Musical Chairs: Will the Future of Powertrain be Mainstream or Alternative?
Despite all the hype and billions of dollars of investment, battery electric vehicles' (BEVs) share of US total light vehicle sales is expected to remain below 1 percent through 2020, according to LMC Automotive. Even if plug-in hybrids (PHEVs), such as the Chevrolet Volt and the Ford Fusion Energi are included, the share will only increase to 3 percent by 2020.
"There is clearly a disconnect between what the federal government and the state of California are looking to achieve and what the majority of consumers actually want," said Mike Omotoso, senior manager of powertrain forecasting at LMC Automotive, while speaking at the CAR Management Briefing Seminars here today. "Even with a federal tax credit of $7,500, the price premium of most electric vehicles is still too high relative to the payback period."
Plug-in Hybrids and EVs Fight to Overcome Roadblocks
However, advancements in technology and investment should alleviate some of consumers' current concerns, which include limited driving range and a lack of a public charging infrastructure, according to Omotoso. One of the advancements that will be growing in availability is the PHEV. Unlike BEVs with a range of 70-100 miles, PHEVs have a range of more than 300 miles with the addition of an internal combustion engine (ICE).
Despite the low market share outlook, LMC Automotive forecasts the volume of BEV and PHEV sales to more than quadruple over the next 10 years to 250,000 units. Stronger demand will be driven by expected higher gas prices, lower costs for the Li-ion batteries and increased model activity. The 2025 Corporate Average Fuel Economy (CAFE) target of 54.5 mpg fleet average will also play a key role in the growth of BEVs and PHEVs.
Diesel is Still Coming
LMC Automotive indicates the diesel light vehicle market is currently dominated by heavy-duty pickup trucks and passenger cars from German automakers, but the share of US light vehicles has continued to hover in the 3 percent range.
Increases in model activity this year in other segments, including new diesel versions of the Chevrolet Cruze, Jeep Grand Cherokee and Ram 1500, will help propel diesel engines' share of light vehicle sales to nearly 8 percent by 2018. Compared to the 50 percent share in the European market, this remains small -- although it more than doubles the US market share in 2012.
Are Conventional Powertrains Doomed?
There is plenty of room for fuel economy improvement of conventional powertrains, with turbocharging and gasoline direct injection (GDI) at the top of the list, according to LMC Automotive. Already standard for many diesels, turbocharged four-cylinder engines are replacing naturally-aspirated V6 engines, and turbocharged V6 engines replacing naturally-aspirated V8s. LMC Automotive expects the share of GDI engine production in North America to grow from 30 percent in 2012 to 55 percent by 2018.
"You get the best of both worlds with turbocharging and GDI: the same or more power than with a larger, naturally aspirated engine, and better fuel economy," said Omotoso.
Even with the advancements in alternative powertrains, LMC Automotive expects the gasoline ICE will remain the dominant powertrain choice for the foreseeable future. However, the gasoline ICE's share of light vehicle sales by fuel type is expected to decrease from 90 percent in 2010 to 72 percent in 2020 as alternative powertrains gain ground over the next few years.
It is clear that there is no one solution in the future to meet the upcoming emissions regulations, and consumers will have a wide variety of powertrain options to choose from to match their driving needs.
About LMC Automotive
LMC Automotive is a market leader in the provision of automotive intelligence and forecasts to an extensive client base of car and truck makers, component manufacturers and suppliers, financial, logistics and government institutions around the world and is widely respected for its extremely responsive customer support.
It offers forecasting services covering global sales and production for light vehicles and heavy trucks, as well as forecasts of engine and transmission supply and demand. In addition, LMC Automotive publishes special studies on subjects of topical interest to the automotive industry.
LMC Automotive is part of the LMC group. LMC is the global leader in economic and business consultancy for the agribusiness sector.