improvement (−2 percent) but also some of the gains from downsizing (−3 percent) and downspeeding (−1 percent).

TECHNOLOGY READINESS/SEQUENCING

In 2003, J.D. Power estimated the CI light-duty market share would reach 16 percent by 2015 (Peckham, 2003). However, the fuel price run-up of 2007-2008 caused a significant negative price differential between diesel and gasoline fuel (i.e., diesel fuel more expensive than gasoline) due to a global shortage of distillate/diesel fuel. This negative price differential has probably interfered with the growth of CI diesel vehicle sales. Even with the large fuel price reduction resulting from the economic slowdown of 2008 to 2009, the negative price differential has gone away slowly. Table 5.3 provides a brief summary of the average U.S. gasoline-to-diesel price differential evolution between May 2008 and June 2009. From Table 5.3 it can be seen that the negative price differential decreased substantially (from 54 cents/gal, or 15 percent, to 11 cents/gal, or 5.2 percent) between May 2008 and May 2009. Between May 2009 and June 2009, gasoline prices increased more than diesel (~45 cents/gal versus 17 cents/gal) causing a shift to a positive price differential. Whether this positive price differential remains when global economic activity returns to normal levels can only be guessed. The current positive price differential in combination with the new national fuel economy standards announced May 19, 2009, may strengthen interest in CI diesel vehicles, but it remains to be seen if the predicted U.S. CI diesel market share of 16 percent will be reached by 2015.

Application of CI technology into the NA market to reduce fuel consumption involves two steps. The first step is the introduction of vehicles with optional base-level CI power trains. The second step is the improvement of these CI power trains to advanced-level ones by implementation of the advanced technologies whose potential gains are indicated in Table 5.2.

The first step is underway now, as noted earlier in this chapter, as demonstrated by the introduction of a large number of vehicles for the 2009 model year. However, these vehicles primarily use versions of CI already in production for the European market. The decisions that put these introductions into product plans occurred several years earlier when it became clear first that there was encouraging development of technology enabling compliance with the 2010 Tier 2, Bin 5 and LEV II emissions standards for modified versions of these existing engines, and second that market conditions were supportive of such introductions due to increasing concern with the rise in both the price of fuel and in greenhouse gas (GHG) emissions. Had these conditions continued, it seems likely that additional vehicles beyond those announced for 2009 would have been introduced in model years 2010 and 2011. However, as noted earlier, as the petroleum price rose and fell during 2008, the unfavorable differential between gasoline and diesel fuel grew and then decreased, leaving potential CI vehicle buyers uncertain about future fuel prices. As a result, the pace of introduction of vehicle platforms with CI power trains for the NA market based on engines already in production is likely to decrease due to reduced market demand because of the fuel-price differential history as well as lower fuel prices in general. In addition, the global economic slowdown and the associated reduced tooling capital availability caused by the global auto industry’s economic problems will also have a major impact on decisions about tooling new CI power trains for those OEMs that do not already have appropriately sized CI engines in production. Appropriately sized engines would be those with displacements suitable for the classes of vehicles whose fuel consumption reduction would have the largest impact on OEMs’ specific fleet CAFE values.

Therefore, the second step, introduction into the market of CI technologies that could reduce light-duty fuel consumption beyond that shown in Table 5.1, will likely follow two paths. The first path is the introduction of the advanced-level technologies listed in Table 5.2 into post-2009 vehicles that were newly introduced in the 2009 model year. It is expected that this will occur in vehicles for model-years 2011-2014. This estimate is based on several factors. First, it is known that these technology areas are currently under development based on meetings with several OEMs. Second, European OEMs that are introducing CI-powered vehicles in the North American market in 2009 will also be preparing for Euro 6 emissions regulations that will take effect in 2014. Since Euro 6 NOx requirements are less stringent than Tier 2, Bin 5 and LEV II emissions technologies to be used for Euro 6 will have already been developed to meet the U.S. requirements. As a result, it is expected that European OEM engineering resources in the 2009-2011 time frame will be partly applied

TABLE 5.3 Comparison of U.S. Average Gasoline and Diesel Fuel Prices Between May 2008 and June 2009

Date

Gasoline Cost ($/gal)

Diesel Cost ($/gal)

Gasoline to Diesel Cost Difference (cents)

Diesel to Gasoline Cost Difference (percent)

May 9, 2008

3.613

4.149

−54

−14.8

May 9, 2009

2.078

2.185

−11

−5.15

June 1, 2009

2.524

2.352

+17

+7.3

SOURCE: EIA (2009b).



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