What future for the diesel engine in Europe? Impacts of different futures scenarios on carmakers and...

THE FUTURE OF DIESEL ENGINE IN EUROPE Michel Costes

Jamel Taganza Jean-Michel Prillieux Jean-Bruno Monteil

[email protected]

http://www.inovev.com

25/6/2013 Diesel-F-20130625

mailto:[email protected]

http://www.inovev.com/

Contents

Diesel definition

Diesel engine and fuel.

Technology evolution in diesel engines.

Diesel history in Europe

Oil supply strategy and policy in France in the 50-70s. Need of use heavy fractions from distillation. Consequent Implementation of tax differential between diesel and gasoline fuel.

Diesel development in France and in Europe from 1994 up to 2012.

Diesel market in Europe and in the rest of the world

Market share in Europe from 1994 up to 2012.

• 27 countries of European Union and main countries: Germany, France, UK, Italy, Spain, Portugal, Belgium, Netherlands.

• By segments: A, B, C, D, E, SUV.

• By carmakers: BMW, Daimler, VW, Renault-Nissan, PSA, FIAT.

Diesel market in the rest of the world.

Current changes

Comparison of emissions : CO2, CO, NOX, PM, Others. Strengthening of European regulations: EuroV, EuroVI.

Other factors : toxicology, noise (internal, external), driving comfort, …

Conclusion: threats on diesel.

Scenarios relating to diesel engine future

Forecast from 2013 to 2017

• By segments: A, B, C, D, E, SUV.

• By carmakers: BMW, Daimler, VW, Renault-Nissan, PSA, FIAT.

• European forecast for 2017 and 2030 .

Impacts on carmakers and parts suppliers: impacted components by change of diesel/gasoline/hybrid/electric engines ratio; consequences for parts suppliers, which produce these components.

June 25, 2013 2

DEFINITIONS DU DIESEL DIESEL DEFINITION

June 25, 2013 3

Diesel Engine and Fuel

Diesel engine:

Combustion of a heterogeneous mixture directly injected into the combustion chamber.

Self-ignited fuel.

Load adjusted by varying the amount of injected fuel, the mass of admitted air being substantially unchanged .

Strong excess of air in the mixture.

Diesel fuel:

Mixture of hydrocarbons from mineral oil or synthesis and possibly methyl ester of fatty acid

Ignition by compression

June 25, 2013 4

Diesel Engine and Fuel

Diesel fuel

French regulations (example – similar regulations all over Europe)

MEASUREMENTS SPECIFICATIONS

Density at 15° C 820 to 845 kg/m3

Distillation % recovered at 250° C Less than 65 %

Distillation % recovered at 350° C 85 % minimum

Viscosity at 40 ° C 2 to 4.5 mm²/s

Sulfur content Maximum 10 mg/kg

Water content Maximum 200 mg/kg

Overall contamination Maximum 24 mg/kg

Ash content Maximum 0.01 %

Measured cetane index Minimum 51 %

Calculated cetane index Minimum 46 %

Flashpoint More than 55°C

Polycyclic aromatic hydrocarbons 8 % maximum

Content in methylic ester of fatty acid 7 % maximum

June 25, 2013 5

Technology Evolution in Diesel Engines

Indirect injection

Direct injection

Indirect injection versus direct injection

• Advantages for indirect injection: less noisy, weaker NOx emissions.

• Advantages for direct injection: better combustion, quicker start.

Pre-chamber Swirl chamber

First car equipped: FIAT Croma in 1988

June 25, 2013 6

Direct injection with injector pump system

« Injector pump system » and « pump system » are based on the same concept: one pump injector nozzle for each cylinder. These systems are mainly known for their outstanding performance: good acceleration and fuel savings.

Pump injectors are included in cylinder heads and are driven by camshaft. These systems enable a better adjustment and a higher pressure (up to 2,050 bar)

Source: BOSCH First car equipped: VW Golf in 1993

June 25, 2013 7


Source: BOSCH

First car equipped: ALFA ROMEO 156 in 1997

Direct injection with common rail system

The first series-produced Common Rail System was marketed by Bosch in 1997.

The system sources its name from the high-pressure accumulator (Common Rail) which supplies all the cylinders with fuel. While other diesel injection systems generate the fuel pressure for each injection separately, the Common Rail System separates pressure generation and injection from one another. The fuel is constantly available at the pressure required for injection. The Common Rail System is modular in design. The right combination of high-pressure pump, injectors, rail and electronic control unit results in systems for all types of vehicle from the smallest passenger cars right up to the heaviest luxury limousine.

The range of high-pressure pumps covers pressures from 1,100 bar to 2,200 bar.

June 25, 2013 8


DIESEL HISTORY IN EUROPE

HISTORIQUE DU DIESEL EN EUROPE

June 25, 2013 9

Diesel History in Europe

Oil supply policy in France in the 50-70s

Need of use heavy fractions from distillation.

Consequent Implementation of tax differential between diesel and gasoline fuel.

This advantageous taxation combined with the better diesel engine led to increase slowly the market share of diesel until 1990.

Development of diesel in Europe from 1990 to now resulting from following factors:

Technical development:

• indirect injection towards direct injection at the end of 80s (FIAT).

• direct injection with injector pump system at the beginning of 90s (VW).

• direct injection with common rail system at the end of 90s (Bosch).

Strategy and policy of carmakers: diesel cars are more expensive (10 to 15 %), the overcost can be balanced by savings on fuel (price and fuel consumption).

Tax incentives:

• In 2013, the fuel tax in France is 0.4284 € per liter of diesel fuel against 0.6069 € per liter of unleaded gasoline 95 and 98.

• Nevertheless, the gap between customer price of diesel and gasoline fuel is decreasing due to the increase of diesel fuel cost price (fuel price at the exit of refineries).

June 25, 2013 10

DIESEL MARKET

June 25, 2013 11

Market Share in Europe up to 2012 (PC registrations)

Diesel development in the different European countries from 1994 to 2012.

Diesel car registrations in the European Union 27 countries (in volume):

In 2011: 7.6 million of passenger cars and 1.3 million of light utility vehicles.

In 2012: 6.9 million of passenger cars and 1.2 million of light utility vehicles.

Registrations in market share - only passenger cars:

- Germany - France - Belgium - Spain

- United Kingdom - Italy - Netherlands - Portugal

Europe 27

June 25, 2013 12


UK

France

Italy

Germany

June 25, 2013 13


Belgium

Portugal Spain

Netherlands

June 25, 2013 14

Market Share in Europe up to 2012 by Segments (PC production)

Diesel market share in the main segments (PC production In Europe between 1998 and 2012*) :

Segment A

Segment B

Segment C

Segment D

Segment E

Segment SUV

Total production in Europe was 7.9 million of diesel PC in 2012*

Segment A

All Segments

Segment B

0.14 million in 2011

June 25, 2013 15

0.14 million in 2012*

2012* : Estimated figures

8 million in 2011





Segment E

Segment C Segment D

Segment SUV

June 25, 2013 16










Market Share in Europe up to 2012 by Carmakers (PC production)

Diesel car market share of main European carmakers between 1998 and 2012:

BMW Group (BMW + Mini)

DAIMLER Group (Mercedes + Smart)

VW Group (Audi + Seat + Skoda + VW)

RENAULT-NISSAN Group (Dacia + Nissan + Renault)

PSA Group (Peugeot + Citroën)

FIAT Group (FIAT + Alfa + Lancia)

These automotive groups produced 6.7 million of diesel PC in Europe in 2012*.

Moreover, FORD Europe and GM Europe produced 0.8 million of diesel PC in 2012*.

Other carmakers (Japanese, Korean, Indian, Chinese groups) produced 0.4 million of diesel PC.

Total production in Europe was 7.9 million of diesel PC in 2012*.

BMW GROUP DAIMLER

June 25, 2013 17







VW GROUP RENAULT-NISSAN

PSA FIAT GROUP

June 25, 2013 18


2.25 million in 2011 2.18 million

in 2012*







European Production by Engine in 2011 (PC+UV)

19

Rank ENGINE FAMILY CC PROD 2011 1 1600 DIESEL PSA/FORD 1560 1181152

2 2000 DIESEL VW 1968 1155542

3 1500 DIESEL RENAULT 1461 1121134

4 1600 DIESEL VW 1598 777845

5 2000 DIESEL PSA/FORD 1997 632799

6 1300 DIESEL FIAT 1248 523226

7 2000 DIESEL BMW 1995 437283

8 1400 DIESEL PSA/FORD 1398 294642

9 2200 DIESEL MERCEDES 2148 245823

10 2000 DIESEL FIAT 1956 181720

11 1700 DIESEL GM 1686 178511

12 2000 DIESEL RENAULT 1995 160572

13 3000 DIESEL VW 2967 138625

14 1200 DIESEL VW 1198 123818

15 2400 DIESEL VOLVO 2401 114773

16 2500 DIESEL RENAULT 2495 111736

17 1900 DIESEL RENAULT 1870 108795

18 2200 DIESEL PSA/FORD 2179 91305

19 3000 DIESEL BMW 2993 85475

20 2800 DIESEL FIAT 2800 81580

21 2000 DIESEL KIA 1991 80244

22 2000 DIESEL TOYOTA 1995 78206

23 1600 DIESEL FIAT 1598 73785

24 2300 DIESEL FIAT 2300 70034

Rank ENGINE FAMILY CC PROD 2011 25 3000 DIESEL MERCEDES 2987 69068

26 2200 DIESEL HONDA 2204 67993

27 2000 DIESEL VOLVO 1984 61751

28 1400 DIESEL TOYOTA 1364 60888

29 3000 DIESEL FORD/PSA 2993 57015


31 1600 DIESEL BMW 1600 47952

32 2700 DIESEL FORD/PSA 2720 47654

33 2500 DIESEL FORD 2496 46313

34 1600 DIESEL KIA 1582 43071

35 2500 DIESEL NISSAN 2488 40628

36 2500 DIESEL VW 2459 38411

37 2200 DIESEL TOYOTA 2231 35776

38 3000 DIESEL RENAULT 2993 29097

39 1900 DIESEL FIAT 1910 29089

40 4400 DIESEL FORD 4367 24591

41 3000 DIESEL FIAT 3000 20941

42 2700 DIESEL VW 2698 16410


44 800 DIESEL SMART 799 10199

45 4200 DIESEL VW 4134 8276

46 1600 DIESEL RENAULT 1598 7500

47 1500 DIESEL MITSUBISHI 1493 5903

48 2400 DIESEL FIAT 2387 1472

0

200000

400000

600000

800000

1000000

1200000

1400000

16

00 D

IESE

L P

SA/F

OR

D

20

00

DIE

SEL

VW

150

0 D

IESE

L R

ENA

ULT

16

00

DIE

SEL

VW

20

00 D

IESE

L P

SA/F

OR

D

13

00 D

IESE

L FI

AT

200

0 D

IESE

L B

MW

14

00 D

IESE

L P

SA/F

OR

D

2200

DIE

SEL

MER

CED

ES

20

00 D

IESE

L FI

AT

17

00 D

IESE

L G

M

200

0 D

IESE

L R

ENA

ULT

30

00

DIE

SEL

VW

12

00

DIE

SEL

VW

24

00 D

IESE

L V

OLV

O

250

0 D

IESE

L R

ENA

ULT

190

0 D

IESE

L R

ENA

ULT

22

00 D

IESE

L P

SA/F

OR

D

300

0 D

IESE

L B

MW

28

00 D

IESE

L FI

AT

20

00 D

IESE

L K

IA

20

00

DIE

SEL

TOYO

TA

16

00 D

IESE

L FI

AT

23

00 D

IESE

L FI

AT

3000

DIE

SEL

MER

CED

ES

220

0 D

IESE

L H

ON

DA

20

00 D

IESE

L V

OLV

O

14

00

DIE

SEL

TOYO

TA

30

00 D

IESE

L FO

RD

/PSA

2000

DIE

SEL

MER

CED

ES

160

0 D

IESE

L B

MW

27

00 D

IESE

L FO

RD

/PSA

250

0 D

IESE

L FO

RD

16

00 D

IESE

L K

IA

25

00 D

IESE

L N

ISSA

N

25

00

DIE

SEL

VW

22

00

DIE

SEL

TOYO

TA

300

0 D

IESE

L R

ENA

ULT

19

00 D

IESE

L FI

AT

440

0 D

IESE

L FO

RD

30

00 D

IESE

L FI

AT

27

00

DIE

SEL

VW

1800

DIE

SEL

MER

CED

ES

80

0 D

IESE

L SM

AR

T

420

0 D

IESE

L V

W

160

0 D

IESE

L R

ENA

ULT

150

0 D

IESE

L M

ITSU

BIS

HI

24

00 D

IESE

L FI

AT

European Production by Engine (PC+UV)

June 25, 2013 20

Diesel Market in the Rest of the World (PC registrations)

Weak development in other regions of the world

Low penetration of diesel in the rest of the world.

Lobby due to oil companies.

Lean burn engine in Japan.

Although it has almost doubled in Australia, Brazil and the USA over the last ten years, the diesel market share remains marginal in these countries.

In Japan, however, the government has the idea to make the diesel market increase to about 5% (while it is currently close to zero). Expensive hybrid vehicles would be then replaced by less expensive diesel vehicles. It will however be difficult for diesel vehicles to reach such a market share in a country where diesel has been banned since the 60s.

Worldwide diesel PC market share

Europe currently accounts for 85% world diesel market of passenger cars.

June 25, 2013 21

CURRENT CHANGES

Technical Positioning of Diesel versus other Motorisations

Other motorisation technologies:

Direct injection gasoline.

Traditional gasoline.

Electric.

Hybrid.

Fuel cell.

Comparison gasoline / diesel:

Engine consumption (CO2):

• Objective of the European Commission for 2015: 130 g/km; objective for 2020: 95 g/km .

• For same power output, traditional gasoline engines produce more CO2 compared to diesel engines: 15 to 20% according to carmakers data.

• For direct injection gasoline engines, the gap is weaker: 0 to 15 % according to carmakers data. VW Group is the leader in the development of these engines, which are used in Golf, Passat, A1, A3 and A4.

Pollution: CO, NOx, Particulates, unburnt hydrocarbons:

• CO and unburnt hydrocarbons: advantage to diesel.

• Particulates and NOx : advantage to gasoline.

Strengthening of European regulations over time (following slides).

June 25, 2013 23

Strenghtening of European Regulations over time

Convergence of standards between diesel and gasoline over time: Euro III, Euro IV, Euro V, Euro VI (emissions in mg/km without for number of particulates)

Standards Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6

Nitrogen oxides

(NOx) - - 500 250 180 80

Carbon

Monoxide (CO) 2720 1000 640 500 500 500

Hydrocarbons

(HC) - - - - - -

Non methane

hydrocarbons

(HCNM)

- - - - - -

HC + NOX 970 900 560 300 230 170

Particulates

(PM) 140 100 50 25 5 4.5

Particulates (PN)

(#/km) - - - - 6×1011 6×1011

Standards Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6

Nitrogen oxides

(NOx) - - 150 80 60 60

Carbon monoxide

(CO) 2720 2200 2200 1000 1000 1000

Hydrocarbons

(HC) - - 200 100 100 100

Non methane

hydrocarbons

(HCNM)

- - - - 68 68

HC + NOX - - - - - -

Particulates (PM) - - - - 5(*) 4.5(*)

Particulates (PN)

(#/km) - - - - - 6×1011

Diesel cars Gasoline cars

June 25, 2013 24

* For direct injection gasoline

Strenghtening of European Regulations over time

Emissions in mg/km

Convergence of standards between diesel and gasoline over time: Euro III, Euro IV, Euro V, Euro VI

June 25, 2013 25


Comparison gasoline / diesel

Other factors: toxicity, noise, driving comfort, etc…

• In 2010, American Heart Association has underscored a relationship between exposure to fine particles (PM2.5) and cardiovascular morbidity and mortality.

• noise treatment is more important in diesel vehicles, which increases their cost.

• Today, there is no big difference in driving comfort.

Competition with new motorisations

Gasoline hybrids: Smaller gasoline consumption than traditional gasoline engines. No big use in Europe due to diesel competition.

Electric vehicles: No direct pollution, less noise, possibility of loading cars locally (no need to go to the gasoline station for short trip users).

June 25, 2013 26


Threats on diesel:

Increasing cost of depollution in diesel engines with Euro VI: particulate filter and NOx catalyst:

• Particulate filters have been and are widely used in order to comply with Euro V. Some improvements are in progress in order to filter smaller and more toxic particles.

• Selective NOx reduction catalysts should be used in order to pass Euro VI standards in September 2015 (SCR systems with added urea).

Health concern:

• According to a World Health Organisation statement in 2012, emissions of fine particles present in exhaust gases of diesel engines would have a carcinogenic effect.

• European Union has fixed a limit value for “PM2.5” at 25 µg/m3 of air in 2015, then at 20 µg/m3 in 2020.

Impact on economics:

• Deficits of trade balance of European countries due to diesel fuel importations: In France for instance, this deficit accounts for € 13 billion by year i.e. 20% of the total deficit of the country.

• Loss in taxes for European countries.

June 25, 2013 27

SCENARIOS ABOUT DIESEL ENGINE FUTURE

June 25, 2013 28

Our different Scenarios

Scenarios

Two main scenarios, which depend on:

• Political choices in France and in Europe.

• Influences of the different lobbies.

Scenario 1: Slow decrease:

• Progressive change in taxes.

• Low market shares for hybrid and electric vehicles in 2030.

• Likely scenario.

Scenario 2: Faster decrease:

• Quick increase of taxes on diesel fuel.

• Higher penetration of the alternative motorisations in 2030.

• Less likely scenario.

June 25, 2013 29


Diesel market share in the main segments (PC production In Europe between 1998 and 2017) :

Segment A

Segment B

Segment C

Segment D

Segment E

Segment SUV

Total production in Europe was 7.9 million of diesel PC in 2012*

Segment A

All Segments

Segment B

June 25, 2013 30

8 million in 2011








Segment E

Segment C Segment D

Segment SUV

June 25, 2013 31











BMW GROUP DAIMLER

June 25, 2013 32

Diesel car market share of the main European carmakers between 1998 in 2017:

BMW Group (BMW + Mini).

DAIMLER Group (Mercedes + Smart).

VW Group (Audi + Seat + Skoda + VW).

RENAULT-NISSAN Group (Dacia + Nissan + Renault).

PSA Group (Peugeot + Citroën).

FIAT Group (FIAT + Alfa + Lancia).

These automotive groups produced 6.7 million of diesel PC in Europe in 2012*.

In addition, FORD and GM Europe produced 0.8 million of diesel PC diesel.

Finally, other carmakers (Japanese, Korean, Indian, Chinese groups) produced 0.4 million of diesel PC.

Total production in Europe was 7.9 million of diesel PC in 2012*.







VW GROUP RENAULT-NISSAN

PSA FIAT GROUP

June 25, 2013 33

2.25 million in 2011 2.18 million

in 2012*








Forecast for Europe in 2017

Forecast 2017

Decrease of diesel market share in Europe: from 55 % in 2012 to 48 % in 2017

The ratio of diesel vehicles produced in Europe has increased until 2004 (53%), and then was flat. After a drop in 2009, this ratio has reached again the same level, but should decline under 50% during the coming years (in 2016 or 2017).

June 25, 2013 34

Forecast for Europe in 2030

Forecast 2030

Decrease of diesel market share in Europe: from 55 % in 2012 to 35 % in 2030

The strong developments in direct injection gasoline engines, and in electric and hybrid vehicles, combined with stringent standards on diesel engines and decrease in the price gap between gasoline and diesel fuel should lead to a continuous decrease of diesel between today and 2030.

June 25, 2013 35

Forecast in Europe for 2017 and 2030: Comparison of our two Scenarios

2012

2017

2017

2030

2030

Slow decrease

Quick decrease

Slow decrease

Quick decrease

GASOLINE 44 49 50 50 50

DIESEL 55 48 45 35 30

HYBRIDS

ELECTRICS 1 3 5 15 20

MISCELLANEOUS

June 25, 2013 36

Market share of different motorisation: Comparison Europe / Japan

2012

2012

2017

2017

2030

2030

EUROPE

JAPAN

EUROPE

JAPAN

EUROPE

JAPAN

GASOLINE 44 88 49 82 50 65

DIESEL 55 0 48 0 35 5

HYBRIDS 12 15 20

ELECTRICS 1 0,3 3 3 15 10

MISCELLANEOUS 0 0 1

Sources : INOVEV for Europe, METI for Japan

June 25, 2013 37

Impacts of different Scenarios on Carmakers and Parts Suppliers

Carmakers

Diesel market share of European carmakers:

• Renault-Nissan and PSA manufacture more diesel vehicles than the other European carmakers.

• BMW and Daimler produce few diesel vehicles.

Slow decrease

• Small impact on carmakers up to 2017.

• Concerning 2030, the development of new motorisations may be compulsory even for carmakers, which manufacture few diesel vehicles.

Quick decrease

• Renault-Nissan and PSA should change quickly their engine mix between diesel and gasoline.

• All carmakers should invest quickly in new motorisations in order to keep their market shares.

June 25, 2013 38

Impacts of different Scenarios on Carmakers and parts Suppliers

Parts suppliers

Components impacted by a substitution of diesel by gasoline:

• Fuel supply: high pressure injection pump, tubes for common rail, injectors…

• Air supply: turbochargers, EGR valves, intercooler…

• Engine block: cylinder head, cylinder block…

• Exhaust line: oxidation catalyst, SCR catalyst, particulate filter…

Components impacted by an increase of hybrid and electric vehicles:

• Electric motor

• Inverter / reducer

• HV battery

• HV cables

June 25, 2013 39

Impacts of different Scenarios on Carmakers and parts Suppliers

Parts suppliers

Consequences for parts suppliers, which produce these components:

• Tier 1 parts suppliers provide components as well for gasoline and diesel:

For instance: Bosch, Delphi, Denso or Continental for fuel supply.

For the time being, turbochargers and EGR valves are also used in gasoline engine.

Faurecia, Teneco, Eberspaecher, etc… supply exhaust lines for both gasoline and diesel engines.

A moderate decrease in diesel in Europe will not change so much the business of these parts suppliers, which have global markets.

• The suppliers of components for vehicles equipped with electric motors (hybrids, electrics or fuel cell) are different today, but all the major parts suppliers want to develop their business on this new market, which is growing:

15 to 20 % of the total market forecast in 2030 in Europe.

30 % of the total market forecast in 2030 in Japon.

• Tier 2 or 3 parts suppliers will be more concerned by the decrease of diesel vehicles, for instance:

• Suppliers of high pressure tubes for common rail.

• Suppliers of particulate filters.

June 25, 2013 40

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What future for the diesel engine in Europe? Impacts of different futures scenarios on carmakers and...

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Transcript of What future for the diesel engine in Europe? Impacts of different futures scenarios on carmakers and...