Frankfurt Auto Show: Gasoline Likely To Lead Through 2030
“To the surprise of many, ICE vehicles will retain a huge market share, while mild hybrids make big inroads”
Automotive corporate heavyweights will be bragging about their new electric cars at the Frankfurt Auto Show this week, suggesting that a new battery era is dawning, while gasoline powered cars are on their last legs.
The reverse will be the truth though, while mild-hybrids, are the coming thing.
The most promising new technology for improving fuel consumption over the next decade turns out to be little known and unglamorous mild-hybrids, which use state of the art technology to augment the performance of ICE engines to improve fuel economy and reduce CO2 emissions at a fraction of the cost of battery electric vehicles (BEVs).
Long-term global predictions from reputable forecasters show that demand for BEVs will increase too slowly to meet the ambitions of companies like Volkswagen, which are leading the move to electric power. The internal combustion engine (ICE), far from being outlawed, will account for more than half the global market in 2025, and still hang on to a more than 40% market share by 2030, according to global information provider IHS Markit.
Forecasts from Morgan Stanley also point to a slow embrace of BEVs, with ICE car sales staying ahead of BEVs until at least 2035.
Show-room ready electric cars will be all over the Frankfurt stands while dirty, unloved CO2-spewing ICE vehicles will hide at the back. After all, aren’t politicians and environmental activists declaring that ICE power threatens to accelerate the climate change emergency and manufacturer of these cars should be stopped? Some influential British lawmakers have called for a production ban by 2030. France and British governments have declared a ban for 2040. Sweden has opted for 2030.
But data from IHS Markit suggests that BEVs will have a hard time in the market place and ICE cars will flourish.
“It’s a very complicated ecosystem out there and the take up of electric vehicles has many high barriers. The charging infrastructure, the price, and practical problems like the fact that many people don’t have driveways in front of their houses or live in apartment blocks so home charging will be difficult,” IHS Markit analyst Tim Urquhart said.
“Look at the likelihood of massive queues at motorway charging stations. Politicians like to talk about the electric car age, but the reality looks very different, unless there are big improvements in the technology,” Urquhart said.
“To the surprise of many, ICE vehicles will retain a huge market share, while mild hybrids make big inroads,” Urquhart said.
Battery electric vehicles will also require a huge increase in electricity generating capacity, and perhaps the biggest hurdle is charging. There is unlikely to be a serious mass market for electric cars until they can be refuelled as easily as gasoline ones.
Latest data from IHS Markit forecasts that by 2025, BEVs will account for only 10.2% of the world’s car sales, and 14.8% by 2030. Investment bank Morgan Stanley predicts the global market share of BEVs will reach close to 10% by 2025 and just over 20% by 2030. If that’s right, car manufacturers who have embraced BEVs will face financial problems because their expensive plans assume a sales rate of more than twice that.
IHS Markit also predicts that ICE vehicles will have a global market share of 54.2% by 2025 and 41.9% by 2030. That doesn’t look like demise mode, does it? Mild hybrids though will come from nowhere currently to 25.1% by 2025 and reach 30.2% by 2030.
According to British technology analyst IDTechEx, the 48 volt mild hybrids will move from minority status to ubiquity early in the next decade.
“Most use belt-driven alternator replacements for starter, torque-assist for downsized engine, and primitive regenerative braking. The reduction in carbon dioxide emission keeps things legal as emissions laws tighten. It is quieter and uses less fuel. Favorite uses for the extra electricity stored in an added lithium-ion battery are an electric supercharger instead of turbocharger for better fuel economy and performance, and active suspension for improved comfort,” IDTechEx said in a report.
Despite its enthusiasm, IDTechEx predicts a much lower market share than IHS Markit, at 10 to 15% of the market by 2027.
Fitch Solutions also sees slow growth of BEVs in Europe, with market share growing slowly from 3.1% in 2020 to only 7.0% in 2028. Manufacturers are gearing up to meet stringent European Union (EU) fuel economy regulations which start in 2021, tighten again in 2025 and peak out in 2030. Mild hybrids will lead the way for cost conscious manufacturers.
“Current ICE technology does not allow for cutting emissions significantly further without heavy investments, however by combining an ICE engine with a hybrid system, average vehicle emissions can go down considerably depending on the type of hybrid system,” Fitch Solutions said in a report.
“Although the mild-hybrid’s CO2 reduction capabilities are not on a par with full-hybrids or plug-in hybrids, the benefits come with scale, as these systems are inexpensive and relatively easy to implement without any changes to the design of the vehicle. We believe car manufacturers will be willing to use any feasible opportunity to reduce their average fleet emissions, hence adding mild-hybrid systems to current and future models present a cost-effective way to avoid fines for not meeting emission targets. While it will command a higher vehicle price, the increased cost of the mild-hybrid car will be offset by lower running expenses, such as fuel costs, insurance, and vehicle tax, making them an attractive option compared with an ICE-powered car,” the Fitch Solutions report said.
Full-hybrids combine a gasoline engine with a battery which is charged as the vehicle moves, and allows only up to a mile of battery-only travel. Plug-in hybrids have a battery which can be externally charged, and allows up to perhaps 30 miles of battery-only travel.