Are 2020 Emissions Targets Achievable with Gas Engines?

July 20, 2011

Internal combustion engines are improving their ability to cut CO2 emissions at a lower cost than expected and, as a result, carmakers should be able to meet 2020 emissions targets mainly through improvements to conventional technologies, according to a new report, “Powering Autos to 2020: The Era of the Electric Car?” by The Boston Consulting Group.

Internal combustion engine (ICE) technologies offer the potential to cut tailpipe emissions of carbon dioxide by approximately 40 percent at a cost to consumers of $50 to $60 per percentage point of reduction for an average passenger car — roughly half the cost of what was expected three years ago, the report says. But automakers will need to pull multiple levers simultaneously to achieve such dramatic reductions. Modifications to combustion technologies, transmissions, vehicle mass, aerodynamics and power management will all be necessary.

Although conventional technologies will pose stiff competition for electric vehicles (EVs), BCG’s research also found that there is a distinct “green” consumer segment that will be willing to pay a significant premium for EVs even if the total cost is higher.

“Electric cars will undoubtedly play an increasingly large role in many countries’ plans in the decades ahead as energy independence and environmental concerns intensify,” said Xavier Mosquet, a senior partner in the firm’s Detroit office, global coleader of BCG’s Automotive practice, and lead author of the report. “But they will gain only modest ground to 2020. Gasoline- and diesel-powered vehicles are improving faster than expected and will continue to dominate the global landscape.”

Other key findings include the following:

• China and Europe — not the United States, as many believe — will be the largest markets for EVs in 2020.

• Based solely on total cost-of-ownership (TCO) economics, EVs will not be the preferred option for most consumers. Battery pack costs are forecast to fall sharply (approximately 64 percent from 2009 levels) to $360 to $400 per usable kilowatt-hour (kWh) by 2020. However, to the consumer, this still represents a cost of $9,600 per vehicle for the typical 20-kWh battery necessary for a pure battery EV.

• As OEMs wrestle with advanced ICEs and EVs, they will have to keep an eye on a compelling alternative fuel source — compressed natural gas. CNG could expand beyond its current strongholds with transit buses and airport shuttles and see growing adoption by delivery vehicles, government fleets and taxis.

The above article was published by the National Oil & Lube News 7/20/11