"Energy supply and demand is evenly matched right now. That causes wild price fluctuations... as we have seen recently,” said Ken Howden at the recent SAE 2009 World Congress in Detroit.
Howden is the Director of the 21st Century Truck program in the Vehicle Technologies Program of the U.S. Department of Energy. Hand in hand with fuel price volatility goes consumer volatility, he said. “The consumer reacted very quickly to the increase in fuel prices [in 2008] by immediately buying small. After this kind of event, the consumer does not immediately respond back when the fuel prices come down; they continue to change their buying patterns for some time because of the uncertainty in fuel prices.”
Fuel prices have a decisive effect on the take-rates of various engine technologies, Howden said in citing a DOE model that predicts a take-rate of almost 70% for the traditional gasoline internal-combustion engine (ICE) with fuel at $3/gal. At $5/gal, the ICE take-rate drops to 35%. For gasoline electric-hybrids and plug-in hybrids, $3/gal fuel leads to a take-rate of only 20% vs. almost 50% at $5/gal. While Howden acknowledged that the model may not be perfect, it can be instructive for those planning 5 to 10 years in the future.
Another key message he had is that new technologies take time to have an effect. Citing data from a recent EPA study, Howden pointed out that recent technology introductions such as variable valve timing or lock-up transmissions have taken approximately 15 years to reach maximum penetration in new vehicles and another 15 years for the technology to be spread widely across the installed fleet. Expect new technologies such as hybrid technologies, plug-ins, and diesel to take some time to spread and provide benefits in overall fuel savings. “It doesn’t mean we should not do it; it means the sooner we start, the sooner we get there,” he said.
According to Roger Clark, Senior Manager at the Energy Center for General Motors, the company looks deeply at the relationship between the cost of potential technologies and the price of fuel. “You want to add the technologies with the least cost first,” he said.
Clark pointed to such "early" cost-effective solutions as improved aerodynamics, low-rolling-resistance tires, active fuel management, variable valve timing, and "eco-driving" aids that help people drive more efficiently. “These are technologies that pay back [to the consumer] at less than $3/gal,” he said.
In the middle range of cost are spark-ignition direct injection (SIDI), mild hybrids, start/stop technologies, and diesels. The most expensive and least cost-effective are strong hybrids and electric vehicles.
All is dependent on future fuel prices. “As fuel prices increase, the less cost-effective technologies grow in penetration in response to demand for greater fuel savings,” said Clark. Another wrinkle is that fuel savings from such technologies are not fully additive. A diesel engine provides only a small efficiency benefit over a gasoline engine in a strong electric hybrid, but it adds significantly to the costs, he noted.
Successive generations of technologies enable engineers to learn and adapt, making technologies and technology combinations cheaper and more cost-effective. Clark reiterated that GM’s Advanced Propulsion Technology Strategy involves investigating all such technologies in combination with a variety of alternative fuels. Petroleum, ethanol, biodiesel, and electricity are in the development mix. Hydrogen is viewed as a long-term solution for producing power with virtually no emissions. “We are in these learning cycles, trying to bring the costs down ... so that everyone can drive a hybrid some day. Electricity is the most diverse energy source,” said Clark.
There may be too many technology choices in the industry's playbook, according to Dr. Dean Tomazic, Vice President of Engine Performance and Emissions Division, FEV. He pointed out that technologies to improve fuel economy include improved gasoline engines, diesel, alternative fuels, improved transmission, hybrids, and electric vehicles. “Each of these individual technologies branches down to different types of technologies," he said. "When we look at this multidimensional matrix, it becomes clear that the OEMs cannot cover each of these individual configurations. So, decisions have to be made as to which configuration has the most value for the customer, provides sustainable solutions for transportation, and makes sure we can use the fuels that will be available in the future."
Tomazic predicted significant downsizing of conventional gasoline engines. “We are in the process of basically transforming V8s into V6s, V6s into I4s, and actually I4s will go down to I3s and potentially even I2s,” he said.
The combination of direct injection and turbocharging is a key technology for downsizing, as Tomazic sees it, in all segments. He believes the technology mix will continue to increase due to different customer expectations and demands. “This means the fast identification of acceptable best compromises is mandatory to minimize cost impact on consumers," he said. "Fuel prices and types, in combination with CO2 emission legislation, will ultimately define available technology options in the vehicle market.”