Bad news Good news - ECMA India. Suraj Ghosh (IHS...Diesel share: 7.2% 86% 14% South America (Internal combustion engine) (Mild hybrid electric vehicle) (Full hybrid electric vehicle)

Confidential. © 2019 IHS Markit®. All Rights Reserved.

1

Good newsBad news

There will be no ICE-

powered vehicles in future.

But that future with no ICE, is

at least 20-30 years away.

Confidential. © 2019 IHS Markit®. All Rights Reserved.Confidential. © 2019 IHS Markit®. All Rights Reserved.

Emission Control Technologies 2019

by ECMA

India Powertrain Outlook

Suraj Ghosh

Principal Analyst

Powertrain & Compliance Forecasts

15- 11- 2019


Contents

• Global Powertrain Outlook – Brief

• Regulations

• BS VI

• CO2 Regulations

• Variables – Customer vs Carmaker

• Powertrain trend analysis

• Challenges & Opportunities

• Conclusion

3


Worldwide powertrain production

A global market with fragmented landscapes

4

ElectricMHEV FHEVICE Stop-start PHEV

Source: IHS Markit Powertrain Production Forecast FEB19

2% 1% 2%

4%

13%

78%

Europe2% 1% 1%

2%

53%

41%

North America

Diesel share: 6.2%

2% 1%

12%

6%

36%

43%

Japan/Korea

Diesel share: 12.5%

5% 2%1%

1%

39%

52%

China

Diesel share: 7.2%

86%

14%

South America

(Internal combustion engine) (Mild hybrid electric vehicle) (Full hybrid electric vehicle) (Plug-in hybrid electric vehicle)

IHS Markit 2019 global engine installation forecast by propulsion system, design, and fuel type

1%

65%33%

MEA

Diesel share: 20.8%

Diesel share: 12.6%

(Internal combustion engine)

Diesel share:

37.3%

© 2019 IHS Markit


Global market drivers: Multi-dimensional pressures and challenges

5

RegulationsUrbanization

Technology Economy

Competition

Impact events

Local incentives/

policies

Current electrification race

Product portfolio competition

Countries/States or regions Incentives/fees

City bans, restricted areas, C40 Cities groupIndustry challenges (“diesel-gate” recalls)

Disruptive government renewals

CO2 regulatory frameworks

Emissions standards and homologation tests

Emissions-free areas

New mobility service providers

Charging infrastructure access

Cell production, capacity enhancement,

Technological breakthroughs

Energy network landscape (wind/PV/V2G)

$


Regulations – BS6 & CAFE

6


HC

NOx

PN

HC +

NOx

NOx

PM

Emission Norms Schedule

7

NOx

PM

* Based on WHTC or WHSC

Region/Year 2010 2017 2020 2022 2023 2027

Select Cities

Rest of India

RDE

Test Cycle

CAFE

MHCV FE

MIDC WLTC

Phase 1 Phase 2 Phase 3

Observation phase ISC

BS 4

BS 3

BS 4 BS 6 BS 7

Phase 1 Phase 2 Phase 3

LV HDVPollutant limits


Standard Measures - EuropeEuro 4 Euro 5 Euro 6

Gasoline Base • Combustion improvements over Euro 4

• Faster oxygen sensors

• Catalyst improvements - oxygen storage

capacity and better coatings

• No changes required for MPFI gasoline engines

• Improvements to fuel injection timing or addition of a gasoline

particle filter for gasoline direct injection (GDI) engines Diesel

Diesel Base • Combustion improvements over Euro 4

• Variable fuel injection timing for DPF

regeneration

• DOC + DPF

• Some engines use lean NOX traps

• Increased fuel injection pressure

• Smaller and medium-size engines (<2L) tend to use DOC+DPF

and primarily LNT for NOX control

• Larger cars (>2L) use DOC+DPF+SCR

• Some manufacturers offer EGR-only NOX control (with no

aftertreatment control), and DOC+DPF on medium and larger

cars

• Our internal estimates indicate the following cost/unit incurred by OEMs in EU region:

Tech (Assembly) Cost/unit (€)

1 DOC 87

2 DPF 425

3 LNT 356

4 SCR 652

8

India:

Since India is skipping BS 5, the quantum of leap is wider but

most technologies have evolved and matured with time, hence

the incremental price impact is may be balanced.


Engine Vol (liter) PM Control NOx Control In-cylinder Measures Incremental cost/engine (₹)

Petrol

<1.2 Optimized cat/GPF* None/EGR* Low/Mild 0 – 10k

1.2 – 2.0 Optimized cat/GPF* EGR Mild 5k – 15k

>2.0 Optimized cat/GPF* EGR Mild 10k – 20k

Diesel

<1.5 DPF+DOC LNT Mild 45k – 67k

1.5 – 2.0 DPF+DOC LNT/SCR Mild to Strong 65k – 90k

>2.0 DPF+DOC SCR Strong 90k – 125k

Cost of BS 6 compliance - IHS Estimate based on internal research₹10000~$145~¥16000

* Required for GDI engines

10

0,0

00 IN

R (

1 L

akh

)

5

7

9

11

13

15

17

19

Petrol Diesel Petrol - BS6 Diesel - BS6

9

(Table based on an ICCT study, re-estimated and updated by IHS Markit)


0

1

2

3

4

5

6

7

8

9

10

500 1000 1500 2000 2500

FY 2017-18 to 2021-22 FY 2022-23 onwards

20.5% @ 1200 Kg

Consta

nts

FY 2017

to FY 2021

FY 2022

onwards

a 0.0024 0.002

b 1037 1145

c 5.4922 4.7694

Averaged un-laden mass (kg)

Ave

rag

ed

Fu

el E

co

no

my (

L/1

00

km

)

𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐹𝑢𝑒𝑙 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑= 𝑎 × 𝑊 − 𝑏 + 𝑐

CAFC Targets: Phase I & II

Phase II

FY2022 onwards

Phase I

FY2017-FY2021Phase I

(FY2017-

2021)

Phase II

(FY2022

onwards)

130 g/km 113 g/km

Fleet Target

CO2 Regulations

10


11

CO2 legislation

Compliance

CO2 limit

Test cycle

Procedure

Report

Resistance• Air drag

• Rolling drag

Lightweight• Body type

• Chassis

• Interior and exterior

In-cylinder• Combustion engineering

• Intake technology

• Energy management

• Low friction

• Downsizing

Electrification• BEV

• PHEV

• FHEV

• MHEV

Transmission• Design

• Forward speed

• EVT


Electrification portfolio – From mild hybrid (P0 12V) to high-performance BEV

12

Incre

menta

lcost

from

a s

tandard

IC

E

CO2 benefit from an ICE

From 5 to 15% From 15% to 20% +70% +100%

MHEV

HEV

PHEV

BEV

© 2019 IHS Markit

© 2019 IHS Markit

© 2019 IHS Markit


Key OEMs FE Map – FY2016-17

0

1

2

3

4

5

6

7

8

9

10

11

12

500 700 900 1100 1300 1500 1700 1900 2100 2300 2500

Fu

el E

conom

y (

L/1

00K

m)

Kerb Wt (Kg)

0

1

2

3

4

5

6

7

8

9

10

11

12

500 700 900 1100 1300 1500 1700 1900 2100 2300 2500F

uel E

conom

y (L

/100 K

m)

Kerb Wt (Kg)

0

1

2

3

4

5

6

7

8

9

10

11

12

500 700 900 1100 1300 1500 1700 1900 2100 2300 2500

Fu

el E

conom

y (

L/1

00 K

m)

Kerb Wt (Kg)

FY 2017-18 to 2021-22 FY 2022-23 onwards Petrol Diesel Diesel with Mild CNG

0

1

2

3

4

5

6

7

8

9

10

11

12

500 700 900 1100 1300 1500 1700 1900 2100 2300 2500

Fuel E

conom

y (L

/100 K

m)

Kerb Wt (Kg)

LPG

13

FE data source: SIAM FE data release, www.siamindia.com


Actual FE Data – FY 2017-18

14

Note: Calculation

factors in some sales

number assumptions.


European homologation test cycle evolution

European Powertrain Outlook

15

Impacts of the transition from NEDC to WLTC on the CO2 road to target

© 2018 IHS Markit

Notes: Test cycle comparison between NEDC and WLTP – Source IHS Markit

Simulation result comparison shows an estimated 20% average gap between WLTP CO2 and current NEDC CO2.

This will make the OEMs’ path to compliancy even harder.

Source: IHS Markit VPaC EU © 2018 IHS Markit


Variables – Customer vs Carmaker

16


EV MHEV HEV GDITurbo

DieselGas NA

Convenience OthersVehicle PriceSize/

PerformanceFuel Economy

Fuel Consumption Regulation

Exhaust Gas Regulation

Taxes/Subsidies OthersConsumer Trend

Powertrain Lineup

Variables – Mandated nature of requirements for OEMs

17


EV PHV HEV GDITurbo

DieselGas NA

Powertrain Lineup

Fuel Consumption Regulation

Exhaust Gas Regulation

Taxes/Subsidies OthersConsumer Trend

Convenience OthersVehicle PriceSize/

PerformanceFuel Economy

Variables – Open nature of requirements for Customers

18


Price Clusters – Influencing factors

Price Class

(₹)

TCO Convenience/Technology/Safety

Initial

InvestmentFinance

Fuel

economy

Maintenanc

e cost

Power

steering

Power

windowUpholstery Telematics

Performanc

eTM Design NVH Airbags ABS

300000-500000

500000-700000

700000-900000

900000-1.2mn

1.2mn-1.5mn

1.5mn-2mn

19

1 5

Source: IHSM internal research

Importance


Key Powertrain Trends

20


Diesel Share - OEMs

21

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

LCV≤6T

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

DIESEL Electricity GAS ALT

PC≤3.5T LCV≤6T

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PC≤3.5T


Diesel Share – Segments & Body-type (LVs)

22

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

DIESEL Electricity GAS ALT

A B C D

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

SUV+MPVCar


Key Technologies - LVs

24

0%

10%

20%

30%

40%

50%

60%

70%

80%

2020 2022 2025 2027 2030 2020 2022 2025 2027 2030

xEV GDI Auto-shift 6MT

0%

10%

20%

30%

40%

50%

60%

70%

80%

2020 2022 2025 2027 2030 2020 2022 2025 2027 2030

xEV = MHEV + HEV + PHEV + BEV


Challenges & Opportunities

25


Challenges & Opportunities

26

Government

• RDE implementation.

• Shift to WLTC.

• Urea supply for SCR tech.

• Certification and homologation.

Oil companies

• Supplying BS6 fuel across India on time.

• Huge investments (INR 80,000 crore ~ $11.5 bn).

• Uncertainty of product mix prospects.

Suppliers

• Uncertain business environment.

• Cost challenges.

OEMs

• High compliance costs, hence higher vehicle prices.

• Risk of volume loss due to negative sentiments.

• Urea supply

Opportunities

• Cleaner air

• Accessibility of advanced markets.

• Emission control tech manufacturers.


RDE India

Driving condition Speed (km/h) Time Remarks

Urban V≤40 34% ± 10% Time never <29%

Rural 40<V≤60 33% ± 10%

Motorway V>60 33% ± 10% V≤90km/h

Challenges in Indian market• Dense road traffic, extended idle: Critical for DPF Regeneration

• Extreme operating conditions: 0~5500m, -7ºC to 52ºC, Wide Humidity range.

• Low engine speed.

• Varying driving behavior and pattern.

Conformity Factor

• Will European estimations be followed?

• Phase I – 2.1 and Phase II – 1.4; then gradually moving to Phase III – RDE 1.0?

Validity of RDE Tests

• Start with power binning method or shift directly to moving average window (MAW) method?

In-Service Conformity

• The responsible authority for the ISC tests?

27


Conclusion

28

• Emission regulations continue to be the most significant driver of powertrain technologies.

> Transition to new Test cycle (WLTP) and stricter CO2 norms will become key drivers beyond 2025.

• Small car segments (A+, B and B+) would see rapid decline of diesel share post 2020.

• But, UV (SUVs, MUVs) segment would continue to be diesel-dominant in short- to mid-terms.

• LCVs/MHCVs will see rise in CNG but diesel will remain preferred fuel-type.

• Fleet segment could see more uptake of CNG vehicles, especially considering Maruti’s aggressive CNG-push.

IHS Markit Customer Care

[email protected]

Americas: +1 800 IHS CARE (+1 800 447 2273)

Europe, Middle East, and Africa: +44 (0) 1344 328 300

Asia and the Pacific Rim: +604 291 3600

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Bad news Good news - ECMA India. Suraj Ghosh (IHS...Diesel share: 7.2% 86% 14% South America (Internal combustion engine) (Mild hybrid electric vehicle) (Full hybrid electric vehicle)