FROM CO2 NEUTRAL FUELS TO EMISSIONFREE DRIVING - PWC
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
www.pwc.de
From CO2 neutral
fuels to emission-
free driving
Alternative Fuels and
Powertrains and their
impact on the automotive
transformation.From CO2 neutral
fuels to emission-
free driving
Alternative Fuels and
Powertrains and their
impact on the automotive
transformation.From CO 2 neutral fuels to emission-free driving
Published by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
By Dr. Oliver Bollmann, Dr. Jörn Neuhausen, Christoph Stürmer, Felix Andre and Philipp Kluschke
November 2017, 32 Pages, 10 Figures, Soft cover
All rights reserved. This material may not be reproduced in any form, copied onto microfilm or saved
and edited in any digital medium without the explicit permission of the editor.
This publication is intended to be a resource for our clients, and the information therein was correct
to the best of the authors’ knowledge at the time of publication. Before making any decision or taking
any action, you should consult the sources or contacts listed here. The opinions reflected are those
of the authors. The graphics may contain rounding differences.
Mus
ter
© November 2017 PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft.
All rights reserved.
In this document, “PwC” refers to PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft,
which is a member firm of PricewaterhouseCoopers International Limited (PwCIL). Each member firm
of PwCIL is a separate and independent legal entity.Preface
Preface
We are at the advent of a series of and powertrain technology. Air quality For vehicle technology, we compared
massive changes to the automotive is a major issue, and local authorities the different powertrain options and
landscape. Cars are becoming ever- are starting to get tougher, both to plug-in hybrid electric vehicles (PHEVs)
more connected, the sharing economy combat local pollution and in addressing in terms of a total-cost-of-ownership
is starting to make visible inroads into current noncompliance with air quality (TCO) calculation for today (2017)
ownership patterns, and autonomous regulations. Ultimately, buyers and and the mid-term future (2030). The
driving looks closer than ever to users of cars and trucks are increasingly latter takes into account technological
becoming technically viable. Just weary of the negative effects on health developments, stricter regulation for
as importantly, the mix of fuels that and quality-of-living of current vehicles. ICEs and economies of scale.
power vehicles, and the powertrains
that drive them, will be radically Albeit the actual vehicle fleets are In addition to our own analysis, we
different in 15 years. That poses a transforming gradually, we investigated also asked industry insiders for their
series of challenges for automakers theoretical scenarios for Germany, views at our AutomotiveINNOVATIONS
and suppliers, who need to juggle their in which we hypothesized a full Conference in May 2017 in Frankfurt,
investments in several competing transformation of the light vehicle Germany. Their responses to our
technologies and anticipate future client fleet to either battery-powered electric poll make the industry’s uncertainty
demands and regulatory requirements vehicles (BEVs) running on regenerative dramatically clear – for many questions,
around the world. electricity, fuel-cell powered electric “no answer” scored higher than any
vehicles (FCEVs) running on hydrogen, of the given options. And they’re
There is near-consensus that national or internal combustion engine vehicles concerned about costs – in fact, the only
governments need to regulate CO2 (ICEs) running on CO2 neutral statement that a majority of respondents
emissions to help slow climate change, “synfuel”. For each of these scenarios we agreed with was “Uncertainty about
which includes introducing ever- calculated infrastructure investments future value of all technologies leads to
stricter rules for the automotive sector. and resulting fuel prices when allocating increasing costs for all powertrain types
As a consequence of the Paris COP21 these investments on to the sold fuel. in the future”.
Agreement, targeting zero net CO2
emissions by 2050 is needed. Even if
the US government, the only major
hold-out, does not enact national
regulation, state- and city-level
regulations are likely to have a big
impact. And climate change is not the
only driver for the regulation of fuels
Automotive executives are uncertain about
the future of powertrains and worry about
increasing costs. Hence, it is extremely
challenging to sharpen the R&D focus and
allocate investments for new powertrain
technologies appropriately. Readiness in
technology and organization are key to be
successful in the future.
From CO 2 neutral fuels to emission-free driving 5Preface
That is exactly why we undertook scenario. Assuming an allocation of the
this analysis: to help automakers and infrastructure costs to the fuel price,
suppliers understand how different BEVs would run at fuel costs of €5–7 per
powertrains stack up and what it 100km, whereas hydrogen fuel costs
may mean for their future. We found for FCEVs would range from €7–11, and
that the respondents had different synfuels would cost nearly four times as
understandings of how the different much, at €18–26.
options perform in terms of efficiency.
As there is a risk that many industry For consumers and fleet operators
players may fail to make the right alike, the total cost of ownership (TCO)
investments to compete in the future, is also critical to purchase decisions.
particularly in parts of the value chain The biggest contributor to TCO of an
that could be fair game for disruption, automobile is not actual fuel costs,
we aim to provide transparency with it’s the depreciation. And while ICEs
our study. and BEVs currently enjoy similar
resale values, this fact could change
Our analysis shows that the clear rapidly – for example if major cities
winners in terms of well-to-wheel implement access restrictions for ICEs.
efficiency are battery-electric-vehicles BEVs come with other drawbacks,
(BEVs). And while consumer preferences though, with their current short range
still lean towards internal combustion and long recharge times. A majority of
engines (ICEs) – we predict that ICEs the industry executives polled expect
will retain the largest market share these drawbacks to persist in 2025 and
through 2030 – running the entire to impede the widespread adoption of
fleet on synfuel-powered ICEs won’t BEVs. These can be overcome by PHEVs,
be feasible in a future where these but they may face similar regulatory
fuels have to be produced by electric hurdles in a zero emissions future.
power generated only by renewable Regulation will therefore be a significant
resources. In fact, synfuels require catalyst for transformation. If access
more than six times as much electrical restrictions for urban areas come widely
energy as battery-powered options. into play, BEVs will begin to offer real
In order to power the complete fleet of added-value in the mass segment. ICEs
light vehicles in Germany by synfuels, will also become much harder to re-
therefore, additional 110 nuclear power sell, compounding the effect. Until this
plants would be needed. point is reached at about 2025, OEMs
and suppliers will continue to generate
There is also a dramatic difference in significant profits from ICEs.
the infrastructure costs in theoretical
100% supply scenarios, which range And what about fuel-cell electric
from €300 billion for the BEV scenario, vehicles (FCEVs)? At the moment, they
to €480 billion for the FCEV scenario, aren’t yet in series production. Given
to €1,370 billion for the synfuel current expectations on costs, and
their strong performance in terms of
range (for many car buyers short range
is likely to remain a deal-breaker) we
believe that FCEVs have the potential to
BEVs are the clear winners when it become successful over the longer term
in the long-range premium private car
comes to well-to-wheel efficiency segment.
and require the least investment of
the zero-carbon fuel supply options
we studied.
6 From CO 2 neutral fuels to emission-free drivingPreface
So what does this all mean for On a global level, the strategy towards resource towards LNG. The United
OEMs and suppliers, machinery higher CO2 efficiency in transportation States still binge on unconventional oil
and plant engineering sector, and points to an increasing regional and gas and may continue to rely on
governments? diversity: transportation should use fossil energy for a while. Other regions
OEMs and suppliers need to invest in whatever primary energy is most such as Brazil may continue to leverage
the new technologies, both to improve abundant in the respective market – their abundant bio-mass based fuels. At
product technology and attractiveness which may lead to different pathways. least for a transitional period, it seems
to consumers, and to reduce cost While Germany, Europe and China that the automotive industry will face
levels to be more competitive. That’s converge heavily towards regenerative rather more than less fuel and drivetrain
particularly important given how value sun and wind-energy-based electricity, diversity – making investment decisions
creation shifts in BEVs vs. ICEs. To Japan moves its primary energy even harder to take.
accomplish this, automotive companies
will need to recruit, retain, and develop
their employees’ skills in key areas like
electrical engineering. They will also
need to integrate new technologies
effectively into their R&D, procurement,
production and sales processes.
As the transition to electric and
electrified powertrains will happen
in the next decade, new production
equipment will be needed to
manufacture the components of
alternative powertrains. Production
equipment makers are ready to support
this transition looking forward to a
future with high turnovers. Dr. Oliver Bollmann Dr. Jörn Neuhausen
Partner Principal
Governments may set the pace of the PwC Strategy& PwC Strategy&
transition, well balancing the speed
in order to keep the risk of decreasing
employment rates in the production of
traditional powertrain components low
and to build a positive environment for
the upcoming employment in future
powertrains production. In this way it
will be essential for governments to find
a way to support competitiveness and
stable employment and still foster the
transition of automotive powertrains.
Christoph Stürmer Felix Andre
Global Lead Analyst Senior Associate
PwC Autofacts PwC Strategy&
From CO 2 neutral fuels to emission-free driving 7How different powertrains stack up …
How different powertrains stack up …
… and what it means for the future of the automotive industry.
1 What drives the transformation S. 10 3 Total cost of ownership S. 18
towards alternative fuels and usability are sometimes
and powertrains? at odds.
Current strong momentum in the transformation is
mainly due to local clean air policies and national CO2
emission regulations.
Ability to access 0%
zero-emission zones
will become a key
emissions
feature for usability
of powertrains.
4 The total automotive market S. 21
will grow, electric vehicle market
share will expand dynamically.
2 What would it mean if all light S. 13
vehicles in Germany switched to
one alternative CO2 neutral fuel? 35 % market share
for full electric vehicles
in 2030.
Additional demand for electrical energy:
+34 % 5 Time to act is now. S. 24
Electric energy / BEV
0% of industrial
leaders we asked think
OEMs are well prepared
HH +66 % for the upcoming
e-technology. Therefore
H2 / FCEV
product portfolios and
technology roadmaps
+206 % have to be revised now,
and organizational
Synfuel/ICE change has to be driven.
8 From CO 2 neutral fuels to emission-free drivingTable of figures
Table of figures
Fig. 1 Drivers for the transformation to alternative fuels and powertrains.......... 10
Fig. 2 Focus of the study – selection of conversion paths......................................13
Fig. 3 Efficiencies (%) and energy demand (in kWh) in the production
chain of CO2 neutral fuels per kWh of mechanical energy......................... 14
Fig. 4 Alternative full supply scenarios for Germany: Total demand
of electrical energy and investment needs (in billion €)............................15
Fig. 5 Full supply scenario for Germany: Estimation of variable costs
(€/MWh fuel )............................................................................................... 16
Fig. 6 Attributes of reference vehicles by powertrain..........................................18
Fig. 7 Mobility costs for reference vehicles..........................................................19
Fig. 8 Estimated development of drivers over time (2017–2030).........................21
Fig. 9 Estimation of global vehicle sales by powertrain type
(in million vehicles per year).....................................................................22
Fig. 10 Market volume for powertrains produced by German OEMs
worldwide and domestic content (in billion € per year).............................23
From CO 2 neutral fuels to emission-free driving 9What drives the transformation towards alternative fuels and powertrains?
A What drives the transformation towards
alternative fuels and powertrains?
Current strong momentum in Alternative fuels and powertrains are Players all across the industry value
already a hot topic in all of the big chain are taking the developments very
the transformation is mainly automotive markets. The shift from seriously, driven by increasing concerns
due to local clean air policies today’s standard fossil fuels, based on around local pollution and global
and national CO2 emission refined crude oil, to new sources of warming, growing public awareness and
regulations. energy is receiving intense interest from calls for action around both issues.
media, consumers, and governments.
Fig. 1 Drivers for the transformation to alternative fuels and powertrains
Local pollution Global warming
1 (NOx, PM, noise) 2 (CO2) 3 Public perception 4 Trade policy
• WHO recommendations • The Paris Agreement • Growing number of cities • Oil prices have dropped
for air quality are hardly entered into force aiming to plan to intensify emission strongly since 2011,
met by any big city tackle global warming by regulations or even ban reducing the economical
throughout the world –– Keeping temperature combustion engine importance of reducing net
• More than 80% of people rise below 2 degrees powered vehicles imports
living in urban areas are Celsius • Real world driving • EU is highly depending on
exposed to air quality levels –– Achieving zero net emissions are becoming crude oil imports (88%)
that exceed the WHO limits greenhouse gas more relevant for public and spent €187bn in 2015;
emissions by 2050 perception and legislation >70% of imports come
from politically unstable
regions
Efforts to slow climate change
lead to regulation on a national
CO2
level and necessitate CO2 neutral
solutions for mobility.
10 From CO 2 neutral fuels to emission-free drivingWhat drives the transformation towards alternative fuels and powertrains?
Local Pollution Global Warming
Big cities and metropolitan areas Greenhouse gas emissions are an
around the world today face enormous important driving force of global climate
challenges from local pollution. The change. CO2 is the most important
main air pollutants relevant in this greenhouse gas, and road transport
context are nitrogen oxides (NO, NO2) contributes approximately 17% to the
and particulate matter (PM), both of global emission of CO2 .
which have drastic negative effects on
human health. According to the WHO, In December 2015, during the
ambient air pollution contributes to UNFCC Conference in Paris, the Paris
5.4% of all premature deaths worldwide. Agreement was adopted; it entered
into force in November 2016. As of May
Air pollution is mainly an issue for 2017, it was ratified by 147 nations.
urban areas and in proximity to main The main goal of the Paris Agreement
traffic routes. Especially in urban is “Holding the increase in the global
areas of low-income countries, the air average temperature to well below 2°C
quality is very weak. Throughout the above pre-industrial levels and to pursue
world, almost no big city can currently efforts to limit the temperature increase
meet WHO recommendations for air to 1.5°C above pre-industrial levels,
quality. In fact, more than 80% of urban recognizing that this would significantly
population around the world is exposed reduce the risks and impacts of climate
to air quality levels that exceed the change.”
WHO limits.
In order to achieve this goal, it is
necessary to achieve net-zero emissions
of greenhouse gases by the second half
of the century.
What is the difference between carbon dioxide (CO2)
and air pollutants?
Conventional fossil fuels such as Diesel and Gasoline belong to the
family of hydrocarbons (CyHy). In an ideal combustion process,
they are oxidized, resulting in H2O (water vapour) and CO2 as
reaction products. CO2 is not harmful to the human body, but
contributes to the greenhouse effect and drives climate change.
However, in an actual combustion process, unwanted side
products arise. Due to their negative effect on human health
they are considered as pollutants. Nitrogen oxides (NOx) and
particulate matter (PM) belong to this group.
From CO 2 neutral fuels to emission-free driving 11What drives the transformation towards alternative fuels and powertrains?
Public awareness of emissions The result: more regulation
and pollution issues Local pollution problems, global
Public awareness of air pollution warming and increased public
and demand for action has increased awareness are all resulting in a drive
strongly within the last years. Within to implement regulations to restrict
Germany, air quality has improved internal combustion engines and
slightly in the last two decades. stimulate electric vehicle usage.
However, the air quality goals set by
the EU are still often violated, leading A growing number of cities plan to
to an increased pressure on municipal intensify emission regulations or
authorities to take measures in order to even ban combustion engine powered
improve air quality. Demand for action vehicles. In particular, diesel powered
on climate change continues as well. engines are in the focus, as their NOx
and PM emissions during real world use
Many consumers have had their faith are higher than what has been measured
in the automotive industry’s progress in laboratory tests. And while a new
on both fronts severely shaken by generation of diesel engines may be able
the recent discussions around the to cope with the challenge of reducing
manipulation of laboratory tests emissions, it is not guaranteed that the
certifying the emissions of passenger general public will regain their trust in
cars. ICEs are in the spotlight. Many diesel engines. At the same time, many
consumers now view real world industrialized countries are developing
emissions of diesel engines in a very governmental programs to stimulate
critical light, despite their excellent electric vehicle sales and usage.
performance in terms of fuel efficiency
and future capability of fulfilling NOx
regulations. Consumers want assurance
that the cars they drive are not harming
the environment.
Trade policy
Although oil prices have dropped
strongly within the last few years, the
dependence of most industrialized
countries on oil imports still motivates
governments to increase their degree
Local pollution and noncompliance
of energy independence. The political with air quality regulations push
stability in most of the countries with
large proven oil reserves is rather low local authorities to introduce
and trading relations are prone to
uncertainty and shocks.
emission-related access restrictions.
12 From CO 2 neutral fuels to emission-free drivingWhat would it mean if all light vehicles in Germany switched to one alternative CO 2 neutral fuel?
B What would it mean if all light vehicles in
Germany switched to one alternative CO2
neutral fuel?
The well-to-wheel efficiency To gain greater insights on what the exclusively CO2 neutral energy fuels,
future might look like, we devised several covering the whole production and
of 70% for BEVs outnumber scenarios of what the future might hold usage chain from “well to wheel”. We
all other CO2 neutral options. for different types of powertrains. We excluded some energy sources that
started with the premise that countries are not currently used in larger scale
will honor their Paris commitments applications, or where conversion costs
to achieve zero net greenhouse gas are much higher. Figure 2 shows which
emissions over the long-term (by 2050). paths were included and excluded from
We then investigated pathways for the scope of the study.
Fig. 2 Focus of the study – selection of conversion paths
Conversion options for automotive fuels
Internal
Oil Gasoline/Diesel
Combustion
Engine (ICE)
Compressed
Natural Gas
natural gas (CNG)
Biomass-to-Gas CO2 neutral
Biomass Biofuel (gaseous) synfuels for ICE
Biomass-to-Liquid Focus of the study
Solar (PV) CO2 neutral electric Biofuel (liquid)
energy for BEV
Focus of the study Power-to-Gas Synthetic natural
Wind
gas (SNG)1
Geothermal Synfuel
CO2 neutral hydro-
HH
gen for fuel cell
Fuel Cell Electric
Tidal Focus of the study Hydrogen
Vehicle (FCEV)
Battery Electric
Nuclear Electrical
Vehicle (BEV)
Focus of the study
1
Also referred to as “E-Gas”.
From CO 2 neutral fuels to emission-free driving 13What would it mean if all light vehicles in Germany switched to one alternative CO 2 neutral fuel?
Only CO2 neutral energy sources were Our results show that there are dramatic
selected for the analysis, thus fossil differences in the well-to-wheel
oil and gas were excluded. Biomass, Electric power that can efficiency of these paths. Figure 3
geothermal, and tidal energy do have directly be used in BEVs shows these sharp contrasts. Although
a limited availability in Germany and the distribution and supply of electric
are thus not included in the analysis. energy for BEVs is less efficient than
Although nuclear energy is considered Conversion of electrical for the other paths, the overall well-
as CO2 neutral energy source, we don’t energy to hydrogen and to-wheel efficiency for BEVs is highest
see a realistic chance for a large-scale subsequent use in fuel with 70%. For the hydrogen path, it is
renaissance of nuclear power at least in cell electric vehicles only at 36%, whereas for the synfuel
the western world. Thus, only wind and (FCEV) path it drops as low as 11%. In order to
solar photovoltaic power are included as get 1kWh mechanical energy at a car’s
CO2 neutral energy sources. Liquid synthetic hydro wheel, one therefore has to produce
carbon fuels (“synfuels”) 1.4kWh electrical energy for a BEV,
Coming from wind and solar power, our produced by a “Power- 2.8kWh for a FCEV, and 8.7kWh for an
primary focus was on three different to-Liquid” method and ICE powered by synfuel.
ways to power vehicles using carbon burned in ICEs
neutral energy sources: Many industry players haven’t yet
recognized the efficiency advantages
BEVs can provide – just 32% of the
automotive executives we polled agreed
with the statement “The most energy
efficient pathway is using electric
energy for battery electric vehicles”.
Fig. 3 Efficiencies (%) and energy demand (in kWh) in the production chain of CO2 neutral1 fuels per kWh of mechanical energy
Production Distribution
Powertrain
and storage and supply
Electrical 70%
energy
1.4 94% 1.3 89% 1.2 84% 1.0
Hydrogen 36%
H H 2.8 1.9 1.8 1.0
69% 95% 55%
Synfuel 11%
8.7
3.8 3.7
44% 96% 27% 1.0
Electrical Produced Fuel at point Mechanical
energy fuel of supply energy
Efficiency
1
Assuming CO2 neutral energy is used throughout the whole process chain.
14 From CO 2 neutral fuels to emission-free drivingWhat would it mean if all light vehicles in Germany switched to one alternative CO 2 neutral fuel?
Electricity demand levels Today’s annual demand for electric
and investment needs differ energy in Germany is at about 525 TWh
dramatically too (Source: BDEW for year 2015), including
The dramatic differences in production virtually no demand for any of these
efficiency have significant implications alternative powertrains.
for electricity demand over the mid- and
long-term.
In order to compare the different fuels What are synfuels?
we modeled full supply scenarios for
Germany. In each scenario, one of the
three fuels (electric, hydrogen, synfuel) Synfuel is used as a collective term for synthetic hydrocarbons,
is used as the sole energy supply for all produced from electrical power. CO2 is used as a carbon source.
of the motorcars licensed in Germany. We considered use of CO2 from the ambient atmosphere, as other
Based on the efficiencies given in CO2 sources such as from steel production or biomass, are limited
Figure 4, the total annual distance in their availability. All synfuels (and gaseous synthetic fuels,
driven by German motorcars in 2015 such as SNG) rely on a first step where hydrogen gas is produced
(619 billion kilometers) and the average from electric power by electrolysis. The hydrogen and CO2 are
energy consumption of a motorcar processed to methanol, which is then processed to a synthetic
(20kWh per 100km), the fuel energy fuel with characteristics similar to diesel or gasoline fuel. The
and electrical energy needed for all methanol route represents analternative to the Fischer-Tropsch
motorcars per year was calculated for synthesis, but is considered to be more efficient.
each scenario.
Fig. 4 Alternative full supply scenarios for Germany: Total demand of electrical energy and investment needs (in billion €)
Additional Production and storage Infrastructure
demand for
Total
electrical Point of supply/
Production Storage Distribution
energy1 (TWh) filling station
Electrical
energy 58 48 301
176 18
176
• e.g., ~35.000 • 61 GWh storage • Investments • 26m low power, • 58% for electrical
wind power plants capacity (e.g., 200 to strengthen 300k high power power plants
large scale systems) electrical grid charging points
(+34 %)
Hydrogen
402 7 44 27 479
344 344
H H • e.g., ~70,000 wind • Compressed H 2
power pl. tanks close to
• Investments
to strengthen
• 6,200 filling
stations, each
• 72% for electrical
power plants
• 6,200 electrolysers, electrolyser (180 kg electrical grid with 10 dispensers
(+66 %) 7.5MW each H 2 each)
Synfuel 1,239 0 132 0 1,371
1,079
1,079
• e.g., ~200,000 • Use of existing • Use of existing • Use of existing • 79% for electrical
wind power plants fuel bunkers transport trucks to facilities power plants
distribute liq. fuel
(+206 %) • Invest for electrical grid
525 Total demand2
Electrical power plants Fuel plants
(Germany, 2015)
1
Additional demand for automotive fuels, assuming full supply of all light vehicles in Germany.
2
Total demand for Germany as of 2015 (Source: BDEW).
From CO 2 neutral fuels to emission-free driving 15What would it mean if all light vehicles in Germany switched to one alternative CO2 neutral fuel?
Mobility-demand for electricity in If all vehicles shifted to hydrogen for For the synfuel scenario, the mobility-
the pure electric scenario would be at FCEVs, the energy demand would demand for electric energy would
176TWh, approximately one-third of be larger than in the pure electric necessitate large investments for
today’s total annual energy demand. scenario. There would also be a number power plants and an enhanced
Covering this demand would require of additional investments needed, transmission grid. Even though almost
a range of investments in additional for example, for the transmission no investments would be needed in
power plants, grid-level electrical grid, as well as for electrolyzers and the supply infrastructure, the total
storage, and improvements to the filling stations. In total, we assumed investment needed would still be a
transmission and distribution grid. 6,200 electrolyzers and filling stations. staggering €1,371 billion to power the
There will also be a need for demand Since each filling station has a full supply for the total car park – and
management around vehicle charging, compressed H2 tank, one advantage of that’s only in Germany.
in order to prevent distribution systems the hydrogen scenario is a decoupling of
from overloading. And naturally a full energy supply and demand. We estimate
network of private and public charging total investment costs in this scenario at
points will need to be built. All told, this €479 billion.
adds up to €301 billion in investments.
Fig. 5 Full supply scenario for Germany: Estimation of variable costs (€/MWh fuel)
Production and storage Infrastructure Add. price components
End user price
Point of
Production Storage Distribution Margin Tax
supply
Electrical 64 273
energy 65 33 19
85 7
• Estimated • CAPEX for • Grid fee • CAPEX and • 10% of cost • Energy tax • 27.3€-ct/kWh
average LCOE storage OPEX for 20.50€/MWh
charging points • 19% VAT
• No further fees
Hydrogen 45 279
170 3 32 9 21
146
H H • Electrical
power and
• CAPEX for
storage
• Grid fee for
electric energy
• CAPEX and
OPEX for H2
• 10% of cost • No energy tax
• 19% VAT
• 9.3€/kg
electrolyzer filling stations
CAPEX/OPEX
Synfuel 27 57 357
219 0 50 3
193
• Electrical • OPEX for • Grid fee for • OPEX for • 10% of cost • No energy tax • 3.3€/L
power and storage of electric energy filling station • 19% VAT
synfuel plant 0.18€/MWh
CAPEX/OPEX
Electrical energy Fuel processing
Hydrogen and synfuels are less
energy and cost efficient, but are
essential for applications with
high energy demand.
16 From CO 2 neutral fuels to emission-free drivingWhat would it mean if all light vehicles in Germany switched to one alternative CO 2 neutral fuel?
Fuel costs are much lower for Having analyzed the zero-CO2 fuel full
both BEVs and FCEVs supply scenarios for three fuel types,
We calculated a fuel price for end we will shift gears in the next chapter
users for each scenario, assuming an and focus on the total cost of ownership
allocation of the investments to the fuel (TCO), thus also covering technological
price, additional operational costs as attributes of existing traditional and
well as margins and taxes.1 Compared alternative powertrains.
to today’s fossil fuel costs of ~€7–12
per 100km, lower fuel costs in the full
electric scenario of €5–7 per 100km
are expected. In the hydrogen scenario
the same range as today is expected,
whereas in the synfuel scenario fuel
costs are about twice as high as today’s
Large scale supply of light
fuel costs. vehicles with CO2 neutrally
produced synfuel seems
not feasible.
Fuel per 100km
Consumption Fuel cost (€)
tax share
23%
BEV
5–7
18–26 kWh
tax share
If all light vehicles in Germany
16% switched to BEVs, demand of
FCEV
0.8–1.2kg H2
7–11 electrical energy would grow by
176TWh annually, 34% of today’s
total demand for electrical energy.
tax share
16%
ICE
18–26
5.5–8L Synfuel
ICE today: ~€7–12
tax share ca. 60%
1
or the electrical energy pathway we included an additional energy tax. Further fees, especially the German renewable energy fee, were not accounted
F
for here, as the cost for electrical energy is already based on an assumed non-subsidized price for renewable energy of 85€/MWh.
From CO 2 neutral fuels to emission-free driving 17Total cost of ownership and usability are sometimes at odds
C Total cost of ownership and usability are
sometimes at odds
Ability to access zero- Moving away from the hypothetic full is charged directly from the external
supply scenarios, we now focus on electrical grid. This realistic “plug-in”
emission zones will become the technology and TCO of vehicles. configuration lowers the dependence
a key feature for usability of We defined several reference vehicles of the FCEV on hydrogen infrastructure
powertrains. employing different powertrains, in and uses the better conversion of electric
order to compare features and costs. energy directly from the battery for low
Our base car is premium mid-sized, with distances, while using hydrogen on long
200kW peak output rating. Figure 6 distances or low battery charge.
shows the vehicles we defined, which
include a PHEV option as well. We assume that PHEVs and FCEVs are
operated with electrical energy from the
The ICE vehicle includes a 48V electric grid at 60% of the driven distance (short
machine as integrated-starter generator distance rides) and the rest in “range
for boost and recuperation function. extension mode” with energy from the
Our fuel cell electric vehicle includes combustion engine or the fuel cell.
a high-voltage battery (25kWh) that
Fig. 6 Attributes of reference vehicles by powertrain
ICE PHEV BEV FCEV
Engine 200 kW 160 kW – –
e-Engine ~15–20 kW ~80 kW Peak, ~50 kW Cont. ~200 kW Peak, ~100 kW Cont. ~200 kW Peak, ~100 kW Cont.
Components
Electric Drive – Inverter/DCDC/OBC Inverter/DCDC/OBC Inverter/DCDC/OBC
Tank ~60 l (fuel/synfuel) ~60 l (fuel/synfuel) – ~5 kg @ 700 bar (hydrogen)
BatteryTotal cost of ownership and usability are sometimes at odds
Car buyers focus both on total cost BEVs lead the pack both today and in the will decrease due to economies of
of ownership (TCO), and on more anticipated future when it comes to fuel scale; that’s already being seen in price
qualitative factors that we term cost. PHEVs benefit from some of the reductions on battery cells, electric
“usability”. While BEVs have a clear lead same advantages as BEVs, giving them motors, and power electronics. Fuel
in TCO, they still fall short in some of a lower fuel cost than conventionally cell costs are more of a question mark;
the key usability criteria like range and powered ICEs. For synfuel powered ICEs, the extent to which the technology
refueling time. the high cost of producing synfuel leads proliferates will have a big impact on
to very high fuel costs. whether or not the cost curve comes
We looked at fuel cost, depreciation down dramatically.
(variabilization of vehicle cost), and We calculated vehicle costs based on
other factors (tax, maintenance and a cost model that assumes a lifetime Other costs include taxes and one-time
bonus) in determining the TCO of each production of 2 million vehicles, in purchase bonuses that lead to reduced
reference vehicle. In order to estimate order to allow for a fair comparison of costs for electrified powertrains in 2017.
the TCO for 2030, a cost model for each the powertrain types (see Figure 7). While maintenance costs are expected to
powertrain was developed, including Actual vehicle costs could, of course, be lower for BEVs and FCEVs, these only
technological progress mainly for vary somewhat, however there are some played a minor role in our calculation.
batteries and power electronics, as well significant trends which are already
as more stringent legal requirements for apparent. Cost of ICE powertrains
combustion engines. On the other hand, will increase, due to more restrictive
we anticipated that both ICEs and PHEVs legislative demands regarding
will benefit from additional efficiency efficiency and emissions. The cost of key
improvements. components of alternative powertrains
Fig. 7 Mobility costs for reference vehicles
TCO/mobility cost in €/100km Usability
Refuel time Access to
2017 2030 Range (km)
(min) ZEZ1
Zero local
Fuel cost Other (tax, maintenance, Assuming full
Content Full reload emission and
Depreciation insurance and bonus) tank
low noise
ICE/Mild
Diesel/ Hybrid
55.9 54.5 700 1 ✗
gasoline
PHEV 52.2 54.8 700 1
Electrical
energy 30–
BEV 49.9 50.7 400
3602 ✓
Hydrogen FCEV 55.5 56.2 600 3 ✓
ICE/Mild
Synfuel 69.3 64.4 700 1
Hybrid
Good performance Medium performance Weak performance
Bonus of €4,000 (BEV/FCEV) and €3,000 (PHEV) included for 2017. Powertrain costs calculated for 2 million vehicles lifetime.
1
ZEZ: zero-emission zone.
2
Largely depending on charging power.
From CO 2 neutral fuels to emission-free driving 19Total cost of ownership and usability are sometimes at odds
Weak range and
infrastructure impede the
widespread adoption of BEVs.
Although the total cost of ownership ICEs to enter emission free zones is
of our reference vehicles is lowest for still unclear. Plug-in hybrids could be
BEVs today, and will stay lowest in 2030, a way to achieve quick refueling and
the difference between the powertrain high range, while enabling a zero local
types is relatively small. Depreciation emission drive mode when running on
represents a major portion of total costs. electric power in urban areas. Currently
In our model we assumed a constant it is also not yet clear if PHEVs will be
rate in loss of value for all vehicle granted access to zero-emission zones,
types. Depending on factors like the though, and this could vary according to
extent of proliferation of zero emission the exact wording of local legislations.
zones, these values could still change
significantly. FCEVs and BEVs emit zero local
emissions at any time and will have
Figure 7 compares costs for our modeled access to zero-emission zones. Pitfall
vehicles, as well as for vehicles powered for BEVs are the short range and slow
with conventional ICEs. In terms of recharge time. FCEVs combine long
day-to-day usability, the conventional range, fast refill and accessibility to
ICE offers a bigger range and faster zero-emission zones. However, for both
refueling, but won’t be able to access BEVs and FCEVs limited availability
zero-emission zones. Whether or not of charging points and refill stations,
local governments will permit synfueled respectively, is an issue.
Uncertainty about future value will increase
Total cost of ownership of vehicles in this segment is dominated
by depreciation. All powertrains suffer from large uncertainty
about their future value. For ICEs it is mainly due to the threat of
non-accessible zero-emission zones, whereas PHEVs, BEVs and
FCEVs might quickly become outdated faster due to the pace of
progress in technological development.
FCEVs are expected to
become an attractive
solution for the long-range
premium vehicle segment.
20 From CO 2 neutral fuels to emission-free drivingThe total automotive market will grow, electric vehicle market share will expand dynamically
D The total automotive market will grow,
electric vehicle market share will expand
dynamically
In 2030 42 million EVs will be In order to be able to project future sales
on a global level, the development of the
sold globally, representing a drivers has to be investigated globally
market share of 35%. as well. Besides the already discussed
powertrain costs and vehicle TCOs,
we see legislation, infrastructure, and
public perception as main drivers for the
transformation.
Fig. 8 Estimated development of drivers over time (2017–2030)
2017 2020 2025 2030
Legislation1 • 120g CO 2 /km (NEDC) • 95g CO2 /km (WLTP) • 1,000
Powertrain • Lowest cost for ICEs, • BEV cost ~2x of ICE, • BEV cost ~40% higher • BEV and ICE almost at
€
cost ~50% surcharge for as ICE cost increase than ICE, FCEV ~80% same cost, FCEV still
PHEVs, BEV and FCEV and battery cost more expensive than ICE ~50% above ICE cost
cost 2.5–3x higher decrease
Public • ICE with best usability • Still ICE with best • Growing focus on • Due to driving
Perception in focus usability in focus BEVs and FCEVs prohibitions, ICEs
• Most customers of APTs • Most customers of APTs • Increasing customers of become unattractive
are companies, are early adopter (some APTs • Wide basis for
innovators private customers) customers of APTs
Driver is suitable for APT Driver is moderate for APT Driver is unsuitable for APT
1
Based on Local Pollution, Global Warming & trade policy.
APT: Alternative Powertrain
From CO 2 neutral fuels to emission-free driving 21The total automotive market will grow, electric vehicle market share will expand dynamically Most important legislative driver are the CO2 emission regulations, which are motivated by the effort to limit climate Domestic content of change. The average limit is expected to drop to
The total automotive market will grow, electric vehicle market share will expand dynamically
Our forecasts suggest that light vehicle Although German OEMs have only For instance, the major part of the
sales will likely grow from 93 million few BEVs currently in their product value of the battery, the most costly
units per year in 2017 to 122 million portfolio, attractive models are in the component of the BEV powertrain,
in 2030. While sales of vehicles with pipeline. This enables them to not only is created non-domestically. Based
ICEs will increase over the next few participate in the short term growth on a model of the value chains and
years, beginning in 2020 they will start of the market for conventional ICEs, the localization on each level for all
declining, with the rate of decrease but also in the emerging segments of powertrains, the impact of the transition
accelerating over time. Over the same PHEVs, BEVs, and FCEVs. The expected on the German domestic content is
time period, PHEVs sales will slowly total market volume of German OEMs estimated.
increase, while BEVs will grow strongly. including their worldwide production,
In 2025, we estimate BEVs will make is depicted in Figure 10. It is expected to The domestic content cannot keep the
up 12% of the global sales, and 31% grow strongly from €91 billion in 2017 pace with the market volume. From
in 2030. We also expect FCEV sales to about €174 billion in 2030. 2025 on, we even expect it to stagnate,
to increase to 1 million in 2025 and due to the large rise of the BEV segment.
~5 million in 2030, mainly in the long- The structure of the value chains and This is less dramatic for the OEMs,
haul premium segment. the respective localization on each level that profit from increasing production
changes dramatically when comparing numbers and rely with their value
the emerging powertrain technologies. creation not only on the mechanical
parts of the powertrain. However,
Fig. 10 Market volume for powertrains produced by German OEMs worldwide especially those suppliers that focus on
and domestic content (in billion € per year) ICE components to a large extent, will
suffer from this development. From a
∑ 174 national macroeconomic point of view,
∑ 153 9 it means that the automotive industry in
its entirety might reduce its importance
24 55 in future, contributing less to the job
∑ 118 market and overall macroeconomic
11
performance.
∑ 91 21
109 115
∑89
32 ∑ 38 ∑ 38
∑ 32 89
∑ 25
25 31 32 25
2017 2020 2025 2030
Value of world-wide production:
ICE PHEV BEV FCEV
German domestic content:
ICE PHEV BEV FCEV
Market share of ICEs
will decline dynamically,
especially from 2025 on.
ICEs will still remain
largest segment in 2030.
From CO 2 neutral fuels to emission-free driving 23Time to act is now
E Time to act is now
0% of the automotive industry Over the last twenty years, the share In our view, automotive OEMs and
of content developed and produced by suppliers should take key strategic
leaders think OEMs are well OEMs has steadily declined. One area decisions very soon, including adjusting
prepared for the upcoming that’s remained a core competency, their product portfolio, improving
transition.2 though, is the internal combustion product costs, optimizing the value
engine. As the overall market begins chain, and driving organizational
to shift towards BEVs, this core change.
competency will lose some of its value.
Beginning in 2025, the shift is likely The first step is adjusting the product
to be more dramatic, as revenues from portfolio. Companies need to be sure
ICEs will begin to decline. Still, over the that they have the right types of vehicles
next few years, many companies should for their target markets. Especially
be able to generate strong profits from employing a purpose design for BEVs
their ICEs. In our view, it’s absolutely will be prerequisite to fill customer
critical that they invest these in the new needs and to achieve competitive costs.
technologies that will drive the industry They will also need to focus on some key
forward in the future. Given the low- technologies that enhance usability and
level of maturity of BEVs and FCEVs, streamline production. For example,
companies may be able to develop wireless inductive charging could make
innovations that are truly unique (and an enormous difference, by freeing
potentially patent-able) to set them customers from the need to recharge at
apart from the competition. specific charging stations. There will
be strong pressure to bring costs down
on BEVs and PHEVs, so companies
will need to optimize their products to
ensure sufficient margins, e.g. by means
Recommendations for OEMs of design-to-cost processes.
and suppliers:
The next step will be for companies
across the automotive industry to work
together across the value chain. OEMs
• Revise product portfolio and technology roadmap and suppliers should cooperate closely
• Optimize products to ensure sufficient margins and work jointly to accelerate economies
of scale and reduce costs. For OEMs,
• Industrialize the value chain appropriately for that should include taking care to
large scale production volumes avoid unnecessary cost drivers in their
• Drive organizational change to reflect shift in specifications to suppliers.
technology
2
PwC AutomotiveINNOVATIONS Conference 2017.
24 From CO 2 neutral fuels to emission-free drivingTime to act is now
Perhaps most importantly, companies Mechanical and Plant Politics and Government
across the industry will need to drive Engineering Sector The transformation of fuels and
far-reaching organizational change The demand for mechanical parts and powertrains will increase competition
on a number of levels. They’ll need processes attributed with the ICE will for OEMs resulting in risks and chances
to develop greater capabilities in reduce after 2025. At the same time a for the German domestic content
electrical engineering. Organizational large buildup of production capacities and employment. Compliancy with
structures that have proven successful and investments for new technologies emission reduction and clean air
for conventional powertrains may not is expected, leading to the following targets seems more feasible with the
work as well for alternative powertrains, recommendations: adoption of alternative powertrains. The
so it will be time to take a fresh look independence of oil exporting countries
at how your company does things. For • Adjust product portfolio will also grow.
OEMs, that will include developing a –– Explore new products and
strategy for how and where the future technology trends for components Especially to avoid a negative impact on
mix of powertrains should be produced. together with potential customers domestic content and employment the
And with series roll-outs critical to –– Apply existing and/or adjusted following actions are recommended:
consumer acceptance, research and capabilities to improve
pre-development will need to be closely manufacturing process in order • Accelerate build-up of
connected to series engineering. to gain a selling proposition to the infrastructure
clients –– Remove legal barriers for
construction of private charging
• Leverage global reach infrastructure
–– Enter and dominate new growing –– Directly invest in the build-up of
production equipment markets of public charging infrastructure and
alternative powertrain components H2 filling stations
–– Improve and use global sales reach –– Enable attractive market models for
to maximize scale effects flexible load from BEVs
–– Identify key global markets per –– Check reduction of taxes and fees on
component electric power for BEVs
• Leverage industrial automation • Education and research
experience –– Enhance professional and academic
–– Apply existing production teaching to ensure adequate
equipment capabilities with high qualification on all levels (e.g.
standards of productivity and engineering, production staff,
quality to new production processes service staff)
–– Increase research funding in all
• Broaden network relevant fields (materials science
–– Partner with other manufacturers and production technology of
of industrial machines to provide batteries, fuel cells, electric motors,
system solution power electronics, …)
–– Engage in research networks and
projects to improve manufacturing • Product and production technology
equipment and competiveness –– Support local industry in
installation of cell production line
From CO 2 neutral fuels to emission-free driving 25Wrap-Up
F Wrap-Up
All players in the industry Growing concerns about negative The main drivers of the transformation,
effects of the climate change and such as local emissions and global
should prepare now for the raising awareness of local pollution warming, will lead to dynamic growth
ongoing transition and seek are currently pushing the interest in global EV sales. In 2030, we expect a
new business areas. in alternative fuels and powertrains market share of 35% for EVs. However,
strongly. Taking CO2 neutrality as a sales of internal combustion engine
prerequisite and excluding biomass powered vehicles (ICEs) will still
based fuels, renewable energy from represent the largest share throughout
wind and sun are the choice. 2030.
Different conversion paths are widely OEMs and suppliers should act now
discussed but in a full supply scenario and take strategic decisions soon.
battery electric vehicles (BEVs) are Adjustments in their product portfolios
advantageous in terms of energy and technology roadmapping are key
efficiency, investments, and fuel costs. to ensure future competitiveness and
However, weak usability impedes profitability. By the industrialization
widespread adoption of BEVs. In of the whole value chain further cost
particular, range and refuel time fall reductions can be achieved.
short of the performance customers are
used to from conventional vehicles. Key For the mechanical and plant
benefit for end users is the accessibility engineering sector, the large build-
to zero-emission zones, which has an up of production capacities for new
important impact on the sales of BEVs. technologies generates opportunities as
new machinery is needed.
Hydrogen powered fuel cell electric
vehicles (FCEVs) can combine the best Employment level and competitiveness
of two worlds but costs and lacking of the national industry should be
infrastructure are critical issues. For a main concern of the public sector.
special applications, such as long- Governments have to deal with the
range premium vehicles, FCEVs are risk of decreasing employment rates
still expected to become successful in in the transition and should build a
the long run. Synfuels suffer from low positive environment for the upcoming
efficiency and high cost but might be employment in future powertrains.
the only viable solution for applications
with even higher energy demand such
as long-haul heavy duty transport or
aviation.
Readiness in technology and
organization are key to be
successful in the future.
26 From CO 2 neutral fuels to emission-free drivingAppendix
Appendix
Detailed discussion of our Synfuel is used as a collective term for
conversion path methodology synthetic hydrocarbons, produced from
and assumptions electrical power. As carbon source,
In the all-electric path, electricity CO2 is used. We considered use of CO2
is generated non-centralized in from ambient atmosphere, as other CO2
photovoltaic and wind energy power sources such as from steel production or
plants. An average loss of energy due biomass, are limited in their availability.
to storage is estimated at about 6%, All synfuels (and gaseous synthetic
accounting for seasonal and time- fuels, such as SNG) have in common,
variant supply and load, resulting in an that in the first step hydrogen gas
efficiency of 94%. The distribution via is produced from electric power by
the electrical grid on the transmission electrolysis. For the further processing,
and distribution grid level is estimated we assumed a “Carbon Oxides and
at about 89% efficiency. From the Water to Liquid” (CWtL) process route,
charge plug to the wheel, an average where hydrogen and CO2 are processed
efficiency of 84% is estimated, including to methanol. In a further step, methanol
losses during recharge of the BEV is then processed to a synthetic fuel
battery and actual use of the BEV. with characteristics similar to diesel
or gasoline fuel. The total efficiency
Hydrogen gas as fuel is expected to including all processing steps is
be produced via electrolysis, splitting expected at about 44%. It should be
water molecules in hydrogen and noted that the processing is expected to
oxygen gas. We expect de-centralized be carried out in larger more centralized
facilities, where electrolyzers are facilities than the production of
integrated in filling stations, to be hydrogen. Thus, we expect a higher
the most economical solution for efficiency of the electrolysis of 76%.
hydrogen supply. For the electrolysis The efficiencies for the CO2 production
and the storage of hydrogen gas at high from ambient air and the synfuel
pressure, we expect an efficiency of synthesis are assumed at 75% and 77%,
69%. The distribution itself is covered respectively.
by the electrical grid, distributing
electric energy to the electrolyzers, at an Other important routes for synfuels
efficiency of 95%. The total efficiency of include diesel and gasoline fuels via the
the FCEV powertrain is expected to be at Fischer-Tropsch synthesis, and oxygen
about 55%. containing materials such as dimethyl
ether (DME) and polyoxymethylene
dimethyl ethers (PODE oder OME).
These fuels were not considered here,
due to their somewhat lower efficiency
in production. However, the results
described in the following for synfuels
are expected to be fairly similar to what
one would get from other synthetic
fuels.
From CO 2 neutral fuels to emission-free driving 27Contacts
Contacts
Dr. Oliver Bollmann Dr. Jörn Neuhausen
Partner Principal
PwC Strategy& PwC Strategy&
Tel: +49 211 3890-282 Tel: +49 211 3890-345
oliver.bollmann@strategyand. joern.neuhausen@strategyand.
de.pwc.com de.pwc.com
Christoph Stürmer Felix Andre
Global Lead Analyst Senior Associate
PwC Autofacts PwC Strategy&
Tel: +49 69 9585-6269 Tel: +49 30 8870-5942
christoph.stuermer@pwc.com felix.andre@strategyand.de.pwc.com
About us
Our clients face diverse challenges, strive to put new ideas into practice and seek
expert advice. They turn to us for comprehensive support and practical solutions
that deliver maximum value. Whether for a global player, a family business or a
public institution, we leverage all of our assets: experience, industry knowledge,
high standards of quality, commitment to innovation and the resources of our
expert network in 157 countries. Building a trusting and cooperative relationship
with our clients is particularly important to us – the better we know and understand
our clients’ needs, the more effectively we can support them.
PwC. More than 10,300 dedicated people at 21 locations. €1.9 billion in turnover.
The leading auditing and consulting firm in Germany.
28 From CO 2 neutral fuels to emission-free drivingwww.pwc.de
You can also read
