Market Background
[Due to the increasing size of the archives, each topic page now contains only the prior 365 days of content. Access to older stories is now solely through the Monthly Archive pages or the site search function.]
Study Suggests Consumer Demand for Plug-in Hybrid Technology May Be Higher Relatively in Europe than in US; Expectations for Electric Range are High in Both Regions
September 18, 2008
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| Likely PHEV buyers in both Europe and the US have high expectations for mileage resulting from a single charge. Click to enlarge. |
Figures from the annual AutoTECHCAST Europe study conducted by Harris Interactive show that 20% of Europeans are very (13%) or extremely likely (7%) to purchase a vehicle that has plug-in hybrid technology, not taking into account estimated market prices. A further 25% are likely to make that purchase.
In comparison, the earlier Harris Interactive AutoTECHCAST US found that 15% of Americans are very (11%) or extremely likely (5%) (percentages do not add precisely due to rounding) to purchase a vehicle with plug-in technology, with an additional 17% likely to make that purchase.
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Shifts in Energy Supply/Demand and Biofuels Capacity Challenging Refining Industry; US Could Become a Net Exporter of Gasoline
August 26, 2008
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| Refiners face changes in regional supply/demand balances, affecting global trade flows and refining margins. North America will reduce its need for gasoline; Europe will get shorter in diesel;, and Asia will continue to be thirsty for fuels in general. Click to enlarge. |
The refining industry is grappling with shifting scenarios for the future energy landscape, including one case in which the United States could become a net exporter of gasoline by 2010, according to a new analysis of the refining industry by global management consulting firm Booz & Company. In 2007, the US imported
The report, “Refining Trends: The Golden Age Or the Eye of The Storm? Part IV: Tough Choices,” explores rising demand for fuel in Asia and the BRIC nations (Brazil, Russia, India and China), mandates for biofuels, alternative technology vehicles, and the global introduction of ultra low-cost automobiles such as the $2,500 Tata Nano. This confluence of contradictory factors is confounding an industry that counts on 20-year predictions to guide investment decisions made today, according to the analysis.
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Tata Motors Launches Next-Generation Indica
August 23, 2008
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| The Indica Vista. |
Tata Motors launched the new generation of the Indica, first introduced in 1998 and currently the second-largest selling car in the country. Tata has produced more than 1.127 million units of the vehicle in different variants. Pricing for the Indica Vista starts at Rs.3.49 lakhs (US$8,000).
The new Indica Vista, revealed at the Auto Expo in Delhi in January, has been given a complete makeover, and has grown in exterior size and interior space. The car offers a selection of two new powertrains: the new 75 bhp (56 kW) 1.3L Quadrajet Common Rail Diesel engine and the 65 bhp (48 kW) 1.2L CVCP Safire MPFI (multi-point fuel injection) gasoline engine being manufactured at the new Fiat-Tata joint venture at Ranjangaon in Maharashtra.
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Researchers Urge Revamp of Methodologies for Carbon Footprint Calculations
August 16, 2008
Researchers at Carnegie Mellon University (CMU) are urging companies to adopt new, broader and more consistent methods for calculating their carbon footprints.
Accepted frameworks for tracking industry carbon emissions rely on tiers of increasingly broad scope. Tier one generally includes emissions by the company’s own activities, such as burning gasoline in fleet vehicles or natural gas in its facilities. The second tier boundary expands to include emissions from electricity and steam purchased by the company. Tier three includes all other emissions, including the entire supply chain of goods and services. In practice, most companies reporting their greenhouse gas emissions opt to use only the tier one or the tier two boundary.
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UK Testing VASIDs with Automatic Plate Recognition and Display
July 18, 2008
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| The VASID with ANPR will flash the license plate number of speeding vehicles. Click to enlarge. |
The Highways Agency in the UK is testing new Vehicle Activated Speed Indicator Devices (VASIDs) on the A12 highway for seven weeks. The system includes a large trailer-mounted variable message sign (VMS) and remote speed and ANPR (Automatic Number Plate Recognition) detection units.
When fully operational, the system will flash the license plate numbers of vehicles that are exceeding the speed limit as a visual reminder to the drivers to slow down.
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GM Acts to Add $15 Billion in Cash through 2009, Protect Against “Prolonged” US Downturn
July 15, 2008
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| The US market SAAR is trending down. Click to enlarge. |
GM Chairman and CEO Rick Wagoner announced a set of further actions by the company to generate approximately $15 billion in cash through 2009 to protect against its dropping US auto sales and the lowest overall US industry sales volumes in a decade; the weak US economy; record-high fuel prices; and shifts in consumer vehicle preferences.
For liquidity planning purposes, GM is assuming US light-duty vehicle industry volumes of 14.0 million units in 2008-2009. According to Autodata, the US light-duty vehicle SAAR (seasonally adjusted annual rate) dropped from 15.69 million units in June 2007 to 13.64 million units in June 2008. Actual US LDV sales in 2007 were 16.1 million units, down from 16.5 million in 2006. Other GM planning assumptions include a lower GM US market share of approximately 21% and continued average oil prices ranging from $130 to $150 per barrel through 2009.
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International Study Shows Global Gains in Consideration of Hybrid and Electric Vehicles
June 27, 2008
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| 1st International Continental Hybrid Survey: Consumer acceptance of Electric Cars. Click to enlarge. |
Electric cars and vehicles with hybrid drive are generating strong interest among motorists worldwide, according to a survey commissioned by international automotive supplier Continental. A total of 36.0% of those surveyed were willing to buy a car with hybrid drive while 45.8% were interested in purchasing an electric car. Environmental considerations and increasing fuel prices were equally important motivators.
At the beginning of this year, TNS/Infratest surveyed approximately 1,000 motorists each in China, Germany, France, UK, Japan, Austria, Switzerland and the USA (8,058 motorists total) on behalf of Continental AG. The study focused on the motorists’ current state of knowledge and opinions of hybrid drive systems, their driving styles and their views on battery-powered cars.
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Report Projects 4% Shrinkage of US Vehicle Fleet in Face of $7/Gallon Gas by 2012
June 26, 2008
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| CIBC’s Rubin projects a decrease in the US vehicle fleet of 10 million by 2012 as scrappage overtakes new sales. Click to enlarge. |
CIBC World Markets Managing Director/Chief Economist and Chief Strategist Jeff Rubin is projecting a shrinkage in the US vehicle fleet of 10 million vehicles in light of projected $7/gallon gasoline by 2012. A decline on that order would represent approximately a 4% reduction in the overall fleet—the largest such adjustment yet.
In the 26 June 2008 issue of the StrategEcon newsletter, Rubin lifts CIBC’s target for West Texas Intermediate by $20 per barrel to an average price of $150 in 2009 and by $50 per barrel to an average price of $200 per barrel by 2010. “Under prevailing refinery margins” he writes, “that should translate into a near-$7 per gallon pump price within two years, a 70% increase from today’s already record levels.”
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EIA Projects World Energy Use to Grow 50% Between 2005 and 2030; Transportation Accounts for 74% of Increase in Use of Liquids
June 25, 2008
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| The IEO2008 projects an increase in liquids consumption even in a high-price scenario. The high-price case sees a decline in conventional liquids production compared to today and a stronger increase in unconventionals. Click to enlarge. Data: IEO2008 |
World marketed energy consumption is projected to grow by 50% between 2005 and 2030, driven by economic growth and expanding populations in the world’s developing countries, according to the reference case projection from highlights of the International Energy Outlook 2008 (IEO2008) released by the US Energy Information Administration (EIA). The full IEO2008 will be released in July.
In the reference case, total world energy use rises from 462 quadrillion Btu in 2005 to 563 quadrillion Btu in 2015 and then to 695 quadrillion Btu in 2030. Global energy demand grows despite the sustained high world oil prices that are projected to persist over the long term.
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RAND Study Concludes Major Progress in Technology Needed for 25% Renewable Energy Use to Be Affordable
June 24, 2008
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| Sample incremental cost of renewables substitution curve under one set of assumptions. Click to enlarge. |
Major progress in renewable energy technology is needed if the United States desires to produce 25% of its electricity and motor vehicle fuel from renewable sources by 2025 without significantly increasing consumer costs, according to a new RAND Corporation study. Currently, renewable energy provides 9.5% of total US electricity supply, mostly hydroelectric power, and 1.6% of motor vehicle fuel.
Produced by the RAND Environment, Energy and Economic Development Program, the study provides a snapshot of the nation’s potential energy expenditures if a requirement was imposed that 25% of electricity and motor vehicle fuels used in the United States by 2025 would come from renewable resources (a described as “25 x ’25”, earlier post).
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Global Energy Consumption Rises as Supplies Lag; Coal Still the Fastest Growing Fuel in the World
June 18, 2008
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| Global consumption of energy, in million tonnes of oil equivalent. Click to enlarge. |
According to the just-published BP Statistical Review of World Energy 2008, the ongoing strength of world economic growth last year, despite financial market turmoil which began in August, continued to support global energy consumption. Although growth in primary energy consumption slowed in 2007 compared to 2006, at 2.4% it was still above the 10-year average for the fifth consecutive year.
Coal remained the fastest-growing fuel, but oil consumption grew slowly. Oil is still the world’s leading fuel, but has lost global market share for six consecutive years, while coal has gained market share for six years.
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Survey: Rising Gas Prices Trigger Changes in US Driver Behavior; Consideration for Buying More Fuel-Efficient Vehicles as Primary Reponse Low
June 07, 2008
A new telephone survey of 1,000 Americans, conducted by Ipsos Public Affairs on behalf of Access America Travel Insurance and Assistance, has found that 67% have already changed their driving habits because of gas price increases.
Among those who have changed their driving, the median gas price at which they did so was $3.20 per gallon, a level that was reached back in March. As the price at the pump continues to rise, more and more Americans will be changing their driving habits, according to the survey:
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Survey Finds High Energy Prices Beginning to Change US Driver Behavior
June 03, 2008
A national energy survey of 1,007 US respondents by RBC Capital Markets, released in conjunction with the investment bank’s annual North American Energy Conference being held in New York, found that in response to higher prices at the pump, 76% of those polled said they are driving less, 19% are using or plan to take public transportation more often and 11% have made or are considering carpool arrangements.
Four out of 10 workers said they have considered moving closer to their place of work in order to save on transportation costs, and 82% of respondents said they will consider buying a hybrid when they purchase their next vehicle.
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US Vehicle Miles Travelled Dropping
May 28, 2008
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| Moving 12-month total of US VMT through March 2008. Click to enlarge. |
Americans drove less in March 2008, continuing a trend that began in November 2007, according to estimates recently published by the Federal Highway Administration (FHWA).
The FHWA’s Traffic Volume Trends report, produced monthly since 1942, shows that estimated vehicle miles traveled (VMT) on all US public roads for March 2008 fell 4.3% as compared with March 2007 travel. This is the first time estimated March travel on public roads fell since 1979. At 11 billion miles less in March 2008 than in the previous March, this is the sharpest yearly drop for any month in FHWA history.
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Ford Cuts North American Production of Large Trucks and SUVs, Increases Production of Cars and Crossovers
May 23, 2008
Ford Motor Company announced that it is cutting planned North American production and revising downward its near-term North American Automotive profit outlook, while planning further manufacturing capacity realignments, additional cost reductions and changes to its product mix to respond to the rapidly changing business environment in the US.
The company is increasing 2008 North American production of its better selling, more fuel-efficient cars and trucks—Ford Focus, Fusion, Edge and Escape; Mercury Milan and Mariner; and Lincoln MKZ and MKX. At the same time, Ford is reducing 2008 production of large trucks and SUVs, as gas prices soar and customers move more quickly to smaller and more fuel-efficient cars and crossovers.
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Forecast: Lithium-ion Automotive Market Could Reach $1.6B by 2015; Strong HEVs to Dominate
May 13, 2008
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| The market for Li-ion automotive batteries will be dominated by full hybrid applications in 2015, according to Dr. Anderman. Click to enlarge. |
Dr. Menahem Anderman, the president of Advanced Automotive Batteries, projects that the automotive lithium-ion market could reach $1.6 billion in 2015, up almost five-fold from $337M in 2012, propelled largely by a dramatic expansion in the use of Li-ion batteries in strong (or full) hybrid applications. Anderman bases his forecasts on his work with automotive OEMs, battery manufacturers and materials suppliers.
According to the forecast, strong hybrid applications will account for 78% of the market in 2015, reaching $1.26 billion—more than six times the 2012 figures of $196 million, which represents 58% of that projected market. Dr. Anderman released his projections publicly during a presentation of his analysis of the value proposition for automotive Li-ion batteries at the Advanced Automotive Battery & Ultracapacitor Conference (AABC) 2008, running in Tampa, Florida this week.
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18% of Employees Signing up For Commuter Benefits Programs Were Solo Drivers
April 29, 2008
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| Although mass transit users are the most likely to participate in a consumer benefits program, 18% of participants in the survey had been solo drivers. Click to enlarge. |
Eighteen percent of employees signing up for tax-free commuter benefits switches from driving a car to commuting by mass transit to get to work, according to a study conducted by BusinessWeek Research Services (BWRS) and commissioned by TransitCenter, Inc., a nonprofit organization that develops tax-free transit benefits as a means to promote mass transit use.
Since 1993, employers have been able to offer employees a tax-free benefit for commuting by mass transit and eligible vanpools or to pay for commuter parking primarily at transit or ridesharing locations under IRS tax code section 132(f). Tax-free commuter benefits can be structured as an employee-funded tax-free payroll deduction; as an employer-funded benefit; or the costs can be shared by employer and employee.
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DOE Initiates New Energy Frontier Research Centers; $100M for Multiple Awards Beginning in 2009
April 26, 2008
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| Cover of the 2007 BER report on needs for energy storage—one of 10 in the Basic Research needs series underpinning the EFRC initiative. Click to enlarge. |
The Department of Energy’s (DOE) Office of Science, Office of Basic Energy Sciences is initiating Energy Frontier Research Centers (EFRCs) to accelerate the rate of scientific breakthroughs needed to create advanced energy technologies for the 21st century. DOE anticipates that approximately $100 million will be available for multiple EFRC awards starting in FY 2009.
Examples of areas of research focus include, but are not limited to: the direct conversion of solar energy to electricity and chemical fuels; understanding how biological feedstocks are converted into portable fuels; a new generation of radiation-tolerant materials and chemical separation processes for fission applications; energy storage systems; energy utilization and transmission; and science-based geological carbon sequestration.
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Harris Poll: 67% of Americans Believe Humans Contributing to Warming
April 18, 2008
A new Harris Interactive poll has found that 67% of Americans believe the activities of human beings are contributing to an increase in global temperatures—a level only slightly changed from last year’s 65%. In the 2007 version of this poll, 21% said they did not believe the activities of humans contributed to an increase in temperatures while this year 17% do not believe this.
However, only 30% believe global warming will present a threat to them and their families within their lifetime; 39% believe it will not; 31% are not sure. Last year, 36% believed it would be a threat within their lifetime while 41% said it would not and 24% were not sure.
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SAE Panel: Global Auto Industry Entering Period of Prolonged and Fundamental Change
April 15, 2008
A panel comprising leaders from government, academia and the auto industry at the SAE 2008 World Congress yesterday said that the auto industry, while a growth industry globally, is being forced by the challenges of energy availability and climate change into a period of fundamental transformation that will likely endure for decades.
Although the broad strokes of the powertrain and energy pathways that will emerge as dominant from this change can be identified (i.e., move away from oil and toward electrification), the details are still very uncertain. That very uncertainty and the need for engineering creativity is a major opportunity, said Margot T. Oge, Director, Office of Transportation and Air Quality (OTAQ) at the US Environmental Protection Agency (EPA), who gave a keynote address opening the panel on powertrain diversity.
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EIA Expects US Liquid Fuel Consumption to Decrease in 2008; Increase Again in 2009
April 08, 2008
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| The EIA forecasts a decline in gasoline and diesel consumption in 2008. Click to enlarge. |
Based on projections of weak economic growth and continuing record high crude oil and product prices, the US Department of Energy’s (DOE) Energy Information Administration (EIA) is forecasting a decrease in consumption of gasoline, diesel and other petroleum products in 2008 by about 85,000 barrels per day (bbl/d). This represents the first year-on-year decline of consumption of motor gasoline in the US since 1991.
The EIA expects that a modest economic recovery in 2009, combined with slightly lower petroleum prices (an average $92.50 per barrel in 2009, compared to an average $101 per barrel in 2008) will boost total US liquid fuels and other petroleum consumption by about 200,000 bbl/d next year.
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King Abdullah University of Science and Technology Announces Inaugural Global Research Partnership Investigator Winners
March 15, 2008
King Abdullah University of Science and Technology (KAUST) in Saudi Arabia has named the winners of its Global Research Partnership (GRP) Investigator competition. Twelve international scientists—among them Dr. Yi Cui at Stanford (silicon nanowires for li-ion batteries) and Dr. Bruce Logan at Penn State (microbial fuel cells)—were selected as KAUST GRP investigators for the 2007 round of nominations, which featured more than 60 submissions from 38 of the world’s leading research universities.
GRP investigators receive five-year individual grants to investigate a wide range of research topics. As an example, Dr. Logan’s grant is for $10 million.
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European Automobile Production Grows by 5.3% in 2007; Diesel Accounts for 53.3% of New Car Registrations
February 20, 2008
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| Diesel share of new car registrations in Western Europe, 1990-2007. Click to enlarge. |
Automotive production from the European motor vehicle industry in the EU27 grew 5.3% in 2007, reaching nearly 19.7 million vehicles (passenger cars, trucks and buses), according to the ACEA (European Automobile Manufacturers Association) winter Economic Report.
Diesel-powered cars accounted for 53.3% of total new car registrations in Western Europe in 2007, up from 13.8% in 1990. Luxembourg (77.2%), Belgium (77%), France (73.9%) and Spain (70.9%) had the highest diesel share of new car registrations in 2007. The share of 4x4s has increased steadily as well, rising from 2.6% in 1990 to 9.9% in 2009.
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Study: Nearly 35% of US Households with a Vehicle Have at Least Three
February 12, 2008
In a study of households with at least one vehicle, Experian Automotive, a part of global information services company Experian, found that households with three or more cars are the single largest group among American car owners.
Vehicle ownership in the US is an average 2.28 vehicles per household. Experian Automotive found that single-vehicle households represents nearly 34% of the market, and that two-vehicle households present 31%. However, households with three or more vehicles maintain the single largest category, at nearly 35%.
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Survey: US New-Car Shoppers Do Not See Diesels as a Likely Mainstream Powertrain
January 28, 2008
According to the latest Kelley Blue Book Marketing Research study, only six percent of new-car shoppers in the US think that diesel is most likely to succeed in becoming a mainstream vehicle powertrain type, compared to 40% identifying hybrids, 20% selecting hydrogen fuel cell vehicles and 17% citing flexible-fuel systems.
When asked about their perceptions of diesel engines, nearly half of the in-market new-vehicle shoppers say that diesels are dirty and noisy. In addition, the latest study shows that shoppers increasingly believe that diesel-powered vehicles get poorer fuel mileage than conventional gasoline engines, and fewer consumers are seeing diesels as fuel-efficient.
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Shell to Present New Energy Scenarios to 2050: Scramble and Blueprints
January 25, 2008
As part of its on-going methodology of scenario-assisted planning, this year Shell will present two new global scenarios looking out to 2050: Scramble and Blueprints. Shell last issued a set of global scenarios in 2005, looking forward to 2025.
Shell uses scenarios to help review and assess strategy. The scenarios are not forecasts but rather efforts to understand the possible interplay of different types of change. During the 1990’s, as market liberalization accelerated, the Shell global scenarios explored increasing globalization, the onrush of new technology and market liberalization.
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Munich Re Catalogs Natural Catastrophe Events in 2007; Less Extreme, But Greater in Number
December 27, 2007
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| Natural catastrophes 2007. Click to enlarge. |
The global insurance industry had to cope with far higher natural catastrophe losses in 2007 than in 2006, with its unusually low loss figures, according to the preliminary annual assessment by Munich Re, a global reinsurance firm.
Despite the general absence of extreme events in 2007, overall economic losses reached US$75 billion by the end of December—an increase of 50% over 2006 (US$ 50 billion). However, the loss figures were well short of 2005’s record US$ 220 billion. At just under US$ 30 billion, insured losses were almost double those of 2006 (US$ 15 billion). The number of natural catastrophes recorded in 2007 was 950 (compared with 850 in 2006), the highest figure since 1974, when Munich Re began keeping systematic records in its NatCatService database.
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Panasonic EV Energy Co. Starting Studies Geared to Mass Production of Li-Ion Cells for Toyota
December 25, 2007
Panasonic EV Energy Co., the battery-making joint venture between Toyota and Matsushita, has begun studies at its Omori factory geared to the mass production of lithium-ion batteries, said Toyota President Katsuaki Watanabe in his end-of-year press conference. The Omori factory currently produces NiMH cells.
Lithium-ion batteries are better suited than NiMH cells for use in plug-in hybrid electric vehicles, Watanabe said. Toyota, Matsushita, and Panasonic EV are currently conducting development on the cells and systems. Toyota’s current prototype plug-in hybrid uses a NiMH battery pack. (Earlier post.)
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Survey: Europeans Interested in Better Fuel Economy, But Not in Paying for It
December 21, 2007
According to a new Harris Interactive AutoTECHCAST study of adults in the United Kingdom, France, Italy, Germany and Spain, more than one-third (35%) are very or extremely likely to include enhanced fuel economy technologies on their next vehicle. Nearly one-third of all vehicle segment owners expressed the same sentiment, with SUV/4x4 owners expressing the highest initial consideration at 44%.
However, despite the high initial consideration, enhanced fuel economy experienced the highest drop in post-market price consideration in the study. Once respondents were made aware of the £650/€950 price tag, consideration dropped 24 percentage points to 11%.
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New EIA Annual Energy Outlook Reflects Higher Energy Prices, Lower Consumption; GHG Emissions Projected to Grow 25% from 2006-2030
December 14, 2007
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| AEO2008 projections of energy consumption by sector. Consumption in the transportation sector is projected to grow the most rapidly. Click to enlarge. |
The Annual Energy Outlook 2008 (AEO2008) reference case, released by the Energy Information Administration (EIA), includes several significant changes from earlier AEOs reflecting trends in the economy and energy markets that the EIA now expects to persist.
EIA has raised the world oil price path in the AEO2008. In the last few years, global economic growth has been strong, despite high oil prices. While current oil prices are above EIA’s reference case projection of long-run prices, it now appears that, in the mid-term, the cost of liquids will be higher than previously projected.
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Continental Consolidating its Siemens VDO Acquisition; Focused on Safety, Sustainability and Information
December 05, 2007
Hanover, Germany-based Continental AG has closed the acquisition of Siemens VDO Automotive AG and is now beginning the integration of the two automotive suppliers. Continental is consolidating its automotive electronics division and the former VDO to form three new divisions: Chassis & Safety, Powertrain, and Interior.
Dr. Karl-Thomas Neumann, Executive Board member in charge of corporatewide technological development and the new Chassis & Safety and Powertrain divisions, stressed that the new Continental will focus on three future key auto industry trends: safety, sustainability and information.
