Future Challenges for Vehicle Industry

Date: Mar 18, 2005
Contributor: Nelson Brazelton

Oil Supply and Fuel Costs Are Projected as Biggest Future Challenges after Emissions for Heavy-Duty Vehicle Industry

Results of Fuels and Technologies Survey at WestStart-CALSTART's 2005 Clean Heavy-Duty Vehicle Conference Also Shows Move to Multiple Fuels

Over the next five years, the top concerns of the heavy-duty vehicle industry will be the increased cost and reduced efficiency of diesel engines as they struggle to meet new emission requirements.

However, dominating the future beyond 2010 are significant and growing worries about world oil supplies, and how challenges around oil may greatly increase fuel prices and cause fuel shortages. Alternative fuels and new technologies will play a significantly expanding role.

These are the top results of the Clean Fuels and Technologies Market Survey conducted by WestStart-CALSTART at its just-completed fifth annual Clean Heavy-Duty Vehicle Conference. The conference has become the premier yearly gathering of heavy-duty vehicle industry leaders and experts addressing cleaner and more efficient vehicles.

The survey found that concern over oil supplies and impacts has deepened significantly during the last year, and is now seen as the most important next challenge for heavy-duty vehicles, greater even than fine particulates and greenhouse gases. Survey respondents also project a future of multiple fuels and technologies for transportation.

"Future oil supplies, costs and sources are starting to dominate the thinking of heavy-duty vehicle industry leaders," said WestStart-CALSTART President and CEO John Boesel, "And it affirms their belief that the future is not dominated by one fuel type."

The survey shows that industry experts expect major changes in the transportation fuels mix. The results closely match projections from previous year's surveys, and projected that alternatives to diesel will erode diesel's market dominance in the heavy-duty vehicle industry over the next decade and a half. According to survey respondents, by 2020 diesel could lose up to 35 percent of the new heavy-duty vehicle market to other fuels and technologies, including hybrids, natural gas, hydrogen and diesel alternatives.

Key survey findings include:

Traditional diesel fuel was projected to drop to roughly 65 percent of the 2020 heavy-duty fuels marketplace; Diesel alternatives (biodiesel; gas-to-liquids/GTL) could expand to nearly 20 percent of the diesel market by 2020; Natural gas was projected to grow to 11 percent of the 2020 fuel marketplace;
Hybrid vehicles were projected to grow to 18 percent of the 2020 new market;
Beyond emissions, oil supplies and costs are seen as the top challenge to heavy-duty vehicles over the next fifteen years, followed by fine particulates until 2015, when greenhouse gas emissions emerge as the second biggest concern;
The biggest impacts of these oil supply challenges are believed to be fuel price increases, fuel shortages, and increasing pressure for improved fuel economy;
An overwhelming 93 percent of survey respondents believe there is a relationship between US foreign policy and energy policy; most already believe that relationship is significant to very significant and increasing in importance;
69 percent of respondents believe oil supply challenges will have a significant or very significant impact on US businesses by 2015; rising to 79 percent by 2020.
The findings represent the opinions of a cross section of industry leaders and stakeholders including truck and engine manufacturers, component suppliers, regulators, fleet operators, fuel providers, environmental and research organizations, and the military. However, the results are weighted toward the opinions of truck and engine manufacturers and component suppliers, who made up 39 percent of the final survey respondents, with fleet operators making up an additional 12 percent.

Boesel noted: "Several major engine makers pledged for the first time at our conference that they are committed to meeting the tough 2010 emission standards. The survey shows what they think comes next."

The basic survey results are available free on line at WestStart-CALSTART's Web site: www.calstart.org. A complete analysis of the results can also be ordered, together with the proceedings from the 2005 Clean Heavy-Duty Vehicle Conference, via the Web site.

"This survey does not provide absolute projections of the future, but it is an extremely important indicator of industry trends and concerns," added Boesel. "Going forward, we believe we must find integrated fuel and technology strategies that address the three key issues: energy security, fuel efficiency and emission reductions."

The 2005 Clean Heavy-Duty Vehicle conference was co-hosted by WestStart-CALSTART and the U.S. Army's National Automotive Center (NAC), with major support from the Federal Transit Administration (FTA).




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