Drivers of Investment in Low Carbon Vehicles

Jamie Houghton Transport Partner, PwC

www.pwc.com

PwC

Topics

Making the most out of today’s networking opportunity

The growing case for low carbon vehicles

Focus on the customers

Growth in an emerging market

2

PwC

Making the most out of today’s networking opportunity

3

Pin your business card onto the board to indicate your area(s) of interest

PwC

The move to low carbon vehicles Factors influencing the customer

4

Customer segments

Attitudinal influencers

Commercial influencers

Value Chain

Vehicles Infrastructure

Supply Chain

Inv

estmen

t

Policy and Incentives

Sustainability Incentives

PwC

The move to low carbon vehicles The mega trends and drivers

5

Urban Pollution

Oil Price

Job Creation

Climate Change

PwC

The move to low carbon vehicles Total number of vehicles on EU roads

6

238

240

242

244

246

248

250

252

254

256

2009 2010 2011 2012 2013 2014 2015 2016 2017

Millio

ns

Total cars and light vehicles on EU roads

Source: PwC Autofacts

Sales impacted by credit crunch 2009 - 2013

EU sales of 15m a year, with annual growth of 2 – 4% by

2020

UK new car sales of 2m and new van sales of 220k in

2010

PwC

The move to low carbon vehicles The technology mix

7

Megatrends and drivers… …Will cause a shift in vehicle propulsion systems…

2020 mix

80%

6%

4% 10%

ICE

Hybrid

Plug In Hybrid

Full Electric

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030

Pure Electric Vehicles

Hybrid

Plug in Hybrids

Other ICETech

(BioFuel, Clean

Diesel, DI, etc)

10%

Climate Change

Oil Price

Urban Pollution

Job Creation

Global New Sales Penetration (%)

By 2020 UK electric vehicle sales expected to be between 200k – 250k

PwC

Case studies of successful policy drivers increasing LCVs

8

PwC

Focus on the customer

9

September 2010

PwC 10

Focus on the Customer Customer buying decisions

89%

10%

Customer Main Buying Decision Primary Technology

Private

Commercial

- Initial Price, Brand, Safety

- TCO, Usage requirement, Reliability

-ICE, Hybrid, limited EV

- ICE, Hybrid, Electric

Ca

rs

Private

Fleet

- Initial Price, Usage, Reliability

- TCO, Usage requirement, Reliability

-ICE

- ICE, Hybrid, Electric

Va

ns

Fleet - TCO, Usage requirement, Reliability -ICE

HG

V

PwC

Focus on the Customer Barriers to customer take up span multiple industries

11

Charging

Network

Utilities

Information

• Vehicle Location

• Available Charger Location

• Vehicle Data (Battery, etc…)

Information

• Electricity Usage

• Customer Billing

Information

• Electricity Usage

• Charge Data

• Charge Authentication

• SW Downloads

• Charger Diag.

OEM/Partner

Subscriber

Information

• Charging Status

• Billing Info

• Charger Locator

• Cust. Service

Car Dealer

Information

• New Subscriber Sales/Activation

• Battery Lease Sales

Retailer

Information

• Ad Content

• Customer Info.

• Loyalty Data

Service Ctrs.

Information

• Battery Warranty

• Service Data

• Battery Orders

EV Ecosystem

Vehicle

Information

• Vehicle SW Updates

• Financial Data

(Profit Sharing)

• Subscriber Data

Information

• Load Management

Information

• Charge Authorization

• Vehicle data

• SW Downloads

PwC

Growth in an emerging market

12

September 2010

PwC

Growth in an emerging market Investment focus shifting to 2020

13

“Getting Started”

“Ramping Up” Target segments • Early Adopters, Influencers, Fleets • Earlier Adopters & Pragmatists/Budget

Products/tech

• Convert existing vehicle platforms

• Technical exploration and rapid cost downs

• Develop EV dedicated platforms

• New Components and Scale up

Operational

• Demo Pilots, Initial Deployments

• In-House Competence Build-up

• Initial Alliance Formation

• Scalable Deployment Ramp-up

• Organization/Process Readiness

• Stabilized Alliance/Partner Network

Business

model/economics

• Focus on Technical Cost Down

• Gov’t Incentives; Shape Regulations

• Pilot Adjacent Service & Pricing Models

• Capture Market Share & “Real Estate”

• Integrated EV Business Model

• Less Gov’t Incentives; Regulatory Compliance

• Focus on improving business economics, TCO Cost

Down; Scalable Deployment

LCV Adoption

2011-2014 2015-2020

PwC

Growing an emerging market Attractiveness of fleets in the short term

1. TCO approach

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2. Route predictability 3. Utilisation rates 4. Central parking

5. Maintenance costs 6. Electricity rates 7. Business models 8. CSR

PwC

Summary

The global and local demand for LCV is stepping up influenced by a number of complementary factors

Certain customer segments will be earlier adopters and scale first

There is a greater opportunity for growth through a common alignment of incentives, products and customer focus

Our collective objective for today is to understand the key customer demand influencers and identify the priority areas for growth

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