No one really knows to what extent different powertrain platforms are going to dominate through the 2040 timeframe and beyond. Will it be the ICEV? Hybrid ICEV? BEV? PHEV? What about FCEVs? But one thing is clear: whereas the auto industry in the past tended to dictate the powertrain/vehicle mix (backed up by supportive politics and policies, including fuel economy policy setting), those days may be over.[1] The auto industry, to compete in different parts of the world will have to offer a mix of different powertrain technologies that reflect the transport policy preferences in individual countries as well as consumer preferences. What does that really mean? It be might be a mix of all the foregoing technologies. The percentages will be split by country/region, but they will all be offered, including the ICEV.[2]
What could such a split look like? The figure below from KPMG’s annual survey of the auto industry, shows such a split for the U.S., Western Europe and China in 2020, 2030 and 2040.
The survey showed the investment is focusing on hybrids and BEVs above other technologies. I believe, at least in the U.S., ICEVs may be in the mix at larger proportions than the KPMG survey reflects. For example, the KPMG survey shows a 29% share for ICEVs in 2030 with the rest PHEV, BEV and FCEV. I do not believe this is possible to achieve.
The reason is simple: strong national policy drivers (and frankly, a strong national vision to move toward electrification) has to be in place now to achieve such percentages. And they largely do not exist. Fuel economy standards, a driver for these technologies, are being lessened, then they likely will be litigated for the next several years. There is no strong national Zero Emission Vehicle (ZEV) policy, and the federal tax credit has not been enough to really stimulate significant scale up. There are other mitigating factors as well such as the price of gasoline, infrastructure development and consumer preferences. If President Trump were to win another term, which is actually quite possible, any kind vision would be delayed until at least 2026.
Though globally it seems the investment is on hybrids and BEVs, investments in ICEV technologies is part of the mix as well. What kind of technologies are being considered? According to KPMG, the biggest ICEV investment is in downsizing. I put together a table (link below) based on discussions with contacts in industry of the major horizon technologies. It is by no means exhaustive. A great presentation summarizing some of these developments from Ameya Joshi at Corning is linked here for review as well. Ameya was a source for some of the ICEV technologies listed in the table.
[1] This assessment is supported by my discussions with automaker contacts. See also KPMG, Global Automotive Executive Survey 2019 at https://automotive-institute.kpmg.de/?m=0 . “In summary, we believe that the times when the OEM technology strategy exclusively determined the offer in the market are over. Nowadays, regulators, industrial policies, infrastructure and raw material access are driving the agenda… FCEVs, BEVs, hybrids and ICEs will co-exist and complement each other, varying in their respective areas of application, car size, also factoring in industrial policies and dependency on raw materials.”
[2] I have already made this point with respect to fuels. See Tammy Klein, “Update on Global Low Carbon Fuel Initiatives: It’s Complicated,” Feb. 12, 2019 at http://transportenergystrategies.com/2019/02/12/update-on-global-low-carbon-fuel-initiatives/.
