additional measures, and this will result in high penalties for OEMs. In the progressive scenario, reaching the 95 g CO 2 /km target is possible (rightmost graph of Fig. 7-2). The expected market composition in 22 reduces the starting basis of the calculations. High fuel prices and lower production costs will make many technologies economically feasible within the observation period. The difference to reach the target values for the entire fleet would be a maximum of 8 g CO 2 /km.
18 7 Derivation of CO2 Targets (WP5.1) 18 In the conservative scenario, commercial and private customers would only invest an average of approx. 1,2 additionally for new technologies. In the progressive scenario however, customers are willing to invest approx. 2,25 for more expensive vehicles since they will generate significant savings for them in the future. The results of the CO 2 target analysis depend mainly on just a few factors. Costs and benefits of the technologies define the cost efficiency and the market success of the measures. Additionally, the technology costs should be in line with the costs of gasoline, diesel, gas and electricity, to assure that they can economically penetrate the market. The last important influencing factor is the development of the market and overall economy. This will determine the fleet composition by 22, and the possibilities that are available to private and commercial customers for investment in environmental technologies. The economic analysis of the fleet CO 2 emissions shows that a main future challenge will be to focus new passenger car sales on fuel-saving and highly efficient vehicles. In addition to developing the technological side, a demand for such technologies must also be developed. Therefore, the end customers have to be the core target group in the future.
19 8 Strategic Implications for the German Automotive Industry (WP5.2) 19 8 Strategic Implications for the German Automotive Industry (WP5.2) Since the 95 g CO 2 /km limit set by the EU cannot be achieved solely by the market, the need for action by OEMs is intensified. OEMs should design individual R&D strategies which meet their specific qualifications, in order to effectively take part in the CO 2 reduction megatrend and adapt to the resulting technology changes. R&D is becoming more difficult on a singleplayer basis, making it necessary to cooperate horizontally with other OEMs and vertically with suppliers, thus reducing costs and sharing risks. The generation of scaling effects is a central instrument to counter cost pressure. Economies of scale can also be generated by modularization, thus increasing the number of common parts across the model range. The market changes offer suppliers both chances and risks. The risks entailed include a changing product portfolio due to more CO 2 - and energy-efficient technologies such as downsizing or hybrid technologies. On the other hand, this change opens up many growth opportunities by shifting value from OEMs to suppliers. With the new technologies, new nonbrand-shaping automotive components will become part of the vehicles. The development and production of such components can be passed on from the OEMs to suppliers. The OEMs could focus instead on brand-shaping components, overall vehicle concepts, and brand image. In principle, suppliers also have the opportunity to sell their technologies to several OEMs and therefore realize economies of scale. The EC policy has the task to define the CO 2 guidelines for 22 and beyond on a European level, as well as the corresponding conditions. The CO 2 regulations set the relevant cornerstones of the EC s white paper A Roadmap for Moving to a Competitive Low Carbon Economy in 25 as well as its white paper on transport policy. The core regulatory challenge at the EU level is the development of a market for efficient and low-emission vehicles. The framework conditions and design cycle will be part of the discussion in addition to the actual value of the CO 2 limit while crafting current and future EU CO 2 legislations. Since the targets set by the EU clearly place the automotive industry under pressure, and since the pressure is not equal on all industry players, selected flexibility measures offer the opportunity to accelerate the development of needed technologies and incentivize advanced innovation. However, it is important to keep in mind that the goal of flexibility measures is not to weaken the existing CO 2 targets. Super credits, eco-innovations, the credit/debit system and banking/borrowing, as well as emissions certificates can be considered as measures to meet the 95 g CO 2 /km target in future. Additionally, the passenger car market can be controlled by various fiscal measures related to CO 2 emissions.