NGV RETROFIT Vs OEM: Trends & European Overview

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GFV-22-07 NGV RETROFIT vs OEM: Trends & European Overview Presentation to Informal Group on Gaseous Fuelled Vehicles 2 October 2012

presented by Dr. Jeffrey M. Seisler

Background notes for this presentation • The Worldwide Trends in the first part of this presentation includes materials from various presentations by Clean Fuels Consulting and is provided to the Informal Group on Gaseous Fuelled Vehicles as background to the second part of the presentation. • The information on European OEM/retrofit NGVs has been gathered and prepared by Clean Fuels Consulting (2011- 2012). Some of the information was developed for the European Business Congress project, Legal and Regulatory Environment for the Construction and Operation of CNG Refuelling Stations in European Countries. • The European compilation was prepared for DG Enterprise and was supplied by CFC on behalf of NGV Global. General Worldwide Trends Natural Gas Vehicle Retrofits & OEMs RETROFIT vs OEM

Conversions OEMs € Warranty No Warranty R S E € A L F I Europe, Japan, S. Korea, E A North-America(QVM-based), T B Australia Y I Continental Asia L South-America I T Y

Time

Conversions QVM* / OEM** Gen I II III IV V VI

Source: Dr. Jeffrey M. Seisler, *Qualified Vehicle Modifier updated 10 2012 **Original Equipment Manufacturer

Light Duty NGVs mostly are retrofit; MD/HD buses & trucks mostly are OEM

REGION % Passenger % MD/HD Buses % MD/HD Trucks Cars WORLD 94% 3% 2% ASIA 92% 4.2% 2% EUROPE 91% 4.5% 4% S. AMERICA 99% .004% .002% N. AMERICA 86% 10% 2%

Numbers may not equal 100% due to rounding and/or non-road vehicles not included.

Data Sources: GVR & Asian NGV Communications

Source: OEM & Retrofit NGVs: Synergies & Trends, Working Party on Gas Roundtable on Use of Gas in Transport, Dr. Jeffrey M. Seisler, Clean Fuels Consulting, 18 January 2011,

RETROFIT SYSTEMS MANUFACTURERS • Italy = 14 LDV • Brazil = 3 LDV • Argentina = 71(retrofitters or manuf.?) • Netherlands = 2 LDV; 1 HDV • US = 4 LDV; 2 HDV • Canada = 2 LDV; 2 HDV • UK = 2 HDV • Australia = 4 LDV 1 HDV • Bangladesh = 350 (only 192 ‘authorized’) • Russia, Asia, = multiple hundreds (?)

Source: Updated from OEM & Retrofit NGVs: Synergies & Trends, Working Party on Gas Roundtable on Use of Gas in Transport, Dr. Jeffrey M. Seisler, Clean Fuels Consulting, 18 January 2011,

Worldwide (outside USA) Average* NGV conversion costs - LDVs

U.S $ Middle Latin 14000 Asia-Pacific EUROPE Russia East America 12000 10000 8000 6000 4000 Global - average 2000

min

max

min

max

min

max

min

max

average

Iran Iran

Croatia Croatia

Poland Poland

Austria Austria

Poland Poland

minivan 4x50 4x50 minivan l

Austria Austria

vans vans

cars cars

Malaysia Malaysia

Bulgaria Bulgaria

Malaysia Malaysia

5th gen retro kit 5th retro gen

Spain Spain

3rd gen retro kit retro gen 3rd

personal car personal 2x50 l

Switzerland Switzerland

Argentina Argentina

Japan Japan

Japan Japan Netherlands

Russia Russia

Brazil Brazil

Brazil Brazil Czech Republic Republic Czech

*NOTE: Highly dependant on type of equipment; cylinder volume, type and number; new or Russia recycled components; approvals and certification etc. US costs are more in line with Japan.

IGU NGV Technical & Commercial Data Base – Examples of results, 7 GLOBAL NGV MARKET CONCEPT OEM vs RETROFIT PATHWAYS

Sustainability30000

Qualified Vehicle

Modifier

Vehicle

Numbers (Per Year) (Per

Market Entry 0 2000 Time 2005 2010 2015 2020

OEM: Europe, N. America & Japan OEM: Developing Markets

Retrofit:Europe, N. America & Japan Retrofit: Developing Markets

Source: OEM & Retrofit NGVs: Synergies & Trends, Working Party on Gas Roundtable on Use of Gas in Transport, Dr. Jeffrey M. Seisler, Clean Fuels Consulting, 18 January 2011,

OEM & RETROFIT PATHWAYS Best ‘guestimate’ where we are in 2012

Sustainability30000

Qualified Vehicle

Modifier

Vehicle

Numbers (Per Year) (Per

Market Entry 0 2000 Time 2005 2010 2015 2020

OEM: Europe, N. America & Japan OEM: Developing Markets

Retrofit:Europe, N. America & Japan Retrofit: Developing Markets

Source: OEM & Retrofit NGVs: Synergies & Trends, Working Party on Gas Roundtable on Use of Gas in Transport, Dr. Jeffrey M. Seisler, Clean Fuels Consulting, 18 January 2011,

European Natural Gas Vehicle Retrofits & OEMs Light Duty (LD) NGVs in Europe

• Total LD NGVs: 1,284,707 ( 73% of all European NGVs at 1,757,990) • Assumed LD OEMs: 535,172, or ~42% • NGV data from 40 European countries (including Turkey) in West and East are considered in the totals.

Vehicle data Gas Vehicle Report June 2012, from data at the end-of 2011 In Europe, OEM NGV sales dominate in Italy, Germany and Sweden • Italy: 775,590 LD-NGVs – ‘guestimate’ 50-50 split between OEM & retrofit, with OEMs now dominating sales. • Germany: 94,504 LD-NGVs ~100% OEM • Sweden: 37,700 LD-NGVs ~100% OEM including QVM (qualified vehicle modifier) Volvos • OEM sales play an important role in Switzerland, Austria (90% OEM vs 10% retrofit) and Spain where the total light duty NGV population (3 countries) is 15,816. • Netherlands OEM NGV population also is increasing but it is difficult to judge how many of their 3,530 LD NGVs are OEMs since they have had a strong conversion network (‘guestimate’ 25% OEM)

Vehicle data Gas Vehicle Report June 2012, from data at the end-of 2011 ITALY OEMs gradually have outpaced sales of retrofit NGVs, but NGV registrations are very dependent on incentives.

OEM Retrofit 140000

120000

100000 80000 60000

40000 Nummber of NGV of Nummber 20000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

No incentives +/- 1.500 € 2.000 € 3.500 No incentives €

Sources: Flavio Mariani, Metauto - Eni Gas & Power, 2005, 2009, 2010 & NGV System Italia

14 GERMANY 70-75% of NGVs are used for fleet and commercial applications NGV

Source: Ergas mobil, Timm Kehler,NGV Rome, June 2010 Volkswagen dominates the German NGV market with 49%

6 German OEM are currently in the market: • Volkswagen • Mercedes • Opel • Ford • Evobus • MAN 2 foreign OEM: • FIAT • IVECO Source: Ergas mobil, Timm Kehler,NGV Rome, June 2010 Associated ‘conversion industries’ based in Germany tend to be design & engineering firms but do not produce mainstream NGV retrofit systems • Brachetti and Partner • IAV (engineering & development) • IvS • Air LNG (investigating LNG applications for turbines for stationary and mobile applications

CNG passenger car registration is projected to approach diesel cars by 2020

1600000

1400000

1200000

1000000 CNG Registrations 800000 Diesel Registrations 600000

400000

200000

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Source: BGW, Natural Gas Vehicles 2020 NGVs are anticipated to impact more on diesel car sales then on gasoline cars

T housands

45.000

40.000

35.000

30.000 . CNG 25.000 CNG Diesel . GasolineDiesel + other 20.000

15.000 . Gasoline

10.000

5.000

0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Source: BGW, Natural Gas Vehicles 2020 NGVs should be 8% of total vehicles in Germany in 2016 (challenging target!)

Source: ENI, Compressed natural gas as fuel for NGV – potential, synergy and development , September 2011 SWEDEN In Sweden the majority of the NGVs are passenger cars

Source: Biogas Renewable Methane Gas, Leif Holmberg, Swedish Gas Association OEMs offer a variety of NGVs in Sweden

VOLVO* MERCEDES VOLKSWAGEN • V70 Bi-fuel • Sprinter NGT • Passat FIAT • E Class • Touran • Punto Evo • B 170 NGT • Caddy • Doblò OPEL • Caddy Maxi • Fiorino • Zafira • Transporter IVECO • Combo • EcoDaily

*Qualified vehicle modifier now owned by Westport LD Source: Fordonsgas

Volkswagen dominated 2009 Swedish NGV car market • Volkswagen TSI Passat EcoFuel accounted for 68% of the total NG passenger cars sales in Sweden • Then follow Mercedes B 170 NGT (24 %), VW Touran, VW Caddy, Opel Zafira, Mercedes E 200 NGT, Opel Combo, and Fiat Punto

Source: NGVA Europe, 2009 Volkswagen also is leading on medium duty NGV sales

• Volkswagen Caddy accounts for some 45 % of the total sales • Followed by Opel Combo, VW Transporter, Fiat Fiorino, Iveco Daily, and Fiat Doblò

Source: NGVA Europe, 2009 Swedish target is to reach 500,000 NGVs by 2020

600 550 500 450 400 350 300 250 200 150 100 50 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 Target NGVs (x 1000) NGV RETROFIT vs OEM: Trends & European Overview Presentation to Informal Group on Gaseous Fuelled Vehicles 2 October 2012

presented by Dr. Jeffrey M. Seisler