This document summarizes key points from a presentation on meeting environmental and fuel efficiency goals. It discusses various technologies that can improve fuel economy, such as digital valve actuation, HCCI engines, and lightweight materials. It also covers consumer behavior factors that impact adoption of more efficient vehicles and the implications of electric vehicles. The real cost of driving on consumers is low currently but could increase with higher gas prices. A variety of solutions will be needed, including efficiency improvements, hybrids, and developing alternative fuels and vehicles.

1. Meeting Environmental and Fuel Efficiency Goals John German, ICCT CALSTART Workshop on Advanced Clean Vehicles: Working to Ensure Sustainability September 27, 2011 Diamond Bar, California

2. 2025 SNOI Proposed Requirements and Global Context Technology Development and Costs Consumer Behavior Real Cost of Driving EV Implications

4. A/C efficiency: 5 g/mi (.000563 gal/mi) for cars; 8 g/mi (.000810 gal/mi) for LDT

5. Off-cycle: 10 g/mi (.001125) for cars and LDT

6. Pickup: 20 g/mi (.002250) for pickup trucks only

8. Four markets absolute and annual rate comparison 5

9. 2025 SNOI Proposed Requirements and Global Context Technology Development and Costs Consumer Behavior Real Cost of Driving EV Implications

10. Fiat MultiAir Digital Valve Actuation HCCI Engine Improvement in fuel economy: 30% Honda Prototype Engine Base( Electro-magnetic valve ) 20 Heat release rate HCCI SI 10 dQ/dθ[J/deg] 0 -40 0 -20 40 20 Crank angle [ATDC deg] Requires increasing the self-ignition region Next-generation Gasoline Engines Dual-loop high/low pressure cooled exhaust gas recirculation

11. Turbo-Boosted EGR Engines Highly dilute combustion – considerable efficiency improvement Advanced ignition systems required Terry Alger, Southwest Research Institute, “Clean and Cool”, Technology Today, Summer 2010

12. Lightweight materials offer great potential Material composition of lightweight vehicle body designs: Approximate fuel economy improvement 10% 25% 27% 37% Also incremental improvements in aerodynamics and tire rolling resistance Slide 9

13. 10 Lotus Phase 2 Status – Feb. 2011 Low Mass Body Status Body in White CAD Model Status Mass: 234 kg (230 kg target) Materials: Aluminum – 75% Magnesium – 12% Steel – 8% Composite – 5%

14. US Joint-Agency TAR: Mass Reduction In 2020-2025 timeframe, mass-reduction will be a core technology Looked at many studies (e.g., US DOE, Sierra Research, MIT, Lotus) Mass reduction typically deployed before hybrid; with increasing cost Various technical studies suggest feasible levels of mass reduction of 20-35% Every TAR scenario for 2025 found average vehicle mass reduction of 14-26% 11

15. Hybrid Technology Advances Synergies with other technologies and optimized control strategies Engine (Atkinson, Miller, lean-cruise, digital valve); optimization of engine and transmission operation; mass-reduction; automated manual transmission New P2 hybrid – single motor with two clutches Pre-transmission clutch: engine decoupling and larger motor Nissan, VW, Hyundai, BMW, and Mercedes Approximately 1/3 lower cost than input powersplit with 90-95% of benefits High-power Li-ion batteries – smaller, lighter, and lower cost 12 VW Touareg hybrid module Nissan Fuga/M35 parallel hybrid layout

16. Joint-Agency TAR: Technology Packages Major CO2-reduction potential from emerging technologies by 2025 US EPA’s OMEGA used many technology packages, 19 vehicle classes to evaluate scenarios Increasing costs from incremental efficiency, to hybrid, and to electric technology Electric EV150 EV100 PHEV40 Plug-in hybrids Grid-charging EV75 PHEV20 Hybrid Optimization Regenerative braking Gasoline efficiency Motor-assist Stop-start Aerodynamics Variable valve lift/lift Advanced materials/designs Tires Dual-clutch Direct injection 6+ speed Turbocharging Price in figure refers to the incremental cost to the consumer due to the new technology packages; technology packages include many different technologies; technology labels are approximate for illustration; grid electricity applies US EPA assumptions and accounting method for US electric grid (558 gCO2e/kWh) for electric and plug-in hybrids 13

17. EPA/NHTSA 2025 Technology Assessments EPA/NHTSA Joint NOI Regarding Light-duty Vehicle Standards for the 2017-2025 Model Years 14

19. Incremental vehicle costs and percent improvements are in reference to MY2008 baseline

21. Elantra already meets 2020 target

22. Sonata and F150 need 2.1% to 2.8% annual improvements1.7% 2.8% 1.0% 2.1% 2.6% 2.1% Standard powertrains for Prius, Elantra, Sonata 3.5L Eco-boost for F150 with most common wheelbase

23. 2025 SNOI Proposed Requirements and Global Context Technology Development and Costs Consumer Behavior Real Cost of Driving EV Implications

24. 2002 NAS/NRC CAFE Report Technology Cost Curves “Energy Paradox”

25. Turrentine & Kurani, 2004 In-depth interviews of 60 California households’ vehicle acquisition histories found no evidence of economically rational decision-making about fuel economy. Out of 60 households (125 vehicle transactions) 9 stated that they compared the fuel economy of vehicles in making their choice. 4 households knew their annual fuel costs. None had made any kind of quantitative assessment of the value of fuel savings.

27. What MPG will I get (your mileage may vary)?

28. How long will my car last?

29. How much driving will I do?

30. What will gasoline cost?

31. What will I give up or pay to get better MPG?“A bird in the hand is worth two in the bush.” Causes the market to produce less fuel economy than is economically efficient

32. The implications of a 3-year payback requirement and uncertainty+loss aversion are the same.

33. New Customer Profile Early Majority Majority Hanger- On Early Adopter Innovator Increasingly risk averse

36. Real Gasoline Price $3.82/gal AEO2009 April 2009 update Motor Gasoline Retail Prices, U.S. City Average, adjusted using CPI-U

37. New Vehicle Fuel Economy 34.8 in 2016 plus 4% per year 2008 EPA FE Trends Report

38. New Vehicle Gasoline Cost per Mile $3.82/gal

39. $19/gal $11/gal Real Fuel Cost - % of Disposable Income $3.82/gal Forecasted Per Capita Disposable Income from AEO2009 April 2009 update

40. 2025 SNOI Proposed Requirements and Global Context Technology Development and Costs Consumer Behavior Real Cost of Driving EV Implications

41. Significance of Fuel Cell and Electric Vehicles Fuel cell and electric vehicle technology have the potential to concurrently help solve the problems of air pollution, global warming, and limited energy resources Developing alternative fuel technology (vehicles and infrastructure) to address energy sustainability Energy Sustainability Fuel cell and electric technology Further advancing fuel efficiency through conventional engine hybrid and other technologies ③ Climate Change Reducing air pollution with conventional engine technology ② Hybrid and internal combustion engine technology ① Air Quality Today past future present

42. In gauging the potential for advanced vehicles, remember that the competition is changing…. What looks good against today’s (conventional) car may not look so good against tomorrow’s. Slide from Steve Plotkin, Argonne National Lab, based on ANL’s Multi-Path project 31

43. Uncertainties Larger Barrier for PHEVs How much am I going to save on fuel? How much will I pay for electricity? How often do I need to plug in? How much hassle will it be to plug in? Can I be electrocuted in the rain or if I work on my vehicle? What will it cost to install recharging equipment? How long will the battery last? And how much will it cost to replace it? How reliable will the vehicle be? What will the resale value be? Especially since the next owner also has to install recharging equipment What kind of PHEV is best for me? Would a blended strategy be better than electric-only operation? What amount of AER would be best for my driving? What if I move or change jobs? It’s bad enough to spend $300 on a Betamax - but $30,000+ ?

44. Electricity versus Hydrogen Both are energy carriers – can be dirty or clean, depending on how created Advantages and needed improvements are very different ??? 15 min = 440v x 1,000 amp

45. Natural Market Barriers Need for technological advances Learning by doing Scale economies Resistance to novel technologies Lack of diversity of choice Chicken or egg? Lack of fuel availability Lack of vehicles to use new fuel DOE’s hydrogen study estimated transition costs of$25-40 billion

46. Realty CAFE/feebates needed to fill gap between value of the fuel savings to new vehicle purchasers and to society 2025 proposed standards are aggressive, but can be met with conventional technology at reasonable cost EV credits strong incentive to introduce EVs anyway Mainstream customer risk/loss aversion challenges Most customers will continue to value performance, features, and utility higher than fuel savings Significant barrier to advanced technology, especially PHEVs For BEVs, battery recharge time larger barrier than range Fuel prices will not be a driver of advanced technology Real cost of driving is low and will drop in future

48. Gasoline engines and hybrids are improving rapidly

49. Hybrid costs are dropping and synergies are developing: mass market acceptance likely within 15 years

50. Advanced technologies must be better to be accepted by the mass market

51. No silver bullet – at least not yet

52. Support development of hybrids, lightweight materials, batteries, fuel cells, and alternative fuels

54. No single solution – multi-pronged approach Research for mass production Fleet tests EV/FCV development for future Efficiency/CO2 reduction HEV expansion Clean diesel High efficient gasoline engine HCCI DI turbo Cylinder deactivation Base engine and vehicle improvements weight Aero, tires Trans- missions Friction reduction Variable valves Efficiency/CO2 Reduction Strategies

55. Are We Looking the Wrong Way? Combustion work focuses on raising output efficiency over typical driving cycles From roughly 20% to 35% Heat losses are the 800-pound gorilla in the closet

56. Synergies Between Parallel Hybrid and DCTDCT: Dual-clutch automated manual The electric motor is mounted parallel to the transmission shafts and is connected via an electro-magnetic clutch that allows it to connect to either of the two gear sets.

58. Fuel efficiency has increased by about 1.4% per year since 1987

60. Large impact on size & performance Little impact on vehicle technology (same size vehicles had similar efficiency) Impacts of Fuel Price and Congestion Even 3 years into the European CO2 requirements (1998) and despite 3 x higher fuel prices in Europe, US efficiency still matched that of Europe. Source: Saving Oil and Reducing CO2 Emissions in Transport, IEA, 2001

62. Cost-benefits are clear to purchasers

63. Fuel price does not have a major impact on technology penetration

64. Technology increases initial purchase cost, offsetting fuel savings

65. Net benefits are not clear to purchasers, especially since most new vehicle purchasers severely discount future fuel savings

67. Technology du jour 25 years ago – Methanol 15 years ago – Electric vehicles 10 years ago – Hybrid/electric vehicles 6years ago – Fuel cell vehicles 4years ago – Ethanol Today – BEVs and PHEVs What’s next? Extremely disruptive and wasteful