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In 2030, Internal Combustion Engines will Still Reign
G. David Felt posted an article in Automotive Industry
Market forecasts of the future is a fragile thing, yet LMC Automotive has a strong reputation as a consulting firm looking at the global markets. The daily announcements of electric-car churn, major production investments, battery supply, etc. is cause for people to want to take a reality check of the projections by various OEM producers to individual government pronouncements. US projection is that fossil fuel light-duty autos will still be 69% or 7 out of 10 autos on the road in 2030. According to the LMC Automotive research report, 2018 saw that globally light vehicles running on fossil fuels were 95%. This is expected to drop to 92% by the end of 2019 yet a slowing of the change over from ICE to BEV is expected over the next decade. LMC is expecting a contraction of just 3 to 4 percent annually. This respected report is showing that more than half of the global vehicle demand will still have tailpipes and fuel tanks. So let’s take a look at some of the facts starting with the country India where in 2017 it stated that they would be fully electric by 2030. Yet LMC own research points to India being only 3% electric by 2030. On the other end of the spectrum, we have China where LMC expects the country to have a majority of light autos be electric. LMC expects fossil fuel light autos to make up only 48% of the market by 2030 in China, BEV's will be 52%. This is backed up by many other analysts that point to the massive growth of EV's in the next decade that eventually will taper off as costs stop falling for battery production and EV charging infrastructure. Electric cars are expected to be 55% of the global market by 2040 according to the Bloomberg New Energy Finance. One reason for slowing is the acknowledgment that not all markets will have the electrical infrastructure to support BEV auto's when many in countries like Africa do not even have electricity at their home. Looking at the three major automotive markets of China, India and the US, LMC points to the differences in how the change will happen. China will use the carrot and stick approach pushed by the political elite to ensure the New Energy Vehicles (NEV) come to market. Automakers are getting subsidies to manufacture these NEVs and receive strict penalties if they fail to meet the government goals. Here is where demand for ICE autos will fall off the fastest. In the US, demand is expected to be gradual with growth being slowed by the oil industry that has every reason to keep the price of gas low. This is also being tempered by the popular rise of the pickup truck and SUV sales that will keep BEVs in check till these full-size autos are offered in pure electric mode. Then we have India, per the LMC report where government ministers made global headlines in 2017 with their ambitious target to electrify the whole country by 2030 retiring all ICE autos. Including all types of transportation, 2, 3- and 4-wheel vehicles, the India government has since set a target of 30% BEVs by 2030 which LMC believes is unachievable. Despite having adjusted goals, the India government has approved a 3-year $100 billion program to promote electric vehicle adoption. Even with this big push, LMC sees India with a 97% ICE market share in 2030. Based on LMC's own 3-4% ICE decline annually, where ICE made 95% of global sales in 2018, expected to be 92% in 2030 ICE globally is still expected to make up 62% of global market if the 3% a year drop stays constant, yet numerous external factors will also affect this globally. Yet to make this change happen, one critical area is needed to grow. Batteries are the new OIL of the 21st century. Bloomberg expects $548 billion in investments by 2050 in the battery production industry as costs fall, homes and businesses push for a more reliable clean energy source. Battery prices per kilowatt-hour are expected to be below $70, down 67% from today’s cost. Annual batteries to be commissioned by 2050 is expected to exceed 1,288 gigawatts of power. To quote the Bloomberg story: “It’s a matter of ‘when and how’ and not ‘if’ wind, solar and battery technologies will disrupt electricity delivery all over the world,” Seb Henbest, lead author the report, said in an interview. -
Market forecasts of the future is a fragile thing, yet LMC Automotive has a strong reputation as a consulting firm looking at the global markets. The daily announcements of electric-car churn, major production investments, battery supply, etc. is cause for people to want to take a reality check of the projections by various OEM producers to individual government pronouncements. US projection is that fossil fuel light-duty autos will still be 69% or 7 out of 10 autos on the road in 2030. According to the LMC Automotive research report, 2018 saw that globally light vehicles running on fossil fuels were 95%. This is expected to drop to 92% by the end of 2019 yet a slowing of the change over from ICE to BEV is expected over the next decade. LMC is expecting a contraction of just 3 to 4 percent annually. This respected report is showing that more than half of the global vehicle demand will still have tailpipes and fuel tanks. So let’s take a look at some of the facts starting with the country India where in 2017 it stated that they would be fully electric by 2030. Yet LMC own research points to India being only 3% electric by 2030. On the other end of the spectrum, we have China where LMC expects the country to have a majority of light autos be electric. LMC expects fossil fuel light autos to make up only 48% of the market by 2030 in China, BEV's will be 52%. This is backed up by many other analysts that point to the massive growth of EV's in the next decade that eventually will taper off as costs stop falling for battery production and EV charging infrastructure. Electric cars are expected to be 55% of the global market by 2040 according to the Bloomberg New Energy Finance. One reason for slowing is the acknowledgment that not all markets will have the electrical infrastructure to support BEV auto's when many in countries like Africa do not even have electricity at their home. Looking at the three major automotive markets of China, India and the US, LMC points to the differences in how the change will happen. China will use the carrot and stick approach pushed by the political elite to ensure the New Energy Vehicles (NEV) come to market. Automakers are getting subsidies to manufacture these NEVs and receive strict penalties if they fail to meet the government goals. Here is where demand for ICE autos will fall off the fastest. In the US, demand is expected to be gradual with growth being slowed by the oil industry that has every reason to keep the price of gas low. This is also being tempered by the popular rise of the pickup truck and SUV sales that will keep BEVs in check till these full-size autos are offered in pure electric mode. Then we have India, per the LMC report where government ministers made global headlines in 2017 with their ambitious target to electrify the whole country by 2030 retiring all ICE autos. Including all types of transportation, 2, 3- and 4-wheel vehicles, the India government has since set a target of 30% BEVs by 2030 which LMC believes is unachievable. Despite having adjusted goals, the India government has approved a 3-year $100 billion program to promote electric vehicle adoption. Even with this big push, LMC sees India with a 97% ICE market share in 2030. Based on LMC's own 3-4% ICE decline annually, where ICE made 95% of global sales in 2018, expected to be 92% in 2030 ICE globally is still expected to make up 62% of global market if the 3% a year drop stays constant, yet numerous external factors will also affect this globally. Yet to make this change happen, one critical area is needed to grow. Batteries are the new OIL of the 21st century. Bloomberg expects $548 billion in investments by 2050 in the battery production industry as costs fall, homes and businesses push for a more reliable clean energy source. Battery prices per kilowatt-hour are expected to be below $70, down 67% from today’s cost. Annual batteries to be commissioned by 2050 is expected to exceed 1,288 gigawatts of power. To quote the Bloomberg story: “It’s a matter of ‘when and how’ and not ‘if’ wind, solar and battery technologies will disrupt electricity delivery all over the world,” Seb Henbest, lead author the report, said in an interview. View full article
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Volkswagen AG expects starting in 2026 when they roll out their next-generation gas and diesel engines that are currently in development that it will be the end of any new ICE power trains. Michael Jost strategy chief for VW has stated that in some markets already ICE is starting to fad and by 2026 as more EVs enter the market place, the transition will be underway. VW will continue to modify and tweak as needed for markets where there is insufficient charging infrastructure which will carry this last power train line past 2050. For all major markets though, EVs will become the norm. Bloomberg Story
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G. David Felt - Staff Writer Alternative Energy - www.cheersandgears.com States Leading Charge to Ban ICE Auto's. The last 48 HRS has been very interesting as we have a story that is developing. Washington state in it's battle to reduce climate change is considering following other countries by setting goals to phase out ICE auto's. Washington state has stated the following for this: We used a record 2.78 billion gallons of gasoline in Washington State in 2015. Every gallon of gasoline releases 20 pounds of carbon dioxide. Cars and trucks account for nearly 45 percent of our region’s carbon footprint. Washington spends more than $6 billion annually on gasoline, most of which goes to out-of-state fossil fuel companies to finance drilling, fracking, pipelines and destructive environmental practices. Driving electric vehicles will save the average Washington family about $1,200 a year in fuel costs. Washington has clean and low-cost hydroelectric power, making electric vehicles a sensible and cost-effective solution. Car and truck exhaust is responsible for 53,000 deaths annually in the United States. Washington State and Olympia should implement the following policies: Adopt a phase-out date of 2030 for the sale of new gasoline and diesel vehicles, consistent with the global trend. Plan for and build the charging infrastructure necessary for mass electric vehicle adoption. Create incentives to spur the sale of electric vehicles including preferential HOV lane access, lower tolls, vehicle registration discounts, and preferred parking. Increase funding for infrastructure for public transportation, bicycling and walking. The governor who has signed off on all climate change legislation is wanting to lead the USA in being the first state to start the process of phasing out ICE auto's as he joined New York and California to abide by the Paris Climate Accord. This will create an interesting business climate of how auto dealerships will survive if the auto companies are not building enough EV's for the public to buy. So many questions and not enough answers are brought on by this. While I am all for EV's, I do question this aggressive approach for the state that I live in. Washington State Phasing Out ICE Auto's
