1. 1Presenter, Event, Date1Richard Newell, SAIS, December 14, 20091 October 14, 2010 John Maples, Nick Chase, Matt Tanner Energy Information Administration National Petroleum Council transportation questions about the Annual Energy Outlook 2010

2. 2John Maples, NPC Brief, October 14, 20102 Outline of Presentation Battery and hybrid systems Alternative fuel vehicles Alternative vehicle/technology penetration and consumer preference Other miscellaneous

3. 3 Battery pack cost (2008$/kWh) Lithium-ion follows production- based function Lithium-ion batteries available for PHEV10s and PHEV40s and HEVs and EVs when Lithium-ion becomes cost competitive with Nickel Metal Hydride, or forced penetration for EVs Battery costs based on research from various studies and academic papers, as well as product information Calendar life, cycle life, and safety issues not addressed Battery lasts for lifetime of vehicle; no recycling assumed; no specific Lithium-ion chemistry assumptions Source: EIA, AEO2010 John Maples, NPC Brief, October 14, 2010

4. 4 Non-battery vehicle system incremental cost (2008$) Non-battery incremental systems cost relative to conventional gasoline vehicle EVs do not have an additional vehicle system incremental cost Incremental prices based on academic research, reports, data from vehicles in production, and EPA/NHTSA data Electric drive train vehicle non- battery systems costs are constant across vehicle classes due to lack of complete data on variation in component cost Source: EIA, AEO2010 John Maples, NPC Brief, October 14, 2010

5. 55 Battery electric vehicle pricing Battery vehicle price is a combination of both battery pack cost and non-battery systems cost Battery pack cost based on $/kWh and size of battery, with size of battery determined by the weight of the vehicle Required battery kWh by class can be calculated using model equations –weight*0.0005 (HEV and PHEV10) –weight*0.00235 (PHEV40) –weight*0.0147 (EV) John Maples, NPC Brief, October 14, 2010

6. 66 Battery electric vehicle range and fuel economy PHEV and HEV range is based on input adjustment to conventional gasoline vehicle (25 percent greater) Range for EV is set to 80 miles EV fuel economy (mi/kWh) is calculated as a function of vehicle weight –1/((0.125*weight)/2200)/0.8) Conventional vehicle fuel economy does improve relative to HEVs across the projection period John Maples, NPC Brief, October 14, 2010

7. 77 Battery electric vehicle availability and infrastructure Battery electric vehicle availability based on actual production announcements, such as the Tesla Roadster, Chevy Volt, etc. The AEO2010 (completed in 2009) only considered EVs with the characteristics of the Tesla Roadster (2-seat sports car) and small SUVs; thus, more recent announcements such as the Nissan Leaf are not included There are no product offerings for heavy-duty PHEVs Plug-in recharging infrastructure availability limits maximum market to 50 percent John Maples, NPC Brief, October 14, 2010

8. 88 Other battery electric vehicle questions Electric vehicle sales driven primarily by sales to fleets The AEO2009 “Issues in Focus” piece on PHEVs was done offline using assumptions and inputs included in the various AEO cases in both the AEO2009 and 2010 HEV systems cost does include electric power steering and regenerative breaking but not electric air conditioning John Maples, NPC Brief, October 14, 2010

9. 99 Flex fuel vehicles Corporate Average Fuel Economy (CAFE) credits are phased out over the projection period as called for by the Energy Independence and Security Act between Model Years 2014 to 2019 FFV sales are projected to increase in order to meet the Renewable Fuel Standard (RFS) FFV incremental cost information gathered from discussion with industry –Cost penalty implemented on low volume vehicle sales (<5,000 to 50,000 annually in a size class) John Maples, NPC Brief, October 14, 2010

10. 10 Natural gas vehicles CNG and LNG vehicles are not differentiated for the heavy-duty vehicle side, only CNG vehicles are offered for light-duty vehicles The AEO2010 projected only to 2035 and not 2050 A series of cases included in the AEO2010 “Issues and Focus” section did include projections of heavy-duty natural gas vehicles under several subsidy and expanded market conditions Sensitivities run to test the CNG LDV infrastructure model show that it is difficult for CNG vehicles to gain significant market share largely due to vehicle cost, lack of infrastructure, consumer preference, etc. John Maples, NPC Brief, October 14, 2010

11. Heavy-duty vehicles –Assume central refueling stations –Capital and operating costs are incorporated in distribution tariff inside the Natural Gas Transmission and Distribution Module –Distribution tariff is econometrically estimated from historic price data Light-duty vehicles –Assumed to cost $438,000 per station –Infrastructure expansion algorithm adds a retail markup to CNG fuel cost if stations are built 11 Natural gas infrastructure John Maples, NPC Brief, October 14, 2010

12. 12 Diesel vehicles Future undefined criteria emission standards are not included in the AEO Vehicle prices listed in the AEO output tables are in thousand 2008 dollars while those in the input file are listed in 2000 dollars John Maples, NPC Brief, October 14, 2010

13. 13 Hydrogen vehicles Flat hydrogen vehicle MPG in the projection period is assumption driven John Maples, NPC Brief, October 14, 2010

14. 14 Vehicle/technology adoption and consumer preference New light vehicle fuel economy can be impacted by either: –Adoption of vehicle system technology –Consumer choice for electric drive train/alternative fuel vehicles Technology Choice Model (TCM) –Adopts vehicle system technologies for all vehicle types (conventional gasoline, hybrid, diesel, etc.) based on value of fuel economy and/or performance improvement Consumer Vehicle Choice Model (CVCM) –Determines consumer acceptance (market share) by vehicle type (conventional gasoline, hybrid, diesel, etc.) Fleet vehicle sales John Maples, NPC Brief, October 14, 2010

15. Technology choice model 9 vehicle manufacturers, 6 size classes, 16 vehicle types Technology adoption based on value of performance, fuel economy payback, and CAFE fines –Reduced consumer demand for performance improvement as horsepower to weight ratio increases –Minimum and maximum horsepower to weight ratios Fuel savings payback and value of performance based on economic relationship derived from historic data 63 vehicle subsystem technologies John Maples, NPC Brief, October 14, 201015

16. Consumer choice model Market penetration by vehicle type determined using a multinomial nested logit model Coefficients vary by vehicle size class 16 propulsion/fuel vehicle combinations –8 fuel types and 5 propulsion systems gasoline, diesel, ethanol, methanol, electricity, CNG, LPG, hydrogen SI/ICE, CI/ICE, hybrid, plug-in hybrid, electric, fuel cell Vehicle attributes –Vehicle price, fuel cost, acceleration, driving range, luggage space, maintenance cost, fuel availability, make model availability, and home refueling John Maples, NPC Brief, October 14, 201016

17. Nesting structure John Maples, NPC Brief, October 14, 201017

18. Fleet Vehicle Sales 3 fleet characterizations: business, Federal and State government, and fuel provider Assumes EPAct 1992 Federal, State, and fuel provider purchase requirements for alternative fuel vehicles are met based on historic purchase behavior John Maples, NPC Brief, October 14, 201018

19. Other policies affecting fuel economy Corporate Average Fuel Economy (CAFE) –AFV cafe credits –CAFE credit banking/spending California Low Emission Vehicle Program and those states that have adopted Hybrid and diesel vehicle sales to meet CAFE John Maples, NPC Brief, October 14, 201019

20. 20 Miscellaneous transportation questions There is no “risk” associated with a particular storage technology or fuel Recent announcements regarding pending heavy duty vehicle fuel economy standards are not included in the AEO The real cost of driving is based on fuel costs only The AEO uses a 3 year payback period for light-duty vehicles and a distribution of payback periods (1 to 4 years) for heavy-duty vehicles John Maples, NPC Brief, October 14, 2010

21. 21 Miscellaneous transportation questions (cont.) The AEO includes a manufacturer classification that represents performance vehicles with high horsepower Vehicle ranges for different engines and fuels are assumption driven John Maples, NPC Brief, October 14, 2010

22. Miscellaneous transportation questions (cont.) New vehicle fuel economy by fuel type for passenger car and light- duty truck are available in Table 59 and Table 69 by size class Projections for vehicle horsepower and weight by size class are available in Table 61 for conventional gasoline vehicles only Table 68 provides technology penetration rates for conventional vehicles only that represent on average for all manufacturers and sizes classes The missing EV 2-seater fuel economy from Table 59 is a mistake Detailed output, assumptions, and documentation for the AEO are available online at (http://www.eia.doe.gov/oiaf/aeo/index.html) John Maples, NPC Brief, October 14, 201022