By: Soren Sarstrup
Posted: January 15, 2016
Automotive powertrains were in the news in 2015 – and at the heart of the industry’s biggest reputational scandal in decades.
As the implications of the crisis have become clearer over the last few months, we decided to ask industry experts about the emerging impact of the Volkswagen emissions standard scandal – on the company and on the industry – and about the medium term future of light vehicle powertrains.
First – do diesels have a future?
One of the clearest results of the survey is that diesel engines, in view of industry insiders, do not have much room for improvement. Diesel will offer small or very small fuel economy benefits to the industry in the next five years according to over 80% of powertrain industry insiders (including 4% who said that in their view diesels would offer no new benefits).
But that doesn’t mean that gasoline engines are expected to drive powertrain improvement either – a similar percentage dismissed the fuel economy improvements expected for that technology as well – with over 16% expecting no further improvement in the economy performance of the automotive industry’s traditionally dominant power source.
Instead industry insiders expect the biggest fuel economy gains in the next five years to be seen in electric hybrids (72.5% expecting “large” or “very large” fuel economy benefits) and fully electric vehicles (56% expecting “large” or “very large” fuel economy benefits).
A smaller, but still substantial 40% share of respondents, also expect “large” or “very large” fuel economy improvements in hydrogen cell technology in the same time period.
And fuel economy will matter, insiders say – the reduction in greenhouse gas emissions will be the most important factor driving powertrain development in the next ten years.
Eighty-five percent of respondents said it would be “critical” or “very critical” or “indispensable” (“indispensable” was reported by over 30 percent of respondents).
That put it marginally ahead of customer satisfaction as a development focus. But the installed refueling base will be a major constraint on the development of alternative power sources, most respondents said.
But although electric batteries are expected to show more growth, conventional powertrains still dominate the industry’s short term outlook.
Eighty-five percent of respondents said that combustion engine powertrain improvements were “important” or “very important”, compared with other vehicle technologies (for example lightweighting or electrification) in meeting future fuel economy regulations.
And these improvements will cost money – 5-10 percent more expensive powertrains, say 47 percent of respondents – or more, say another 25 percent.
Second – will the industry be able to meet regulations?
Respondents were clear that changes in regulation were a major factor in powertrain development. And they see OEMS as having almost no say in influencing the direction that their industry will take. On a 10-year horizon it was the least important factor cited.
Sixty-five percent of respondents believe that real World Driving Experience (RDE) test cycle will become necessary for type-certification in Europe by 2017 (15 percent of respondents to this global survey said they didn’t know). Almost half of respondents thought it was likely elsewhere in the world too by next year.
Sixty-nine percent of respondents think that the industry is likely or very likely to meet these the European 2021 GHG standards, which target a fleet average of 95 g of CO2 / km, or 57.4 mpg (US).
Over fifty percent of respondents believe that the industry is “very likely” or “fairly likely” to meet the 2025 CAFE Standards in the USA which require a nationwide fleet average, as adjusted by individual footprints of vehicles, of roughly 54.5 MPG by 2025. Almost nine percent of respondents said it was “very unlikely”.
Third – what about Volkswagen?
Well, it’s still the fourth most respected OEM in the industry in terms of its powertrain development capability (behind Toyota, BMW and Daimler, in that order).
Over two thirds of industry executives surveyed expect the emissions standards scandal to have a “large” or “very large” effect on sales of Volkswagen diesel sales worldwide.
Even if Renault is in trouble after the French government raids on its offices and becomes involved in an emissions scandal of its own, it should take heart – 74 percent of industry executives surveyed also expect the VW scandal to have a small or very small effect on Volkswagen sales. And almost no-one expects the scandal to have a large effect on other German brands. Interestingly, given the company’s connection to the VW situation, the survey puts Bosch top of the pile on powertrain development capability.
Click here to download key survey findings data (PDF format, 350kb)
About the survey:
Autelligence surveyed 53 powertrain executives in the second week of January 2016. Most of the respondents were based in North America and Europe.
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