1. CAFE & GHG Overview
2012-2025 and Beyond
Michael J. Stanton
President, CEO
Association of Global Automakers
Washington Automotive Press Association
April 18, 2012
Washington, D.C.

2. Our Members

3. How Did We Get Here?
• Lack of National Energy Policy
• Energy Security
• Climate Change
• Worldwide Demand for Oil

4. Worldwide Demand
900
USA, 800
800
700
600
500
400
300 Russia, 280
200
100 China, 50
India, 15
0
CARS PER 1,000 RESIDENTS

5. Worldwide Demand
By 2050 there
may be 4 billion
vehicles on our
Planet –up from
a billion today.

6. Share of Oil Consumed and GHG
Emitted by Passenger Vehicles
U.S. Oil U.S. Man Made GHG
Consumption Emissions
Light Duty 19% Light Duty
46% Vehicles Vehicles
54% Other Uses Other
81% Sectors

7. Footprint Based Standards
Footprint is defined
as a vehicle’s
wheelbase
multiplied by its
track width, or in
other words the
area enclosed by
the points at which
the wheels meet
the ground.

8. Regulatory Actions Important to One National
Program (ONP)
DOT
Regulates fuel
economy through
the Corporate
Average Fuel
Economy (CAFE)
Program
EPA State of
California
Regulates
Greenhouse Has its own
Gas (GHG) Greenhouse
Emissions Gas (GHG)
Standards

9. Final Rule
for 2017 - 2025

10. CAFE (mpg) Standards Curves for
Passenger Cars
Combined Standard
for Cars and LDTs
2012-2016: 35.5 MPG
2017-2025: 54.5 MPG

11. The Importance of the Mid Term Review
There is uncertainty about what
the marketplace will look like
in 14 years.
• Technology
• Infrastructure
• Consumer Acceptance

12. California Zero Emission Vehicle Requirements
Source: California Air Resource Board

13. How will Automakers
Get There?

14. Near Term Improvements
Powertrain Improvements Other
• Cylinder deactivation • Aerodynamics
• Friction reduction • Light-weighting
• Cooled EGR
• Improved tires
• Electric accessories
• Engine downsizing
• Down-sizing
• Valve train improvements
• Direct injection
• CVTs
• Improved auto transmissions
• Dual clutch transmissions
• Start/stop
• Turbocharging

15. Recent Announcements
Lexus ES 300 Hybrid Honda FCX Clarity
38 MPG HWY 60 MPG HWY
2013 Hyundai Santa Fe Nissan Altima
33 MPG HWY 38 MPG HWY

16. U.S. Sales by Powertrain Type
102
0.1%
100 0.1% 1.1% 1.3%
2.1%
98 1.5% 1.9%
96 2.5%
3.6%
4.1% Full Electric
94
Plug In
92 3.5%
Hybrid
90 4.4%
Diesel
88 95.3%
ICE
86 90.3%
88.3%
84
82
2011 Projected 2015 Projected 2020
Source: Citi Investment Research & Analysis

17. Beyond 2025
Source: California Air Resource Board

18. Continued Challenges
• Cost
• Range
• Safety
• Infrastructure

19. Consumer Acceptance

20. Annual Market Segment by Vehicle Sales vs. Gas Prices
(2012 YTD)
800,000 $4.00
Cars
700,000 $3.90
Trucks
Gas
600,000 $3.80 Prices
Vehicle Sales by Units
500,000 $3.70
Gas Price
400,000 March Sales Facts
$3.60
Cars accounted for
300,000
nearly 55% of new$3.50
light duty vehicle
sales.
200,000 $3.40
100,000 $3.30
0 $3.20
January February March

21. Vehicle Cost Projections
• The NPRM Estimates Vehicle Cost Projection by
2025:
– $3,000 more per vehicle
• NADA Study on New Vehicle Market Population
– As price of vehicles increase, fewer people
are able to purchase vehicles.

22. Law of Diminishing Returns
Gallons Cost Per
Year MPG Price
Per Year Year
2025 54.5 mpg 220 $5.00 $1,100
2030 67 mpg 180 $5.00 $900
Numbers based off a 12,000 miles a year driving average

23. The Market Today
• Hybrid sales up 33% in March
• Average price of a battery pack declining
• EV sales up, making up three tenths of
1% of market
“Automakers show no signs of pulling
back their multibillion-dollar bet.”
-David Shepardson, Detroit News

24. Other Consumer Issues
• Changing Consumer Attitudes
• Influencing Consumer Behavior
• Providing More Consumer Options

25. Consumer Education
• Education is needed
• Some have started
www.drivingfueleconomy.com

26. In Summary
• Higher Fuel Economy is Needed
• Technologies are Available & Evolving
• Biggest Questions are Infrastructure and
Consumer

27. Thank you
Michael J. Stanton
President, CEO
Association of Global Automakers
Washington Automotive Press Association
April 18, 2012
Washington, D.C.