Today’s Session

Welcome and Overview Allen Schaeffer, Executive Director - Diesel Technology ForumManufacturer Perspectives

Michael J. Ruth, Director - Advanced Systems Integration, Chassis Certified Products - Cummins Inc.

Douglas Skorupski, Powertrain Strategy Manager, Product Strategy - Volkswagen of America, Inc.

Policy Discussion Jeffrey Breneman – Executive Director, U.S. Coalition for

Advanced Diesel Cars

Q&A

Diesel Technology Forumwww.dieselforum.org

AGCO BorgWarner Bosch Caterpillar Inc. Chrysler CNH Industrial Cummins Inc Daimler Delphi Automotive Deere & Company General Motors Honeywell Isuzu Motors Johnson Matthey

Mazda North American Operations

MTU America Umicore Volvo Group Volkswagen Group of

America Yanmar

Allied Members Association of Diesel

Specialists National Biodiesel Board Western States Petroleum

Association

Questions we hope to answer today…

What is clean diesel? Why clean diesel is an increasingly important

technology choice for meeting future fuel economy, GHG requirements and customer demands;

Where does clean diesel fit into the line-up of fuels and technologies for the cars and trucks of the future?

What are the barriers to expanded use of diesel technology?

Diesel Car’s Fuel Efficiency is Well Documented in History

Now we’re talking aboutthe new generation clean diesel

6

?

Proven Real World Fuel Efficiency

Clean & Low CO2

Desirable Performance

No Compromiseon Vehicle Type

Available NOW

Renewable Fuel Ready

DIESELGasoline

CNG

What is Clean Diesel?(Most energy dense fuel + Most energy-efficient internal

combustion engine + Most advanced emissions controls)

EV

Clean Diesel is one of the Fuel and Technology Choices for the Future

2000

•Gasoline•Hybrid (Prius)•Diesel

•(VW, Mercedes; Trucks: GM, Dodge, Ford)

2015

•Gasoline

•Gasoline- GDI

•Clean Diesel

•Hybrids

•Plug-in HEV•Battery Electric Vehicle (BEV)•Natural Gas

2025

• Gasoline

• Gasoline- GDI

• Clean Diesel, Renewable Diesel Blends

• Hybrids

• Plug -in HEV

• BEV

• Natural Gas

• Hydrogen

•Diesel is the most energy efficient internal combustion engine; 30 percent more efficient than gasoline.Energy Efficient

•More than half of all retail fuel stations offer a diesel pump and repair infrastructure is well established.Available

•Advanced emissions control systems reduce emissions to near-zero levels.

Clean

•Diesels typically exceed EPA Fuel economy ratings in real world driving conditions. Proven

•High-quality renewable biodiesel fuels up to 20 percent (B20), further cutting emissions and reducing CO2.

Ready

•Responsive driving performance, driving range over 700-800 miles on a single tank; No compromise for vehicle type, size, towing range, driving habits.Desirable

Diesel is a Technology of Choice

ExxonMobil: Diesel will surpass gasoline as the number one global transportation fuel by 2020. Diesel

demand will account for 70% of the growth in demand for all transportation fuels through the forecast period to 2040. Although natural gas will play a greater role as a transportation fuel by 2040, it will remain only a small share of the global transportation fuel mix, at 4 percent by 2040, up from today’s 1 percent, according to ExxonMobil’s forecast.

The World Energy Outlook: Diesel fuel will remain the “dominant” growth fuel between now and 2035, according to the International Energy Agency. Globally, the report suggests the possibility of only a two percent share of natural gas in the heavy-duty transport market by 2035.

The National Petroleum Council in its 2012 report “Advancing Technology for America’s Transportation Future” for the U.S. Department of Energy stated: “Diesel engines will remain the powertrain of choice for HD (heavy-duty) vehicles for decades to come because of their power and efficiency."

10

ENERGY AUTHORITIES AGREE:DIESEL TO BE #1 TRANSPORT FUEL BY 2020

Light-Duty Diesel is Part of the All-of-the-Above Energy Strategy

“The initial decline in the level of [fuel] consumption is due in part to the recession, but much of the lower projection for the coming decades reflects unforeseen efficiency improvements stemming from the 2012 light-duty vehicle fuel economy standards, along with some projected switching to diesel in the light-duty fleet.

(page 10; emphasis added)

“In real world use, hybrids for many auto makers tended to underperform the lab results.

Meanwhile, diesel engines tend to perform much better than the label—by almost 5 miles a gallon,

according to The Journal's analysis.”

CLEAN DIESEL MEANS TIME AND FUEL SAVINGS FOR OWNERS

Passenger car diesel owners

will stop to refuel 9 less times

per year.

CUSTOMERS THAT CHOOSE A DIESEL SUV WILL SAVE $2,300 IN FUEL COSTS

Savings to the clean diesel

buyer

Per Year 54 Month Ownership

Fuel savings - gallons 192 860

Fuel savings - bbl 4.6 21

Fuel cost savings $502 $2,300

CO2 savings – metric tones 0.8 3.5

Refueling trips saved 8 35

Using More Clean Diesel in Cars and SUVs is Already Reducing Petroleum Consumption

The 2.9M light-duty new technology diesels

introduced from 2005 through 2013 have saved the

American consumer:

• 1.2B gallons of gasoline

• 29M barrels of crude oil

These reductions are equivalent to roughly 11%

of the Strategic Petroleum Reserve for sweet

crude.

and

• Reduced carbon emissions by 7 million tons

(Source: Martec Group, for the Diesel Technology Forum , 2012)

Diesel Cars, Pickup Trucks, Vans account for about 3 percent of total U.S. vehicle market; what about the future?

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2012 2013 2014 2015 2016 2017 2018 2019 2020

New Technology Diesel Engine Sales Forecast – U.S. Market

Market Share ForecastAggressive Scenario = 10%Baseline Scenario = 7%Conservative Scenario = 4%

Aggressive

Baseline

Conservative

Total sales for cars, light trucks, and HD pickups based on future EPA compliance paths, fuel requirement changes under RFS2 and ARB LCFS and announced OEM diesel vehicle introductions.

Forecast

-

500

1,000

1,500

2,000

2,500

2013 2014 2015 2016 2017 2018 2019 2020

Million Gallons

Aggressive: 10% of Market2.1B gallons11.5M tonnes CO2

Baseline: 7% of Market1.6B gallons9.1M tonnes CO2

Conservative: 4% of Market1.3B gallons7.7M tonnes CO2

As more clean diesel cars are chosen over gasoline, fuel and CO2 savings grow

…And benefits are magnified if all those diesel cars are using high-quality renewable biodiesel fuels.

-

50

100

150

200

250

300

350

2013 2014 2015 2016 2017 2018 2019 2020

Million Gallons

Aggressive300M gallons200K tonnes CO2

Baseline200M gallons150K tonnes CO2

Conservative150M gallons110K tonnes CO2

Total savings for cars, light trucks, and HD pickupsAssumes average VMT of 15,000 miles/year

Gasoline = 8,887gCO2 /gal. Diesel = 10,180gCO2 /gal. Biodiesel = 9,460gCO2 /gal.

Biodiesel at 5% (B5) Blend

Today’s Issues: Fuel PricesSince 2011 Diesel Down $1.37; Gasoline down $1.87

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

2011 2012 2013 2014 2015 2016

Do

llars

per

gal

lon

, wit

h t

axes

Axis Title

Diesel Fuel and Gasoline Retail Prices 2011-2016

Diesel Fuel Gasoline, all grades

$2.83

$2.41

Diesel Fuel Prices (Mar

2012-2015)

Gasoline (May

2011, Feb 2015

$ 1.37

$ 1.87Source: Energy Information Administration at www.eia.doe.gov; 2015

NEWS

Texas, California lead the list for top ten states of diesel drivers 2014.

What others are saying about diesel cars

• “Fossil fuel mileage champ”

• “Want to save cash? Go diesel over gas, study says

• “Diesel car owners save thousands in just three years”

• “Study: Diesel vehicle owners save money on fuel, resale costs”

• “Diesel cars’ lower ownership costs will drive sales”

• “Diesel vehicles are less expensive to own”

• “Fuels, diesel is the most convenient: Save up to 4500 in 5 years”

• “Used diesel vehicle the right choice? New study finds U.S. diesel cars have lower cost of ownership”

• “Diesel vehicles have lower cost of ownership than their gasoline counterparts”

• “Diesel drivers saving more in long run, study says”

WHAT OTHERS ARE SAYING