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Roland Berger consultants look at how industrial automobile powertrain combine will evolve in coming years

A couple of years again, industrial automobiles (CVs) have been seen as a secure haven for diesel engines. The business’s necessities for effectivity, sustainability and power density make sure that items and folks transported by way of vans and buses will stay ICE-dominated for a very long time.

In the present day, with a rising consciousness of local weather change, an expanded authorities regulatory push and monetary assist for zero-emission automobiles (ZEVs) within the transportation business, and a transparent focus of NGOs on transportation sectors apart from passenger automobiles, issues have modified. Huh.

CVs on highway to electrification, initially pushed by city purposes
Special Report: Commercial Vehicle Powertrain Mixture

General, the push and pull components are driving the adoption of ZEV within the CV business. Pushed by push aspect regulation. Right here we see, for instance, very strict gas economic system targets in Europe (with a 30% emissions discount by 2030 for heavy-duty automobiles).

If firms are to stay in the established order, the penalties for lacking targets within the area of a number of billion euros are too excessive, so non-compliance is just not an possibility. As well as, native rules and restrictions play a task in lots of European states, as do metropolis entry limits. Once more, these are highly effective drivers to transform elements of the fleet to ZEVs even in conditions the place the economics are unfavorable in comparison with diesel engines.

The US has been much less aggressive on GHG rules for vans on the federal stage. Right here, California has taken the lead in mandating a prescribed proportion of economic ZEVs to be bought within the state. Different states are following swimsuit, resulting in a big regulatory push in the direction of inexperienced transport.

Roland Berger’s TCO mannequin predicts vital modifications in powertrain combine over the following 5 to 10 years

On the bridge aspect, inexperienced fleet picture and complete price of possession (TCO) are main concerns. The connection between sustainable enterprise practices and inventory value has grow to be very clear and drives efforts by firms to decarbonize their fleets.

However, the total transition of the fleet to the ZEV is not going to happen till TCO parity between the choice powertrain and the traditional diesel powertrain is achieved. Based on Roland Berger’s projections, by 2025 for battery electrical automobiles based mostly on sustained price reductions for batteries and round 2030 for gas cell automobiles based mostly on a mixture of price reductions for gas cell stacks and hydrogen gas. is prone to.

One instance is the adoption of CNG within the US trucking business. As the fee benefit of CNG versus diesel eroded, gross sales declined and there was no restoration. Funding in infrastructure stopped which was additional detrimental to gross sales. Briefly, firms throughout the business make rational funding selections. Costly options should be applied by regulation; Because of this, the burden of price escalation may be handed on to the customers as an alternative of the burden of decrease transportation margins.

Xcient Fuel Cell Truck
TCO parity will likely be a serious influencer for gas cell truck adoption

Roland Berger’s TCO mannequin predicts vital modifications within the powertrain combine over the following 5 to 10 years. Within the US, BEV penetration in medium-duty vans ought to attain between 19% and 45% in 2025 and 2030, respectively. For HD vans, the mannequin is anticipated to have penetration charges of 4% and 15%, respectively. Europe, with its sturdy regulatory concentrate on the important thing HD truck phase, is anticipated to achieve 12% in 2025 and 25% in 2030.

China is anticipated to have a mixed MD and HD penetration of 6% and 14%, respectively. Gasoline cell vans in all sectors grow to be related round 2030 with a penetration charge of 2-4% within the HD phase. Their TCO-positive use circumstances are largely present in long-distance transport and intensive dredge operations, as soon as a big price discount for FC vans and hydrogen gas. Clearly, whereas the diesel engine is not lifeless, it is getting out within the CV business as properly.

Different options akin to renewable diesel exist and should have an effect on these penetration ranges with modifications in key price parameters (akin to battery price). So far as infrastructure and engines are involved, renewable diesel is a drop-in answer, a serious problem being the supply of environmentally pleasant developed feedstock. Present market estimates for renewable diesel undertaking a quantity of two to a few billion gallons per yr, in comparison with the requirement of the US transportation business alone which is roughly 40 billion gallons per yr. As well as, renewable diesel could also be extra vital for supporting the decarbonization of different sectors akin to marine and aviation, the place battery electrical or gas cell applied sciences have little potential for fulfillment in comparison with the CV business.

Outsourcing diesel powertrain manufacturing to 3rd events would have been extraordinary a decade in the past, however is being actively thought-about as we speak

Due to this fact, electrical and gas cell vans and buses are an vital a part of the long run and their amount will likely be related in 5 to 10 years. For OEMs and suppliers, this implies they need to actively put together for and drive business change. The strain to put money into a number of applied sciences directly drives energetic portfolio discussions and forces robust selections to be made.

One instance is Daimler Vans’ latest choice to outsource its MD engines to Cummins. The corporate is reportedly partnership choices for its HD engine as properly. One other instance is the joint improvement of gas cell expertise by Daimler and Volvo. Their three way partnership CellCentric combines funding and capabilities to supply the clear long-range powertrain to the business. Outsourcing diesel powertrain manufacturing to 3rd events, licensing of powertrain expertise to different OEMs and/or Tier 1 are measures that won’t have been heard of a decade in the past, however are being actively thought-about as we speak .

Technological disruptions additionally open up alternatives for non-traditional rivals. The present demand for inexperienced options is just not all the time in keeping with the expansion plans of conventional OEMs. This is a chance that start-ups within the EV and gas cell area try to faucet. Established Chinese language gamers like BYD can use disruption to construct a dependable base in Europe and North America. Passenger automobile gamers, akin to Tesla and Geely and Nice Wall Motors in North America, want to insert themselves into the CV ecosystem by investing in vans, in addition to new ideas akin to battery swapping and autonomous driving. The aggressive setting turns into extra dynamic and fewer clear because the boundaries between gamers and segments grow to be fluid.

Special Report: Heavy Duty Diesel Engine Technology
The times of the diesel engine are numbered

Along with elevated participation to cut back funding danger, firms have to preserve an in depth eye on their working fashions, their belongings and the talent units of their workers. Processes have to replicate the peculiarities of high-voltage architectures and the alternatives for elevated use of software program and telematics. Property and folks should be transformed and re-trained if doable.

Outdated stereotypes should be revisited. As a substitute of focusing solely on the US and Europe as sources of innovation, China additionally has sturdy electrical and gas cell powertrain understanding and innovation. With the fast improvement of technology-driven service enterprise mannequin in China, Western firms want to know the Chinese language market and expertise dynamics intimately. Isolating the worldwide economic system includes not solely provide but in addition expertise dangers.

Decarbonizing will result in willpower, large funding within the transportation of products and folks and the higher a part of the following 20 years. Whereas sturdy engineering management was a energy of OEMs and suppliers prior to now, their agility and skill to interact and/or take part within the business ecosystem is essential to future survival. Luckily, many firms are transferring in the direction of a greener future.


Dr. Wilfred Aulber, Frank Pietras and Weinbou Yu are companions in Roland Berger; Dr. Walter Rentzsch is the Principal at Roland Berger

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