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Marketing New Powertrain Technologies

UMTRI Automotive Futures Group“Focus on the Future”

UM Automotive Research Conferences

WELCOME!Bruce M. Belzowski

University of MichiganTransportation Research Institute

Managing Director-Automotive Futuresbbl@umich.edu

Automotive FuturesUniversity of Michigan

Transportation Research Institute

–Globalization–Powertrains–IT

Funding

Affiliate Program Research Conferences

– 5 Annual Conferences

–Supporting Members

–Research Partners

Automotive FuturesAffiliate Program

Affiliate Members

Aisin Technical Center of AmericaArgonne National Labs

BorgWarner Inc.Bosch CorporationDelphi CorporationDenso Corporation

Ford Motor CompanyValeo Corporation

Automotive FuturesResearch Partners

Research Partners

IT OrganizationsHPIBMOracle CorporationSiemens-PLM

OEMsFCA LLCFord Motor CompanyGeneral MotorsNissan Tech CenterToyota Tech Center

Government/NGOsArgonne National LabsCALSTART CARBEnergy FoundationFederal Motor CarrierThe Hewlett FoundationICCTNRDCMichigan DOTNRELNSF

Government/NGOsUnion of Concerned ScientistsUS Army-TARDECUS DOTUS EPAUS DOE

Automotive FuturesResearch Partners

Research PartnersSuppliersBASFBorgWarnerBoschChevronContinental DensoDanaDelphiDowEatonJATCO

SuppliersJCILearMagnaMeansMichelinPeterson SpringTRWYazakiVisteonValeo

ConsultantsAT KearneyAVLFEVMcKinseyRicardoRoland Berger

Automotive FuturesCurrent Research Programs

• Powertrains• 2016-2017 Powertrain Strategies for the 21st Century Survey

(A collaboration with SAE)• Survey results have been distributed to Affiliates

• Total Cost of Ownership: Comparing Diesel and Gas Vehicles (Bosch)• Based on resale value of 30K vehicles sold through Mannheim auctions in

2012 / 2013• Report available

Automotive FuturesCurrent Research Programs

• ITS• The Future of Automotive Safety Sensors (Sponsor: NHTSA)

• In Progress• Comprehensive V2X Retrofit Study of Heavy Trucks (Sponsor: NHTSA)

• In Progress

• Integrated Mobile Observations: Micro-level weather reporting using cell phones in MDOT vehicles (Sponsor: MDOT and FHWA)• Report available.

Automotive FuturesCurrent Research Programs

• ITS• Stuck in Traffic: Analyzing Real Time Traffic Capabilities of Personal

Navigation Devices and Traffic Phone Applications • Final report available

• Roadway Evaluation Project: Measuring road roughness via accelerometers in cell phones mounted in MDOT vehicles• Final report available

Automotive FuturesCurrent Research Programs

• ITS

• Deploying Safety Technologies in Commercial Vehicles• Familiarity and penetration currently and in the future of: Forward

Collision Warning / Lane Departure Warning / Blind Spot Detection / ESC / Vehicle Communications

• Final report available (Sponsor: ITS America)

Automotive FuturesResearchers

• Student Researchers:• Alexa Kershenheiter: Senior, Mechanical Engineering

• Working on study of the effects of autonomous vehicles on society, the economy, and the individual study

• Camille Cu, Senior, Economics and Jaclyn Zhu, Senior, Economics• Chinese electric vehicle industry: subsidies

• Aaron Dalal, Sophomore, Business• UM Automotive Industry Student Survey

• Michael Ross, Sophomore, Electrical Engineering• UM Powertrain Strategies for the 21st Century Survey

• Brian Roche, Sophomore, Political Science• UMTRI Automotive Futures Focus on the Future Conferences

Upcoming UMTRI-AFConferences

April 18, 2018: New Mobility Conference. Our 4th annual New Mobility conference will investigate mobility as a service transportation business models that support sustainability as well as transport.

July 18, 2018: Powertrain Strategies for the 21st Century: Our 10th annual conference that focuses on major issues related to the future powertrains. This conference is also the place to see the results of our annual Powertrain Strategies for the 21st Century expert survey that estimates powertrain technology penetration for 2020 and 2025.

Upcoming UMTRI-AFConferences

September 11, 2018: The Future of Automotive IT: Driving Organizations, Vehicle Development, and Connected/ Autonomous Vehicles. Our 10th annual conference focused on the Future of Automotive IT shows the different sides of automotive IT and how it continues to change automotive organizations and vehicles.

November 15, 2018: Inside China: Understanding China’s Current and Future Automotive Industry. Our 11th annual Inside China conference has traced the rapid rise of the Chinese auto industry. The largest automotive market in the world is such a unique market that it demands that we continue to examine both its current and future trends from a variety of perspectives: consumer choice, marketing, product development, government support and regulations, alternative energy, automotive research and development, industry structure, labor, economic impact, and manufacturing.

Conference Presenters/Schedule

9am Bruce Belzowski, Managing Director, Automotive Futures, UM Transportation Research Institute

• Scott Gallett, Vice President of Marketing, BorgWarner Corporation

• John Major, Regional VP, Midwest Operations, Vice President, Government Relations and Military Liaison, Achates Power

Break (30 minutes)

• Bruce Belzowski, Managing Director, Automotive Futures, UM Transportation Research Institute

Conference Presenters/Schedule

• Mike VanNieuwkuyk, Vice President, Ipsos

• Xavier Mosquet, Senior Partner, The Boston Consulting Group

• Conference Q&A

1:30pm Lunch

2:00pm Adjourn

Post Conference Mailing

Attendees:• Link to presentations

Affiliates:• Link to presentations sent to all company representatives in our

database• Document and link to a review of highlights from the conference

Housekeeping

• Restrooms

• Wireless

• Cell Phones: Silent

• Speaker Bios

• Question Cards

Conference Questions

• How do established market new powertrain technologies to manufacturers?

• What challenges do powertrain suppliers face in developing new powertrain technologies?

• How long does it take for an engine supplier to get new engine technology into a manufacturer’s vehicle?

• What are the differentiators in selling powertrain technology to manufacturers?

Conference Questions• How well are dealers prepared to sell vehicles with new

powertrain technologies?• How are manufacturers supporting their dealers in selling new

powertrain technologies?• When will we see the tipping point for sales of EVs in the US?

Will it be different from China’s and the EU’s? • What are the key indicators that signal the tipping point for

EVs?

Conference Questions

• What strategies are governments using to support new powertrain technologies?

• What methods are used by the Chinese government to support EVs, PHEVs, and fuel cell vehicles?

Sales and Marketing of New Powertrains

Experts expect growth in the use of mild hybrid, full hybrid, and electric powertrains by 2025 for passenger cars

0.25

1

3

3

15

74

0.44

2

6

4

27

57

0 10 20 30 40 50 60 70 80

Fuel Cell

Extended Range

Electric

Advanced Diesel

Hybrid

Spark Ignited

Percentage Penetration

20252020

Growth, but low penetration

Hybrids (2025)• Full: 6%• Plug in: 7%• Mild: 13%• Diesel: .5%

Experts expect an increase in the use of advanced diesel powertrains by 2025 for light trucks

0.24

0.5

1

9

13

74

0.23

1

2

18

14

62

0 10 20 30 40 50 60 70 80

Fuel Cell

Extended Range

Electric

Hybrid

Advanced Diesel

Spark Ignited

Percent Penetration

20252020

Growth, but low penetration

Hybrids (2025)• Full: 4%• Plug in: 3%• Mild: 10%• Diesel: 1%

US Plug-In Vehicle Sales

17,425

52,607

97,507

122,438 116,099

158,614

199,826

0.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

2011 2012 2013 2014 2015 2016 2017Source: Inside EVs

Predominant Alternate Fuel Types

Source: U.S. DOE

Global Plug-In Vehicle Sales

50,000

134,000212,000

324,000

546,000

775,000

1,150,000

0.00

200,000.00

400,000.00

600,000.00

800,000.00

,000,000.00

,200,000.00

,400,000.00

2011 2012 2013 2014 2015 2016 2017Source: Statista

Plug-In Sales and % Growth by Region

Source: EV Volumes

Global Electric Car Stock by Country, 2010-16

US Model Sales: Toyota Mirai

72

1,034

1,838

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00

2,000.00

2015 2016 2017Source: Car Sales Base

Toyota Mirai Marketing Strategies

Sources: AutoWeek, Boston.com, Hybridcars.com

-Company provides three years of complimentary fuel or $15,000 rebate

-Advertised during 2017 Super Bowl, but only in California

-May create sub-models in the future to attract diversified customer base

U.S. Model Sales: Honda Clarity

8

2,455

853

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

2016 2017 2018 (Jan)Source: Car Sales Base

Honda Clarity Marketing Strategies

Sources: PR Newswire and Green Car Reports

- “Beyond the Battery” advertising campaign to reduce confusion about plug-in hybrids

- $15,000 fuel allowance

- T.V. advertising campaign in California only

U.S. Model Sales: Chevrolet Volt

326

7,671

23,461 23,094

18,805

15,393

24,739

20,349

7130.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 (Jan)Source: Car Sales Base

Chevrolet Volt Marketing Strategies

Source: CS Monitor

- De-emphasis on T.V. advertising

- Targeted marketing (those who have bought AFVs in the past

- Acknowledgement that Volt buyers are “not typical Chevy customers”

U.S. Model Sales: Chevrolet Bolt

579

23,297

1,177

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

2016 2017 2018 (Jan)Source: Car Sales Base

Chevrolet Bolt Marketing Strategies

Source: CS Monitor, News Wheel

- Non-traditional (70% of Bolt buyers are new to Chevy)

- Emphasis on Bolt being a “normal, but special” car

- Resolving “brand confusion” (Volt vs. Bolt)

U.S. Model Sales: Toyota Prius Family

207,372184,779

136,629

108,661

6,9430.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

2014 2015 2016 2017 2018 (Jan)Source: Car Sales Base

Toyota Prius Family Marketing Strategies

Source: NBC News

- Emphasizing Mirai as Prius “successor”

- Phasing out all gas powered vehicles by 2050

U.S. Model Sales: Tesla Model S / Model X / Model 3

16,698

25,416

47,644 50,145

3,375

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

2014 2015 2016 2017 2018 (Jan)Source: Car Sales Base

Tesla Model S Marketing Strategies

Source: AdAge

- $0 Marketing Budget

Model Sales: Nissan Leaf

19

9674 9819

22610

30200

1726914006

11230

1500.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 (Jan)Source: Car Sales Base

Nissan Leaf Marketing Strategies

Sources: Black Press USA, Warc, Autonews

- Cameos in high-profile movies (Disney’s A Wrinkle in Time)

- Emphasize “fun” aspects of EVs

- Framed as affordable choice among EVs

Advertising Dollars Spent: Ford Focus v. Focus Electric

Advertising Dollars Spent: Mercedes B Class Electric v. C Class

Advertising Dollars Spent: Nissan Leaf v. Sentra

Advertising Dollars Spent: Chevrolet Volt v. Cruze

Advertising Dollars Spent: Volkswagen eGolf v. Golf

Relative Advertising Dollars Spent

Marketing New Powertrain Technologies

UMTRI Automotive Futures Group“Focus on the Future”

UM Automotive Research Conferences

WELCOME!The Link to Presentations Will Be

Emailed This Weekend

Deployment scenarios for the stock of electric cars to 2030

EV Stock vs. Available Chargers

EV Market Share by Country

Source: IEA