What Does the Future Hold for Advanced Technologies?

John GermanAmerican Honda Motor Co., Inc.

Advanced Powertrain ForumAugust 5, 2005

Energy Supply & DemandEnergy Supply & DemandSustainabilitySustainability

Urban Air QualityUrban Air Quality

Climate ChangeClimate Change

3 Issues for the Future Automobile:

Climate ChangeClimate Change

Key IssuesKey Issues

Air PollutionAir Pollution

EnergyEnergySustainabilitySustainability

Soci

al C

once

rns

Soci

al C

once

rns

Transportation’s Social Issues

Honda is Committed to Clean and Efficient Gasoline Vehicles

• Technically advanced F.E. leading models in the market

• Popular mass-market models with continual efficiency improvement

• Highest CAFE of major OEMs

Honda’s Environmental Leadership

1975Civic CVCC

1st to meet ’70’s Clean Air Act,without a catalyst

1986Civic CRX-HF

1st to top 50-mpg mark

Seemingly-incompatibleachievement of --

1. Strong performance2. Low emissions3. High fuel economy

1990VTEC engine introduced

Honda’s Power Train Roadmap

20101990 2000

i-VTEC

2020

Improvement of ICE

C V TVTEC-E

FCV

Accord Accord I M AI M A

Alternative Fuel Vehicle

Hydrogen fueled FCV

CNGi-DSI

+

Effic

ienc

y / C

O2 R

educ

tion

I M A

INSIGHTIntegrated Motor Assist

I. C. Engine Technologies Civic

IMA

CLEAN GASOLINE

Future Building Block • LEV, ULEV, SULEV Leadership• Infrastructure is perfect• Reasonable cost• Catalyst technology

PURE ELECTRICFuture Building Blocks• EV know-how• Infrastructure Issues• Home Refueling• Customer Habits

CNGFuture Building Blocks• Working with Government• Understanding Fleet Customers• Infrastructure Challenges • Gaseous Fuel know-how

Honda’s Building Blocks for the Future

Combines BEV with ULEV• Infrastructure is perfect• Cost is affordable• Good Customer AcceptanceFuture Building Block:• Electric Energy Mgmt & Safety...

GASOLINE-ELECTRIC HYBRIDS

HOME REFUELED AFV

Combines CNG with BEV attributes:• Home Refueling• As Clean as a BEV• Lower Cost potentialFuture Building Block:• Potential Infrastructure Solution• Gaseous Fuel know-how

Honda’s Building Blocks for the Future

PURE ELECTRIC

CNG

CLEAN GASOLINE

Honda’s Future DreamCNG

HOME REFUELED AFV

GASOLINE-ELECTRIC HYBRIDS

CLEAN GASOLINE

PURE ELECTRIC

Built on Core Honda Technologies:• EV and HEV vehicle know-how• Gaseous Fuel know-how• Catalyst know-how • Infrastructure innovation• Technology innovation (Ultra-Cap)

FUEL CELL VEHICLES

Conventional Technology

‘91 ‘95 ‘03

50%Application %Application %

• HIGHER EFFICIENCYHIGHER EFFICIENCY• LOWER EMISSIONSLOWER EMISSIONS• GREATER PERFORMANCEGREATER PERFORMANCE

(Variable valve Timing and lift, Electronically Controlled)Honda VTEC Combustion:

Vehicle speedVehicle speed

CruiseCruise

DecelDecel

AccelAccel

6 Cylinder operation

3 Cylinder operation

Variable Cylinder ManagementVariable Cylinder Management

Honda Announced Improvements• 2006 Civic VTEC

– Delays intake valve closure timing during cruising and other low-load conditions

• Throttle-by-wire used for larger throttle opening and a major reduction in pumping loss

– Switches valve timing for excellent acceleration• Advanced VTEC

– Continuously variable intake valve timing and lift– + 13% efficiency (vs. 2005 i-VTEC engine

• Advanced VCM– Increased flexibility to expand range of driving

conditions– Improved active control engine mounts– + 11% efficiency (vs. 2005 Honda V-6 engine)

Transmission Advances

• Dual-clutch automated manual– Smooth shifting and potentially cheaper– But launch concerns (no torque converter), huge investment

• Continuously Variable Transmission (CVT)– Excellent city efficiency and extremely smooth– Can deliver steady-state engine speeds to facilitate HCCI– But torque limited, highway efficiency lower (belt friction), huge investment

• Improved shift points and lock-up strategies– Low investment

• Lapillier 6-speed automatic

Computer controls are enabling a variety of improved transmission designs

Not yet clear which is most cost-effective – all may co-exist

Incremental FE Technology• Engine technology

– High specific output (including 4 valve/cylinder)

– Variable valve timing/lift– Cylinder deactivation– Direct injection– Precise air/fuel metering

• Transmission efficiency– 5/6 speed-AT/6-speed MT– CVT– Dual-clutch automated MT

• Reduced losses– Lightweight materials– Low drag coefficient– Low resistance tires– Lower accessory losses

Cost and value issue• These technologies are

continuously being incorporated into vehicles.

• However, consumers value other attributes more highly, such as performance, safety, utility, and luxury.

• Putting in technologies just to improve fuel economy may not be valued by customers.

Fuel Economy Improvement - ???Depends on how much is already incorporated into fleet and synergies (or lack of synergy) between technologies

Worldwide Fuel Control

• On a systems basis, good fuel is needed to enable many technologies

• Growing countries, such as India and China, need to improve fuel quality– Sulfur– Heavy metals– Aromatics– Deposit additives– etc

Diesels

71%67%

58%

47%

39%

26%

3%0

1

2

3

4

5

6

7

Austria France Spain Italy Germany UK US

Fuel

Pri

ce (D

olla

rs/G

allo

n)

Gasoline Base Gasoline TaxDiesel Base Diesel TaxDiesel Penetration

Comparison Between U.S. & Europe

Source: US Department of Energy Report, October 2003; Association of European Automobile Manufacturers, April 2003Note: All data valid through December 2002

Correlation with fuel price: R2=0.61

Diesel emission standards less stringent than gasoline in Europe

• Diesels good for towing and highway efficiency– But hybrids get better fuel economy in city driving

• Diesels are currently cheaper than hybrids, but are not cheap – $1500 for 4-cyl., $2000-$3000 for V-8– Tier 2 emission standards will add significant cost

• Less convenient service stations (only ~ 20% carry diesel)• Will take time for public to recognize improvements in noise,

vibration, smell, starting, and emissions– Plus pickup customers want a “tough” diesel, not a wimpy quiet one

• Must compete with improved gasoline engines and hybrids• Europe refineries already shipping unwanted gasoline to US

– With continued fleet turnover to diesel in Europe, who will buy gasoline if US also shifts to diesels?

Diesel Market Potential in US

Hybrids

Electric MotorElectric Motor

Intelligent Intelligent Power Power

Unit (IPU)Unit (IPU)

Hybrid Vehicles

CVTCVT

Efficient Efficient hybrid hybrid engineengine

Civic Hybrid

Integrated Motor Assist Hybrid

Transmission

Motor / Generator

Engine

BatteryInverter

Parallel - Type

•Relatively Simple, Lightweight & Compact

•Efficient in City and Highway driving

Honda HEV Technology Evolution

• Fuel Economy No.1"World Best Efficiency”

• Hybrid vehicle for personal use

• World best aerodynamic design

• Light aluminum body

• VTEC + IMA system

1999

• First optional hybrid powertrainHigh volume compact car

• i-DSI + IMA system

• Innovative Sedan Package

• Mainstream compact

2002

• First V6 hybridPerformance + efficiency

• 255 horsepower –better than V6

• City 29, hwy 37 mpg (same as Civic class)

• Mainstream midsize

2004

Powerplant

IMA Motor•DC brushless •New IPM Motor •Resolver sensor

V6 3.0L i-VTEC VCM Engine(Variable Cylinder Management)

Compact 5ATLong torsion, LC response UP torque converter

Parallel-Type Hybrid SystemParallel-Type Hybrid System• Simple, Lightweight & CompactSimple, Lightweight & Compact• Efficient in City Efficient in City andand Highway driving Highway driving

Engine and Motor Output Characteristics

High Efficiency,High Efficiency,High TorqueHigh Torque

Electric MotorElectric Motor

CIVIC HYBRID

(1.3L Engine only)

Attractive Hybrid Features

Integrated Integrated Electric MotorElectric Motor

Low Operating Cost:

Best “Idle” Quality:

Superior Driving Range: Pride of Ownership:

Beats any Luxury Car!

Fewer Trips to the Station!

Social Benefits!

Fuel Savings!

Alternative Fuels

Honda’s Advanced CNG Technology

Civic GX Values Range > 200 miles CO2 reduction > 20% Performance = Gasoline Near-Zero Emissions Proven Honda DQR Satisfied customers

Compact Cars - CO2 Comparisons“Wellhead-to-Wheel”

CO

2 em

issi

on

0

100

200

300

400

Civic Gasoline

JettaDiesel

353

306

CivicCNG

264

Civic Hybrid

236

-25%-25%

-11%-11%

Infrastructure Innovations

NGVs

Fleet Forklifts

Private Fleet Refueling

Home Refueling

Fleet & Consumer

Public Fast FillInfrastructure

Network

Buses, Heavy Duty

FCX-V2 FCX-V3

Improved performance and reliability

Evolves to the next generation

CompactExcellent performance

Superb durability

Methanol-reforming fueled fuel cell stack on

FCX-V2

High-pressure hydrogen tankon a pure hydrogen-fueled FCX-V3

Series of public road tests as part of

Next-generationHonda FC Stack released

Start of R

&D

on fuel cell basic S

tart of R&

D on fuel cell basic

technologytechnology

‘80s ‘99 ‘00 ‘01 ‘02 ‘03 ‘04

Development History of Honda FC Stack

20011999

2005 model launchCaFCP

Output density of Honda FC stackCompact High output

Spring 04 confirmation in California, and fall 04 in New YorkJapan testing started fall 03

First delivery to an individual customer in July 2005

Environmental adaptability

Low/high temperature

PerformanceImproved acceleration

performance

Fuel efficiencyImproved energy efficiency

FCX Equipped with Honda Fuel Cell STACK

Home Energy Station

Reformated GasHome Refueling with Co-generation

Heat

Electricity

Hydrogen

～～ ～ ～～

Natural gas Reform

Fuel cell

Inverter

CompressStorage tank

～

Refine

Cooperative development with Plug Power

Fuel Cells: The Holy Grail

Advantages:• Very high fuel conversion

efficiencies– Greatly reduced heat loss

• Virtually zero emissions• Quiet• Reliable and long lifetime• Low maintenance• Wide range of applications

in addition to vehicles

Challenges• Packaging, size, weight• Cost• Waste heat rejection• Air supply Compressor• Cold temperature operation• On-board hydrogen storage• Hydrogen infrastructure

System Comparison

Renewable Energy

Oil Base

Natural Gas Base

CO2 emissions [g/km]

Tank to Wheels Well to Tank

Honda’s Estimate

JAPAN 10-15 mode

FE base in 2010

CIVIC (VTEC-E)

FIT (i-DSI)

CIVIC IMA

Diesel EngineGasoline Reform.

FCV

CIVIC CNG Methanol Reform.

FCV

Hydrogen FCV

0 50 100 1500

23km/L

16km/L

20km/L

29km/L

(1250kg)

Comparison of CO2 Emissions

Improvement of Gasoline Vehicle

: Excellent : Good : Marginal :No contribution or not acceptable

H2 Fuel Cell

Gasoline

Nat Gas

GasolineHybrid

Social Demand Customer Demand Tailpipe

EmissionsEfficiency

(CO2)Alt.Fuel

Cost Infra-structure

Diesel

Technology

◎◎

◎

◎

◎◎

◎◎◎

◎○

○○○

○○△

△

△

△ △

△

×

×××

××

○○

(tank)

Current Evaluation of Power Plant Technologies

○○

○ w/ home refueling

Package(Volume, Wt.,

features)

×(inc. range)

△ ○-(range)

00 Insight 03 Civic IMA

Development History of Honda Hybrids05 Accord IMA 06 Civic IMA

60 mm thick, 10kW

NiMH, 144v, 35 kg

Air cooled

also asymmetric windings + 30 % torque

Highstrengthmaterial

Soft, magnetic material

Volume –30%, weight –6%

Integrated cooling –32% weight, -20% size. Also more efficient inverter

Internal magnet + resolver pickup, 12kW

Magnet

Silicon Steel

Improved electrodeNew Current Collector

Reduce internal resistanceU-shape, 12-cell series module

Volume –10%, weight –17%Power + 20%

Condenser

Integrated inverter, condenser, heat sink: –13% weight, -57% size

High density coil High density coil windingswindings

High-performance High-performance magnetsmagnets

15 kW15 kW, same size, same size

Inverter integrated Inverter integrated with motor ECUwith motor ECU

Battery output Battery output power increased power increased

30%30%158v158v

Improved coolingImproved cooling

Hybrid Synergies

• More efficient electric pumps and compressors– Beltless engine

• Extend operating windows for Atkinson cycle and cylinder deactivation

• Provide quasi-steady-state load conditions for HCCI/CAI operation (especially with CVT)

• E-turbo – High electric power – supercharger boost– When power is not needed, use exhaust energy

to drive e-turbo and recharge battery

Potential Operating Modes

Atkinson

cycle

Otto cycle

Electric motor only

CAI – Controlled Auto Ignition

Assumes camless valve actuation and e-turbo

Consumer FeaturesPlenty of electric power to do anything • On-board electric generator

– Construction, emergency power• Individual climate-controlled seats• Power everything• Automatic load leveling and shock resistance• Multiple video displays and high power sound• Safety features – cameras, heads-up displays• “Stealth” operation (military, police, crooks)

No limit to the imagination

: Excellent : Good : Marginal

:No contribution or not acceptable

GasolineGasolineHybrid

Social Demand Customer Demand Tailpipe

EmissionsEfficiency

(CO2)Alt.Fuel

Package(Volume, Wt.,

features)Cost Infra-

structure

Diesel

Technology

◎

◎

◎

◎◎◎

○

○○

△

△

×××

×

△○○

Mid-Term Evaluation of Hybrids vs. Diesels

○-△ ○-◎

△ ○- △ ○-

Diesels in wide-open rural areas – value highway FE and towingHybrids everywhere else? – better city FE plus electric features

Hybrid Cost downSynergies + customer features

Diesel Emissions down, but cost upDiesel shift cheap gasoline

Technology Conclusions• Challenge is customer’s low value of fuel economy

– Real cost of driving very low– Performance, utility, comfort, safety valued more highly– Most only consider fuel savings during ownership period

• Hybrid technology is progressing rapidly– Costs coming down– Synergies with other technologies developing– Consumer features will develop

• Crystal ball unclear– Improved conventional engines keep raising the bar– Fuel cells the endgame, but timing unclear (not near term)– CNG may appeal to a segment who dislikes refueling– Diesels for rural areas, hybrids for urban?– Multiple transmission designs likely

Barriers to Achieving Potential Fuel Economy Increases in

Cars and Light Trucks

• Tradeoff with other attributes• Declining fuel cost• Consumers versus society

CAFE History

Historical combined car and light truck CAFE

Since 1987:• Car CAFE up 0.9 mpg, light truck CAFE down 0.8 mpg• LDT market share increased from 28% to 48%• Combined CAFE decreased by 1.5 mpg

0

5

10

15

20

25

30

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

MPG

0%

10%

20%

30%

40%

50%

60%

car + light truck

light truck

car

light truck market share

Effect of Attribute Tradeoffs - CarsCar Data from EPA’s 2003 FE Trends Report

Fuel efficiency has increased by about 1.5% per year since 1987However, this has all been used to increase other attributes more highly valued by

the customer, such as performance, comfort, utility, and safety

10

15

20

25

30

35

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

1000

1500

2000

2500

3000

3500weight

MPG

% manual

0-60 time

20

22

24

26

28

30

32

34

36

38

40

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

1981 wts, accel,& % manual

1981 wts& accel

actual data

MPG

Effect of Attribute Tradeoffs - LDTLight Truck Data from EPA’s 2003 FE Trends Report

Fuel efficiency has increased by about 1.9% per year since 1987However, this has all been used to increase other attributes more highly valued by

the customer, such as performance, comfort, utility, and safety

5

10

15

20

25

30

35

40

45

50

55

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

weight

MPG

% manual

0-60 time

20

21

22

23

24

25

26

27

28

29

30

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

MPG

1981 wts, accel,& % manual

1981 wts& accel

actual data

Real Gasoline Price

June 2004

Real Gasoline Prices(2005 $ per gallon)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

1950 1960 1970 1980 1990 2000Motor Gasoline Retail Prices, U.S. City Average, adjusted using CPI-U

Jun-05

Fleet Fuel EconomyReal Gasoline Prices and In-Use Fleet MPG

(2005 $ per gallon)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

1950 1960 1970 1980 1990 20000

5

10

15

20

25

30

MPG

Car mpg

Car + Light Truck mpg

Real Gasoline Price

In-Use MPG from Transportation Energy Data Book: 2004

Gasoline Cost per Mile

Real Gasoline Cost for Cars - Cents per Mile(2005 $ per gallon)

$0.00$0.02

$0.04$0.06

$0.08$0.10$0.12

$0.14$0.16

$0.18$0.20

1970 1975 1980 1985 1990 1995 2000 2005

June 2005

Real Fuel Cost - % of Disposable Income

Per Capita Disposable Income from BEA, Table 2.1, Personal Income and It's Disposition

Real Fuel Cost of Driving a Passenger Car 10,000 Miles % of Per Capita Disposable Income

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

1970 1975 1980 1985 1990 1995 2000 2005

% o

f Per

Cap

ita D

ispo

sabl

e In

com

e

June 2005

Willingness to Pay for FE

J.D. Power Hybrid Vehicle Acceptance StudyMarch 6, 2002 Press

Release• Consumer interest in hybrid vehicles increases as

gasoline prices rise• 30% of buyers would “definitely” consider -

another 30% indicate a strong consideration• Of these, 1/3 would buy even if fuel cost savings

during their ownership period would be less than the extra cost of the hybrid option

2/3 would not pay more than fuel savings during ownership period

Customer Value of Hybrid Fuel Savings (Savings for the first 50,000 miles @ U.S.$1.80/gallon)

Hybrid fuel economy

increase34 mpgbaseline

23 mpgbaseline

14 mpgbaseline

Small car Midsize car Large truck

+ 20%

+ 40%

+ 80%

$441

$756

$1,176

$652

$1,118

$1,739

$1,071

$1,837

$2,857

J.D.Power survey on hybrids found that “Consumers indicate a willingness to pay more – $1,000 to $1,500 – for a hybrid powertrain…”