Alternative Drivetrain Markets...3Q12 Electric Vehicle Charging Equipment in Europe 2Q12 Plug-in...

Alternative Drivetrain Markets Forecast of Hybrid, Plug-in Electric, and

Natural Gas Car and Truck Markets

October 3, 2012

Dave Hurst

Senior Research Analyst

Section 1 » Company Overview

Section 2 » Demand Drivers

Section 3 » Fuel Availability

Section 3 » Electric Vehicles

Section 4 » Natural Gas Vehicles

Table of Contents

2 ©2012 Navigant Consulting, Inc. All rights reserved.

Company Overview

Introduction

Pike Research, a part of Navigant’s Energy Practice,

provides in-depth analysis of global clean technology

markets.

The team’s research methodology combines supply-side

industry analysis, end-user primary research and demand

assessment, and deep examination of technology trends to

provide a comprehensive view of the Smart Energy

ecosystem.

Sector Focus:

Smart Energy

Smart Utilities

Smart Transportation

Smart Industry

Smart Buildings

Research Services:

Research Reports

Subscription Advisory Services

Consulting & Custom Research

• Go-To-Market Strategy

• Custom Market Analysis

• Market Sizing & Forecasts

• Primary Research

• Technology Evaluation

• Commercial Due Diligence

• Competitive Benchmarking

• Strategic Advisory Sessions

©2012 Navigant Consulting, Inc. All rights reserved. 4

Smart Energy Ecosystem



Advisory Services

SMART

ENERGY

SMART

UTILITIES

SMART

TRANSPORTATION

SMART

INDUSTRY

SMART

BUILDINGS

Solar Energy

Wind Energy

Emerging Renewables

Biofuels

Biopower

Energy Storage

Advanced Batteries

Fuel Cells

Distributed Generation

Microgrids

Electric Vehicles

Light Electric Vehicles

Natural Gas Vehicles

Advanced Transportation Technologies

Building Energy Management

Building Automation Systems

Energy Efficient Lighting

Smart Building Technologies

Green Buildings Demand Response

Smart Cities

Industrial Innovations

Smart Meters

Transmission Systems

Distribution Optimization

Home Energy Management

Utility Data Analytics

Utility Communication Networks

Smart Grid Technologies

Smart Grid Global Analysis

Utility Innovations

Commercial Vehicle Innovations

Research Methodology


INFORMATION COLLECTION

Supply Side

Demand Side

MARKET ANALYSIS

Primary Research Secondary Research

• Executive Interviews

• Vendor Briefings

• Product Demos and Tours

• Company News & Financials

• Technology & Product Specs

• Government Data

• Economic, Demographic Data

• Consumer Surveys

• Business Leader Surveys

• Case Studies

• Reference Customers

Qualitative Quantitative

• Business Models & Trends

• Technology Issues

• Policy & Regulatory Factors

• Competitive Landscape

• Profiles of Key Players

• Market Sizing

• Segmentation by Technology,

Geography, Application, etc.

• Market Share Analysis

• Forecasts by Segment

Smart Transportation Practice


Electric Vehicles

Light Electric Vehicles


Commercial Vehicle Innovations

Advanced Transportation Technologies

SMART

TRANSPORTATION

Electric Vehicles


Reports Published:

3Q12 Electric Vehicle Geographic Forecasts

3Q12 Electric Vehicles in China

3Q12 Electric Vehicle Charging Equipment in Europe

2Q12 Plug-in Electric Vehicles

1Q12 Pike Pulse Report: Electric Vehicle Batteries

4Q11 Electric Vehicle Consumer Survey

4Q11 Electric Vehicle Telematics

4Q11 Electric Vehicles: 10 Predictions for 2012

4Q11 Vehicle to Grid Technologies

4Q11 Electric Vehicle Batteries

3Q11 Electric Vehicle Charging Equipment

3Q11 Electric Vehicle Market Forecasts

2Q11 Pike Pulse Report – Electric Vehicle Charging Equipment

1Q11 Electric Vehicle Cyber Security


4Q10 Electric Vehicles in Asia Pacific

Future Reports (Subject to Change):

3Q12 Electric Vehicle Charging Equipment

4Q12 Pike Pulse: Plug-in Electric Vehicles

4Q12 Electric Vehicle Consumer Survey

4Q12 Electric Vehicle Batteries

4Q12 Electric Vehicle Market Forecasts

4Q12 Pike Pulse: Electric Vehicle Charging Equipment


4Q12 Electric Vehicles: Europe

1Q13 Electric Vehicles Tracker: North America 1Q13

1Q13 Electric Vehicle Data Analytics

1Q13 Pike Pulse Report: Electric Vehicle Batteries

2Q13 Vehicle to Grid Technologies

2Q13 Electric Vehicle Charging Equipment Tracker 2Q13

• Plug-in Hybrid Electric Vehicles

• Battery Electric Vehicles

• Hybrid Electric Vehicles

• Electric Vehicle Battery Technologies

• Electric Vehicle Charging Infrastructure

• Consumer Attitudes, Preferences, and Behavior



Reports Published:

3Q12 Propane/Autogas Vehicles

3Q12 Natural Gas Trucks and Buses

3Q12 Light Duty Natural Gas Vehicles

1Q11 Natural Gas Vehicles

Future Reports (Subject to Change):

1Q13 Market Data: Natural Gas Vehicles

1Q13 Research Brief: Natural Gas Refueling Infrastructure

• Compressed Natural Gas (CNG)

• Liquefied Natural Gas (LNG)

• Natural Gas Refueling Infrastructure

• Light Duty Vehicles

• Medium and Heavy Duty Trucks and Buses

Demand Drivers

» Petroleum fuel costs

» Government influence: purchase incentives and emissions

restrictions

» Lower total costs of ownership

» Greening of fleets

» Increasing alternative fuel availability

Vehicle Market Demand Drivers


» Petroleum-based fuels increase about 10% per year (rolling average)

» Diesel has consistently cost more than gasoline since mid-2009

Petroleum Fuel Costs


Weekly Petroleum Fuel Prices by Type, United States:

January 2000-September 2012

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

($/G

all

on

)

Gasoline Diesel

(Source: Energy Information Agency)

» Based on annual growth of 9% in gasoline and 10% in diesel:

› Gas will be $5.95 in 2017 and reach $7.74 by 2020

› Diesel will be $6.60 in 2017 and $8.79 by 2020

Forecasted Petroleum Costs


Average Petroleum Fuel Prices by Type, United States: 2012-2020

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

2012 2013 2014 2015 2016 2017 2018 2019 2020

($/G

allo

n)

Gasoline

Diesel

(Source: Pike Research)

» 54.5 mpg combined by 2025

» Anticipated to add $2,000 to passenger cars, saving $5,200 to $6,600 in

fuel costs

Light Duty Fuel Economy Requirements


Corporate Average Fuel Economy by Segment, United States: 2012-2025

(Source: Environmental Protection Agency)

-

10

20

30

40

50

60

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

(Miles/G

allo

n)

Passenger Cars

Light Trucks

» Limits begin with 2014 MY trucks

» Expected to add $6,000 to $10,000 to trucks

Medium/Heavy Duty Truck

Fuel Economy Requirements


United States Truck Fuel Economy and Emissions Regulations

(Source: Environmental Protection Agency)

Component Combination Tractors

(MY 2017)

MD/HD Pickups/Vans

(MY 2018)

Vocational Trucks

(MY 2017)

Fuel

Economy

Phase in to 2017 limits of 11.8

gal/1,000 ton-miles and 6.5

gal/1,000 ton-miles depending

on cab type and weight class

10% consumption

reduction in gas

vehicles;

15% consumption

reduction in diesel

vehicles

36.7 gal/1,000 ton-miles for Class 3-5

trucks

22.1 gal/1,000 ton-miles for Class 6-7

trucks

21.8 gal/1,000 ton-miles for Class 8

trucks

Emissions

Phase in to 2017 limits of

120 g CO2/ton-mile and

66 g CO2/ton-mile depending

on cab type and weight class

12% GHG reduction in

gas vehicles;

17% GHG reduction in

diesel vehicles

373 g CO2/ton-mile for Class 3-5

trucks

225 g CO2/ton-mile for Class 6-7

trucks

222 g CO2/ton-mile for Class 8 trucks

» Light Duty

› BEV/PHEV from $2,500 up to $7,500 federal incentives

› BEV/PHEV/NGV state incentives

› Other incentives:

‒ Reduced taxes

‒ High occupancy lane access

‒ Parking benefits

» Medium/Heavy Duty Trucks

› BEV/PHEV from $2,500 up to $7,500 federal incentives

› California – $10,000 to $40,000 HVIP grants

› Other state incentives

Alternative Drive Purchase Incentives


» For higher mileage lifetime, BEVs’ operating costs are the least expensive over the

lifetime: $34,995 (with incentives)

» For lower mileage lifetimes, fuel efficient gas engines lead: $29,102

Passenger Car Total Cost of Ownership


Assumptions:

Gasoline price: $3.75/gal

Electricity cost: $0.1038/kWh

CNG price: $2.05/gal

PHEV-40 driven on electric

power 80% of lifetime miles

PHEV-10 driven on electric

power 50% of lifetime miles

Federal tax credits claimed:

$7,500 on PHEV-40/BEV and

$2,500 on PHEV-10

Estimated Total Cost of Ownership for Small

Sedans by Lifetime Miles, United States: 2012

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

BEV-100Mid-Size

HEV<2L Gas

(45.3 mpg)

4-Cyl<2L Gas(30 mpg)

CNG(28 mpg)

PHEV-10 PHEV-40

(To

tal C

os

t o

f O

wn

ers

hip

)

120,000 Lifetime Miles

75,000 Lifetime Miles


» Low purchase price gasoline pickups are challenging to beat at gas prices

below $5/gal

» CNG trucks are often heavier duty to accommodate larger cylinders

Pickup Truck Total Cost of Ownership


Assumptions:

120,000 lifetime miles

Gasoline price: $3.75/gal

Electricity cost $0.1038/kWh

CNG price: $2.05/gal

Propane price: $2.50/gal

Estimated Total Cost of Ownership for Light Duty

Trucks by Cost Type, United States: 2012


$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

GasolinePickup

Pickup FFV PropanePickup

CNG Pickup GasolinePickup Crew-

Cab

Hybrid PickupCrew-Cab

(To

tal C

os

t o

f O

wn

ers

hip

)

Operating Costs

Purchase Price

» The market for MD trucks hinges on cost recovery for incremental costs of hybrid and

plug-in electric trucks:

› Fuel prices continue to rise improving the equation for electric

› Incremental cost recovery ranges from two to six years

» Driving range limits battery electric to inner city operations

Medium Duty Total Cost of Ownership


Annual Fuel Cost Comparison, Medium Duty Trucks

Vehicle Miles

traveled

per year

Fuel

Economy

Fuel used

per year

Fuel price Annual

fuel costs

Diesel MD 20,000 8 mpg 2,500 gal $4.00/gal $10,000

BEV MD 20,000 N/A 16 MW $0.09/kWh $1,440

Gas HEV MD 20,000 10 mpg 2,000 gal $3.80/gal $7,600


» Funding for “green” vehicles may come from separate social

responsibility or marketing budgets, otherwise cost recovery

is critical

» Drive cycle will dictate technology

» Companies/governments that track emissions may be able to

justify additional investment

Greening of Fleets


Fuel Availability

» Biodiesel remains more expensive than diesel due to production costs

($3.83/gal B20 vs. $3.75/gal diesel in July 2012)

» About 620 stations offer B20 in the United States

Biodiesel Availability


Biodiesel Mandated Demand and Installed

Production Capacity, North America: 2012-2022

-

2

4

6

8

10

12

14

16

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

(Bil

lio

n G

allo

ns

pe

r Y

ear)

Mandated Demand

Installed Supply


» Almost two-thirds of North American sales will be to residential

customers in 2012; Private networks account for 17% of EVCE sales

» Public charging critical in Asia Pacific

EV Charging Equipment Sales by Segment


EV Charging Equipment Unit Sales by Segment, World Markets: 2012

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

North America Asia Pacific Western Europe

Private

Public

Workplace

Residential


» Annual private charging equipment sales will reach 106,516 units by 2020

» Installing EVCE can add 5% to 10% to the cost of owning PEVs

EV Charging Equipment Impact

on PEV Sales


Annual EV Charging Equipment Unit Sales by Segment,

North America: 2012-2020


-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2012 2013 2014 2015 2016 2017 2018 2019 2020

(EV

CE

Un

its)

Private

Public

Workplace

» Over 125 new stations per year through 2016; the majority will be open

to public

» 52 LNG stations currently available, anticipating about 150 new LNG stations

through 2014

NGV Refueling Infrastructure


Cumulative Natural Gas Refueling Stations,

United States: 2012-2019

-

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2012 2013 2014 2015 2016 2017 2018 2019

(NG

V S

tati

on

s)


Electric Vehicles

Key OEM Vehicle Development


OEM Product Plan Segment Timeline

BMW ActiveE

BMWi products

Small car

Multiple

2012-2013

2013+

Ford Motor Co. Transit Connect Electric

Focus Electric

CMAX Energi (PHEV)

Fusion/Mondeo Energi (PHEV)

Van

Small car

Small car

Midsize car

2011-2012

2012+

Fall 2012+

2013+

General Motors Volt /Ampera (PHEV)

e-Spark/Sail (BEV)

Cadillac ELR (PHEV)

Small car

Small car

Luxury car

2010+

2013+

2013+

Honda Motor FIT (BEV)

Accord PHEV

Small car

Midsize car

2012+

2013+

Hyundai i10 Blueon (BEV)

Elantra Electric

Sonata PHEV

Small car

Small car

Midsize car

2012+

2013+

2013+

Nissan LEAF (BEV)

e-NV200 (BEV)

PHEV Sedan

Small car

Van

Midsize car

2010+

2014+

2015+

Tesla Motors Roadster

Model S

Model X

Luxury car

Luxury car

Small SUV

2009+

2012+

2014+

Toyota Prius PHV

RAV4 Electric

Midsize car

Small SUV

2012+

2012+

» Battery costs expected to fall 34% by 2017

» Potential to reduce battery pack costs by $4,000 to $6,500 by 2017

» Optimal price point of PEVs is $23,750 in United States

Li-ion Prices


Lithium Ion Battery Selling Price, World Markets: 2011-2017


» Non-plug-in hybrids are leading electrified vehicles through 2020

» PHEVs expected to outsell BEVs

› 1.4 million vs. 1.1 million cumulatively by 2020

Electric Vehicles in North America


Annual HEV/PHEV/BEV Sales, North America: 2012-2020

-

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

2012 2013 2014 2015 2016 2017 2018 2019 2020

(Millio

ns)

BEV

PHEV

HEV


» MD hybrids anticipated to have a compound annual growth rate of 35%

» Plug-in trucks are not anticipated to see significant numbers prior to 2015

Medium/Heavy Duty Truck Drivetrains


Annual Medium/Heavy Duty Hybrid Electric Truck Sales,

United States: 2012-2017

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2012 2013 2014 2015 2016 2017

Veh

icle

s


» CNG pricing is more stable than gasoline due to low natural gas component

» Petroleum is 65% of gasoline price and 60% of diesel price

CNG Cost Components


Cost Components of Transportation CNG Fuel,

United States: 2012


Wholesale Natural Gas Costs

17%

Transmission Costs16%

Compression & Cooling Costs

41%

Labor & Profit26%

» Majority of North American sales are light duty pickup trucks and vans

» MD/HD trucks and buses growing at slightly slower pace than light duty

vehicles

NGV Sales


Natural Gas Vehicle Sales by Segment, North America: 2012-2019

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2012 2013 2014 2015 2016 2017 2018 2019

(Veh

icle

s)

M/HD Buses

M/HD Trucks

Light Duty Vehicles


» Market big enough for all current technology

» BEV passenger cars will be cost leaders in the long run

» NGVs and HEVs are proving to be leaders in medium and

heavy duty truck markets

» Diesel trucks are still hard to beat financially, but rising fuel

costs will tip that equation in favor of alternatives

Conclusions


MAIN OFFICE

1320 Pearl Street, Suite 300

Boulder, CO 80302

+1.303.997.7609

WORLDWIDE OFFICES

United States: Boulder, Colorado

Washington, DC

Europe: London, United Kingdom

Asia Pacific: Seoul, South Korea

Dave Hurst,

Senior Research Analyst: [email protected]

Contact Us

©2012 Navigant Consulting, Inc. All rights reserved. 36

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