Johnson Controls1

Going Green – Opportunities and Challenges

Automotive News World Congress – 2008January 22, 2008

Mary Ann WrightChief Executive OfficerJohnson Controls - Saft Advanced Power Solutions LLC

Johnson Controls2

Johnson Controls has been in the Energy Efficiency Business for 122 Years

NorthAmerica

52%

Power Solutions

World’s largest manufacturer of lead-acid automotive batteries

• 97% Lead Recycling Rate

The leading independent supplier of fully integratedbattery systems for hybrid and electric vehicles

Sold 400,000 AGM lead-acid batteries for micro-hybrids in 2007

Building Efficiency

World’s largest provider of energy efficiency and comfort solutions involving heating, cooling, fire, security, and lighting

Automotive Experience

World’s largest provider of automotive interiors, including seats, door systems, cockpits, overhead systems, and electronics

Johnson Controls3

Transportation Sustainability – the Challenges are Well Known

Economic Disruption

Oil to reach $100/barrel by end of '08

Tuesday October 2, 2007 @ 4:29 pm ET

By Adam Schreck, AP Business WriterFROM: http://biz.yahoo.com/ap/071002/100_oil_outlook.html?.v=1

Energy Security

Environmental Risk

http://www.usip.org/fellows/reports/2004/images/iraq_oil_fire.jpg

http://www.anarkismo.net/attachments/apr2007/panic_peak_oil.jpg

http://www.maf.govt.nz/mafnet/rural-nz/sustainable-resource-use/climate/impact-on-industries/greenhouse.jpg

Resource Impact

Johnson Controls4

Globally, the Transportation Sector Accounts for 24% of all CO2 Emissions

A mid-size automobile driven 24,000 km per year will emit approximately 5 metric tons of CO2 annually

Some forecasts project that the current global population of 700 million automobiles could reach 1.2 billion by 2030

In absence of significant improvementsin powertrain efficiencies, annual CO2 emissions from the transportation sector could exceed 10 billion metric tons by 2030

The non-OECD countries will account for the majority of this increase, about 60%

Non-OECD Countries

Brazil China India Russia

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Year 2006 Year 2030

Bil

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Global Emissions from the Transportation Sector

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A Spectrum of Technologies can Reduce Oil Consumption and CO2 Emissions

Hybrid and electric technologies significantly improve overall vehicle efficiency

Energy Efficiency is the Lowest Total Cost Strategy for CO2 Abatement

XXXCost per mile

XInitial cost to manufacture

XXConvenience (range, refilling)

XXXModel choice/flexibility

XXXXPerformance (acceleration)

XXXFuel efficiency

XXXEmissions (GHG)

All Electricor Fuel Cell

Hybrid(gasoline)

Flex-Fuel(E85)

DieselFactor

XXXCost per mile

XInitial cost to manufacture

XXConvenience (range, refilling)

XXXModel choice/flexibility

XXXXPerformance (acceleration)

XXXFuel efficiency

XXXEmissions (GHG)

All Electricor Fuel Cell

Hybrid(gasoline)

Flex-Fuel(E85)

DieselFactor

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Types of Hybrid Electric Vehicle (HEVs)

Micro (a.k.a Stop/Start) Low voltage Shuts down engine at idle to save fuel

Example: BMW 1,3 mini series – JCI is the world leader in AGM micro hybrid batteries

Mild Low to medium voltage

Includes stop-start, regeneration brakingand acceleration assist

Example: GM Saturn VUE

Full hybrids High voltage

Includes all mild HEV features PLUS electric-only operating range and optionally,multiple axle electric drive

Example: Ford Escape

There are Multiple Types of Hybrids…

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There are Multiple Types of Hybrids…

Plug-In Hybrid (PHEV) High voltage

Includes all full hybrid features PLUSelectric-only operation for ~20 miles

Ability to recharge batterythrough 120V electrical outlet(in addition to regenerative braking)

Demonstration vehicles: GM Saturn VUE, Dodge Transit, Ford Escape

Electric Vehicle High voltage No internal combustion engine Recharge battery through 120V electrical

outlet No models in production

Fuel Cells High Voltage No internal combustion engine Full gas hybrid functionality Demonstration vehicles:

Daimler, Ford, Honda, Toyota

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MicroHybrid Vehicle Fleets

MildHybrid Vehicle Fleets

FullHybrid Vehicle Fleets

PHEV Vehicle Fleets

Battery Innovation “Fuels” the Drive To Sustainable Transportation Technology

Phased Technology Roll-out and Commercialization

Fu

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& C

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Pure Electric Vehicle Fleets

5-8%

12-20%

25-40%

60%- 100%

100%

Commercially Available

Under Development

Available NOW

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Incremental Steps Can Have a Significant Impact

Mild hybridization of just 25 percent of the new vehicle fleet over the next 23 years would have the equivalent emissions impact of eliminating 6 percent of the current global automobile fleet

43 Million Automobiles Hybridization achieving a 20% MPG improvement in ¼ of the new vehicles

Reduced CO2

Emissions of 215 Million

Metric Tons

Johnson Controls10

Li-Ion Battery Technology Advantages for HEVs

Existing Nickel Metal Hydride Battery

• 1.8 kWh of Energy

• 83 liters volume

• 76 kg (without housing)

New Lithium Ion Battery

• 1.5 kWh of Energy

• 35 liters volume

• 33 kg (without housing)

FlexibleDurable

Smaller More PowerfulLighter

Safe

Nickel Metal Hydride is today’s battery technology

Li-Ion is the target of every OEM as the obvious next step battery solution

WHY? {30% Smaller 50% Lighter

30% SmallerMore Energy

More Powerful

Faster RechargeEnhanced Cycle Life

Li-Ion is the Next Battery Technology for Hybrid Vehicles

Johnson Controls11

Hybrid Batteries – A Very Complex System

Mechanical Subsystem Electrochemistry/Cell

Electronics Software

Electrical Subsystem Thermal Management Subsystem

Cell Manufacturing

JIT System Assembly

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Validation of system level performance: OEM requirements Regulatory requirements Life Abuse Tolerance

Identifying the “Value Proposition” Petroleum versus electricity costs Public policy incentives Involvement by all stakeholders Cost impact of regulatory requirements Battery secondary use potential Comprehensive understanding of V2B/V2G economics/challenges Regulatory motivation beyond California

Understanding energy security versus environmental impact Broad use of PHEVs will require rationalization of the utilities fuel base More coal will require CO2 sequestration

Innovation is the key, both technically and commercially

Critical Challenges to PHEV Commercialization

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PHEV - 80% DoD Test Results

80%

85%

90%

95%

100%

105%

110%

0 500 1000 1500 2000 2500 3000

cycle number

Pe

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JCS Li-Ion VL41M

JCS NiMH 4NP40

Life Testing at Southern

California Edison: 78% DOD under

40°C Ambient

Temperature

Initial Test Results from PHEV Application are Encouraging

120K+ Miles Equivalent

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Cost Economies of scale Diverse/capable supply base and access to secure supplies of strategic materials Legislative and policy alignment with technology and market development needs

Technology Technology advancements for PHEVs with demonstrated safety Advanced manufacturing technologies

Infrastructure Recycling and Battery recharging infrastructure (plug-ins) Common engineering standards for HEV powertrains Transportation regulations for shipment of large battery systems

Technical skill sets - Renewed emphasis on technical education in the United States

Software engineering Electrochemistry/Materials science Electrical engineering Mechanical/Thermal engineering

Critical Challenges for the Transportation and Battery Industries

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Energy Bill - Key Transportation Provisions

CAFE increase to 35 mpg fleet average by 2020 vs. current 25 mpg

Promote development and manufacturing of advanced batteries

Expanded R&D

Technology and vehicle demonstration

• Federal fleet conservation program

• Encourage PHEV and electric drive vehicle fleet at state and local levels

Domestic manufacturing incentives

Secondary applications and recycling

Technical education

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Johnson Controls Global Footprint

Bordeaux, FranceLi-Ion Pilot Line & Research Lab

Milwaukee, US

Li-Ion Lab

Hannover, Germany

System Integration

Nersac, France NiMH & Li-Ion

Production Line

Pontoise, France

BMS NiMH & Li-Ion

Shanghai, PRCDevelopment

Facility

New Milwaukee Test Facility Opened October 2007

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The Future Without Hybrids?