Survey Predicts Higher Fuel Costs, Gradual Technology Shifts
By Bill Visnic WardsAuto.com, Dec 1, 2006 9:13 AM

DETROIT – More than 100 North America-based automotive powertrain experts foresee mostly gradual evolution of powertrain technology between now and 2020, according to a new study by the University of Michigan Transportation Research Institute.

The Powertrain Strategies for the 21st Century survey is part of the institute’s long-term Future Powertrain Program focusing on the potential development directions for automotive propulsion. Respondents include engineers, executives and managers from auto makers, suppliers and other non-industry sectors. Ward's assisted in the development of the survey and encouraged readers in the powertrain sector to participate.

Survey results suggest while almost all respondents are convinced fuel prices will be significantly higher in 2015 and 2020, the majority of automotive engines and transmissions used in North America will look much like they do today.

In short, hybrid-electric powertrains and new-generation diesels appear to be the future’s big winners, the survey finds.

Respondents predict in 2015, 58% of passenger cars will be powered by spark-ignited gasoline engines (the current U.S. percentage is about 97%), with compression-ignition diesels accounting for 15%. By 2020, however, the survey predicts gasoline-engine share will drop to 45%, with diesels growing to 18% of the passenger-car market.

Hybrids – “mild” hybrids and even plug-in hybrids using both gasoline and diesel combustion engines – are predicted to account for a combined passenger-car share of 21% in 2015 and 27% in 2020.

Diesels also are expected to advance significantly in powering light trucks. Survey respondents say they expect fully 25% of light trucks in 2015 to be diesel powered and 28% by 2020.

They expect gasoline-engine share in light-truck segments to fall from 51% in 2015 to 40% by 2020, with hybrids accounting for 18% of light-truck powertrains in 2015 and 24% in 2020.

Those surveyed say the most significant impediment to launching new diesels in North America is the development of effective exhaust aftertreatment systems, but 13% also cite the need for advanced fuel-injection components as a major diesel-development challenge.

Consumer perception and the potential for more stringent future emissions standards also are named as hurdles for diesel adoption in North America.

Widespread adoption of fuel-cell powertrains, which many predict will become the end-game solution for automotive propulsion, apparently will have to wait. Those surveyed believe just 3% of passenger-car powertrains will be fuel cell-based in 2020, with 2% of light trucks being fuel-cell motivated.

Those surveyed expect consumers would pay between $600 and $2,000 in 2015 for an “advanced powertrain system” and between $1,000 and $2,500 by 2020. Some comment, however, that many consumers do not believe they should pay anything. “If the powertrain cost goes up, then something else has to come down,” one respondent says.

Most surveyed agree future fuel prices will be significantly higher than today.

Unleaded regular gasoline is expected to cost $4.09 per gallon, according to the weighted-response figure for 2015, and $5.06 in 2020. Premium unleaded is expected to cost about $4.48 in 2015 and $5.53 in 2020.

Some predict regular-grade unleaded gasoline could cost as much as $6 per gallon in 2020.

Meanwhile, respondents say the decision to make capital investments and manufacturing-facility conversions would make the development of new powertrain technologies “somewhat difficult” to “very difficult.”

“Business cases for new powertrain technology are difficult to make at our company,” one respondent says. “Most new powertrain-technology decisions are made based only upon regulatory requirements and competitors’ technologies.”

Most surveyed predict there will be increasing modularization of powertrain components, and that more development will be sourced to Tier 1 and Tier 2 suppliers.

The findings suggest OEM development of powertrain components, subsystems and/or complete systems and modules will drop from 36% in 2015 to 32% in 2020, with Tier 1 suppliers winning most of the outsourced work.

One respondent doubts industry predictions that OEMs gradually will remove themselves from the business of powertrain development. “Engines or the main power source will continue to be a core engineering focus for OEMs,” he says.

But another says, “It is clear the trend of the OEMs is to outsource engineering, and the most capable persons to pick up that engineering task are Tier 1 suppliers. OEMs will continue down the path toward being system integrators, similar to aerospace.”

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For transmissions, the survey predicts 6-speed automatics will achieve the dominant market position for passenger cars, accounting for 25% of the market in 2015 and 28% in 2020.

And by 2020, respondents see continuously variable transmissions holding 14%, matching the market penetration of 5-speed automatics for passenger cars.

For light trucks, 6-speed automatics are predicted to occupy 25% of the market in 2015 and 30% in 2020, a share that surpasses use in passenger cars, likely reflecting the need for economy-enhancing gearboxes in light trucks. Surprisingly, 4-speed automatics are seen as still accounting for a significant 12% of the light-truck transmission market in 2020.

All-wheel-drive configurations are predicted to enjoy a significant portion of all vehicle segments by 2020: 21% for passenger cars; 40% for cross/utility vehicles; 20% for light trucks; and 38% for SUVs. The survey also predicts fully 19% of passenger cars will be rear-wheel drive in 2020.

All survey respondents essentially agree the increasing electrification of automotive powertrains will require additional electrical and software engineers, as well as systems engineers capable of combining mechanical and electrical knowledge.

One respondent says engineers with combination electrical- and mechanical-engineering degrees, or those with “mechatronic” skills, is “where the shortage lies right now and will continue for the next couple decades. This should be the basic (college) degree to take us forward. I think the universities in the U.S. are really asleep on this point compared with Germany.”

Those interested in detailed results of the Powertrain Strategies for the 21st Century survey can contact UMTRI’s Bruce M. Belzowski at 734-936-2704 or bbl@umich.edu.

bvisnic@wardsauto.com