The Future of the Automotive Industry and its Impact on Automotive Materials
Presentation on November 1st POSCO EVI Forum
New trends - Rise of EVs, Autonomous Vehicles, Sharing Econommy
Impact on Automotive Industry-
Changes in Value Chain, Business Model, Car Design
"The Future of the Automotive Industry", Automotive Session, POSCO EVI Forum
1. The Future of the Automotive Industry
- And its Impact on Automotive Materials -
Park, Hyungkeun
Image: Mercedes Benz Concept
2. 1/26After a 130 years of car history, still…
Source: “Resource Revolution “, Heck & Rogers (2014)
Idling
Egine losses
• Rolling resistance
• Aux. power
• Transmission losses
• Inertia
• Aerodynamics
Fuel Efficiency
• 0.8% looking for parking
• 0.5% sitting in congestion
Utilization efficiency
2.6% driving
A car spends
96%
of its time parked
* Based on the USA
Infra efficiency
Energy used to move
a person/thing (4~5%)
86%
of fuel never
reaches the wheels
Only 10% of a road occupied by cars (Peak) Peak only 5% of the time
90% of road is idle
3. 2/263 key drivers of automotive paradigm shift
Electric vehicles (EVs)
Energy efficiency
Sharing economy
Ownership efficiency
Self-driving cars
Use efficiency
4. 3/26Tesla Model 3 & GM Bolt heralds ‘era of electric vehicles’
Rank Model 2015 Sales
1 Toyota Corolla 1,278,909
2 Volkswagen Golf 1,041,279
3 Ford F-Series 920,172
4 Ford Focus 826,221
5 Toyota Camry 754,154
6 Hyundai Elantra 746,924
7 Volkswagen Polo 698,182
8 Honda CR-V 696,594
9 Chevrolet Silverado 669,683
10 Toyota RAV4 664,382
Global Top Sellers 2015
400,000
Pre-orders
In April only,
If 500,000 vehicles are
produced by 2018, Tesla
will be able to become a
top seller
Tesla Motors Model 3
$35,000
Price
215 miles
Mileage
End of
2017
Release
GM Chevy Bolt
• 200 miles per charge
• 60kWh battery capacity
• U$37,500, release in 2017
Source: Compiled from the media
(Unit)
5. 4/26
U$30,000
Innovation in battery pack cost
• Leading companies’ battery cost: U$400/kWh (cell U$250/kWh)
U$150/kWh by 2025 upon popularization of EVs
*Tesla already achieved U$190/kWh by 2016 (’16.4 IR)
[Battery pack cost, U$/kWh]
0
100
200
300
400
500
600
2013 2015 2020 USABC
Target*
Tesla
2016
Pack Cost
Cell Mfg
Other Materials
Separator
Electrolyte
Anode
Cathode
521
393
261
150
190
Best-in-Class
Manufacturer
2025?
Cost-competitive EVs
Source: Avicenne Energy 2015, POSRI revised
* USABC (US Advanced Battery Consortium) has set a price target of battery pack at $150/kWh
Rapidly falling battery costs will expedite spread of EVs
EV price excl. battery packs
• Less room for improvement
in auto body tech.
U$20,000
Ideal battery pack cost
• Over 300 miles
• About 60 kWh
• U$150/kWh
U$10,000
6. 5/26
* Share of xEV (HEV, PHEV, AEV, FCEV) in total auto sales (passenger cars, SUVs, light duty vehicles)
xEV adoption forecast Perspective by institution
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2010 2015 2020
Midrange
Entire forecast range
0.8~4.0%
2.0~12.0%
1.5~2.5%
6.0~8.0%
Optimistic
About 10 mil.
units by 2020
(Over 10% )*
• Battery research institutes (SNE, IIT, B3)
- China’s bus market working as positive
- Influenced by micro car, e-bike, commercial
vehicle markets
Neutral
About 5 mil.
units by 2020
(6~8% )
Pessimistic
About 2 mil.
units by 2020
(Under 2% )
• Battery producers (LG Chem, Samsung SDI)
- Battery producers have neutral views
- Paying attention to 100GWh-battery market
in anticipation for increased EVs (‘20)
• Traditional energy institutes (OPEC, Shell)
- Limited battery tech., insufficient infra.
ICE’s improved gas mileage
Performance 2.9%
[Share of xEV in new car sales]
※ Complied from various forecast reports after 2009, UK Dept. for Transport
BNEF forecasts that xEV will account for 35% by 2040
(BNEF: Bloomberg New Energy Finance)
EVs accounting for 6% of new car sales within 5 years (neutral)
7. 6/26
Total 2.1 mil. miles self-driving record
• 24 Lexus RX450h SUVs
• 34 prototypes
• 6 states with self-driving car legislation
• 19 accidents (mostly by other vehicles)
A 15km self-driving test on
A8 motorway in Germany (Oct. ‘15)
A 30km self-driving test on
G7 highway in Beijing (Dec. ‘15)
Fierce competition for developing self-driving cars
Source: Compiled from the media
8. 7/26
Source: “Revolution in the driver’s seat”, BCG (2015)
200
50
10 1
2014 2015 2025 2030
Price decline in
full-self driving system
[$1,000]
LIDAR
(Core Equipment)
GPS
positioning
$80~$6,000
Ultrasonic sensors
Measure position of
nearby objects $15~$20
Odometry sensors
Complement GPS info.
$80~$120
Central ECU
Information processing & control
50~200% of sensor costs
Lidar
Monitors surroundings
$90~$8,000
Video camera
Visual monitoring
$125~$200
Radar sensors
Monitor surroundings
(pedestrians, roads)
$50~150
‘Fully autonomous vehicles’ about to be commercialized
Tesla Motors offers a level 5 autonomous system without LIDAR at a price level of 8,000 US dollars
9. 8/26
Source: “Revolution in the driver’s seat”, BCG (2015); forecast is based on McKinsey&Company
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2020 2025 2030 2035 2040
15.4%
56.0%
62.5%
97.5%
9.0%
34.0%
8.0%
100.0%
90.0%
Incl. partial automation
Share of high automation
Incl. partial automation
Share of high automation
High Scenario
Low Scenario
Share of self-driving cars in new car sales
BCG 25%
Partial 15%
Full 10%
Mixed views on the market penetration
PROS
• Reduced accidents: 94% caused by human mistakes
• Improved efficiency: Less congestion
• Prosperous sharing economy: Less demand for cars,
improved efficiency
CONS
• Facility investment: Expensive facility, infra investment
• Unpredictable mechanical fault: System failure, hacking
• Job loss: Truck and taxi drivers
10. 9/26
Source: Chinese automotive consumer survey, McKinsey 2016 (n=3,571) *Estimated by A.T. Kearney
1.5 mil. 22,000
NORTH AMERICA EUROPE ASIA-PACIFIC
2.1 mil. 31,000 2.3 mil. 33,000
Leading company
Survey about car ownership
• 60% No more symbol of wealth
• 42% Less appealing due to high maintenance costs &
traffic jam
• 37% Alternatives make car ownership less important
Survey about alternatives
• 40% Rent a car if necessary
• 34% Long-term leasing if cost is similar
• 26% Don’t mind sharing a car with others
86,000
cars
58 mil.
users
2.5 bil.
minutes per year
EUR 650 mil.
car-sharing market
WORLD (‘15): 500,000 car-sharing vehicles by 2020*
Rapid growth in car sharing, reduced car ownership
11. 10/26Impact on Automotive Industry
Changes in
Supply Chain
• Electrification – Battery, motor, electric components
• Autonomous Vehicles - LIDAR, camera, radar
• Customization – 3D printing, customized design parts
Changes in
Business Models
• Car Sharing – Car ownership becomes obsolete
• Robot Taxis – New form of cheap public transportation
• Autonomous Trucks – Disruption in logistics
Changes in
Car Design
• Simple Structure – Less components, less weight
• Micro Mobility – Mini pods, Minibus
• Pedestrian Interaction – Communication with outer space
12. 11/26Changes in Supply Chain - Electrification
Source: POSRI * According to JAMA(Japan Automobile Manufacturers Association), among 30,000 parts in a gasoline car,
6,900 engine parts, 2,100 powertrain parts and 2,100 electric components can be reduced when electrified
ICE EV
New Parts
Drive Motor
Battery Pack
High Voltage
Components
Disappearing Parts
Engine
Intake/
Exhaust
Transmission
Fuel Tank
Axle
Components Electrification
Electric Pump
(HVAC)
Electric Steering System
Electric Brake
Regenerative
Brake
13. 12/26Changes in Supply Chain – New Production Paradigm
Crowdsourcing from
20,000 people
Online collaboration
Using already
market-available
components
Basic components
Preassembled,
consumer self-assembles
and finishes last process
3D printing base frame
Carbon fiber
reinforced ABS
14. 13/26Changes in Business Models
Source: ‘Revolution of the automotive ecosystem’, Roland Berger * VMT (Vehicle Miles Traveled)
Private
Cars
Auton.
Minibus
Robot
Taxi
Family Autonomous Vehicle Shared Autonomous Vehicle Pooled Shared AV
‘15 ‘30
Transportation
Demand (VMT*) 74% ▶ 46% 0% ▶ 27%
24%
▼
25%
High-Cap.
Transport
2%
▼
2%
• Car Rental
• Taxi
• P2P Sharing
Others
‘15
‘30
17. 16/26
1st Material War
Oil Shock (80’s)
2nd Material War
Oil Price Hike, China Effect (2000’s)
Impact on Automotive Materials
3rd Material War
Climate Action (2010~)
CAFE 27.5 mpg for almost 26 years
1985~2010
Market-Lead Efficiency Improvement Regulation-Lead
33.0 54.5
20252012
CAGR 4%
AutoBody
Design, Frames
Transparent Plastics,
Fiber-reinforced Plastics
Major
Steel Market
Poly
Polymer/
Composite
Al
Aluminum
Wheels
Ornaments
Emblems, Covers,
Housings, Bumpers
Engine Castings, Closures
Interior
Instrument Panels, Seat Covers,
Thermoplastics, Engineering Plastics
Source: POSRI
18. 17/26Automotive Materials Race
Source: Compiled from the media * CFRP: Carbon Fiber Reinforced Plastic
Future
Automotive
Material?
2015 Ford F-150 Pickup
• Aluminum full body 222kg reduction
• Railframe 77% HSS, 27kg reduction
Al
Aluminum 317 kg
(Compared to MY2014)
Volkswagen 7th gen
• Superstructure (AHSS 60%) 37kg reduction
• Other powertrain-, electric components
Fe
Steel 100 kg
(Compared to 6th gen.)
BMW i3 EV
• CFRP applied on whole passenger cell
• Aluminum subframe, plastic closures
Poly
Polymer/
Composite
315 kg
(Compared to LEAF)
19. 18/26Automotive Materials Race - Steel
Source: WorldAutoSteel
WorldAutoSteel FSV (Future Steel Vehicle) Development of Steel Solutions
20. 19/26Automotive Materials Race - Aluminum
Source: POSCO
Al Replacement PossibilitySection Components Description
Body-In-White
• Structures
• Supports
Steel more competitive
Better crash∙process featuresLow
Closure
• Hood • Door • Trunk Lid
High
Al, rigidity advantage
Fast adoption
Body (Non-BIW)
• Bumper Beam
• IP Support
Competitive environment
Al growth in midterm
Medium
Suspension
• Subframe
• Control Arm Medium
PO (durability↑), Al(drive comfort)
Steel more competitive
Seat/Fender
• Fender
• Seatframe Low
Seat: Steel more competitive
Fender: Steel, plastic competitive
21. 20/26Automotive Materials Race – Plastic & Composites
Source: BMW
i-Series Carbon Fiber Lifemodule 7-Series Carbon Core
Plastic Structures for Interior
Support Structure
PBT
Seat Cover PA
Structure PU
Rear Seat Support PU
Interior Materials
Kenaf: Biological fibers from plants
-20.6kg CO2 reduction per kg
Outer Shell
Elastic parts
EPDM-modified PP copolymer
22. 21/26
Source: BMW, compiled from the media
PAN
(Precursor)
Weaving
Prepreg
Carbonization
Carbon
Fiber
• Energy intensive carbonization
• Wanapum hydroelectric power
SGL
Moses Lake
(JV w/ BMW)
Electricity:2.8cent/kWh
※ 1/3 of US, 1/5 Germany
Cutting
Forming
(HP-RTM)
• High-pressure resin
transfer molding
• Thermosetting plastics,
100 degrees high pressure
Fast forming
speed: 3~5min.
1/3 of market price
※ Forming normally
takes several hours
Thermal
Pressing
Assembly
BMW
Leipzig
• 4x 2.5MW wind turbines
100% energy supply
• Press, paintshop minimized
Energy use : -50%
Water use : -70%
Recycled
Materials
Rooftop CFRP 10%
Thermoplastics 25%
Aluminum frame 80%
Maintenance
(Sectioning)
Economic
Repair
Process
• CFRP parts sectioned
bonding process
Insurance, repair cost↓
Automotive Materials Race – Plastic & Composites
23. 22/26
Source: American Chemistry Council 2014
CFRP Hood
(17min. forming time)
Valve Cover
(BASF)
Nissan Tail gate
(LyondellBasell))
Audi A8 Frontend
(Lanxess)
Roof Assembly Nissan Battery Case
(SABIC)
Door trim Panel
(Bayer)
Front grill Ford Diesel System
(BASF)
Seat pan Foam-filled frame
(Dow)
Automotive Materials Race – Plastic & Composites
24. 23/26Automotive Materials Race – Comparison
Source: Mass Reduction for LDV for MY2017-2025, NHTSA
Fe
Steel
Al
Aluminum
Poly
CFRP
(Applied on same base model 2011MY Honda Accord, NHTSA)
328 kg 164 kg213 kg
-35% -23%
Weight
Price +$720 +$1,792
Weight reduction and cost analysis
Metal Intensive
Plastic/Composite Intensive
[단위:$/kg]
1.14 1.44 4.26
17.6
1.46 2.08
5.62
42.24
Mild Steel AHSS Aluminum Sheet CFRP
가공비
소재가격
Unit cost comparison (Fender example)
[ $/kg ]
Processing cost
Material cost
25. 24/26
Source: American Chemistry Council 2015 *LDV(Light Duty Vehicle): Passenger cars, pickups, SUV
2014 US LDV* weight breakdown
Regular Steel,
35%
High-&Medium-
Strength, 16%
Stainless Steel,
2% Other Steels, 1%
Iron
Castings,
7%
Aluminum, 10%
Magnesium, 0%
Copper and Bass,
2%
Lead, 1%
Zinc Castings, 0%
Powder Metal, 1%
Other Metals, 0%
Plastics/Polymer
Composites, 8%
Rubber, 5%
Coatings, 1%
Textiles, 1%
Fluids and
Lubricants, 6%Glass, 2%Other, 2%
1,812 kg/unit
Fe
Steel
• Mass market of $30,000 cars
• Steel intensive, while closures like
hood, doors are aluminum
Nissan Leaf, Tesla Model3
※ Battery weight 218kg out of 1,495kg (15%)
Al
Aluminum
• Premium brands with over $50,000
• Battery pack cage, base frame and
body in white with closures
Tesla Model S
※ Battery weight 540kg out of 2,200kg (25%)
Poly
Polymer/
Composites
• Building full supply chain is key
• Sports cars, luxury cars
BMW i-Series
※ Battery weight 230kg out of 1,195kg (19%)
Automotive Materials Race – EVs
26. 25/26
Source: Korea institute of machinery and materials
• Energy efficiency, quality
still needs improvements
R&D stage
Hybrid Welding
• Using tool rotation friction heat
Hyundai, trunk lid welding
Honda Acura, Nissan
Friction Stir Welding
• Anti-corrosion treated
boron steel rivets
• Hybrid & aluminum bodies
Jaguar, Land rover, Ford
Self-piercing Rivets
• BASF, Henkel are key players
• Aluminum bonding, finishing
Various applications
Chemical Bonding
• Future of welding
• Friction welding using
ultrasonic waves
Ultrasonic Spot Welding
Automotive Materials Race – Multi-material solutions
27. 26/26Key Takeaways
Multi-material use, hybrid structure is the new norm
While alternatives grow fast, steel solutions will still play a key role
Develop multi-material solutions, collaborate with your competitors
Electrification, Car Sharing and Autonomous Vehicles are unavoidable future
Prepare for new players, supply chain and business models
It may also have direct impact on car sales
Keep an eye on new entrants who may become your future customers