Clean Diesel Power 2013 update. Tom Fulks Diesel Technology Forum

Transcription

1 Clean Diesel Power 2013 update Tom Fulks Diesel Technology Forum

2 Agenda Policy Issues in Play The Current Condition Heavy duty commercial vehicles The latest on new diesel cars New Research - Benefits of new technology

3 Issues we have issues Climate Change Black Carbon Renewable fuel standard (RFS) & California Low Carbon Fuel Standard (LCFS) Heavy-duty fuel economy requirements (2014, 2017) Vehicle CAFE standards 54.5 by 2025 Emissions and Air Quality Off-road large engine emissions milestone Jan. 1, 2014 (U.S. EPA Tier 4) Light-duty emissions rules (CARB LEV III, proposed EPA Tier 3) Localized air quality concerns/hot-spots

4 New Generation heavy duty clean diesel trucks now make up ~1/3 of all trucks on the road today (2007 & Later MY National average 28 %) (California: 20%)

5 5 Chances are you re going to be seeing fewer of these

6 and more of these Chevy Cruze, VW Passat TDI, Mazda6 SKYACTIV, Dodge Ram 1500? 6

7 Consumer acceptance of new clean diesel technology growing

8 Reporters are warming up to clean diesel Boom Times for Born-Again Diesels Efficiency, Imported From Europe (July 21, 2013) -New diesels are greenest: How does miles between fill-ups sound?" (Canada News Press) -"Diesels give best bang for buck" (The Youngstown Vindicator) -"Diesels are greenest" (Multiple newspapers) -"Today's diesel cars are king of green in U.S." (The Fresno Bee) New Diesels are greenest, most efficient Op-Ed: Are hybrids the best green bet for motorists? 45 Newspapers Reaching more than 5.5 Million People 15 States 4 Countries

9 US Diesel car sales strong and growing Diesel registrations up 24 % ( ) (Hybrids up 33%) 22 diesel cars and trucks today Launch 2013 Chevy Cruze Mazda6 SKYACTIV-D Dodge Ram 1500 Jeep Grand Cherokee Audi (multiple) BMW (multiple) Mercedes (multiple)

10 Twice as many clean diesel choices today.... More on the way Diesel Choices for Consumers (Cars, SUVs, Vans and HD Diesel Pick Ups Diesel Choices for consumers

11 Thanks to the tremendous advancements, diesel can no longer be viewed as just a fuel used by commercial truckers. Clean diesel vehicles are quickly becoming widely available and popular. Thanks to their inherent energy efficiency, diesel cars and trucks achieve 20 to 40 percent better fuel economy than a comparable gasoline vehicle and achieve roughly 10 to 20 percent reduction of greenhouse gases (GHG) along with near zero emissions of smog forming pollutants. Replacing 15 percent of the fleet with diesels would reduce GHG by 190 million tons over the estimated vehicle lifetime and save 17 billion gallons of fuel. Slide Courtesy of BOSCH

12 Diesel market share forecasts percent by Industry LMC Auto ALG JD Powers AVG

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14 Popularity by state Top 10 states by numbers of diesel vehicles registered 2012 CALIFORNIA (84,000) TEXAS FLORIDA NEW YORK ILLINOIS PENNSYLVANIA OHIO MICHIGAN NEW JERSEY NORTH CAROLINA Top to states by diesel as percent of all vehicles 2012 WYOMING MONTANA IDAHO ALASKA UTAH OREGON SOUTH DAKOTA NEW MEXICO NORTH DAKOTA COLORADO WASHINGTON Source: 2012 Data from R.L. Polk and Company

15 Fastest growing states for registrations of ( ) Diesel cars and SUVs : California, Massachusetts, New York; Pick Up truck: Montana, Nebraska, Maine/Pennsylvania Hybrids cars and SUV South Carolina, Tennessee, Kentucky

16 More state diesel trivia. States with most diesel pick up trucks Texas 697,904 State with most diesel cars/suvs California 84,106 State with most hybrids California 547,464 Source: 2012 Data from R.L. Polk and Company

17 Economics of the diesel investment have been challenging but that has not stopped consumers Consider that from Highest diesel fuel prices in history ($ 4.80+) Highest differential fuel prices of diesel over gasoline ($0.50/gal) Diesel product premium ($500-$2000) Worst Economic recession in decades NONETHELESS. Double-digit month to month sales increases of diesel cars in 20 of 24 months

18 Diesel fuel Price Outlook: Moderating into 2014 but diesel premium over gasoline persists... $3.92 Diesel +$0.37 $3.55 Gasoline

19 New Research on Benefits of Light Duty Diesel Vehicles

20 THE MARTEC GROUP CONFIDENTIAL Our Research Project Analyze historic fuel savings and CO2 reductions for light duty diesel vehicles Aggregated by cars, trucks, and HD pickups National and state specific fuel savings Targeted states to include CA, NY, TX, VA Project potential future fuel savings and CO2 reductions for for the same scenario of vehicles and markets as above This projection will be based on available 3 rd party forecasting information, CAFÉ regulation estimates for diesel technology adoption, and projected future diesel powertrain announcements Biodiesel benefit analysis The above forecasting scenario will then be run with various levels of biodiesel in place of B0 reference fuel and the benefits will be recalculated B5, B10, B20 Analyze the potential fuel and CO2 savings and generate an appropriate comparisons SPR, Imported oil (OPEC, Saudi Arabia, etc.), cars off the road, coal power plants, value of CO2 saved versus battery factory grants, equivalent solar panel sprawl, etc. Comparisons will be discussed and adapted for targeted audiences (state or national regulators and media) 20

21 THE MARTEC GROUP Analysis of registration data for diesel vehicles in the U.S. yields a cumulative savings curve for fuel and CO 2 savings. Methodology for Historic Diesel Vehicle Savings CONFIDENTIAL Inputs and Assumptions Output and Analysis Polk registration data for U.S. and state specific registrations of passenger cars, light trucks, and HD pickups. Actual fuel economy benefits for diesel options over equivalently performing gasoline option. Average vehicle miles traveled (VMT) of 15,000 miles per year Vehicle level savings for each model year by U.S. total and for selected states based on actual registrations and average savings over gasoline equivalent powertrains. These vehicle level savings are summed up to generate a cumulative savings to date for diesel powertrains. 21

22 THE MARTEC GROUP CONFIDENTIAL Diesel engines sold between 2005 and 2012 have saved ~1.2B gallons of fuel. Cumulative Diesel Savings U.S. Market Million Gallons U.S. Market HD Pickup Total Savings 1.2B gallons 29M barrels 7.6M tonnes CO 2 Pass. Car Lt. Truck Number of Models Total savings for cars, light trucks, and HD pickups Assumes average VMT of 15,000 miles/year Gasoline = 8,887gCO 2 /gal. Diesel = 10,180gCO 2 /gal. 22

23 THE MARTEC GROUP CONFIDENTIAL Passenger car diesel sales and savings have exploded in the last 3 years. Cumulative Diesel Savings Passenger Car Million Gallons U.S. Market Diesel Vehicles Audi A3 BMW 335d Mercedes E-Class Mercedes S-Class Volkswagen Beetle Volkswagen Golf Volkswagen Jetta Volkswagen Passat Total Savings 51M gallons 1.2M barrels 0.3M tonnes CO 2 Total savings for passenger car Assumes average VMT of 15,000 miles/year Gasoline = 8,887gCO 2 /gal. Diesel = 10,180gCO 2 /gal. 23

24 THE MARTEC GROUP CONFIDENTIAL Light duty truck savings have come from German OEM offerings. Cumulative Diesel Savings Light Truck Million Gallons U.S. Market Diesel Vehicles Audi Q7 BMW X5 Jeep Grand Cherokee Jeep Liberty Mercedes GL-Class Mercedes M-Class Mercedes R-Class Porsche Cayenne Volkswagen Touareg Total Savings 24M gallons 0.6M barrels 0.1M tonnes CO 2 Total savings for light trucks Assumes average VMT of 15,000 miles/year Gasoline = 8,887gCO 2 /gal. Diesel = 10,180gCO 2 /gal. 24

25 THE MARTEC GROUP CONFIDENTIAL Chrysler, Ford and GM HD diesel pickup trucks have saved the US consumer 1.1B gallons of fuel. Cumulative Diesel Savings HD Pickup Million Gallons U.S. Market Diesel Vehicles Dodge Ram Ford F-Series Chevrolet Silverado GMC Sierra Total Savings 1.1B gallons 27M barrels 7.3M tonnes CO 2 Total savings for HD pickups Assumes average VMT of 15,000 miles/year Gasoline = 8,887gCO 2 /gal. Diesel = 10,180gCO 2 /gal. 25

26 THE MARTEC GROUP CONFIDENTIAL Putting the numbers into perspective The 2.9M light-duty new technology diesels introduced from 2005 through 2012 have saved the American consumer: 7.6M tonnes of CO 2 1.2B gallons of gasoline 29M barrels of crude oil U.S. Market These reductions are equivalent to: Removing 1.6M vehicles from the road for a year Carbon sequestration from 6.2M acres of forests This is an equivalent forest the size of Vermont Removing the annual emissions from 2.2 coal fired power plants 32,000 railcars of coal stretching continuously from Boston to Philadelphia Societal savings of $250M based on U.S. government value of CO 2 ($33/ton) Roughly 11% of the Strategic Petroleum Reserve for sweet crude. Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order Interagency Working Group on Social Cost of Carbon,May

27 THE MARTEC GROUP CONFIDENTIAL Since 2005, new diesel vehicles in the state of California have saved the environment nearly 700,000 tonnes of CO 2. Cumulative Diesel Savings California Million Gallons Total Savings 110M gallons 2.5M barrels 0.7M tonnes CO 2 Total savings for cars, light trucks, and HD pickups Assumes average VMT of 15,000 miles/year Gasoline = 8,887gCO 2 /gal. Diesel = 10,180gCO 2 /gal. 27

28 THE MARTEC GROUP CONFIDENTIAL Passenger car diesel owners will stop to refuel 9 less times per year. Passenger Car Savings to the clean diesel Per Year 54 Month Ownership buyer Fuel savings - gallons Fuel savings - bbl 3 14 Fuel cost savings $340 $1,530 CO 2 savings metric tones Refueling trips saved 9 40 Assumptions: Fuel savings based on Polk sales weighted average of diesel vehicles for DOE Average gasoline and diesel prices for the U.S. as of 4/29/13. Gasoline = $3.59 Diesel = $3.85 CO2 conversion based on EPA s content per gallon. While not specifically evaluated in this study, other reports and data from used car sales indicate that diesel powered vehicles retain a higher residual value compared to gasoline counterparts. 28

29 THE MARTEC GROUP CONFIDENTIAL Customers that choose the light duty diesel in a SUV will reduce their carbon footprint by 3.5 metric tons. Light Duty Truck Savings to the clean diesel buyer Per Year 54 Month Ownership Fuel savings - gallons Fuel savings - bbl Fuel cost savings $502 $2,300 CO 2 savings metric tones Refueling trips saved 8 35 Assumptions: Fuel savings based on Polk sales weighted average of diesel vehicles for DOE Average gasoline and diesel prices for the U.S. as of 4/29/13. Gasoline = $3.59 Diesel = $3.85 CO2 conversion based on EPA s content per gallon. While not specifically evaluated in this study, other reports and data from used car sales indicate that diesel powered vehicles retain a higher residual value compared to gasoline counterparts. 29

30 THE MARTEC GROUP CONFIDENTIAL The average diesel engine in a heavy duty pickup saves the customer ~$5,400 in fuel over the typical ownership cycle. Heavy Duty Pickup Truck Savings to the clean diesel buyer Per Year 54 Month Ownership Fuel savings - gallons 425 1,900 Fuel savings - bbl Fuel cost savings $1,307 $5,600 CO 2 savings metric tones Refueling trips saved Assumptions: Fuel savings based on Polk sales weighted average of diesel vehicles for DOE Average gasoline and diesel prices for the U.S. as of 4/29/13. Gasoline = $3.59 Diesel = $3.85 CO2 conversion based on EPA s content per gallon. While not specifically evaluated in this study, other reports and data from used car sales indicate that diesel powered vehicles retain a higher residual value compared to gasoline counterparts. 30

31 THE MARTEC GROUP Diesel acceptance in Europe exploded with the introduction of direct injection and turbocharging to meet CO 2 objectives. Historic Diesel Engine Market Share - Europe CONFIDENTIAL Voluntary commitment by the European OEMs to meet 120g/km CO2 by

32 THE MARTEC GROUP CONFIDENTIAL New technology diesel engine sales show strong customer acceptance. New Technology Diesel Engine Sales 2012 U.S. Market Diesel Share Diesel Volume Sales based on 32

33 THE MARTEC GROUP CONFIDENTIAL Baseline assumptions for diesel engine growth yield a 7% market share and over 1M new diesel sales per year by New Technology Diesel Engine Sales Forecast U.S. Market Forecast Market Share Forecast Aggressive Scenario = 10% Baseline Scenario = 7% Conservative Scenario = 4% Aggressive Baseline Conservative Total sales for cars, light trucks, and HD pickups based on future EPA compliance paths, fuel requirement changes under RFS2 and ARB LCFS and announced OEM diesel vehicle introductions. 33

34 THE MARTEC GROUP CONFIDENTIAL Forecasted diesel savings for new diesel sales are expected to save B gallons of gasoline. Cumulative Diesel Engine Savings U.S. Market Forecast Million Gallons Aggressive 2.1B gallons 11.5M tonnes CO 2 Baseline 1.6B gallons 9.1M tonnes CO 2 Conservative 1.3B gallons 7.7M tonnes CO 2 Total savings for cars, light trucks, and HD pickups Assumes average VMT of 15,000 miles/year Gasoline = 8,887gCO 2 /gal. Diesel = 10,180gCO 2 /gal. 34

35 THE MARTEC GROUP CONFIDENTIAL If all new light-duty diesel vehicles are fueled with B5 biodiesel, the US will save an additional M gallons as compared to diesel fuel alone. Cumulative B5 Biodiesel Fuel Savings U.S. Market Biodiesel Million Gallons Aggressive 300M gallons 200K tonnes CO 2 Baseline 200M gallons 150K tonnes CO 2 Conservative 150M gallons 110K tonnes CO 2 Total savings for cars, light trucks, and HD pickups Assumes average VMT of 15,000 miles/year 35 Gasoline = 8,887gCO 2 /gal. Diesel = 10,180gCO 2 /gal. Biodiesel = 9,460gCO 2 /gal.

36 Summary Prospects for Clean Diesel in the US are outstanding More choices needed & coming Biggest threats maintaining market momentum, fuel price magnitude and fluctuations, general economic conditions Using more clean diesel cars is good for saving fuel and the climate