11

How Far can Technologies and Fuels Currently in Development

Take Us?

Transportation / Land Use / Environment ConnectionJohn German

American Honda Motor Co., Inc.October 20, 2008

i-VTEC

InsightＩＭＡ

CivicＩＭＡ

Cylinderdeactivation

GasolineDI

i-DSIＶ６

i-DSI

AccordＩＭＡ

High efficient gasoline engine

Clean diesel

HEV expansion

Base engine improvement

Diesel

CO2

redu

ctio

n FCV development for futureＦＣＶ

Fleet test

Research for mass production

GasolineHCCI

Civic GXCNG

GlobalＩＭＡ

No single solution –

multi-pronged approach

Honda’s Powertrain Progress for CO2 reduction

22

2002 NAS CAFE Report

ABA

B

A

B

New Variable Cylinder ManagementAll 6 CylindersAll 6 Cylinders

#1 #2 #3

#4 #5 #6

B A

CC

#1 #2 #3

#4 #5 #6C

B A

4 Cylinders4 Cylinders

B A#1 #2 #3

#4 #5 #6C

3 Cylinders3 Cylinders

Rear Bank

Front Bank

Rear rocker shaft(4 channels)

Rear rocker shaft(4 channels)

Rear rocker shaft(4 channels)

New Active Control Engine Mount

Active Noise Control

Torque Converter LockupLong Torsion Spring

Drive by Wire

33

Lightweight Materials• High strength steel

– Over 50% of the steel in most Honda vehicles– Also improves safety

• Aluminum– Requires lots of electricity, price has been going up

• Plastic– Cheap, color goes below surface– Less rigid and must paint

• Carbon fiber– Very strong and light– Difficult to work with and expensive

• Safety is extremely important• Must be able to manufacturer on assembly line• Must be able to repair and recycle or reuse

Honda Prototype Engine Base( Electro-magnetic valve )

HCCI Engine

30%Improvement in fuel economy:

Camless Valve Actuation

Heat release rate

Crank angle [ATDC deg]

dQ/dθ

[J/d

eg]

-40 0-20 4020

0

10

20 HCCISI

Requires increasing the self-ignition region

Next-generation Gasoline Engines

Lift sensor

Hydraulic tappet

ArmatureCoil

Yoke

Upper spring

Lower spring

EX IN

EX IN

NOL

Conventional

Negative valve overlap

44

Potential Operating Modes

Atkinson

cycle

Otto cycle

Electric motor only

CAI – Controlled Auto Ignition (a form of HCCI)

Assumes camless valve actuation and e-turbo

Are We Looking the Wrong Way?

• Combustion work focuses on raising output efficiency over typical driving cycles– From roughly 20% to 35%

• Heat losses are the 800-pound gorilla in the closet

Fig. 2 Example of heat balance in a conventional engine

55

BatteryBattery

InverterInverterEngineEngine

TransTransMotorMotor

2) Integrated Motor Assist2) Integrated Motor AssistBatteryBattery

EngineEngine

InverterInverter

GeneratorGenerator

Power SplitPower SplitDeviceDevice

MotorMotor

InverterInverter

3) Power3) Power--SplitSplit

Basic Hybrid System Designs

1) Belt1) Belt--Driven Alternator/StarterDriven Alternator/Starter

GM/BMW/Chrysler 2GM/BMW/Chrysler 2--mode mode is a poweris a power--split variationsplit variation

Hybrid TechnologyExpanded to our volume leader vehicle

Honda Hybrid Vehicle DevelopmentHonda Hybrid Vehicle Development

Mar. 2002Mar. 2002Mar. 2002

2nd2nd

Dec. 1999

1st1st

Enhanced Fuel Economyfor V6 engine

Enhanced Fuel Economyfor V6 engineDec. 2004 Dec. 2004

3rd3rd

Nov. 2005Nov. 2005

Higher power added to increase use

of hybrid vehicles

4th4th

4

2009Insight

• All new• More affordable

5th5th 6th6th

CR-ZCR-Z2010-11

66

i-DTEC - Super Clean Diesel for US

CO2 + H2OCO2 + H2O

N2N2NOxNOx

HC ,COHC ,CO

O2O2

Under Floor Lean NOx CAT SystemUnder Floor Lean NOx CAT System

• Improved Lean NOx Catalyser • Rich Air/Fuel Ratio Spike Control• Sulfur Regeneration• Emission Stabilizing System

• New Combustion Chamber Design• High Pressure Piezo Common Rail• Compression Ratio• Combustion Pressure Sensor

Improved CombustionOBDOBD--II SystemII SystemNew Software

• LNC Control• Combustion Control• Cetane Estimation

Closed-coupled Catalytic Converter

Diesel Particulate Filter (DPF)

＋＋

Audi TechDay 2007

29,000 psi (2,000 bar) piezo injectors and combustion chamber sensors

• Heated lines and tanks (in blue)• Passive AdBlue 15.5L tank (not shown – also heated)• Green lines are to NOx sensors

77

Crystal Ball is Very Cloudy• Improved gasoline engines keep raising the bar

– Especially a problem for diesels• Diesels: Towing, low rpm torque, highway efficiency

– But will public recognize improvements in noise, vibration, smell, starting, and emissions?

• Hybrids: City efficiency and electrical synergies– But reduces space and concerns about battery life

• Market split?–Diesels for larger vehicles and rural areas–Hybrids for smaller vehicles and urban areas

• Both must slash costs for mass market– Diesels currently cheaper, but Tier 2 will add major costs – Hybrid costs will likely decrease faster in the future

2007 MIT Study of Greenhouse Gas Emissions from Plug-in

Hybrids, Battery EVs, and Fuel Cell EVs.

88

Petroleum Consumption

GHG

Better

Plug-in hybrid and conventional

hybrid offer same GHG on U.S. average grid

Source: 2007 MIT Study

MIT’s Estimate of Technology PotentialAll with projected 2030 technology

Cost-Effectiveness ComparisonBase Case: Estimated OEM battery cost from Tables 16 and 26

Units HEV PHEV-10 PHEV-30 PHEV-60Battery Size kWh 1.0 3.2 8.2 16.5Specific Cost $/kWh $900 $420 $320 $270Battery Cost $ $900 $1,450 $2,700 $4,500

Optimistic Case based on a $200/kWh battery

Source: 2007 MIT Study

All compared to 2030 NA-SI baseline

99

The Liquid Fuel Advantage

0.28 ?0.140.139397.9

12.713.2

KWh/kgEnergy density per weight

vs gasolinevs gasolinekWh/liter

2.1%1.1%0.8%295%295%60%96%

2.1%2.1%27%13%66%

110%

Lithium-ion battery (future)0.2Lithium-ion battery (present time)

0.1-0.3NiMH battery2.6Liquid hydrogen1.3Hydrogen at 10,000 psi6.4Ethanol

10.7Diesel fuel9.7Gasoline

Energy density per volume

ENERGY FUTURE: Think EfficiencyAmerican Physical Society, Sept. 2008, Chapter 2, Table 1

Future Hybrid Potential• Must compare to future gasoline engines

–Gasoline engines will improve dramatically• Watch direction of battery development

– HEVs need higher power batteries• Current batteries have 2 to 3 times excess energy

storage, to ensure adequate power and durability– PHEVs need higher energy batteries

• High power Li-ion batteries currently in development will decrease HEV costs – increasing PHEV cost premium

1010

Plug-In Hybrid FutureChallenges

• Battery durability will be shorter• Deep discharge cycles • Higher loads at lower SOC

• Battery pack uses ~ 4 cu. ft.• Reduced vehicle utility

• Battery pack adds 200-250 lbs • Lower FE and performance

• Requires safe off-board charging system operation

• Limits market• May affect resale value

• Cost• Larger motor and power electronics• Battery

Market Acceptance• Niche market is

coming• Energy storage

breakthrough or oil shortages needed for mass market acceptance

The Real Barrier - Leadtime• Ironically, there are too many technologies coming

– Each with unknown future cost, potential, and synergies

• Must allow time to ensure quality and reliability– Rigorous product development process – 2-3 years after

feasibility has been demonstrated– Prove in production with a small pilot program – 2-3 years– Assess impact of higher volume and further development

on costs before committing to a single technology– Spread across fleet – 5-year minimum product cycles

• Longer leadtime is needed for new technologies• Costs increase dramatically if normal development

cycles are not followed– Greatly increases development costs, tooling costs, and

the risk of mistakes

1111

Technology du jour

• 25 years ago – Methanol• 15 years ago – Electric vehicles• 10 years ago – Hybrid/electric vehicles• 5 years ago – Fuel cell vehicles• 2 years ago – Ethanol• Today – Plug-in hybrid vehicles• 2011 – What’s next?

Extremely disruptive and wasteful

pastpast presentpresent futurefuture

TodayToday Air QualityAir QualityAir Quality

Climate ChangeClimate Change

Energy SustainabilityEnergy Sustainability

Developing alternativefuel technology

(vehicles and infrastructure)to address energy sustainability

Further advancingfuel efficiency through

conventional engine hybridand other technologies

Reducing air pollution

with conventionalengine technology

②

①

③

Hybrid and internal

combustion engine

technology

Hybrid and internal

combustion engine

technology

Fuel cell and electric

technology

Fuel cell and electric

technology

Fuel cell and electric vehicle technology have the potential to concurrently help solve the problems of air pollution, global warming, and limited energy resources

Significance of Fuel Cell and Electric Vehicles

1212

New Achievement for Fuel Cell Vehicles

Limited marketing:

Summer 2008U.S. (CA) and

Japan

Compact fuel cell stack(center tunnel layout)

Coaxial electric motor-gearbox

Lithium-ionbattery

Hydrogen tank(Gaseous fuel)

3 – 5 minutes

Refueling Time

Lithium-ion battery

Energy Storage

≈ 4kg5000psi

Hydrogen Storage & Pressure

100 kWFuel Cell

Stack Output

256 NmMotor Torque280 milesDriving

Range

100 kWMotor Output100 mphMaximum

speed

Rapid advances in size & weight reduction

00.5 1.0 1.5 2.0

0.5

1.0

1.5

Output with volumetric density (kW/L)

Out

put w

ith w

eigh

t den

sity

(kW

/kg)

~1/5 the size and weight per

kw

1999

2001

0

FCX Clarity STACKFCX Clarity STACK

2003

Fuel Cell Performance

1313

Well-to-wheel CO2 emissions -Battery EV & Fuel Cell EV show GHG reductions based on

today’s U.S. energy sourcingC

O2

Em

issi

onW

ell-t

o-W

heel

(g/m

ile*)

100

200

300

400

500

412412

278278

60%

ComparableGasoline Vehicle

168168

Battery EV Sedan charged on U.S. Electric

Grid Mix

33%

Source: DOE’s GREET model (Argonne/U Chicago), EPA unadjusted f.e. values (Clarity f.e. estimated by Honda R&D, BEV using 3.5 EER)

Hydrogen fromnatural gas

Greenhouse Gas Reductions

Storage tank

• Home Energy Station, 4th-generation

• Cooperative Development with Plug Power

Operating Principle

Heat

Electricity

Hydrogen

～～～～～

Natural gas Reformer

Fuel cellInverter

Compressor

～

Purifier

Reformed GasHome Refueling with Co-generation

New Value from Fuel Cell Infrastructure

1414

Electricity versus Hydrogen• Both are energy carriers – can be dirty or clean, depending on

how created• Neither will replace gasoline internal combustion for a long time

• Driving range – energy storage breakthrough

• Lower carbon grid• Safe place to plug in• Charge time

• Existing infrastructure • Battery charge/discharge

losses lower than fuel cell losses

Electricity

• 90% of energy from air• Remote generation (wind,

geothermal, waves, solar)• Cogeneration – heat and

electricity for home, fuel for car

Advantages

• Breakthrough in hydrogen storage and delivery

• Better ways to create hydrogen

• New infrastructure

Hydrogen

Needed improvements

???

15 min = 440v x 1,000 amp

Future Directions• Future gasoline engine improvements will

raise the bar for other technologies and will extend the fossil fuel era

• Government needs to set performanceobjectives and requirements

• Need advanced batteries and H storage • New high-power Li-ion chemistries will increase

cost gap between HEVs and PHEVs

No silver bullet • Energy and GHG so immense we must do

everything – avoid trap of single solutions

1515

Future Fuels

Honda Civic GX

• Critical bridge to fuel cells and hydrogen (refueling infrastructure and transitional fuel)

• Near zero emissions; AT-PZEV

• GHG reductions

• Fuel cost just 60% the cost of gasoline using Phill, the home refueling appliance

Home Refueling of a CNG Vehicle

PhillTM

1616

Honda’s View on Biofuels

Honda believes an “ideal” biofuel…

1. Has a true positive impact upon GHG reduction and energy security, as determined by complete and objective life cycle analyses.

2. Does not harm the environment through secondary effects, such asbiodiversity loss.

3. Does not impact the price and availability of food supplies, directly or indirectly.

4. Has a pathway for sustained growth in the market.

5. Is compatible with all current and legacy vehicles, small engines, etc.

6. Is transparent to the consumer in terms of performance, price, and availability.

7. Can be transported using the existing pipeline infrastructure.

Honda is very supportive of biomass fuel development, and is actively involved in R&D efforts regarding the production and use of biofuels and other bio-products.

New RFS Requirements

0

5

10

15

20

25

30

35

40

2006

2008

2010

2012

2014

2016

2018

2020

2022

Bill

ion

Gal

lons

Cellulosic

Conventional Biofuels

• Big wager on ethanol.

• Waivers are possible, i.e.:• Target volume for cellulosic ethanol can be reduced if required

volume is not available. In that case…• Target volume for renewable fuel and advanced biofuels can

be reduced concurrently

• Big wager on ethanol.

• Waivers are possible, i.e.:• Target volume for cellulosic ethanol can be reduced if required

volume is not available. In that case…• Target volume for renewable fuel and advanced biofuels can

be reduced concurrently

• Corn ethanol

• Cellulosic ethanol

• All other non-corn ethanol• Renewable diesel• Butanol

• FAME

ExamplesGHG

Target

- 20%*

- 60%

- 50%

- 50%

Volume and Type of Renewable Fuel Required by the RFS

Advanced Biofuels

Biodiesel

* future facilities only

1717

What Can We Do with all of that Ethanol?Assuming ≈ 30B gallons….

• Consumer acceptance of a 26% to 36% drop in fuel economy* and range, in the absence of significantly lower E85 prices.

• Very limited availability outside of the corn belt states; < 5 public stations in California.

• Cellulosic ethanol and new infrastructure needed before significant market penetration is feasible.

E85

(FFVs)

• Need to confirm compatibility with current and legacy autos, motorcycles, small engines, etc.

• Depending on compatibility findings, E10 might need to coexist with an intermediate blend for some period of time.

E11 E20intermediate blends

• Acceptance by all statesE10nationwide

30B gal

30B gal

E20

30B gal

Honda Civic FFV for Brazil market (E20 E100)• High consumer demand driven by substantial ethanol cost advantage.• E100 is widely available.• Brazil ethanol has small GHG footprint, compared to US corn ethanol.

* EPA 2008 Fuel Economy Guide

Ethanol Blend Challenges

Next-Generation Biofuel Pathways

Sacharification HydrotreatingPyrolysisGasification

Dehydration /Hydrogenation Fermentation Fischer-

Tropsch

Ligno-Cellulosic Biomass• Crops• Residue / Waste

Waste Oils & FatsMicro-Algae

Diesel-like Fuels

Ethanol & Butanol

Gasoline-like Fuels

• Multiple pathways possible from non-food biomass.• Many pathways result in fuels that are fungible with today’s fuels.• Some examples for liquid transportation fuels are shown here.

1818

RITE strain Corynebacterium glutamicum

Honda – RITE Cellulosic Ethanol R&D

Major advancement achieved by the RITE – Honda R&D team:

New strain of bacterium with the following attributes:

• Highly resistant to fermentation inhibitors

• Can simultaneously use xylose and glucose (5- and 6-carbon sugars)

• High ethanol yield

Current activity:

• Process is now undergoing second scale-up

• Honda is providing the engineering technology, and RITE is developing the bacterial strains

New strain of bacterium with the following attributes:

• Highly resistant to fermentation inhibitors

• Can simultaneously use xylose and glucose (5- and 6-carbon sugars)

• High ethanol yield

Current activity:

• Process is now undergoing second scale-up

• Honda is providing the engineering technology, and RITE is developing the bacterial strains

RITE = Research Institute of Innovative Technology for the Earth

Impact on travel and land development

1919

Real Gasoline PriceReal Gasoline Prices

(2008 $ per gallon)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

1950 1960 1970 1980 1990 2000Motor Gasoline Retail Prices, U.S. City Average, adjusted using CPI-U

Jun 08$4.07

Fleet Fuel EconomyReal Gasoline Prices and In-Use Fleet MPG

(2008 $ per gallon)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

1950 1960 1970 1980 1990 20000

5

10

15

20

25

30

35M

PG

Car mpg

Car + Light Truck mpg

Real Gasoline Price

In-Use MPG from Transportation Energy Data Book: 2007

2020

Gasoline Cost per MileReal Gasoline Cost for Cars - Cents per Mile

(2008 $ per gallon)

$0.00$0.02$0.04$0.06$0.08$0.10$0.12$0.14$0.16$0.18$0.20$0.22

1970 1975 1980 1985 1990 1995 2000 2005

Jun 08$4.07

Real Fuel Cost - % of Disposable IncomeReal Fuel Cost of Driving a Passenger Car 10,000 Miles

% of Per Capita Disposable Income

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

1970 1975 1980 1985 1990 1995 2000 2005

% o

f Per

Cap

ita D

ispo

sabl

e In

com

e

Jun 08$4.07

BEA, Table 2.1, Personal Income and It's Disposition

2121

$6 per gallon in 2030 – Cost per MileHypothetical Real Gasoline Cost for Cars & Light Trucks

(2008 $ per gallon)

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030$0.00

$0.03

$0.06

$0.09

$0.12

$0.15

$0.18

$0.21

$0.24

Fuel Price - assume increases to $6/gal

by 2030

Cents per Mile -w/ AEO2008 in-use fleet

mpg forecast