Power wars

Kevin Riddell, Senior Manager, Americas Powertrain

12 February 2020

Power wars

Bragging rights about power are not a new battleground in the auto industry. While 10 years ago 500 horsepower from the factory was exotic car territory, today many options are available for around $70,000. A lot of diesel, 1-tonne Pickups now produce over 1,000 pounds feet (1,355 newton metres) of torque and several hyper cars are well beyond the 1,000 horsepower mark. However, looking at the bigger picture, it took 100 years to get to where we are.

Electrification is taking performance to a completely new level. Tesla introduced the world to sub-$100,000 cars that out accelerate many current supercars. The new Porsche Taycan stretches this capability by being able to maintain sustained high-performance. Also, an increasing focus on global carbon reduction has legislation in many countries pushing the industry toward electrification.

“By 2030, we forecast nearly 50% of the global market to be electrified in some form.”

In 2019, BEV sales made up around 2% of global car (and North American Light Truck) sales. By 2025 we expect close to 8% global market share, and 15.5% in 2030. To many this number seems very aggressive, to others, it is very conservative. By 2030, we forecast nearly 50% of the global market to be electrified in some form. In North America, we predict the transformation to be a little slower, reaching 7% BEV sales and 20% hybrid sales in 2030.

Big strides are being made in electrification technology, but in general it is still very young and there are significant differences in strategy between OEMs over its development and rollout. Only a few years ago you would hear a lot about combustion-based technologies, such as variable compression, HCCI, higher pressure injectors and improved aftertreatment. While these are still being developed and improved, the headlines have shifted to how electricity is added into the powertrain and how batteries are improving.

“It is interesting that when buying an IC car today, a larger engine is a big cost option, and for a BEV, a bigger ‘gas tank’ is a major, high-cost feature.”

BEVs suit the needs of a lot of people, but they still fall short for many due to lack of range, extreme weather capability, lack of charging infrastructure, unknown durability and/or recyclability. These are important challenges that need continued improvement to help adoption. It is interesting that when buying an IC car today, a larger engine is a big cost option, and for a BEV, a bigger ‘gas tank’ is a major, high-cost feature. The batteries cost less than one fifth of the price per kWh than 10 years ago but remain a huge part of a plug-in electric vehicle (PEVs) cost. As a result, PEVs are still largely reliant on subsidies to sell the cars and improve the infrastructure.

In Europe, China and other markets the government is driving electrified vehicle growth, while the US is moving toward a more consumer-driven and automaker friendly approach, with comparatively limited government interference. Government restrictions are in the process of being eased regarding CO2 regulation, for example, the recent, contested removal of California ZEV legislation. As US subsidies end, BEV sales may increase more slowly than we currently show unless a) ZEV legislation is reinstated or b) California finds another way to legislate a transition to increased carbon neutral vehicle sales.

Meanwhile, I will be eagerly watching for the next big tech jump, whether it is electric or combustion-focused.