A REPORT FOR EMIRATES AND DUBAI AIRPORTSOCTOBER 2024THE ECONOMIC IMPACT OF AVIATION IN DUBAI3The eco.
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MobilityMarket Trendsin SoutheastAsiaVynn Capital2024Disclaimer 2024 Vynn CapitalThis research report has been prepared by Vynn Capital using third-party andinternal sources we believe to be accurate,complete and reliable at the time ofpreparation but the accuracy and completeness cannot be guaranteed.This isfor general purposes only.Vynn Capital does not make any representation orwarranty as to,or takes responsibility for,the accuracy,reliability orcompleteness of the information contained in this report.It may not bepublished,reproduced or quoted in part of whole,nor may it be used as a basisfor any contract,prospectus,agreement or other document without priorconsent.Table of Contents1Foreword2Overview10Electric Vehicle Manufacturing28EV Battery Manufacturing42Battery Second Life46Electric Vehicle Charging54Ride-hailing56Vehicle RentalTable of Contents60On-demand Public Transport65Aftermarket Inspection&Maintenance70Automotive Marketplaces73Autonomous DrivingMobility Startup Map74Afterword75ForewordToday,over 2.1 billion vehicles are on theroad worldwide,with Southeast Asia aloneaccounting for 64 million cars and anastonishing 221 million motorbikes.Asglobalization accelerates and greenhousegas pollution rises,cities and countriesgrapple with the unique mobilitychallenges posed by a massive surge invehicles on the road.Amid thesechallenges,a golden opportunity hasemergedglobal venture funds arepouring investments into groundbreakingmobility solutions,fueling what is seen asthe 21st-century Mobility Revolution.This wave of innovation centres aroundfour transformative sectors set to redefinethe future of transportation over the nextdecade:shared mobility,connectivity,autonomous driving,and electrification,with the electric vehicle transition takingthe spotlight.These sectors are crucial tosupporting the future of global cleanmobility.Similar trends are emerging in SoutheastAsia,where rapid urbanization andincreased vehicle ownership havesignificantly pressured existingtransportation infrastructure.Cities in theregion are grappling with challenges suchas traffic congestion,environmentaldegradation,and road safety issues,struggling to keep pace with eachcountrys economic development.Concurrently,technological innovation isgaining momentum,particularly in thetransition to electric vehicles and relatedadvancements,including charginginfrastructure,battery technology,anddigitization of secondary markets drivenby robust policy support and evolving consumer preferences.Furthermore,anew wave of startups is surging acrossthe region,reshaping how people move byintroducing disruptive and innovativesolutions in connectivity and sharedmobility segments such as ride-hailing,car-sharing,micro-mobility,aftermarketinspection and maintenance,automotivemarketplace and on-demand services.This report aims to inform stakeholdersabout the transformative potential of themobility space,presenting acomprehensive analysis of the mobilitytechnology landscape in Southeast Asia.The report outlines market dynamics,pinpoints challenges and opportunities,and tracks funding trends across keytechnological sectors,offering a deep diveinto Southeast Asias evolving panoramaof mobility technology.This reportexplores:1Market overview:Mobility technologypatterns,transportation infrastructure,and consumer preferences across theregion.Challenges and opportunities:Addressing issues of sustainability,safety,and creating future-prooftransportation systems.Funding analysis:Identifying mobilityfunding highlights and the flow ofcapital into promising mobilitysolutions.Technology sector analysis:Examininginnovations in EV manufacturing,charging,connected vehicles,autonomous driving,ride-hailing,shared mobility,and more.CityHOURSJakarta117Manila105Bangkok108Kuala Lumpur81Singapore65OverviewAverage time lost at rushhours in 2023 per personSource:TomTom The vibrant region of Southeast Asia(SEA)has seen significant economic growth inrecent decades.This year,the region saw itscombined real 2024 GDP reach US$4.1 trillion,a figure that is projected to reach US$5trillion by 2027.This growth is driven by rapidurbanization as young and tech-savvySoutheast Asians migrate to cities to findbetter working opportunities.The growing rate of urban migration hascaused Southeast Asia(SEA)to experiencea seismic shift in its mobility landscape,driven by the intertwined forces ofurbanization,environmental concerns,andtechnological innovation.The regions rapidurbanization is outpacing infrastructuredevelopment,with the urbanization rateacross six major ASEAN nations climbingsteadily,except for a minor decline in thePhilippines(World Bank data).This influx ofpeople into densely populated mega-citieslike Jakarta,Bangkok,and Manila has fueleda surge in private vehicle ownership,leadingto chronic traffic congestion.The economicimpact is severe:AECOM,an infrastructureconsulting firm,estimates that trafficbottlenecks cost SEA economies billions ofdollars annually in lost productivity,increased transportation costs,anddiminished competitiveness.The environmental consequences of thefossil-fuel-dependent transportation modelare equally stark.Fossil fuels contribute 75%and 90%of global greenhouse gasemissions and carbon dioxide emissions,respectively.Rising emissions from internalcombustion engine(ICE)vehicles degradeair quality and contribute to climate change.2SEA governments acknowledge thisproblem by actively promoting theadoption of electric vehicles(EVs).Ambitious national EV policies,such astax incentives,subsidies,andinvestments in charging infrastructure,are being rolled out across the ten-country region.Singapore wants tocompletely phase out ICE vehicles by2040,while Thailand seeks to become aregional EV production hub.However,many challenges still need tobe addressed when adopting electricvehicles before the region can see asuccessful transition.Limited charginginfrastructure outside major urban CountryUrbanizationrate in 2023Expectedurbanizationrate in 2050%year-over-year changeIndonesia59s$%Malaysia78%Philippines48b)%Singapore1000%0%Thailand54i(%Vietnam40WC%Urbanization Rate in Southeast AsiaSource:Statista,World Bankcentres create range anxiety for potentialEV buyers.The cost of electric vehicles hasalso been a primary concern in the regionsdeveloping economies.Additionally,roadsafety is a significant issue,with SEAexhibiting higher road fatality rates thanglobal averages(WHO,2023).Despite these challenges,SEAs mobilitymarket presents significant opportunities.Avibrant tech scene fuels the rise of EVs,connected IoT vehicle features,and otherdata-driven mobility solutions that hold thepotential to optimize traffic flows,streamline public transit systems,predictcongestion patterns,and inform data-driven urban planning decisions.Theincrease in ride-hailing and rentals offersalternatives to private car ownership whileenhancing urban mobility efficiency.The SEA mobility sector is poised fortransformation driven by necessity andinnovation.The path to success lies inmodernizing traffic management,accelerating EV adoption with robustsupport,integrating alternative mobility 3solutions and harnessing the power oftechnology to create an efficient,sustainable,and people-centrictransportation system in the region.In 2024,Southeast Asias venture capital(VC)landscape is undergoing significantchanges,marked by a shift in investmentfocus and strategies.Exits in the region areexperiencing a slowdown,with a 50%dropin IPO proceeds in the first half of the year.Overall,VC and PE investment in SoutheastAsia have plummeted by two-thirds fromtheir 2021 peak,according to the GlobalPrivate Capital Association(GPCA).VC investments in mobility have primarilyfollowed this prudent trend,recording adecrease in cumulative investment volumesince 2021.However,in percentage terms,the mobility sector has shown resilienceagainst the falling volume,evidently by adecrease of only 27%Y-O-y in 2023 from2022 as compared to the 87%Y-O-Y drop Trends in Mobility Investments in SEAIndonesiaMalaysiaSingaporeThailandVietnamPhillipines20222023H1 202401002003004005006007004Total PE&VC mobility Investment volumein Southeast Asia in 2022-H1 2024(in millions US$)Source:Various sources*include announced&disclosed transactions only613.869448.063140.145in overall venture funding in the region.Theindustry was largely cushioned by thelarger rounds held by major players in theautomotive marketplace sector,long-termprospects of EV development in the regionand an increasing interest in early-stagestartups.In fact,the investment volume fordeals raising less than US$10 million in themobility industry showed a 130%increasein H1 2024 compared to H1 2022.Investments are primarily concentrated inVietnam,Indonesia,Singapore,andMalaysia,where in Indonesia,investmentvolumes are driven by a strong localinterest in electrification industries,specifically electric motorbikes,EVcharging and battery swappingtechnologies;in Malaysia,investmentvolume is driven by automotivemarketplace heavyweight,Carsome;whileSingapores investment volume is driven bya governmental push towards high-tech and innovative research towards mobilitysubsectors.The automotive marketplace investmentshave been mainly absent in H1 2024 afterdominating investment shares throughout2022 and 2023.It is worth noting that aSingaporean startup,Motorist,didcomplete an undisclosed series A funding,while Carsome expanded its network offinancing partners in Q3 2024.This steadilydeclining investment volume trend mightsignal market maturity in the onlineautomotive marketplace segment.Still,itreflects the growing interest in othersectors,with increasing funding roundsunderscoring this trend.For example,Indonesias battery swap startup EnergiSwap raised$22 million,while Singapore-based 4-W EV manufacturer SingAutoachieved a notable$45 million in its SeriesA roundthe largest mobility series roundin H1 2024.Deal ValueDealCount inH1 2022TotalDealValue inUS$MillionsDealCount inH1 2023TotalDealValue inUS$MillionsDealCount inH1 2024TotalDealValue inUS$Millions US$10million to US$50million 34781200005Number of deals by round size in H1 2022 to 2024(in million US$)Deal ValueDeal Count in2022Total DealValue in US$MillionsDeal Count in2023Total DealValue in US$Millions US$10 millionto US$50 million 34781200Number of deals by round size in FY 2023&2024(in million US$)Source:Various sources*include announced&disclosed transactions onlySource:Various sources*include announced&disclosed transactions onlyAutomotive Marketplace50.7%EV Manufacturing35r Rental4.8%EV Charging2.4termarket Inspection&Maintenance0.96%H1 2024On-Demand PublicTransport2.3%EV Manufacturing33.9%EV Charging28.8%Others16.2%Ride-hailing5.7%Automotive Marketplace70%Others22.4%EV Manufacturing2.9ttery Recycling1.9termarket Inspection Maintenanance0.2b023Total mobility VC and PE investmentvolume by segment in Southeast Asia Autonomous Driving 1.7%AutonomousDriving 0.3tteryManufacturing2.4r rental3.4tteryRecycling3.5 22 EV Charging1.1%EV Manufacturing2.9r Rental1.3ttery Recycling 1.9ttery Manufacturing0.3%EV Charging2.4.%Others0.5%Ride-hailing0.9r rental5.5%Source:Various sources*include announced&disclosed transactions onlyYear-Over-Year mobility Investment volume change bysegment In Southeast Asia 2-and 4-wheeler manufacturing74-w EV manufacturing2-w EV manufacturing20222023H1 202405010015020017.80156.87US$millionEV battery manufacturing20222023H1 20240.00.51.01.52.02.5US$million2.102.50EV battery recycling20222023H1 20240510152025US$million11.6020.5045 2.50 76.7% 19.05% 781.3%-98%-100%-100%0(Undisclosed)0(Undisclosed)0(Undisclosed)0(Undisclosed)Year-Over-Year mobility investment volume change bysegment In Southeast Asia Electric vehicle charging820222023H1 202401020304050US$millionRide-hailing20222023H1 202402468US$million0(Undisclosed)Vehicle rental20222023H1 20240510152025US$million6.6010.8040.408217.654 64% 180% 100% 162.5%8-63.6%Year-Over-Year mobility investment volume change bysegment In Southeast Asia Automotive marketplaces920222023H1 20240100200300400500US$millionAftermarket inspection&maintenance20222023H1 2024012345US$millionOn-demand public transportation20222023H1 202401234567US$million7.20429.60227.500(Undisclosed)14.37-47.04%-100%0(Undisclosed)0(Undisclosed)0(Undisclosed)Sector20232050Road Transport-Passenger2%of registered 2W/3W areelectric2%of registered cars areelectric40-95%of registered 2W/3W areelectric75-95%of registered cars areelectricRoad Transport-Commercial1%of buses are electric30-80%of buses are electric201920202021202220232024F0.0020.0040.0060.0080.00100.00120.00140.00ElectrificationGovernment initiatives and consumerinterest in Southeast Asia thus far havebeen receptive towards the Electric Vehicle (EV)movement.Countries like Thailand,Singapore,and Indonesia aim to achievetheir bold EV adoption targets by craftingmore conducive regulatory environmentsfor EV manufacturing and charginginfrastructure.For example,Thailand aimsfor a minimum of 30%of total automotiveproduction to be zero-emission vehicles by2030,Singapore aims for 100%commercialEV sales share by 2040,and Indonesia aimsfor 100%of new motorcycles and cars tocome from EVs by 2050.As governmentscontinue to announce new targets andsolidify their EV road maps,the future ofelectric mobility in SEA is coming into focus.While the outlook is generally positive,eachcountry is progressing at their own pace,facing new,unique challenges as the EVindustry matures in the region.Electric VehicleManufacturingSource:Taylor 2023EV transitions by 2050 in Southeast Asia10SEA EV passenger car sales(in Thousands of Units)Source:Statista Market Insights-July 20242.011.282.286.204.758.6516.1113.05113.3011.96114.7011.92Battery Electric VehiclePlug-in Hybrid Electric VehiclePassenger carMotorcycleBus&truck202520300200400600800accounted for an 80%share of Thailands EVmarket as of 2023,with some companiesfrom Japan as well,including TakanoAutomobiles(an established Japanese busproducer)and Fomm(a Japanese venturespecializing in small EV passenger cars),have commenced production in Thailand.Notably,Thai-owned startups like EtranKRAFF,Edison Motors,and SLEEK EV areemerging in the electric motorcycle market,with SLEEK EV receiving early-stageinvestment from Krungsri Finnovate in 2023.This evolving EV market finally presents awindow of opportunity for local firms.ThailandDespite sluggish sales in H1 2024,Thailandremains the leader in EV sales in SoutheastAsia,contributing half of EV and HybridElectric Vehicle(HEV)sales in the region.Thailands domestic EV production,particularly Battery Electric Vehicles(BEVs),remains in its early stage.Manyinternational carmakers in Thailand haveheavily invested in existing internalcombustion engine(ICE)technologies andare still planning to transition into BEVproduction.While some companies offerhydrogen fuel cell vehicles,these areproduced outside of Thailand due to acontinued focus on utilizing current ICE-based facilities.However,certain producers like Nissan havedirectly transitioned to BEV production inThailand,prompting the Thai governmentto adopt EV promotion strategies swiftly.Interestingly,Mitsubishi Motors has taken ahybrid approach,aiming to produce 39,000vehicles annually,including 9,500 BEVs and29,500 hybrid vehicles,for both the localmarket and exports to ASEAN members(Source:BOI).The Thai Cabinet has approved andlaunched an Electric Vehicle PromotionPolicy and the Eastern Economic Corridor(EEC)to target new industries,includingnext-generation automobiles.The Board ofInvestment(BOI)has offered special taxincentives for EV investment since 2016 toencourage demand.The excise tax for BOI-approved BEV passenger cars is set at 2%,a significantly lower rate than the 25-35%for standard passenger cars under 3000cc.From 2017 to 2023,the BOI has approvedand executed over 100 EV-related projectsunder promotions initiated by the BOI.Thailands dominant position in theworldwide electric vehicle supply chain hasresulted in numerous benefits for thecountry,drawing in a considerable influx ofsuppliers and businesses.Most notably,Thailand has become the main target forexpanding EV manufacturing and exportproductivity among Chinese investors,who Thailands EV production targets(in Thousands of Units)225360187256753311Source:EV Magazine,Bangkok PostThailand holds the more than half theshare of total registered EVs andhybrids in the region up until H1 2024 ThailandIndonesiaMalaysiaPhilippinesSingaporeOthers65.4.2%8.9%7.3%5.8%1.4%Source:Statista;Data from respective Transportministries;National Automotive AssociationsSource:Vynn CapitalCompanyGreat Wall MotorManufacturingHonda Automobile(Thailand)Mine MobilityMitsubishi Motors(Thailand)Nissan Motor(Thailand)SAIC Motor CPSuzuki Motor(Thailand)Isuzu Motor ThailandMercedez Benz ManufacturingFord Motor Company(Thailand)FOMM(Asia)Isuzu Motor ThailandAuto Alliance(Thailand)MazdaBMW Manufacturing(Thailand)Note:In operation Board of Investment approved BEV project not started production yet Passenger CarBus&TruckVanPickupICEBEVICEBEV12Automotive ManufacturerInvestment ValueGreat Wall MotorsUS$640 millionBYDUS$1 billionChangan AutomobileUS$550 millionGAC AionUS$64 millionSource:company announcementsTarget investment value of EV Makers in ThailandMotor vehicle assemblers In ThailandIndonesiaThe electric vehicle supply chain build-upin Indonesia plays a crucial role in thecountrys broader national industrial policyin a bid to be a high-income nation by2045,as outlined in the Making Indonesia4.0 roadmap.The framework set by thenPresident Joko Widodo under PresidentialRegulation No.55 in 2019 wants toaccelerate EV development,specifyingtimelines for EV adoption in public andprivate transportation.Outside of range anxiety,affordability hasbeen a main consumer concern inIndonesia regarding EV adoption,asrecorded in a consumer survey conductedby PwC in 2023.To address theseconcerns,the government has provided aVAT tax reduction from 11%to 1%for EVssince early 2023 and is applicable untilDecember 2024.The tax exemption is steadily showingresults,with EV sales in the country havingsteadily grown from 8,562 units of 4-wheelEVs sold in 2022 to 11,943 units for only thefirst half of 2024.Another fascinatinginsight has been the growing adoption oftwo-wheeler electric vehicles in the nationwhich saw a 300%increase in 2023 to60,000 units from just 17,000 units in 2022.13Passenger carMotorcycleSales of EV in Indonesia by vehicletype,by unit11,94330,083In a country where more than 75%vehicles registered are motorbikes,thissignals a more mass market change inpreference towards EVs.Regarding EV manufacturing,one of thecrucial points of the presidentialregulation involves the amendment toArticle 8,which regulates the minimumlocal content requirement(TKDN)withinspecific time frames.Under the latestregulations,the government has set aminimum TKDN for EVs at 40 per cent until2026.In the previous rules,the 40 per centTKDN was to be achieved by 2024,followed by a 60 per cent TKDNrequirement before 2030 and mandating80 per cent local content afterwards.This unique approach has receivedtraction with Hyundai,Mitsubishi,Wuling,Chery,and DFSK,which have alreadystarted production of EVs in Indonesia.Chinas BYD hopes to begin productionthis year,and Stellantiss Citroen and GWMwill follow suit.The country is also home to severalnotable two-wheel EV startups,includingiMoto,Electrum,Alva,and MAKA.Notably,MAKA raised an impressive US$37 millionin a seed round,one of the largest seedrounds in Southeast Asia in 2023.Thecompany launched its first pilot electricvehicles in 2023 and aims to mass-produce two-wheeled EVs by the end of2024.According to MAKA Motors,existingplayers in Indonesia have only provided afleet of 43,000 registered electricmotorcycles,falling short of local demand.MAKA plans to produce 600,000 EVs by2030.Moreover,in July 2024,iMoto introducedits newest motorbike,VISION.ev.Thiselectric motorbike is claimed to be thefirst in Indonesia with a DomesticComponent Level(TKDN)target of over75 per cent and is set to hit the market in2025.62,40912,24817,1988,562Source:Star Online,Indonesian AutomotiveManufacturers Association(Gaikindo),The Diplomat2023H1 20242022Note:includes BEVs and hybrids14Tax holidayincentivesTax holiday incentives are extended for a duration of up to 10 years toelectric vehicle(EV)manufacturers who commit to investing a minimumof IDR5 trillion(equivalent to US$346.2 million)within the nation.SubsidiesNew battery-electric vehicle purchases are eligible for a subsidy of IDR80million(approximately US$5,000).Conventional hybrid vehicle purchases qualify for half of the battery-electric vehicle subsidy amount.New electric motorbike buyers receive a subsidy of IDR8 million(US$520).Conversion of a two-wheeled internal combustion engine(ICE)vehicle toelectric is rewarded with a subsidy of IDR5 million(US$320).Value-addedtax incentivesElectric cars and buses with a domestic component level(TKDN)exceeding 40%are eligible for a VAT incentive of up to 10%.Electric cars and buses with a TKDN between 20%and 40%qualify for a 5%VAT incentiveIncentives/subsidies in Indonesia to promote EV adoptionSource:Maybank IBG ResearchHybrid Vehicles(units)Electric Vehicles(units)ambitious target for electric vehicles tomake up 15%of the total car volume by2030,translating to over 100,000 electriccars on the road.Despite motorcycles constituting about47%of all vehicles on the roads,theadoption of electric motorbikes remainsnotably low.However,several notablelocal and international players havecommenced EV production in the country.Among the active players and newentrants in the production preparationstages are Desla,Modenas,Honda,Eclimo,Yadea,Treeletrik,Aze-Bike,Inokim andOride Sdn Bhd.With such a significantmarket share coupled with an increasingdemand for 2-wheel EVs in B2B services,2-wheel EVs are expected to drive thegrowth of EVs in Malaysia oncemanufacturing potential is realised.MalaysiaMalaysias domestic EV manufacturingindustry has been developing steadily.While EV sales are growing,the country primarilyrelies on imports for finished vehicles.However,the potential for Malaysia tobecome a regional EV manufacturing hub issignificant.The governments incentives forlocal assembly,coupled with Malaysiasstrategic location within the ASEAN marketand a skilled workforce,create a favourableenvironment for the growth of this sector.Foreign car manufacturers such as Toyotaare already active in EV manufacturing.Local companies like EP Manufacturing Bhd(EPMB)are among the first to enter the localelectric car manufacturing market.EPMB hassecured manufacturing licenses from theMinistry of International Trade and Industry(MITI),allowing the assembly andproduction of electric vehicles.They haveannounced plans to establish an automotivemanufacturing facility in Melaka with aninvestment exceeding RM100 million.Established Malaysian car brands like Protonand Perodua also plan to enter the EVmarket with Protons electric fleet,E.mas,tobe launched by early 2025.The countrys government actively supportsmass EV adoption and has implementedattractive tax breaks to make EVs moreaffordable.These include exemptions onimport duties,excise duties,and sales taxesfor locally assembled EVs until the end of2025.Also,Malaysias EV owners benefit fromroad tax exemption and tax deductions forEV charging infrastructure costs.The EV market in Malaysia has gainedconsumer traction over recent years.Salesfor EVs and hybrid EVs,which include four-wheeled and two-wheelers,grew from 22thousand units in full-year sales in 2022 to26 thousand units in just half-year sales in2024.This growth aligns with the LowCarbon Mobility Blueprint,which aims toincrease EV adoption and reducegreenhouse gas emissions by setting anSales of hybrid and electricpassenger cars in MalaysiaNote:are sales projected for 2024 based onmonthly trends.This graph only includes passenger 4-wheeled carsSource:JPJ Registration Data;Statista;WapCar157,87527819,99828,0552,63110,15911,72212,85720222023H1 2024202121,00025,000The Vietnamese government has beensupporting EV adoption throughregistration fee reductions andfavourable special consumption tax ratesto compensate for EV vehicles highcosts.For instance,EVs in Vietnam areexempt from registration fees for the firstthree years,offering a significant costadvantage over conventional gasolineand diesel vehicles.Additionally,thespecial consumption tax for EVs has onlyincreased from 5%to 15%since 2018,compared to a steeper rise of 35%to150%for traditional cars during the sameperiod.The Vietnamese government has setambitious EV adoption and infrastructuretargets,aiming for 250,000 EV unitsproduced annually by 2025,alongsideconstructing 20,000 charging stations.Additionally,they aim to have 15-20%ofHanois public transportation running onrenewable energy by 2025Vietnams two million units strong two-wheeler EV market accounts for 95%ofthe SEA share.This dominance stemsfrom a high reliance on motorcycles as aprimary mode of transportation,with over60%of the 100 million population owningmotorcycles.Notably,Vietnams two-wheeler EVmarket has several growing players,including Selex Motors and Pega.Selex isincreasing its manufacturing capabilitieswith a recent US$3 million investment in2023 from ADB Ventures,SchneiderElectric Energy Access Asia,TouchstonePartners,and Sopoong Ventures.Meanwhile,Pega established significantproduction capacity in 2020,with afactory that reached an annual output of40,000 units.VietnamVietnam is emerging as one of the regionalleaders for EV growth in Southeast Asia.Fueled by favourable government policiesand increasing consumer interest,thecountry continues to attract majorautomakers while adding new local playerswho are steadily expanding their reach.Vietnams locally-borne EV brand,VinFast,has had a rapid trajectory.After launching itsfirst domestic EV in 2021,it became theworlds first global Vietnamese EV companyin 2022,with showrooms across the U.S.,Canada,and Europe.In 2023,the companyreceived significant debt financing led by theAsian Development Bank to support VinFastselectric bus manufacturing and its nationalexpansion of charging network deployment.International companies have graduallyentered the Vietnamese electric vehicle(EV)market.In 2023,Hyundai Thanh CongVietnam(HTV),a joint venture formed in 2017between South Koreas Hyundai Motors andthe Vietnamese conglomerate Thanh CongGroup,launched the sales in Vietnam for itsall-electric Ioniq 5 model.This vehicle isproduced at HTVs second facility in thenorthern province of Ninh Binh,which openedin November of 2022.Hyundai holds a dominant position in theVietnamese car market.HTV successfullymanufactured the Grand i10,Avante,Tucson,and Santa Fe models at its first plant in thesame province.Building upon this success,the joint venture invested US$129 million in asecond factory to expand its productioncapabilities,including the production ofelectric vehicles.Moreover,Nissan Vietnam,a subsidiary ofJapanese carmaker Nissan,has completedthe industrial design protection registrationprocess for its all-electric SUV,the NissanAriya.Even Chinas largest electric vehiclemanufacturer,BYD,plans to establish itsregional EV manufacturing facilities inVietnam.16Total cost factor(a)EV VinFastKlara A2Lead-acid(e-moped)(b)EV VinFastKlara S Li-ion(e-moped)(c)ICE Elegant SYM(moped)(d)EV PegaLead-acid(e-motor-cycle)(e)EV VinFastTheon Li-ion(e-motor-cycle)(f)ICE HondaWAVE 100(motor-cycle-Manual)(g)ICE HondaVision 110(motor-cycle-Automatic)Base price24,210,00044,640,00014,939,99831,500,00080,820,00016,020,00027,000,000VAT2,690,0004,960,0001,660,0003,500,0008,980,0001,780,0003,000,000Ex-showroomprice26,900,000 49,600,00016,599,99835,000,00089,800,00017,800,00030,000,000Registration fee1,500,000250,000830,0001,750,0004,355,000890,0001,500,000License plate fee2,000,0002,000,0001,000,0002,000,0002,000,0001,000,0002,000,000Total capital cost(TCO)30,400,00051,850,00018,429,99838,750,00096,155,00019,690,00033,500,000EV TCO premium to ICE moped/Manual65%(a vs.c)181%(b vs.c)97%(d vs.f)388%(e vs.f)EV TCO premium to ICE moped/Automatic16%(d vs.g)187%(e vs.g)Total capital cost of Vietnams two-wheeler EV vs.ICE cost(in VND)Source:International Council on Clean Transportation 2023-0817Note:Selection of vehicle models is based on popularity of vehicle model and available vehicle brands in Vietnam.Total cost factor(a)EV VinFastKlara A2Lead-acid(e-moped)(b)EV VinFastKlara S Li-ion(e-moped)(c)ICE Elegant SYM(moped)(d)EV PegaLead-acid(e-motor-cycle)(e)EV VinFastTheon Li-ion(e-motor-cycle)(f)ICE HondaWAVE 100(motor-cycle-Manual)(g)ICE HondaVision 110(motor-cycle-Automatic)Insurance(5 years)275,000275,000275,000300,000300,000300,000300,000Maintenance(5 years)1,000,0001,000,0003,000,0001,500,0001,500,0003,750,0003,750,000Batteryreplacement12,000,00012,000,000Fuel consumption2,004,2891,253,86815,211,0002,621,7242,621,72421,147,00020,961,500Total ownershipcost(TOC)45,679,28954,378,86836,915,99855,171,724100,576,724 44,887,00058,511,500EV TOC premiumto ICE Manual24%(a vs.c)47%(b vs.c)23%(d vs.f)124%(e vs.f)EV TOC premiumto ICE Automatic-6%(d vs.g)72%(e vs.g)Total ownership costs of Vietnams two-wheeler EV vs.ICEcost(in VND)18Source:International Council on Clean Transportation 2023-08Note:Selection of vehicle models is based on popularity of vehicle model and available vehicle brands in Vietnam.Calculation Method:Total Ownership Cost includes Total Capital Cost listed in the previous table.Singapores EV transformation extendsbeyond cars.The government focuses ontransitioning to electrifying buses,aimingfor 100%electrification of its hybrid bus fleetby 2040.Two-wheeler electric vehicles areless popular in Singapore.As of 2022,therewere only 117 registered electric motorcyclesout of the total 143,000 registeredmotorcycles.Yet,there is a growing number of local two-wheeler EV startups driven by exportopportunities across Southeast Asia.Thisincludes the local two-wheeler electricvehicle manufacturer ION Mobility,whichsecured US$19 million US$2 million in arolling close Series A round from 2023 toearly 2024,gaining a strategic partnershipwith Indias TVS Motor Company.In March 2024,ION Mobility partnered withSiemens to leverage Siemens NX softwarefor styling,mechanical engineering,andelectric battery pack development,preparing the team for the manufacturingreadiness of its first model,the ION MobilityM1-S motorbike.Other startups,including Scorpio Electricand Charged Asia,chose the originaldesign manufacturer(ODM)approach,which is also known as private labelling orwhite-label products.As of April 2024,Scorpio Electric is in the preparation stagesfor its first EV release,the Scorpio Electric X1maxi-scooter.In addition to the localmarket,the company aims to expand toglobal markets through distributors inJapan,Spain,and Portugal.In 2023,Singapores Charged Asia receivedUS$40 million in investment fromIndonesian coal producer Geo EnergyResources.Before the investment,thecompany had already sold 1,000 e-bikes.The company also offers e-bike rentalservices with three-,six-,and nine-monthplans and rent-to-own models.SingaporeCar sales in the island state havehistorically been small,but in percentageterms,Singapore has the fastest EVtransition in the region despite incentivesthat are comparably more restrictive to itsneighbours,largely driven by its higher-income population.In H1 2024,the island state recorded only18.5 thousand total car sales.However,outof this number,6,019 units(32.4%)are fullEVs,and 9,018(48.5%)are HEVs,surmounting a staggering 81%of total carsales nationwide.This percentage is a 25percentage point increase from the 57%inH1 2023,driven by an increase in EV salesby 4,000 units showcasing rapid adoption.Singapore has long relied solely onimported vehicles with no local carproduction.However,in Q4 2023,Hyundaiopened a new smart plant in Jurong toproduce electric cars.According to thecompany,the facility can build 30,000electric vehicles annually.The facilitycurrently produces the IONIQ 5 electricvehicle and the fully autonomous IONIQ 5robotaxi,which can operate without adriver.Hyundai plans to build the IONIQ 6sedan by the end of 2024.The opening of Hyundais plant aligns withSingapores ambitious goals of haltingnew internal combustion engine(ICE)vehicle sales by 2030 and phasing out allICE vehicles by 2040.The Singapore government activelyencourages EV adoption.Its tax schemerewards low-carbon vehicles,placing EVsin the A1 band with a substantialSG$20,000(around US$14,5000)rebate.Initiatives like the Early Electric VehicleAdoption Incentive(EEAI)and theEnhanced Vehicular Emissions Scheme(VES)further support EV ownershipfinancially.Notably,the cost of EVs andtheir ICE counterparts has reached parityin Singapore,removing a significantbarrier to adoption.19Total cost factorBMW X3(ICE)BMW iX3(EV)EV PricePremium/Discountto ICEOpen market value(OMV)47,23557,95123%Custom duty(20%of OMV)9,44711,590GST(7%of OMW custom duty)3,9684,868Additional registration fee(ARF)61,74782,107Registration fee220220Vehicular emission scheme(VES) EVearly adoption incentive(EEAI)rebate15,000-45,000Certificate of Entitlement(COE)118,002118,002Basic cost255,619229,738-10r Dealers Premium75,269112,15049%Insurance3,2993,674Net cost to customer334,187345,5623%Singapores upfront cost of EV vs.ICE(in SGD)Source:Maybank IBR Research20Note:The selection of vehicle models is based on the popularity of vehicle models and available vehicle brands inSingapore.BMW is one of the most best selling brands in the country.Total cost factorBMW X3(ICE)BMW iX3(EV)EV PricePremium/Discountto ICECost per charge/fuel price2.72/ltr0.523/kWhMileage(km/charge or ltr)14.35.4Fuel cost per km0.190.10Fuel cost at 17,500 km/yr3,3251,750-47%Maintenance cost/year7,270600Insurance3,2993,674Financing cost2,4352,256Depreciation22,60032,400Total running cost(17,500 km/yr)16,3298,280-49%Singapores total running cost for EV vs.ICE(in SGD)Source:Maybank IBR ResearchNote:The selection of vehicle models is based on the popularity of vehicle models and available vehicle brands inSingapore.BMW is one of the most best selling brands in the country.202120222023H1 2024020004000600080001000012000Pampanga or Calabarzon area.Thecompanys planned Philippines factorywill be its first EV manufacturing facilityin Southeast Asia.It targets producingand exporting 200 e-buses to Singaporeas its first order.Besides EnvirontechVehicles,one Chinese EV company plansto start its twoand three-wheel e-motorcycle assembly activity in thecountry.The scale is yet to bedetermined.Alongside manufacturing,the Philippinesprioritises the parallel development of EVcharging infrastructure in the country,which remains nascent.This includessetting targets of establishing 2,000charging stations nationwide by 2030.Anew law is expected to mandate that allgasoline stations dedicate space toreducing charging anxiety sentimentsamong potential consumers.PhilippinesThe Philippines automotive industry hastraditionally been modest compared tomajor regional players such as Thailand andVietnam.However,recent EV policydevelopments in the country have shownsuccess,evidenced by a tremendous EVsales growth from just over a thousand unitssold in 2022 to 10,600 EV units sold in 2023and another 9,700 units sold in the first sevenmonths this year.Under the Electric Vehicle IndustryDevelopment Act(EVIDA),Key incentives forEV manufacturing include:Tax holidays for 3-6 years for EV partsmanufacturers and charging stationoperators.Exemption from import duties on whollybuilt charging stations for 8 years.Reduced import duties on EV componentsto boost local assembly affordability.These incentives aim to create a 21%EVmarket share by 2030 and 50%by 2040.These incentives are proving themselves aslocal manufacturers like BEMAC,PhUV,PinoyAko Corporation,Star,and ToJo Motorsare ramping up production of electrictricycles and jeepneys to meet the demandin the Philippines,where 2-W and 3-Wvehicles dominate the roads.Moreover,the Philippines government plansto attract major international EVmanufacturers.The Philippine Economic ZoneAuthority(PEZA)reported being in talks withseveral foreign companies from the UnitedStates,China,and Indonesia to explore thepossibility of setting up manufacturingfacilities in the country.According to PEZA,the U.S.EV manufacturerEnvirotech Vehicles is currently scoutinglocations for its first facility within the 21Sales of hybrid and electricvehicles in the Philippinesreached an astonishing 889%Y-O-Y growth in 2023843Note:Sales include both BEV and Hybrid 4-wheeledpassenger carsSource:Statista Market Insights,Inquirer.Net1,07210,6029,2932,0004,0006,0008,00010,00012,000022Leading reasons against purchasing an electric car(BEV/PHEV)in Southeast Asia,by selected countryIDMYPHILSGTHVTToo few chargingstations around42UBqYW%Charging time islonger thanrefuelling347PUHD%Price of electriccars47VETG(%Durability concerns(e.g.batterywearing out)333AS6A%Risk of running outof power/limiteddriving range34DPUD%Limited range ofavailable electriccar models212&B$%Lack of knowledgeon electric cars23)(0$%Safety concerns(e.g.,fire hazard)15%(%Unappealingdesign11%8%Unwilling tochange lifestyle7%9%9%6%8%7%Other2%4%3%3%3%5%Source:In a survey conducted in September 2021,Southeast Asians of legal driving age were asked why they wouldnot consider purchasing electric car such as a battery electric vehicle(BEV)or a plug-in hybrid vehicle(PHEV);6,000 respondents of legal driving ageSource:Millieu Insight23Leading reasons to switch to an EV car in Southeast Asia,by selected countryIDMYPHILSGTHVTIncentives orprivilege for owningelectric cars(e.g.taxrebates)9%9%6c%5%Sufficient number ofcharging stations19b%When electric carswork as well/betteras combustible-engine or hybrid cars31#%W%5%Government policymandating only useof electric cars onroads9S%8%3%Manufacturing haltof combustible-engine cars/hybridcars8%7%72%4%5%A seriousenvironmentalshift/visible climatedeterioration135%Penalties for owningcombustible-engineof hybrid cars2%3%4%2%5%Disapproval ofcombustible-enginecars byfamily/friends2%2%4%1%8%Sociatal judgement/pressures againstcombustible-engineor hybrid cars6%5%1%1%Other3%3%1%3%2%3%Source:In a survey conducted in September 2021,Southeast Asians of legal driving age were asked why they wouldnot consider purchasing an electric car such as a battery electric vehicle(BEV)or a plug-in hybrid vehicle(PHEV);6,000 respondents of legal driving ageSource:Millieu Insight24Targets for EV Volumes,sales share and charginginfrastructure in Southeast AsiaIDMYPHILSGTHVTEV volume andtarget year15.2m(cars 2W)by20301.5m EVsby 20401m EVsby 2030100%EVsalesshare by2040306,000 by2025250,000annualproductionby 2025EV sales share andtarget year20%domesticproductionby 202538%annualnew salesby 204030%by2030100%by204030%productionby 2030100%by2040Charginginfrastructure andtarget year6,318 by202510,000publicchargersby 202565,000public andprivate40,000public and20,000private by203020,000 by2025N/ASource:Maybank IBG ResearchSource:Maybank IBG ResearchDetails of regulations/policies in ASEANCountryRegulations/policiesMalaysiaNational Automotive Policy(NAP)2020Low Carbon Mobility Footprint(2021-2030)New Industrial Masterplan(NIMP)2030EV and Battery Management GuidelinesIndonesiaNational Master Plan for Industry(2015-2035)Luxury Tax for Automotive Productions 2019National Energy PolicySingaporeEV Early Adoption Incentive(EEAI)Enhanced Vehicular Emissions Scheme(VES)Commercial Vehicles Emissions Scheme(CVES)Early Turnover Scheme(ETS)ThailandEV Tax Incentive Package(2022-2025)National Electric Vehicle Policy Committees EV Roadmap 2030VietnamAction Program on Green Energy TransitionNational Automobile Development Strategy(2021-2050)National Green Growth Strategy(NGGS)(2021-2030)PhilippinesElectric Vehicle Industry Development Act(EVIDA)(2022)Tax Reform for Acceleration&Inclusion(TRAIN)Act(2017)HRV 1.5L T v2022BYD ATTO 3BYD DolphinTesla Model 3HyundaiIoniq 5Tank/BatteryCapacity14 gallons50.1 Kwh60 Kwh57.5 Kwh58.5 KwhVehicleConsumption6.5l/100Km183 Wh/KM173 Wh/KM139 Wh/KM190 Wh/KMVehicle Fuel Equivalent6.5 l/100km2.1 l/100Km1.9 l/100Km1.6 l/100Km2.1 l/100KmRange630 km300 KM350 KM385 KM420 KMRange comparison of one full tankSource:Electric Vehicle Database,HondaNote:Cars depict the top selling mass market ICE and EV cars in the region.e.g.Honda HRV is one of the bestselling mid-SUV in Thailand,Malaysia,and Indonesia.25HRV 1.5L T v2022BYD ATTO 3BYDDolphinTesla Model3HyundaiIoniq 5Average cost perlitre and kWhRM2.05/litre(Ron 95)RM 0.33/kWh(Highest home electric tariff)Cost per fulltank/chargeRM 107.59RM 16.53RM 19.8RM 19RM 19%difference incharging pricecompared to HRV85%cheaper82.5%cheaper83.5%cheaper83.5%cheaperCost comparison of one full tank with battery capacityMalaysia,in Ringgit MalaysiaNote:The cars depict the regions top-selling mass-market ICE and EV cars.For example,the Honda HRV is one ofthe best-selling mid-SUVs in Thailand,Malaysia,and Indonesia.Source:respective national electric utility companies,petrol company websites,credible news reports26Note:The cars depict the regions top-selling mass-market ICE and EV cars.For example,the Honda HRV is one ofthe best-selling mid-SUVs in Thailand,Malaysia,and Indonesia.Source:respective national electric utility companies,petrol company websites,credible news reportsHRV 1.5L T v2022BYD ATTO 3BYDDolphinTesla Model3HyundaiIoniq 5Average cost perlitre and kWh 14,520 IDR/litre(Jakarta ShellSuper)1700 IDR/kWh(Highest home electric tariff)Cost per fulltank/charge773,916 IDR85,000 IDR102,000 IDR97,750 IDR99,450 IDR%difference incharging Pricecompared to HRV90%cheaper87%cheaper88%cheaper88%cheaperIndonesia,in Indonesian RupiahHRV 1.5L T v2022BYD ATTO 3BYDDolphinTesla Model3HyundaiIoniq 5Average cost perlitre and kWh36.65 Baht/litre(Gasohol 95)4.5 Baht/kWh(Highest home electric tariff)Cost per fulltank/charge1,953.44 Baht225.45 Baht270 Baht258.75 Baht263 Baht%difference incharging Pricecompared to HRV88.5%cheaper86%cheaper84%cheaper87%cheaperThailand,in Thai BahtCost comparison of one full tank with battery capacity,(continued)27Total cost factorHonda HRV 1.5 T V2022BYD Atto 3 Standard rangeEV PricePremium/Discount toICEBase Price130,900149,800Registration1500(exempted)Road Tax900(exempted)Any Other Charges96750Total cost before insurance132,107149,80013%PremiumTotal upfront cost comparison in the three largestautomotive markets in ASEAN in 2023Note:Cars depict the top selling mass market ICE and EV cars in the region.e.g.Honda HRV is one of the bestselling mid-SUV in Thailand,Malaysia,and Indonesia.Total cost factorHonda HRV 1.5Turbo RS 2021BYD Atto 3 Standard rangeEV PricePremium/Discount toICEBase Price973,0001,449,900Government subsidy250,000Price after subsidy973,0001,199,900Registration315315Total cost before insurance973,3151,200,21523%premiumTotal cost factorHonda HRV 1.5Turbo RS 2022BYD Atto 3 Standard rangeEV PricePremium/Discount toICEBase Price424,000,000515,000,000VAT466,400,00(11%)5,150,000(1%)Resgistration Fee200,000200,000Total cost before insurance377,560,000510,050,00013%premiumMalaysia,in Ringgit MalaysiaThailand,in Thai BahtIndonesia,in Indonesian RupiahSource:Electric Vehicle Database,Data from respective transportation ministries.EV Battery ManufacturingThe electrification of industries depends onthe availability and advancement ofbattery technologies.Southeast Asia isemerging as a battery manufacturing hub,boasting rich reserves of critical minerals.Indonesia(1,721.5 thousand tons/year)andthe Philippines(365 thousand tons/year),the worlds largest nickel producers in 2023,are key players in this growth.This,coupledwith strong interest from global industryleaders,has led to significant localmanufacturing by VinES(Vietnam),LG,Contemporary Amperex Technology Co.Limited(CATL),POSCO(Indonesia),EVE(Malaysia),DuraPower,Energy Absolute,and Gotion(Thailand).Currently,Nickel Manganese Cobalt(NMC)and Lithium Iron Phosphate(LFP)batterytechnologies dominate the battery market.Due to the abundance of nickel reserves inthe regionIndonesia alone holds roughly42%of global nickel reservesSoutheastAsia is well-positioned to develop an NMCbattery ecosystem.Despite growing domestic demand,Southeast Asias battery productionmarket opportunities will rely on exports tomajor markets,particularly China,the U.S.and Europe.This aligns with the surge inglobal battery demand,projected toreach 4.5 terawatt-hours(TWh)by 2030at a 25%annual growth rate.NMCtechnology,with 20%yearly growth,holdsthe majority of the market share.Southeast Asias global battery marketshare remains modest(5%).Still,theregion will see an increase in absolutegrowth as demand is expected toincrease over 40%annually through 2030,reaching 75-80 GWh,potentially doublingto 150-175 GWh by 2035.Electric vehicles(EVs)and battery energystorage systems(BESS)drive batterydemand in Southeast Asia.EV adoptionfuels demand in Indonesia,Thailand,andVietnam,while BESS adoption is strongwithin Malaysia and the Philippines due to Battery cell manufacturers have committed to a 60 GWh capacityin Southeast Asia by 2030Manufacturing capabilityCritical mineral productionProduction outputExamples of manufacturersThousands MT(%of global production)(2030 announced capacity)VietnamIndonesiaMalaysiaPhilippinesOther SEAVinES,SumimotoLG,CATL,POSCO,LopalEVEDurapower,Energy Absolute,Gotion(Thailand)San Miguel CorporationSource:McKinsey Battery Insights,McKinsey Power Model,McKinsey Center of Future Mobility,companyannouncementsCathode,ktpaCell,GWhNickelCobaltManganeseCopperTotal SEAGWh=gigawatt-hour,MT=megatonne130604153551302120(0.6%)250(1%)320(2%)370(14%)1000(37%)760(4%)2(1%)28Resource Access and IntegrationRaw materials play a significant part in cell production costs.Manufacturers who strategically integrate upstreamoperations,such as mining and refining,can better controlcosts and secure stable supplies.This approach aligns withmajor players like CATL,Panasonic,and LG Chem.Economies of ScaleSmaller production volumes(below ten gigawatt-hours)often lead to higher labor and energy costs.Aiming for largerproduction scales can drive cost competitiveness down by asmuch as 20%Production EfficiencyIn the early stages,battery manufacturers may face loweryields(20%-30%).Rapidly optimizing production processes toachieve stable yields of 90%or higher within four years iscritical for cost competitiveness,a benchmark set by leadingcompanies,particularly those in China.Logistics and Supply ChainStrategic location near equipment and technology suppliersor large-volume contracts can reduce expenditures oncapital equipment and the raw materials used during cellproduction.manufacturers must prioritize costcompetitiveness.This is essential ascustomers like electric vehicle(EV)OEMs are highly price-sensitive.favourable renewable energy potential andhigher electricity costs.To fuel growth inSoutheast Asias battery industry,a strongemphasis on global exports is crucial due tothe regions expanding,yet nascent,domestic market.Additionally,to competeeffectively on the international stage,Factors shaping battery manufacturing costs29Local battery manufacturers need toexpand their technological capacity andmodernize their processes to meet thestringent production standards of globalcarmakers.Failure to do so could hindertheir integration into new supply chains,as previously evidenced by thechallenges faced by second-tiersuppliers in China and India who couldntmeet quality standards due to limitedR&D earlier in their development.In otherwords,technological capacity and robustnetworks are essential for domestic firmsto achieve efficiency,economies of scale,and international competitiveness.One emerging player in Indonesiasbattery manufacturing sector is VKTR,which partnered with the Bakrie Groupand Vale Indonesia to construct a US$4billion nickel processing plant.This facility,slated for completion in 2025,willproduce nickel sulfate,a critical step inexpanding Indonesias domestic batteryproduction.IndonesiaIndonesias success in developing its EVsegment hinges on lithium batteryproduction.The country possesses abundanthigh-quality mineral resources,particularlynickel,copper,and cobalt,essentialcomponents for lithium batteries.Indonesiaholds an estimated 55 million tons of nickel,representing 42%of global reserves.Thecountry leverages on this abundance toposition itself as an essential batterymanufacturing supply chain player byproducing half of the global nickelproduction in 2023.The Indonesian government actively seeksforeign investment to accelerate its EVindustry ambitions.Recognizing the countrystechnological limitations,FDI in lithiumbattery production is crucial to bridge thetechnological gap.Indonesia has attractedChinese battery manufacturers to developthe industry in Morowali,Central Sulawesi.EV battery material reserves location in IndonesiaSource:Bawazier,T.for Forum Energizing Indonesia,2021;Nugroho,T.Rencana Pengembangan Ekosistem EV BatteryIndonesia,2021;Ministry of Energy and Mineral Resources Coal and Minerals,2021;Statista Market Insights;Crediblenews sources30MetalNickelCopperCobaltBauxiteManganeseMining Reserve(mln ton)55240.6120043GlobalRankings1st 10th3rd6th10thSymbol Unknown%of WorldReserves42%2.39%7.23%3.36%2.26tween 2009 and 2019,President Widodosgovernment implemented a succession ofpolicies and regulations to restrict raw nickelore export trade.The core export ban wasinitiated in early 2014,with some ore with aconcentration below 1.7%still legally beingexported until 2019.A full export ban has beenin place since January 2020.In addition to theban,a domestic processing requirement wasimposed for those seeking to extract the rawnickel ore.The government outlines three main reasonsfor the export ban and the domesticprocessing requirement.The restriction isdriven by Indonesias commitment to capturemore downstream supply chains.31Indonesias Nickel Export Ban Nickel Ores and ConcentratesFerronickleNickle MattesNickel Oxide Sinters and Others201320142015201620172018201920202021202205101520in billions US$Indonesian nickel product exports,by value,20132022 Nickel Ores and ConcentratesFerronickleNickle MattesNickel Oxide Sinters and Others2013201420152016201720182019202020212022010203040506070 Indonesian nickel product exports,by quantity,20132022Export restrictionExport restriction in millions Metric TonIndonesia is the global leader in nickelmining,producing half of the worldwidenickel production yet only extracting lessthan US$5 billion from an estimated marketvaluation of US$50 billion in 2023.Thestrategy aims to boost Indonesias miningsectors overall added economic value,contributing 12%of its GDP in 2022.Moreover,nickel production is located in westernIndonesia,the countrys most impoverishedregion,which is distant from Java island,Indonesias economic hub.The requirementfor domestic processing aims to increaseemployment opportunities in more upskilledindustries diversifying from 3D jobs offeredin mining.2.51.51.523456919.5Source:S&P Global,GTAS,accessed October 10,2023;Data are from HS subheadings 2064.00,7202.60,7501.10,7501.20,and 7502.10Source:S&P Global,GTAS,accessed October 10,2023;Data are from HS subheadings 2064.00,7202.60,7501.10,7501.20,and 7502.1032Indonesias Nickel Export Ban Thus far,the protectionist policy has beensuccessful,with the export value of nickelproducts reaching US$20 billion in 2022.Thegrowth of ferronickel production,which contains35%nickel and 65%iron,has increased 14-fold,driving the policys success.It is worth noting Chinas role in the policysstrategic success.Chinese investment wasfundamental in developing the current nickelproduction industry,which is now concentratedmainly in the Indonesia-Morowali Industrial Park(IMIP).Despite this value growth,ESG concerns and alawsuit remain.The controversial move hasangered many traditional markets,particularlythe EU,which has a considerable stainless steelproduction industry that relies on the import ofcheap ore.Indonesia lost a legal lawsuit againstthe EU,which considered Indonesia violating its1994 GA on Tariffs and Trade.The World TradeOrganization(WTO)in 2022 ruled in favour ofthe European Bloc.Indonesia is now in theprocess of appeal.There is growing scrutinyfrom Western competitors and buyers blamingthe competitive pricing of Indonesian againstWestern produce,such as Canadian nickelexports,due to a lack of ESG management andregulation.The Indonesian Ministry of NationalDevelopment Planning and climate think tankWorld Resources Institute Indonesia plan tolaunch a nickel decarbonization roadmap earlynext year.This roadmap is part of the 2025-2029National Medium-Term Development Plan,which plans to integrate environmental,socialand governance(ESG)principles into theindustry downstream.The key focus is toreduce emissions from the nickel industry by90%by 2050,expand employmentopportunities in the renewable energy(RE)sector and provide incentives for greenindustries to mature in the medium to longterm.In 2023,Indonesias nickel industry emitted 58.6tonnes of carbon dioxide equivalent(tCO2e)per tonne of nickel,exceeding the globalstandard of 48 tCO2e per tonne.Secondly,Indonesia claims that the nickelsector,a vital input for its steel industry,accounts for about 4%of its total industrial GDP.Indonesia notes that its domestic steel industrycannot meet demand and that nearly half ofIndonesias steel consumption is supplied byimports.Last but not least,the restriction ofnickel exports was in line with the governmentslarger strategy to become a major regionalplayer in the supply chain of new technology,particularly EV production.Name ofcompanyActivityTsingshanHoldingGroupNickel mining and refining,producing stainless steel andbattery-grade nickelJiangsuDelong NickelIndustryNickel refining operationsthrough subsidiaries like VirtueDragon Nickel Industry(VDNI)and Gunbuster Nickel Industry(GNI)ChinaNationalMachineryImport andExportCorporation(CMC)Construction and operation ofnickel smelters in IndonesiaChinaWanxiangGroupNickel mining and refining,focusing on producingmaterials for electric vehiclebatteriesChina HuadiNickel AlloySpecializes in nickel alloyproduction,supporting bothstainless steel and nickelmanufacturingSource:U.S.International Trade Commission(USITC)Chinese companies in NIMP Country Gigawatt-hours Country Gigawatt-hoursChina2,051.8United Kingdom7.4United States187.3Norway6Germany150.8Greece5.3Poland90Turkey5.2Hungary57.3Slovakia5Japan48.1Taiwan3.8South Korea41.6Russia1.5France41.5Czechia1.5Sweden32.5Switzerland1.2Canada25.5Israel1India17.9Vietnam1Thailand11.1Austria0.8Finland10Netherlands0.5Australia10Italy0.2Source:S&Global Market Intelligence as of May 202333VietnamVietnams substantial nickel resources(over 3.6 million tons of estimated nickelresources)are attracting investorattention.Nickel is a critical component inlithium-ion batteries,the power source forelectric vehicles.The booming electricvehicle market has ignited a surge indemand for nickel and other batterymetals.Global nickel demand is estimatedto reach 3.02 million tons in 2022,asignificant increase from 2021s 2.78million tons.This strain on existing supplychains fuels a global push to increasemining operations.Australian mining company BlackstoneMinerals is developing the Ta Khoa NickelProject,aiming to produce 18,000 tons ofnickel annually from 225,000 tons ofconcentrate.Their goal is to become amajor supplier of high-purity nickel,specifically for lithium-ion batteries.Vietnams well-developed infrastructureand proximity to major EV markets further enhance the countrys appeal.Localconglomerate Vingroup is deeply investedin fostering a robust domestic EV batteryproduction industry.In December 2021,Vingroup began construction on a US$174million battery cell plant designed toproduce 100,000 battery packs per year,with plans to increase capacity to onemillion eventually.The battery cell plantwill support the goals of their VinFastelectric vehicle brand,with aspirations forboth domestic and international EV salesexpansion.Vietnams Selex Motors is anotheremerging player in the manufacturing ofEV battery packs.The company secured aUS$3 million convertible note investmentto accelerate its manufacturingcapabilities by supporting production linesand expanding its sales regionally.SelexMotors has also significantly expanded itsinfluence in Vietnam by forging strategicpartnerships with major deliverycompanies,including GrabExpress,LazadaLogistics,BAEMIN,Viettel Post,and othermobility players.Leading countries by lithium-ion battery capacity worldwide MalaysiaMalaysia is a strategic hub for batterymanufacturing,offering essentialmaterials for EV batteries and a networkof reputable companies with advancedautomation for cell and pack assembly.Complementing the sector is Malaysiasrobust electronics and electrical(E&E)ecosystem,which has been a pillar of itseconomy for over five decades.Malaysia is gradually increasing its sharein the global EV battery manufacturingmarket.The country welcomedinternational EV battery partsmanufacturers such as Honda and SKGroup,and EV battery manufacturerssuch as Samsung SDI,EVE,andhomegrown APM Automotive,GreatechTechnology and Genetec Technology.It isalso worth noting that INV New MaterialTechnology-one of the leadingenterprises in lithium battery separatortechnology in China-invested in theconstruction of its first ASEAN factory inMalaysia to produce 4k sqm of wetprocess separators and coatedseparators annually.Malaysias government has createdsignificant incentives for EV chargingequipment providers,such as 100%income tax exemptions from 2023 to2032 and a 100%investment taxallowance.Local EV assemblers alsohave full import and excise dutyexemptions,such as a sales and servicetax waiver until the end of 2025.Malaysia is currently developingguidelines for battery manufacturing thatwill be built upon Malaysian Standard2697 and aligned with internationalregulations.This move reflects Malaysiascommitment to sustainable practices inline with global efforts to manage wasteand hazardous materials.As part of thisstrategy,Malaysia has ceased importingscrap batteries and black mass due to a 34Leading electric vehicle batterymaterial exporting countriesworldwide in 2022(in billion US$)ChinaSouth KoreaPolandGermanyHungaryJapanU.S.SingaporeVietnamMalaysiaSource:OEC58.79.7119.558.386.665.263.972.321.711.37Sales value of manufactured batteriesand accumulators in Malaysia from2019 to 2023(in billion Malaysian Ringgit)Source:Statistics Malaysia201920202021202220234.55.174.986.656.42crackdown prompted by the BaselConvention,an international treaty toprevent the transfer of hazardous wastefrom developed to developing countries.Previously,Malaysia imported feedstockfrom the U.S.to produce Mixed HydroxidePrecipitate(MHP),which was then sold toChina,the worlds largest MHP buyer.Therestriction on imports is likely to drive MHPprices globally since Malaysia accountedfor 31%of Southeast Asias shreddingcapacity in 2023.Electrical and electronics(E&E)industry in Malaysia Malaysias electrical and electronics(E&E)sector is vital to the nations economy.Itscontribution to Malaysias gross domestic product(GDP)amounted to approximately 5.8%in 2023,making it the primary driving force within the manufacturing domain.Elevated E&E ProductionThe escalating production levels of various electronics components and consumerelectronics underscore the robust nature of Malaysias E&E industry.Notably,given strongerexport demands,there was a surge in the output of semiconductors,with over 3 billionadditional units manufactured from 2021 to 2022.Concurrently,the country achieved arecord high in integrated circuit production,reaching 55 billion units in 2022,marking thepinnacle of the past decade.Seizing Opportunities Amidst Chip ShortagesThe onset of the pandemic spurred a surge in demand for electronic devices,triggering aglobal shortage of semiconductors since early 2020.This scarcity has advantageouslypositioned Malaysias E&E industry,evident in the substantial surge in the annual exportvalue of electrical and electronic products.Key export destinations for Malaysia includeChina,the U.S.,Singapore,Hong Kong,and Japan.Furthermore,with the unveiling of the New Industrial Master Plan(NIMP)2030,theMalaysian government has identified the E&E sector as a high-growth,high-value industry,signalling its commitment to fostering further development in the years ahead.Given theindustrys current trajectory,Malaysia is poised to assume a more prominent role in theglobal supply chain as a leading manufacturer of electrical and electronic products.35Manufacturing of electronic components and consumer electronics as shareof gross domestic product(GDP)in Malaysia from 2015 to 2023201520162017201820192020202120224%4.1%4%3.9%4%4.5%4.6%4.9%Source:Statistics MalaysiaExport value of electrical and electronic products from Malaysia from 2013 to2023(in billion Malaysian ringgit)Source:Statistics Malaysia2013201420152016201720182019202020212022263.98256.15277.92287.81343.07381.55373.12386.29455.95593.54.9 23387.45202336Production index for electronics and electrical products in Malaysia from2015 to 2023Source:Statistics Malaysia20142015201620172018201920202021202220152016201720182019202020212022100107.4115.7122.2125.9128.7147.7168.8Investment value in the electrical and electronics industry in Malaysia from2013 to 2023(in billion Malaysian ringgit)2013201420152016201720182019202020212022Source:MIDA;MITI,November 20239.811.18.99.29.711.225.615.6148.029.3Foreign investment value in the electrical and electronics industry inMalaysia from 2013 to 2023(in billion Malaysian ringgit)20132014201520162017201820192020202120228.510.48.27.98.1610.721.7913.5146.327.9Source:MIDA;MITI,November 20232013201420152016201720182019202020212022Source:MIDA;MITI,November 2023Domestic investment value in the electrical and electronics industry inMalaysia from 2013 to 2023(in billion Malaysian ringgit)1.30.70.71.31.50.473.872.11.71.4Production of semiconductors in Malaysia from 2014 to 2023(in billions units)15.0211.813.5620.1122.0328.7626.729.4532.6435.23202385.451.7202320232023165.933.72023Source:Statista051015202530352013201420152016201720182019202020212022202337ThailandThailands proactive stance in promotingclean transportation has led to thesuccessful attraction of major automotiveplayers,including Ford and Toyota andChinese companies,including BYD,SAIC,andGreat Wall,bolstering Thailands reputationas a key destination for EV batterymanufacturing.The Thai government has set an ambitioustarget of producing 30%of clean carsdomestically by 2030.This goal necessitatesa substantial increase in domestic batteryproduction capability,with a target of 40GWh.To achieve this,the governmentactively supports foreign investment in theEV battery sector,paving the way for growthand innovation.Chinese battery manufacturers are alsomaking significant inroads into Thailandsmarket.Leading the charge is CATL,whichannounced its entry into Thailand in 2023.CATLs partnership with Arun Plus,asubsidiary of Thailands national oil companyPTT,underscores the collaborative effortsdriving Thailands EV battery industryforward.Additionally,Svolt Technology andGreat Wall Motor are poised to establishmanufacturing facilities,further solidifyingThailands position in the global EV market.Thailands established electronicsmanufacturing sector provides a solidfoundation for the growth of EV batterymanufacturing.With skilled labour,state-of-the-art facilities,and robust supply chains,Thailand possesses key assets to supportthe burgeoning EV industry.The countrysexpertise in electronics manufacturing,evident in its US$32.7 billion worth ofexported products in 2023,serves as aspringboard for the transition to EV batteryproduction.However,challenges loom on the horizon.The countrys electronics industry,whilesignificant,commands only a 1.8%market share of global exports,lagging behindregional competitors like China andTaiwan.Labour costs are also on the rise,prompting Thailand to seek innovativesolutions to maintain competitiveness.Export value of electronics inThailand from 2013 to 2023(in billion US$)Source:Bank of Thailand,November 202326.2727.0526.525.3428.7430.0627.527.7733.0334.2705101520 25 30 35USAASEANEUHong KongChinaJapanExport Markets of ThailandsElectronic products in 2023,%Source:Office of Industrial Economics(Thailand);Electrical and Electronics Intelligence Unit32.3.5.4.3%9.5%7.42.30500000100000015000002000000IndonesiaPhilippinesNew CaledoniaRussiaCanadaBrazilUnited StatesRest of worldSource:US Geological Survey,January 202438PhilippinesThe Philippines is strategically moving toincrease its participation in the globalbattery production market.The Departmentof Trade and Industry(DTI)activelypromotes the countrys potential as amanufacturing hub for EV batteries.Thecountry wants to leverage its massivenickel and cobalt reserves,which arecrucial components in battery production.The DTI envisions of creating an end-to-end EV value chain to complement thebattery manufacturing ambitions.Thisincludes everything from green metalmining and processing to the domesticproduction of batteries,charginginfrastructure,and electric vehicles.Recentlegislation,such as the Electric Vehicle Industry Development Act(EVIDA)demonstrates the governmentscommitment to foster a supportivebusiness environment through fiscal andnon-fiscal incentives.The Philippines is already attractingsignificant investment in its EV sector.US-based Envirotech Vehicles(EVT)isestablishing a manufacturing plant in theClark Freeport Zone,promising to drivemodernization within the countrysautomotive industry.Additionally,theVietnamese conglomerate Vingroup hasannounced ambitious plans to establish anetwork of EV dealerships across thePhilippines,also stating particular interestin the countrys development directions,including EV battery production.Major countries in worldwide nickelmine production in 2023(in metric tons)1,800,000400,000230,000200,000180,00089,00017,000380,000Leading countries based on reservesof cobalt worldwide in 2023(in metric tons)0200000040000006000000DR CongoAustraliaIndonesiaCubaPhilippinesRussiaCanadaMadagascarTurkeyUnited StatesPapue New GuineaOther countriesSource:US Geological Survey,January 20246,000,0001,700,000500,000500,000260,000250,000230,000100,00091,00069,00049,000780,000010203040SingaporeSeoulLondonBarcelonaHelsinkibatteries aim to last up to 30 years potentially outlasting the vehicle itself.Thisinitiative marks NUS entry into the globalbattery innovation race,where lithium-ionshortages underscore the need foralternatives.In collaboration with the Brazilian companyCompanhia Brasileira de Metalurgia eMinerao(CBMM),the worlds leadingniobium supplier,NUS has established theCBMM-CA2DM Advanced BatteryLaboratory.This cutting-edge facilityenables developers to build and testbattery prototypes entirely on-site,whereits facilities offer a comprehensive range ofbattery testing equipment.The lab serves as a pilot line for batteryproduction for third-party manufacturers totest their batteries and bring them tomarket.Open to approved battery makersand enterprises,each project undergoes areview by a scientific panel to ensure trueinnovation.Niobium-graphene batteries area primary focus,combining niobiumsstructural resilience with graphenesconductivity.CBMMs experience usingniobium in batteries for e-scooters andpower tools informs the goal of increasedconvenience and longevity.A niobium-graphene battery prototype is slated forrelease this year.Niobiums structure enhances batterydurability and prevents overheating.CBMMprojects that niobium-built batteries couldwithstand at least 10,000 charging cycleswhile maintaining 80%of their originalcapacity,significantly exceeding thecapabilities of current EV batteries.Niobium-built batteries could offer a moresustainable alternative to lithium-ionbatteries,addressing waste.CBMM envisions fully charged batterieswithin 10 minutes that are durable and safefor widespread use.While fast-chargingcapabilities are still being explored,thetechnology could enable more miniaturebattery packs.SingaporeThough Singapore is a relatively smallmarket for battery manufacturing andcurrently lacks mass production facilities,local innovators are leading the charge insustainable battery technology.For example,SES,a Singapore-basedlithium metal battery manufacturer,ismaking significant strides in batterydevelopment.The company recentlyannounced Apollo,a hybrid lithium metalbattery that boasts an impressive capacityof 107 Ah,with an energy density of 417Wh/kg and 935 Wh/L.In comparison,typical cells used in EVs have capacitiesranging from 50 to 100 Ah,with an averagegravimetric energy density between 350 to400 Wh/kg and an average volumetricenergy density between 600 and 800 Wh/L.The high capacity and energy densityoffered by SESs Apollo battery highlight itspotential to enable extended-rangecapabilities in EVs.SES aims to releaselithium metal battery samples for EV testingin 2024,with plans for commercial massproduction by 2025.At the National University of Singapore(NUS),a new US$5 million batteryinnovation facility spearheads thedevelopment of next-generation batterysolutions.Among the facilitys flagshipprojects is the creation of batteries thatcan fully charge in the same time it takesto fill a car with gas.These niobium 39Singapores city government is themost innovative globallyNote:talent readiness,innovative ecosystems,financialinitiatives,track record.Source:Eden Strategy Institute,202035.83433.132.132VietnamIndonesiaMalaysiaPhilippinesThailandSource:McKinsey Battery Insights,McKinsey Power Model,McKinsey Center of Future Mobility,companyannouncementsBattery demand In Southeast Asian countries over the nextdecade(in billion US$)202220302035EVBESS1.40.20.20.100.30.10.100.110713248321022026226821308Battery demand In Southeast Asian countries over thenext decade,In Gigawatt-hour(GWh)%of global demandSource:McKinsey Battery Insights,McKinsey Power Model,McKinsey Center of Future Mobility,companyannouncements2023203020356 Gwh80 Gwh175 Gwh0.6%1.7%2% 46%p.a. 17%p.a.40note:p.a=per annum51ManufacturerGlobal marketshare(%)Presence inSEAActivityContemporaryAmperexTechnology37.7IndonesiaCATL established a US$5.2 billion EV batteryproduction plant,which broke ground in 2021BYD15.8IndonesiaBYD established offices and market presence inSEA.LG EnergySoulution12.9Indonesia,ThailandLG Energy Solution established a US$9.8 billionintegrated EV battery plant in 2021 in a jointventure with Hyundai(Republic of Korea)andIndonesian state-owned battery corporation.SK On4.8Singapore,Thailand,MalaysiaSK Innovation established an office in Singaporeearly 2022.The company established a US$553 millionbattery copper-foil manufacturing facility inSabah,which will be part of the SK Groups EVvalue chain.CALB4.6MalaysiaSamsung SDI established a US$175 million facilityin 2021 to expand lithium battery productioncapacity(Samsung SDI Seremban plant)Samsung SDI4.5MalaysiaSamsung SDI established a US$175 million facilityin 2021 to expand lithium battery productioncapacity(Samsung SDI Seremban plant)Panasonic4.4Indonesia,ThailandPanasonic established battery manufacturingfacilities.The company is a major supplier of EVbatteries to Toyota,which has a significantpresence in SEA.Gotion2.5MalaysiaSingaporeGotion High-Tech Co Ltd(Gotion)is planning toset up a battery pack assembly plant in Malaysiato boost its presence in Southeast Asiaregional HQ and RND facility in SingaporeEve Energy2.1MalaysiaEVE Energy is building a factory in Kulim,Kedah,Malaysia,with a focus on developing andmanufacturing cylindrical batteries.Sunwoda2.1VietnamSunwoda plans to invest approximately CNY 2billion(US$275 million)to build a new batteryfactory in Vietnam.This factory will focus onproducing consumer lithium battery cells,systemin package,and finished battery products.Top 10 global EV battery manufacturers present InSoutheast Asia as of H1 2024Source:Maybank Research;company announcements41Note:Activities are specified to Battery Manufacturing related activities only and does not include other businessactivities if any.e.g BYD EV distribution and manufacturing businesses in the region.Battery Second LifeAs electric vehicles become moreprevalent,the need for sustainable andreliable sources of battery materials growscritical.Expanding electric vehicleproduction will strain the supply ofmaterials used in lithium-ion batteries.Recycling offers a potential answer,but tomake it a viable solution,more strategiesmust be adopted to overcome substantialtechnical,economic,logistical,andregulatory obstacles.Availability of Battery Materials Similar in size to AA batteries,each cell hastwo electrodes(anode and cathode),anelectrolyte,and a separator to preventshort circuits.During discharge,lithium ionsmove from the anode to the cathode whileelectrons flow through the device thebattery powers.Battery packs combinemultiple cells into modules and packagethem with a thermal management systemto ensure safe and efficient operation.Lithium-ion batteries rely on criticalmaterials whose availability is at risk due toshortages or concentrated supply chains.Different metals in the cathode(e.g.,nickel,manganese,cobalt,aluminium,or iron)determine battery cost,longevity,andenergy density.Early batteries heavily usedcobalt,but newer chemistries offerimproved performance with less or even nocobalt.Still,as more EVs are produced,theoverall demand for critical materials willcontinue to rise.In the past decade,EV battery capacityhas increased significantly while costshave fallen.This has boosted EV range andaffordability,further driving EV adoption.However,a few countries hold most of theworlds known reserves of battery minerals(e.g.,cobalt,nickel,manganese,lithium,and graphite).Expanding miningoperations to meet demand could worsen.existing environmental and human rightsissues,underscoring the need forsustainable material sourcing andrecycling initiatives.Role of Battery RecyclingThe rapid transition to electric cars andtrucks is essential to combat the impact ofglobal warming.The number of passengerelectric vehicles globally is expected toskyrocket from 5 million today to 245million by 2035,according to theInternational Energy Agency(IEA).Thissurge will drastically increase the demandfor battery minerals like lithium,nickel,manganese,cobalt,and graphite.Depending on the material,globalproduction could increase five-toseventeen-fold over the next 20 years,potentially straining current resourceavailability and manufacturing capacity.While producing more electric vehiclescurrently requires the use of new rawmaterials,a robust battery recyclingstrategy holds promise.Widespreadrecycling could stabilize the domesticsupply of materials,reduce reliance onraw materials,and minimize risksassociated with geopolitical supply chaindisruptions.Battery Impact on EV EmissionsConventional ICE vehicles produce most oftheir global warming emissions from thevehicle itself,with about 90%coming fromthe tailpipe.In contrast,emissionsassociated with EVs occur upstreamduring vehicle manufacturing andelectricity generation needed to powerthem.Studies show that EVs produceroughly 55%lower global warmingemissions than gasoline vehicles,evenwith todays electricity mix.iReserves of materials used in lithium-ion batteries,bycountry MMT=Million Metric TonsChile50.5%Australia15.8%Rest of World12.9%Argentina9.9%China5.9%United Stages5%South Africa32%Ukraine17%Brazil17%Australia12%Gabon8%China7%Rest of World7%DRC51%Rest of World24%Australia17%Cuba7%United States1%Indonesia24%Australia23%Rest of World21%Brazil12%Russia8%Cuba6%Philippines5%United States1%Russia30%China25%Brazil24%Rest of World13%South Africa8%Source:NMIS,N.D.B.Reserves of minerals currently used in lithium-ion batteries are distributed around the world,butindividual minerals are concentrated in a few countries.Lithium17MMTManganese0.81MMTCobalt7 MMTNickel89 MMTGraphite30 MMT43up with the shift to electric transportation.Arobust battery recycling and reuse couldoffer the following benefits:Research and Development:facilities forbattery handling and repurposing willcreate a new data-driven field of batteryresearch and safety.Creating new economies:Recyclingbatteries will require higher-skilledprofessions diversifying away from dirtyand dangerous mining professionscommon across the region.Maximizing battery life:Recyclingbatteries allows EVs to extract more froma single-use battery.Sustainable practices:Encouragingresponsible recycling throughout thesupply chain.Proactive planning is essential to establish acircular battery economy that supports thelong-term transition toward a clean andgreener mobility ecosystem.This includesmandates for used battery collection,revised policies for their transport,andstandards for safe and responsiblerecycling.Battery and vehicle manufacturingcontribute significantly to EV emissions,ranging from 14%to 24%of a BEVs lifecycle.This figure is comparably higherthan that of gasoline vehicles,with BEVmanufacturing producing around 113grams of carbon dioxide-equivalentemissions per kilometre compared to 65grams for gasoline vehicles.However,there is potential forimprovement.Optimizing batterymanufacturing and increasing renewableenergy for cell assembly could reducethose manufacturing emissions by over40%.Recycling batteries is also crucial,decreasing the need to extract and refinenew materials and lowering emissionsand environmental impacts.Mostsignificantly,using more renewableenergy for EV charging would greatlyreduce a BEVs overall global warmingemissions.Recycling and Reuse of Batteries When an electric vehicles battery reachesthe end of its road life,it requires carefulhandling.Options include reusing thebattery in other applications(secondlife),recycling its materials,or disposingof them entirely.Since even reusedbatteries eventually need recycling,thefocus is on recovering valuable cathodematerials to reduce the need for newmining.A used EV battery may still hold over two-thirds of its capacity,making it suitable forless demanding applications.Refurbishedbatteries could power another vehicle orprovide stationary energy storage forutilities and consumers.This growingmarket could reduce new EV costs andboost used EV values.Currently,fewer than a dozen facilitiesrecycle EV batteries,with a capacity farbelow the rapidly rising demand driven byEV sales.This highlights the urgent need toscale up recycling infrastructure to keepCobalt use(kg/100 kWh)%of global demand20182020202520302035051015202530The high price of cobalt,negativeimpacts of mining it motivate efforts tosubstitute it in batteries.Source:Benchmark Mineral Intelligence4429$%found in electric vehicles.Their approachutilizes electricity and regenerativechemicals for sustainable recycling.NeuBattery Materials opened a recycling plantin Singapore,furthering its mission.The recent US$3.7 million seed fundinground,led by SGInnovate,aims toaccelerate the companys automatedrecycling line deployment and strengthenpartnerships with EV OEMs and batterymanufacturers.ComfortDelGro Ventures,the corporate venture arm of a majorSingaporean taxi company,alsoparticipated in Neu Battery Materials seedround.Global e-waste recycler TES is alsodeveloping energy storage systems inSingapore using retired EV batteries tosupport commercial and residential powerneeds.The landscape across Southeast Asia isdiverse.Thailand is witnessing increased EVbattery production.However,batteryrecycling is still in the early adoption phase.Malaysia is working to formulate specific EVbattery reuse policies,while the Philippineshas yet to develop a dedicated plan.Indonesia has a general reuse andrecycling framework yet faces someregulatory hurdles,but companies like PTIndonesia Puqin Recycling Technology areprepared for the growing need.Battery Recycling in Southeast AsiaThe rapid expansion of Southeast Asiaselectric vehicle(EV)market highlights thecrucial issue of managing end-of-lifebatteries.Companies in the region aretransitioning towards a sustainable futureby actively supporting recycling playersand or working on frameworks toaccelerate battery reuse and recycling.In Southeast Asia,Singapore stands out asan innovative player in the field of batteryrecycling technology with its researchinstitutions and growing private batteryrecycling sector.One of the countrys growing players in theindustry is Green Li-ion.In the first half of2023,the company secured US$20.5million in pre-Series B funding,bringing itstotal funding to US$26 million.Green Li-ioncurrently operates in the United States,Europe,Australia,and Singapore.Theirglobal presence strategically positionsthem to capture a rather globalised supplychain of the battery waste industry.The E-waste supply chain currently beginsin major consuming countries,includingthe United States and Europe.Thesewastes are then typically consolidated andexported to developing regions such asSoutheast Asia,where they are shreddedand shipped again to China,home tosome of the biggest and most efficientbattery recycling factories.Green Li-ions modular battery processingunits aim to disrupt this supply chain.Thecompany claims to provide a scalablesolution adaptable to various locationsworldwide.This decentralised approachaims to reduce the transportation of wastebatteries and promote regional recyclingefforts,lessening environmental impact.Another scaleup in Singapores batteryrecycling sector is Neu Battery Materials.The company was founded in 2021 andspecialises in recycling lithium ironphosphate(LFP)batteries,commonly The potential of EVbattery recycling issignificant.It couldsupply a majorportion of thematerials needed tomeet growing batterydemand.45Electric Vehicle ChargingThe surge in the adoption of electricvehicles(EVs)in Southeast Asia is driving aparallel need for a robust charginginfrastructure.Currently,the regions publiccharging network is rapidly growing,drivenby conducive investments and governmentinitiatives.Vietnam,Singapore,and Thailand areleading the charge.Vietnam has one of themost extensive charging networks in theworld,with its 150,000 Vinfast-exclusivecharging units.Thailand currently boastsaround 9,694 EV chargers,with targets setfor 12,000 DC quick chargers by 2030 and afurther increase by 2035.Meanwhile,Singapore aims to install 60,000 chargingpoints by 2030,creating a favourable ratioof approximately 5 EVs per charger.As ofJuly 2024,there are 13,800 charging pointsavailable island-wide.Malaysia needs to fill a gap,with only 2,606charging stations as of June 2024.Thegovernment targets 10,000 EV chargingstations by 2025 and 125,000 by 2030.ThePhilippines is working to overcome itsunderdeveloped charging infrastructure.The short-term goal is to establish 2,000charging stations by 2030,focusing finitially on EV Lead Areas.A new lawmandating charging space allocation atgasoline stations is expected to passsoon.Indonesia is facing the most severe gap inits charging infrastructure.The countryonly has under 1,582 charging points(SPKLU)across 38 cities.With anambitious target set by the governmentfor EV volume to reach 15.2 million vehiclesby 2030,a rapid expansion plan will beessential.While SEA governments actively promoteEV adoption through tax breaks andsubsidies,the parallel growth of charginginfrastructure presents challenges.Thegrowing EV market requires activestrategic expansion of charginginfrastructure.Addressing the increaseddemand on the energy grid and ensuringa sustainable energy supply to powerwidespread EV charging will requireinnovative solutions and investments.Stronger collaboration between mobilitystartups,electric utility companies,andproperty developers,along withgovernment support,will be pivotal inovercoming these hurdles.Charging&battery ecosystem stakeholder activationEnd userEV/BatteryCPOUtilitysectorService providerSoftware supplierParking providerVehiclemanufacturerBatterymanufacturerConnected to chargerCharge anddischargeBi-directionalenergy provisionServicesChargingdataChargingdataIntegrationServicesChargingdataWhite labelSoftwareChargingdataChargingdataEV data46charging infrastructure has stalledconsumer purchases,particularly in ruralareas.These networks are primarilyconcentrated in the Klang Valley,an urbanregion encompassing Kuala Lumpur andSelangor.This limited infrastructure poses a majorchallenge for EV users,especially thosetravelling to the east coast of PeninsularMalaysia.According to Deloittes recentcustomer survey,potential EV buyersremain hesitant due to the fear of beingstranded without access to a chargingstation.This concern is echoed in Deloitteslatest automotive consumer study,whichidentified the lack of public chargers as theprimary worry among Malaysiansconsidering EVs.Another significant obstacle to expandingcharging infrastructure is the lengthyapproval process.Negotiations withvarious stakeholders,including localcouncils and landowners,are essential.This process can take around a year inMalaysia,with delays often stemming froma need for more awareness of EVs amongrelevant parties.However,the Malaysian government aimsto have 10,000 electric vehicle(EV)charging stations nationwide by 2025.These will consist of 9,000 alternatingcurrent(AC)chargers and 1,000 directcurrent(DC)fast chargers.While thenumber might be ambitious,as there are2,606 charging stations in Malaysia as ofJune 2024,the high consumer demand forelectric vehicles continues to drive therapid expansion of charging infrastructurenationwide.Among recent efforts,Malaysia AutomotiveRobotics and IoT Institute and the MalayVehicle Importers and Traders Associationof Malaysia have concluded acollaboration to set up a network of 1,000DC charging stations around the countryby 2025.VietnamVietnam is experiencing a rapid boom in EV charging infrastructure,driven by thecountrys sole EV car manufacturer,Vinfast.According to Reuters,The country has seena significant increase in charging units,with VinFast having installed 150,000charging ports nationwide.VinFasts e-charging ports operate in various spaces,including parking spaces,coach stations,commercial centres,office and residentialbuildings,and highway rest stops.Thisexpansion is impressive,with Vietnamaveraging 15 charging ports per 10,000people,surpassing Chinas 12 chargingports per 10,000 people.However,these facilities are exclusively forVinfasts EV users,and Vinfast has made itclear that it will only consider sharing thesefacilities with other brands after 10 years.This severely limits the potential forcompetitors to capitalize on this chargingboom.Thus,in that regard,multiple EVcompanies,such as automakers likePorsche(for its Taycan models),Mitsubishi,and Audi,have taken theinitiative to set up their charging stations.Vietnams power grid relies on a 500kVsystem spanning over 1500 km from northto south,with the main electricity systemoperating at 220V.The country facespotential power shortages as electricitydemand grows at an average rate of 9%annually.Widespread adoption of publiccharging stations could lead to a 3%-32%electric overload in certain transmissionlines.However,Vietnam holds significantpotential for renewable energy sources,such as wind and solar power,which couldmeet the increased demands of theelectric car industry.MalaysiaDespite efforts to promote electric vehicle(EV)adoption in Malaysia since 2015,suchas the ChargEV network,the lack of 47By 2025,Indonesia aims to roll out 6,318 EVcharging stations and 10,000 battery swapstations.Furthermore,PLN will take on aleading role in the newly establishedIndonesia Battery Corporation(IBC)alongside MIND ID,Pertamina,and AnekaTambang(ANTAM).The state-ownedholding companys activities will alsooversee other EV-related industries,including nickel mining,smelting,cathodeand precursor production,energy storagesolutions,and recycling facilities.SingaporeAs of July 2024,Singapore hadapproximately 13,800 charging points.Thegovernment recently announced a plan toinstall 60,000 charging points by 2030-40,000 in public parking areas and 20,000on private property.The ambition wouldyield an EV-to-charger ratio of roughly 5:1by 2030,assuming one-third of vehicles onthe road are electric.Singapores emerging EV charging playersare pushing the country towards its goal ofa fully developed charging network.Forexample,Charge ,a successfulSingaporean startup,received Series Afunding in 2023 to expand its network inSingapore and across Southeast Asia.Founded in 2018,Charge has alreadyinstalled over 1,000 EV charging pointsnationwide in homes,condominiums,malls,businesses,and factories.It has a majorcontract with Singapores Land TransportAuthority to add 4,000 more chargingpoints in public housing parking areas.Charge aims to install 30,000 chargingpoints by 2030 and is planning a 5,000-kilometer EV charging network acrossSingapore,Thailand,Cambodia,Malaysia,Vietnam,and Indonesia.Charge andMalaysias ChargeSini have just signed across-border roaming agreement allowingEV drivers access to both companiescharging networks.Amperesand,another promisingSingaporean EV charging infrastructure IndonesiaIndonesia is grappling with a severe gap inits charging infrastructure,with only 1,582 charging stations for EV passenger cars orStasiun Pengisian Kendaraan Listrik Umum(SPKLU)spread across 38 cities as of thefirst half of 2024.The governmentsambitious target of 15.2 million EVs on theroads by 2030 makes collaborationbetween the public and private sectorsindispensable.Due to rapid urbanization,the EVinfrastructure set-up faces a challenge:finding adequate charging space remainsa hurdle in Indonesias congested urbancentres,where parking space is scarce.Aspublic charging stations are alreadyprohibitively long,the situation iscompounded by inconvenient charginglocations.An interim solution has emerged inresponse to these pressing issues:batteryswapping.Indonesia currently has 2,182Public Electric Vehicle Battery ExchangeStations(SPBKLU).One notable player inthis arena is Indonesian EV battery startupSwap Energy,which secured a significantinvestment of US$22 million in a Series Afunding round led by Qiming VenturePartners,with participation from GGVCapital and existing investor OndineCapital.Established in 2019,Swap Energyaims to address the limitations of charginginfrastructure in the electric two-wheelvehicle segment,providing over 1,300swapping stations nationwide.Thecompany has forged strategicpartnerships with industry giants like Graband Perusahaan Listrik Negara(PLN),theIndonesian government-owned powercompany,to develop an integrated EVecosystem nationwide.The government is also committed todeveloping the EV charging infrastructure.The Indonesian government has taskedPLN,with establishing a significant networkfor EV charging,with an estimatedexpenditure of US$1 billion by 2030.48ThailandThailands commitment to electric vehicleadoption is reflected in the rapidexpansion of its charging infrastructure.As of December 31st,2023,the countryboasted 2,658 charging locations.Theselocations offer a total of 4,173 outlets forDC CCS2,360 outlets for DC CHAdeMO,and 5,161 outlets for AC Type 2connectors,ensuring compatibility with awide range of EVs.To encourage investment in chargingstations,the Thai government offers a 5-year corporate income tax exemption forstations with at least 40 chargers,ofwhich 25%must be DC fast chargers.Recent revisions to this policy now extenda 3-year tax benefit to smaller stations,further accelerating the networks growth.The National EV Policy Committee hasestablished ambitious targets for EVcharging expansion,aiming to have12,000 DC quick chargers installed by2030 and 36,500 by 2035.This forward-thinking roadmap lays the groundworkfor widespread EV adoption across thenation.The Thai government has also taskedthree state-owned enterprises theElectricity Generation Authority ofThailand,the Metropolitan ElectricityAuthority,and the Provincial ElectricityAuthority with establishing chargingstations every 50-70 kilometres.However,these projects are expected to takeseveral years to complete.In addition,the Electricity GeneratingAuthority of Thailand has partnered withleading automotive companies such asAudi,BMW,Mercedes-Benz,MG,Nissan,and Porsche.This cooperation aims tostreamline the EV charging experience byintegrating application data andpromotions,making it more convenientfor EV pany raised over US$12.4 million in earlyfunding in 2024.Developed at NanyangTechnological University,Amperesandprovides power network solutions designedto improve EV charging equipment.Theirtechnology uses solid-state transformers(SSTs),which are more efficient thantraditional ones.The company plans towidely sell its SST systems for use inapplications that require a lot of power,likefast EV charging stations,microgrids,anddata centres.Early-stage funding helpsAmperesand produce its technology on alarge scale.PhilippinesShifting to electric vehicles in the Philippinesis a challenge due to affordability concerns,including EVs high prices and electric tariffs,which are traditionally more expensive thanin the region.As of February 2024,there areonly 338 charging stations,with more thanhalf of them in the Metro Manila NationalCapital Region(NCR).To support the early EV market growth,thegovernment has a short-term plan todevelop EV Lead Areas where EVs will beadopted fastest.By the end of 2030,thegovernment aims to have 2,000 chargingstations set up across the country.The government is expected to pass a newlaw requiring gas stations nationwide toreserve space for charging stations.Thesestations could be run by the gas stationowners or other third-party companies.Moreover,imported charging stations willbe tax-exempt for the first eight years oftheir operations to encourage rapidexpansion of built-up charging unitsnationwideSeveral international companies in the EVcharging space are already active in thePhilippines,including Delta,ABB,WallChargers,Tritium DC,and IMI.They havebeen partnering with local businesses tocommence their operations.49ServiceProviderNumber oflocationsDC CSS 2DCCHAdeMOAC Type 2TOTAL7051,32317532,0775381,515-1,8243,3393395343161711,021323285167395923357155526241171497119275100204-10230680332022086413144946345446371361791301562915156722452-52192249536224953Total2,6584,1733605,1619,694Number of electric vehicle charging stations in Thailandas of December 31st,2023Source:Electric Vehicle Association of Thailand.Notes:not including public charging stations that serve only specific EV owners e.g.,Tesla Supercharger,MG SuperCharge,etc.50StateNo.ofEVCBType ACType DCIndoorOutdoorJohor25418173100151Kedah674423859Kelantan1248-12Melaka7144271556NegeriSembilan763937571Pahang10165362081Pulau Pinang27922257134145Perak9650461482Perlis2-2-Selangor878701177326552Terengganu15510510Sabah98127Sarawak615011457Kuala Lumpur678573105441237W.P.Putrajaya77043TOTAL2,6061,9936131,0781,523Number of electric vehicle charging stations In Malaysiaas of June 2024Source:Malaysia Electric Vehicle Charging Net Dashboard51ProviderNumber of stationsTesla11 charging stationsBYD122 with 11 charging locations around the islandSP Group1000 with 300 charging locations around the islandShell Recharge22 Charge 1000 Bluecharge(byTotalEnergies)1500 Keppel Volt89 CDG Engie500 MeComb16Major providers of EV charging stations In Singapore,December 2023Source:GetSolar,April 202452Value chainSelected countrySelected companiesNickel miningIndonesiaMerdeka Battery Materials(Indonesia),PTH8engjaya Indonesia),PT Antam(Indonesia),Harita TBP(Indonesia),Eramet(France),NickelMines(Australia),Solway Investment(Switzerland),Tsingshan Holding(China),Vale(Brazil),Zhejiang Huayou Cobalt(China)PhilippinesIntex Resources(Philippines),Sumitomo MetalMining(Japan)and Mitsui(Japan)Nickel smeltingIndonesiaEramet(France),Jiangsu Delong NickelIndustry(China),Nickel Mines(Australia),Solway Investment(Switzerland),TsingshanHolding(China),Vale(Brazil),Zhejiang HuayouCobalt(China)EV battery,partsand componentsproductionIndonesiaLG Energy Solution(Republic of Korea)andHyundai Group(Republic of Korea)MalaysiaHonda(Japan),SK Group(Republic of Korea),Greatech Technology,Genetec TechnologyThailandBMW(Germany),Evlomo(United States),Mercedes-Benz(Germany),SAIC(China),Toyota(Japan)EV productionIndonesiaHyundai(Republic of Korea),Toyota(Japan),NFC Indonesia,VKTR Teknologi MobilitasMalaysiaToyota(Japan)PhilippinesEnPlus(Republic of Korea),Ayala CorpSingaporeHyundai Motor Innovation Centre(Republic ofKorea)ThailandBMW(Germany),Foxconn(Taiwan Province ofChina),MercedesBenz(Germany),Mitsubishi(Japan),Nissan(Japan)VietnamVinFast a subsidiary of Vingroup(a very youngEV player set up in 2017)EV value chain in Southeast AsiaSource:Maybank IBG Research530246810IndonesiaMalaysiaThailandSingaporeVietnamPhillipinesMyanmarLaosCambodiaBruneiRide-hailingThe emergence of ride-hailing applications(RHA)has revolutionized urbantransportation globally,with Southeast Asiabeing no exception.SEA countries haveexperienced significant urbanization andpopulation growth in recent decades,outpacing the expansion of formal publictransportation systems.This disparity hasled to a reliance on informal transportoptions,including taxis and ride-hailingservices.In the region,ride-hailing serviceshave filled crucial gaps left by traditionalpublic transportation systems(Source:Taylor&Francis Group,2023).In recent years,SEA has become thebreeding ground for some of the mostsuccessful ride-hailing startups,notablyGrab and Gojek.The two,often referred toas decacorns due to their marketvaluations exceeding US$10 billion,havedominated the ride-hailing market in SEA.Grab boasts 183 million users and 2.8million drivers,while Gojek has 170 millionusers and two million drivers.Thesecompanies have provided convenienttransportation solutions and diversifiedtheir services to include deliveries,financialservices,and more,catering to the evolvingneeds of consumers.The dominance of the two incentivizes themany newer players to innovate.Currently,there are over 35 ride-hailing players in theregion,ten of which operate in multiplecountries within the region.These RHAinclude players big and small and operateunder different playbooks and businessstrategies.Air Asia Move,for instance,aimsto provide a seamless experience fortravellers offering rides,hotel bookings,flights,and more.On the other hand,Singapores Ryde Technologies,whichreceived US$2m in funding from Octava,extended its carpooling service and hasdiversified into taxi bookings.54Furthermore,Vietnams Be Group,hasaggressively expanded its services andrecently secured a US$30 million debtfunding round from VPBank Securities in2023 with an ambitious target to reach 20million users and deliver 1 billion rides by2026.SEAs ride-hailing market is expected toevolve with more RHA players developingmulti-service platforms with expandedofferings such as different types oftransport,deliveries,and even financialsolutions.Partnerships between ride-hailingcompanies and traditional taxi services arelikely to increase,along with potentialmarket consolidation,as the space in mostcountries is in the mature stage.Number of ride-hailing apps bycountry8898674351Source:Tech in Asia55201920202021202220232024F2025F2026F2027F2028F2029F0.0050.00100.00150.00200.00250.00Number of users of Ride-hailing apps in Southeast Asia(in millions)147.9151.7155.4159.1162.8173.1182.9190.7199.5108.8218.5Source:Statista,(most recent update-July 2024)201920202021202220232024F2025F2026F2027F2028F2029F0.05.010.015.020.025.030.035.0User penetration rate of Ride-hailing apps in SoutheastAsia22.3.6#.0#.4#.7%.
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ASEAN GUIDELINES ONLight ElectricLight ElectricVehiclesVehicles Eefffff The Association of Southeast Asian Nations(ASEAN)was established on 8 August 1967.The Member States of the Association are Brunei Darussalam,Cambodia,Indonesia,Lao PDR,Malaysia,Myanmar,Philippines,Singapore,Thailand and Viet Nam.The ASEAN Secretariat is based in Jakarta,Indonesia.For inquiries,contact:The ASEAN Secretariat Community Relations Division(CRD)70A Jalan Sisingamangaraja Jakarta 12110,Indonesia Phone:(62 21)724-3372,726-2991 Fax:(62 21)739-8234,724-3504 E-mail:publicasean.org Catalogue-in-Publication Data ASEAN Guidelines on Light Electric Vehicles Jakarta,ASEAN Secretariat,November 2024 388.0959 1.ASEAN Transportation Land Transport 2.Transport System Electric Vehicles Light Vehicles ISBN ASEAN:A Community of Opportunities for All With the support of The ASEAN Guidelines on Light Electric Vehicles have been produced by Wuppertal Institute with the support of the German international development agency Deutsche Gesellschaft fr Internationale Zusammenarbeit(GIZ)under the ASEAN-German Technical Cooperation Project on Sustainable Design of Urban Mobility in Middle-sized Metropolitan Regions in ASEAN,funded by the German Federal Ministry for Economic Cooperation and Development and implemented by GFA Consulting Group GmbH on behalf of GIZ and with contributions of the European Union SOLUTIONSplus project.Findings,interpretations and conclusions expressed in this publication are based on information gathered by GIZ and its consultants,partners,and contributors.They do not necessarily reflect the views of GIZ,ASEAN or its Member States.GIZ or ASEAN does not guarantee the accuracy or completeness of information in this document,and shall not be held responsible for any errors,omissions or losses which emerge from its use.The text of this publication may be freely quoted or reprinted,provided proper acknowledgement is given and a copy containing the reprinted material is sent to the Community Relations Division(CRD)of the ASEAN Secretariat,Jakarta.Photo credits front cover by:SOLUTIONSplus Project,UEMI,Wuppertal Institute,Unsplash Photo credits back cover by:Wuppertal Institute,SOLUTIONSplus Project General information on ASEAN appears online at the ASEAN Website:www.asean.org Copyright Association of Southeast Asian Nations(ASEAN)2024.All rights reserved.ASEAN Guidelines on Light Electric Vehicles The ASEAN Secretariat Jakarta ASEAN Guidelines on Light Electric Vehicles 2 Eefffff Executive Summary Motorised light vehicles are a crucial component of transportation and logistics in ASEAN Member States(AMS).They are affordable,manoeuvrable,and can accommodate various use cases,ranging from individual passenger transport to freight and logistics.However,their reliance on fossil fuels contributes significantly to air and noise pollution,and greenhouse gas emissions.Electrifying motorised light vehicle fleets is one key approach to address these negative impacts.The diffusion of Light Electric Vehicles(LEVs)can significantly reduce urban pollution and contribute to the decarbonisation of the transport sector.While the direct benefits per electrified vehicle may be lower than for cars,an ambitious strategy to electrify light motorised vehicle fleets can deliver higher combined benefits compared to cars,at lower investment costs per unit.Furthermore,LEVs are adaptable to different charging models and their emergence may facilitate the creation of domestic and regional value chains.The transition to LEVs requires a comprehensive approach.This includes developing new business models,establishing domestic production chains,and creating a supportive e-mobility ecosystem.Key stakeholders must collaborate to achieve a successful transition to LEVs,such as manufacturers,service providers,and government bodies.Additionally,the availability of skilled personnel,reliable infrastructure for charging,and a system to recycle batteries must be set up and ensured.This guideline is designed to assist ASEAN governments in promoting the adoption of LEVs by providing a framework for policy development and collaboration.Recognising the diverse starting points and initiatives of each member states encourages them to tailor and strengthen approaches based on each countrys specific context.Therefore,the guidelines do not provide a universal one-size-fits-all approach that applies to all AMS.Instead,it suggests a process for defining country-specific strategies to support the uptake of LEVs.In deriving strategies to enhance LEV adoption,this document provides a reference to complete the following five different stages:Stage 1:Building a Vision Building a sustainable ecosystem for LEVs requires collaboration and a shared vision among all stakeholders.This includes public authorities,manufacturers,fleet managers,civil society,and electricity providers.Defining a shared vision that incorporates environmental,social,and economic sustainability is crucial to ensure commitment effective implementation.While most of the member states already have national LEV strategies and targets,these are often limited in scope,focusing mainly on personal and lacking specific targets for slower electric two-wheelers(E2W)and light electric four-wheelers(E4W).Despite these limitations,these initial efforts provide a foundation for further collaboration and the development of a comprehensive LEV ecosystem.Stage 2:Understanding the LEV Ecosystem The LEV ecosystem comprises a range of actors and stakeholders who influence the adoption of e-vehicles,the provision of vehicles,components and related services,and play crucial roles in infrastructure development and the production and end-of-life stage of vehicles.The list of stakeholders is comprehensive and may vary from one use case to another.The relevant actors in the LEV ecosystem are interconnected,including national and local governments,manufacturers,and LEV users.At the governmental level,the majority of AMS have yet to establish a dedicated institution with the mandate of coordinating the nationwide uptake of EVs.Stage 3:Identifying Challenges and Opportunities A diverse range of motorised light vehicles are available in AMS,but a uniform categorisation system has yet to be established.Some countries utilise the UNECE L category with adjustments,while others consider the EUs sub-categorisation.This guideline focuses on UNECE L-category vehicles,with ASEAN Guidelines on Light Electric Vehicles 3 Eefffff addition of powered bicycles/e-bikes and electric kick-scooters.Although not all types of LEVs are regulated in every country,low-speed options such as e-bikes and e-scooters are gaining popularity.This lack of clear regulations can create challenges for law enforcement,road safety,and certainty for users.The current growing interest in cleaner transportation solutions could lead to innovative use cases for LEVs,especially to cater diverse market needs.This guideline explores strengths,weaknesses,opportunities,and threats as well as best practices for four different use-cases:personal passenger transport,ride-hailing and paratransit service,shared-vehicle service,and urban logistics.The same approach is also applied to analyse three different businesses and services related to LEV,notably domestic manufacturing of vehicles and components,operation of charging infrastructure and Battery-as-a-Service(BaaS),and vehicle and battery recycling.Standards are crucial for the success of the LEV market in AMS,particularly since it currently is still in its initial phase.It ensures that different components produced by various companies can be integrated effectively.While some AMS share international standards,there is a necessity for further harmonisation to maximise the benefits.A survey targeting businesses and services related to LEV in AMS shows that most business players agrees that the establishment of regional standards as highly important.To summarise,this guideline identifies the main gaps which hinder the LEV uptake in AMS.Compared to the ICE counterparts,the upfront cost of LEVs is significantly higher.The existing government support for LEVs is lacking,particularly for commercial use-cases.In addition,the availability of affordable and high-quality LEVs in the market is lacking,particularly for slow-speed E2/3Ws.Charging infrastructure and battery swapping services are still limited,creating difficulties for high-mileage use-cases and long-distance trips.Stage 4:Setting Targets and Policy Measures A successful LEV strategy for AMS requires the implementation of adaptable policy mixes tailored to the specific needs and context of each country.These mixes should comprise a combination of incentives,regulations and fossil-fuelled vehicle phase-out plans designed to facilitate the adoption of LEVs throughout the entire innovation cycle.This guideline presents a range of measures within the following categories:Financial and non-financial incentives,such as subsidies or tax breaks that address the upfront cost of vehicles,equipment and infrastructure;Taxation and pricing of fossil fuels and CO2 emissions;Planning a dense network of charging infrastructure and leveraging public and private investments to support the development of publicly accessible charging stations;Regulatory measures to create a long-term market shift towards electric mobility,such as zero-emission zones or sales bans for ICE vehicles;The promotion of harmonised vehicle and battery standards to ease market access across AMS,to ensure the safety and quality of vehicles,components,and charging equipment,and to enhance user trust;The introduction of extended producer responsibility schemes to ensure the collection and treatment of end-of-life vehicles;and The education of expert staff to support the local capacity development and awareness-raising Stage 5:Monitoring and Evaluation The effective and efficient implementation of policies to support the uptake of LEVs requires clear objectives and continuous monitoring.Despite its importance,however,monitoring and evaluation is an often-neglected step.Monitoring facilitates the identification of issues at an early stage,thereby enabling timely adjustments in response to innovations,changing user behaviour,and market trends.Although often overlooked,monitoring is crucial for accountability and transparency.To effectively monitor progress,it is necessary to have a set of clear and measurable indicators.These indicators should be designed to track aspects,including funding,the deployment of charging stations,and the impact of these initiatives on the adoption of LEVs.ASEAN Guidelines on Light Electric Vehicles 4 Eefffff This guideline provides indicators for several categories,including cost of e-mobility,diffusion of EV,infrastructure development and safety,regional and domestic production chains and added value,as well as circular economy.All in all,despite the considerable existing demand for motorised light vehicles in AMS and the numerous advantages that are offered by LEV,the market penetration will not occur spontaneously.The government needs to take action to accelerate the uptake of LEVs in the region.In addressing the challenges,implementation of several strategies is crucial,such as provision of support to LEV industry,purchase programmes establishment,strategic public procurement integration,and extension of charging/swapping networks.Additionally,the emergence of LEV could potentially generate new domestic value and supply chain in the region.Regional cooperation among AMS is essential to increase the market size and allow for economies of scale.Lastly,standard harmonisation is crucial in creating markets,particularly in ensuring safety and security,product quality,interoperability,circularity,and procurement procedure.ASEAN Guidelines on Light Electric Vehicles 5 Eefffff Table of Contents Executive Summary 2 List of Tables 7 List of Figures 8 List of Abbreviations 9 01.Introduction 10 Objective and Outcome 12 02.Deriving an LEV Strategy for AMS 13 03.Vision and Targets for LEV Uptake in AMS 15 Building a Vision for the LEV Uptake in AMS 15 Targets for the Uptake of LEV 16 04.Understanding the Local and Regional LEV Ecosystem 18 Stakeholders in the LEV Ecosystem 18 Governance Framework for LEV Adoption 18 05.Identifying Challenges and Opportunities 21 LEV Categories in AMS 21 Use-Cases of LEVs in AMS 23 Businesses and Services Related to LEV in AMS 33 Standards Related to LEV in AMS 42 Existing Policies Related to LEV 50 Summary:Challenges and Opportunities on LEV Uptake in AMS 53 06.Setting Targets and Policy Measures 57 07.Monitoring and Evaluation 67 Cost of e-mobility 68 Diffusion of electric vehicles 68 Infrastructure development,charging safety,and availability 68 Regional and domestic production chains and added value 69 Circular economy 69 08.Conclusion and Recommendations 70 Annexes 72 Annexe 1 LEV-related Targets in AMS 72 Annexe 2 Light Vehicle Classification according to UNECE L Category 73 Annexe 3 Two-and Three-Wheelers Registration per Capita in AMS 76 Annexe 4 Average Performance and Retail Price for Various Models E-Mopeds,E-Three Wheel Mopeds,E-Motorcycle,and E-Powered Tricycle in AMS 76 Annexe 5 Upfront Costs Comparison between E2W and ICE 2W in Viet Nam 76 ASEAN Guidelines on Light Electric Vehicles 6 Eefffff Annexe 6 Good Practices of LEVs 77 Annexe 7 Current Available LEV-Related Standard in AMS 80 Annexe 8 Perceived Effectiveness of Policy Measures according to AMS Representatives 85 List of References 87 ASEAN Guidelines on Light Electric Vehicles 7 Eefffff List of Tables Table 1 Availability of LEV-Related National Targets in AMS 17 Table 2 Availability and Regulation Status for Different LEV Categories in AMS 23 Table 3 SWOT Analysis of the Use of LEVs for Personal Passenger Transport Use Cases 25 Table 4 SWOT Analysis of the Use of LEVs for Ride-Hailing and Paratransit Use Cass 28 Table 5 SWOT Analysis of the Use of LEVs for Shared Vehicle Service Use Case 30 Table 6 SWOT Analysis of the Use of LEVs for Urban Logistics Use Case 33 Table 7 SWOT Analysis of the OEM and Component Manufacturers Business 36 Table 8 Charging Types,Use Cases,and Main Characteristics 38 Table 9 Indonesias Battery Swapping Station Roadmap 40 Table 10 SWOT Analysis of Charging Infrastructure and Battery Swapping Services 40 Table 11 SWOT Analysis of Battery and Vehicle Recycling Businesses 42 Table 12 Summary of Available LEV-Related Standards in AMS 43 Table 13 Vehicle Category and Approval Standards in AMS 45 Table 14 Interoperability Standards in AMS 45 Table 15 Safety and Security Standards in AMS 47 Table 16 Product Quality and Repairability Standards in AMS 48 Table 17 National-Scale Policies for LEV in the AMS 51 Table 18 Summary of Challenges and Opportunities on LEV Uptake in AMS 55 Table 19 Policy Measures 66 ASEAN Guidelines on Light Electric Vehicles 8 Eefffff List of Figures Figure 1 Stages in Deriving LEV Strategies for AMS 13 Figure 2 Elements of a comprehensive vision on the diffusion of LEV 16 Figure 3 LEV Ecosystem and Related Stakeholders 19 Figure 4 Share of LEVs in the total number of registered motorised light vehicles in several AMS 22 Figure 5 Different Types of LEVs in AMS 22 Figure 6 Local electricity distribution grids in Bangkok 25 Figure 7 Share of Imported and Locally-Produced E-Mopeds,E-Three Wheel Mopeds,E-Motorcycle,and E-Powered Tricycle in AMS 34 Figure 8 Share of Available E-Mopeds,E-Three Wheel Mopeds,E-Motorcycle,and E-Powered Tricycle in AMS 34 Figure 9 Main Barriers for LEV Production in Southeast Asia 35 Figure 10 Importance of Regional Standard Harmonisation According to LEV-Related Companies 42 Figure 11 E-Motorcycle Waterproof Tests Exhibition 46 Figure 12 Perceived Current Government Support on LEV Uptake according to LEV-related Business Categories 52 Figure 13 Perceived Effectiveness Regarding Specific Measures to Support LEV Uptake,Domestic LEV Production,and Charging/Swapping Infrastructure 53 ASEAN Guidelines on Light Electric Vehicles 9 Eefffff List of Abbreviations AC Alternate Current AMS ASEAN Member States ASEAN Association of Southeast Asian Nations BaaS Battery-as-a-Service BRT Bus Rapid Transit DC Direct Current E2W Electric Two-Wheelers E3W Electric Three-Wheelers E4W Electric Four-Wheelers EPR Extended Producer Responsibility EU European Union EV Electric Vehicle GHG Greenhouse Gases ICE Internal Combustion Engine IEC International Electrotechnical Commission IEC International Electrotechnical Commission ISO International Standard Organisation ISO International Standard Organisation LEV Light Electric Vehicle OEM SDG Original Equipment Manufacturers Sustainable Development Goals R&D Research and Development SUMP Sustainable Urban Mobility Plans TCO Total Cost of Ownership UNECE United Nations Economic Commission for Europe ASEAN Guidelines on Light Electric Vehicles 10 Introduction 01.Introduction Almost 250 million motorised two-and three-wheelers are on the roads in ASEAN member states(AMS),representing around 80%of the total vehicle stock in the region1.Motorised light vehicles,such as two and three-wheelers,are essential not only for daily mobility,but also contribute to city logistics,paratransit services,and supporting the first-and last-mile of public transportation network in the region.Motorised light vehicles offer various advantages for navigating urban and rural areas in AMS.It provides an affordable and widely available mode of transportation with high levels of manoeuvrability on narrow roads.For many use-cases,motorised light vehicles can serve similar purposes as their heavier counterparts,notably cars,albeit at a slower pace and with less space capacity.In areas with low to medium public transport demand,motorised light vehicles operate as paratransit services,transporting smaller groups of people or goods at a time.Compared to cars and minivans,motorised light vehicles are a resource-efficient in terms of energy use and urban space consumption.The vast majority of the light vehicle fleet in AMS,however,is fuelled by petrol and diesel.Due to their immense numbers,two and three-wheelers contribute significantly to negative impacts:combustion engines emit high levels of air pollutants and greenhouse gases(GHG),exacerbating urban smog and negatively affecting public health and the environment.Motorised light vehicles mostly also have poor engine sound dampening,contributing to noise pollution in densely populated urban areas.One of the solutions to reap the benefits of motorised light vehicles without increasing their negative impacts is to promote the use of Light Electric Vehicles(LEVs).The electrification of motorised light vehicle fleets can potentially alleviate local air pollution issues and contribute to overall transport decarbonisation efforts in Southeast Asia.Despite the advantages of LEV compared to ICE(Internal Combustion Engine)light vehicles,their market diffusion in AMS is still in an early stage.While the electrification of car fleets is on the agenda in many countries,two and three-wheel vehicles are still largely out of the scope.Electrifying both private and commercial light vehicle fleets can provide quick wins in reducing urban pollution and decarbonising the transport sector.Unlike cars,motorised light vehicles are adaptable to different charging models,particularly due to the smaller Image source:Pexels ASEAN Guidelines on Light Electric Vehicles 11 Introduction battery size and its abilities to utilise battery swapping systems,and potentially offer higher benefits per unit of investment.Box 1 ASEAN Transport Strategic Plan 2016-2025 and the 2023 ASEAN Leaders Declaration on Developing a Regional Electric Vehicle Ecosystem The Kuala Lumpur Transport Strategic Plan(ASEAN Transport Strategic Plan)2016-20252 affirms the importance to“intensify regional cooperation in the development of sustainable transport-related policies and strategies”(ST-1)and“support the development and adoption of nationally appropriate policies for cleaner fuels and vehicles”(ST-1.3.3).The 2023 ASEAN Leaders Declaration on Developing a Regional Electric Vehicle Ecosystem3 affirms“the significant role of electric vehicle adoption as part of ASEANs efforts in reducing greenhouse gas emissions,accelerating the energy transition,decarbonising the land transport sector in the region,achieving net-zero emission targets,and improving energy security in each ASEAN Member States and in the region.”Box 2 Light Electric Vehicles and the Sustainable Development Goals SDG 3:Ensure healthy lives and promote well-being for all at all ages,by reducing air and noise pollution SDG 7:Affordable and clean energy,by powering the EVs with renewable energy SDG 8:Decent work and economic growth,by creating new job opportunities in the green economy sector by providing a cost-effective and accessible mode of transportation SDG 9:Build resilient infrastructure,promote inclusive and sustainable industrialization and foster innovation,by reducing import dependency on fossil fuels and fostering a green economy SDG 11:Make cities and human settlements inclusive,safe,resilient and sustainable,by contributing to sustainable and low-carbon mobility services,by incorporating a circular economy approach(recycling and repurposing)on EV batteries SDG 12:Ensure sustainable consumption and production patterns SDG 13:Take urgent action to combat climate change and its impact,by contributing to reducing emissions and mitigating climate change The LEV transition also facilitates the development of new business models,domestic production chains in ASEAN economies and local value creation,provided there is a sufficiently sized vehicle market with largely uniform standards to take advantage of economies of scale.Therefore,the guidelines do not only focus on the operation of e-vehicles but consider the entire e-mobility ecosystem.The ecosystem is the network of all the stakeholders and physical assets that are required to make LEV a practical and widespread transportation option.Its components need to work together seamlessly.Key stakeholders comprise inter alia:manufacturers of vehicles and components(OEMs);mobility service providers and vehicle fleet managers;providers of charging infrastructure,power grids,and electricity;the raw materials and recycling industry;also,national and local governments and decision-makers which influence the legal and financial framework for the e-mobility transition.ASEAN Guidelines on Light Electric Vehicles 12 Introduction Exploiting this potential requires the education of skilled personnel,the deployment of charging solutions and the establishment of a circular economy framework within the sector,in particular the recovery of raw materials as input for new batteries.Support will also be needed from technological developments and the political environment,especially in the area of electricity generation and delivery.This guideline document is intended for policymakers at both national and local government levels to assist in increasing the adoption of LEVs in their respective countries and regions,while also exploring the potential use cases of different types of LEVs.Objective and Outcome Objectives The purpose of this guide is to assist public authorities in AMS in promoting the adoption of LEVs and to contribute to a more coherent policy environment for the production,commercialisation,user acceptance and end-of-life management of LEVs.The guidelines are designed to encourage collaboration among AMS to jointly exploit the benefits and business opportunities associated with the electrification of light vehicles.The desired outcome is:to contribute to socio-economic development in the ASEAN region and to increase ASEANs competitiveness by strengthening domestic vehicle markets and regional value chains by developing a regional e-mobility ecosystem;to ensure affordable and human-centred mobility,to improve public health and the liveability of cities,and to contribute to the global commitment to decarbonizing the transport sector.As market conditions and starting points among AMS vary widely,each country will need to adopt a customised approach,taking into account its specific environment.Therefore,the guidelines do not provide a universal one-size-fits-all approach that applies to all AMS.Rather it suggests a process to define country-specific strategies for supporting the adoption of LEVs.It examines the current state of LEV markets,and the current vehicle offerings,analyses different use cases and resulting user needs,and provides insights into the business and service-related aspects of LEVs,along with sharing inspiring good practice examples from ASEAN countries and beyond.Furthermore,it also provides an overview of recent policies and standards that are in place in individual AMSs,as well as recommendations regarding policy measures and monitoring and evaluation indicators.Box 3 Methodology How the guidelines were derived This guideline builds on both desktop research on existing literature and policy documents and quantitative and qualitative data collection via surveys,interviews and group discussions with relevant stakeholders.The data collection has been done through:Online interviews with LEV-related business and services representatives.Online interviews with LEV experts from various institutions in Southeast Asia including Focus Applied Technology(Malaysia),De La Salle University(Philippines),the Institute of Transportation&Development Policy(Indonesia),and the National Energy Technology Centre(Thailand).Country factsheet contribution from representatives of AMS Group discussions with AMS representatives through Expert Group Meetings(EGM)Online surveys targeting private sectors on LEV-related businesses and services in AMS,with more than 20 respondents.ASEAN Guidelines on Light Electric Vehicles 13 Introduction 02.Deriving an LEV Strategy for AMS This guideline aims to assist decision-makers at different policy levels in developing strategies to promote the uptake of LEVs.It is structured according to the key stages of developing a successful strategy to support the uptake of LEVs at local and national scales.Figure 1 Stages in Deriving LEV Strategies for AMS It is important to note,however,that the development of a strategy is not a strictly linear process.Several stages may proceed in parallel,and adjustments to earlier steps may become necessary,for example as a result of changing stakeholder preferences,technological developments,or evolving markets.As illustrated in Figure 1,this document provides a reference to complete the following stages:Stage 1:Building a Vision Define the vision:Establish a clear and concise vision for LEV adoption.This could focus on environmental sustainability,reducing traffic congestion,or economic opportunities.Stage 2:Understanding the LEV Ecosystem Stakeholder mapping:Identify all relevant stakeholders within the e-mobility ecosystem and their needs,capacity and demand,such as vehicle manufacturers,energy providers,public transport authorities,charging infrastructure companies,and user groups.Stage 3:Identifying Challenges and Opportunities Image source:SOLUTIONSplus ASEAN Guidelines on Light Electric Vehicles 14 Introduction Understand the landscape:Conduct a thorough study of the existing LEV market.This includes assessing current LEV types,uses-cases,businesses,existing policies,and available standards.Consider existing and new use cases and innovative business opportunities Identify key gaps to LEV adoption,such as upfront costs,range anxiety,and lack of charging infrastructure.Stage 4:Setting Targets and Policy Measures Define goals and targets:Set realistic and measurable goals for LEV adoption,considering factors such as phasing out fossil-fuelled vehicles,charging infrastructure density,and emissions reduction targets.Develop a comprehensive set of policy measures to address identified barriers.Stage 5:Monitoring and Evaluation Performance indicators:Establish clear key performance indicators(KPIs)to track progress towards set goals.This could include LEV sales,charging station utilization,and air quality data.Evaluation and adjustment:Regularly evaluate the effectiveness of implemented measures and adapt the strategy based on data and stakeholder feedback.ASEAN Guidelines on Light Electric Vehicles 15 Stage 1 Building a Vision 03.Vision and Targets for LEV Uptake in AMS Building a sustainable ecosystem for LEVs is a collaborative effort.Successfully engaging all relevant stakeholders-including public authorities,vehicle and component manufacturers,private and public fleet managers,civil society representatives,electricity providers or grid owners requires a common understanding of the goal to be pursued.Involving stakeholders in the definition of a shared vision will increase their buy-in and ensure their commitment during the implementation phase.Defining a shared vision can be a crucial part of achieving this.Building a Vision for the LEV Uptake in AMS Developing a strategy for the diffusion of LEVs requires the active participation of public administrations,industries,stakeholders and target users.This will ensure a tailored set of measures and effective implementation.A top-down approach,where decisions are made without a broader involvement of interested parties,risks being inefficient and is unlikely to ensure ownership and continued support.A vision statement is an aspirational,qualitative description of the desired future state of a system.By outlining long-term goals and desired outcomes,a vision serves as a reference point for all stakeholders working towards that future.To reflect the interests of a wide range of stakeholders,a vision should be comprehensive and take into account the different components of sustainability:economic,environmental and social elements.Figure 2 illustrates elements that a vision statement can address.The techniques and how stakeholders contribute during the definition of a vision may differ,ranging from a series of online consultations and feedback to active workshops and scenario planning.Image source:UEMI ASEAN Guidelines on Light Electric Vehicles 16 Stage 1 Building a Vision Figure 2 Elements of a comprehensive vision on the diffusion of LEV Box 4 MobiliseYourCity Topic Guide on Participatory Processes A reference document:A detailed guideline on how to conduct participatory processes in the area of mobility is provided by the MobiliseYourCity Partnership.The respective stages cover the analysis of the current situation and the stakeholder landscape,the co-development of strategies and measures,and the definition of ambitious but achievable targets.The topic guide is available from the MobiliseYourCity website:https:/ for the Uptake of LEV In establishing the vision for the adoption of LEVs,most ASEAN countries will not be starting from scratch.Several member states have already established national strategies for the electrification of the land transport sector,including the Singapore Green Plan,the Philippines Comprehensive Roadmap for the Electric Vehicle Industry,and Malaysias National Automotive Policy.Hence,in one way or another,AMS has set out national targets related to the adoption of LEVs and the supporting ecosystems.Targets provide guidance,reliability and investment certainty.Establishing LEV-related targets is crucial for increasing the uptake of LEVs in the region.Targets should be quantified,be time-bound and include the setting of long-term goals,which will facilitate cross-sectoral cooperation.Currently,the majority of AMS have set targets related to e-mobility,but only a small number of them have defined specific targets for LEVs.To date,the majority of LEV-specific targets in AMS focus on larger vehicles,mostly passenger cars,with a particular emphasis on vehicle registration and production.Targets for E3W have been set in several AMS,while targets for slow E2W(including ASEAN Guidelines on Light Electric Vehicles 17 Stage 1 Building a Vision micro-mobility)and light E4W are not yet available.Some countries have set targets for LEV-supporting infrastructure and services,such as charging infrastructure and battery swapping stations.Table 1 shows the availability of existing LEV-related targets in AMS while the elaboration of the targets is provided in Annexe 1.Categories Targets BN KH ID LA MY MM PH SG TH VN E2W Vehicle Sales Vehicle Registration Vehicle Production ICE Phase-out E3W Vehicle Sales Vehicle Registration Vehicle Production ICE Phase-out All EV Vehicle Sales Vehicle Registration Vehicle Production ICE Phase-out Others Charging Stations 4 Battery Swapping Stations Table 1 Availability of LEV-Related National Targets in AMS Data source:Country Factsheet Contribution by AMS Visions and targets should be aspirational yet realistic and tailored to local circumstances.The use cases outlined under Stage 3 provide potential components of an encompassing vision for increasing the use of LEVs in AMS.However,given the varying initial situations,the landscapes,and priorities across member states,regions and cities,these elements do not specify a clear timeframe or provide quantified targets.Instead,they should serve as inspiration for public authorities when formulating a common vision.ASEAN Guidelines on Light Electric Vehicles 18 Stage 2 Understanding the LEV Ecosystem 04.Understanding the Local and Regional LEV Ecosystem Stakeholders in the LEV Ecosystem The LEV ecosystem comprises a range of actors and stakeholders who influence the adoption of e-vehicles,the provision of vehicles,components and related services,and play crucial roles in infrastructure development and the production and end-of-life stage of vehicles.The list of stakeholders is comprehensive and may vary depending on the use case and country,influenced by differing national economic systems and business models.Figure 3 provides an overview of the potentially relevant stakeholders.Governance Framework for LEV Adoption The electrification of LEV fleets is a cross-cutting policy issue which involves a broad range of stakeholders,ranging from OEM manufacturers to national and local authorities and bureaucracies(including different governmental departments),academia and research institutions,electricity providers and grid operators,up to logistic companies,vehicle fleet managers and individual consumers.Aligning the activities and interests of these actors requires governance structures that allocate responsibilities,and ensure participation and ownership of relevant groups in the development of a comprehensive strategy.This strategy must encompass a multi-pronged approach,such as the introduction of economic incentives,the development of robust energy infrastructure,the enactment of updated vehicle regulations,and the advancement of supporting technologies.However,this presents a challenge,as it necessitates collaboration between various government institutions,such as the ministries of finance,transportation,energy,and industry.Achieving this level of cross-departmental coordination can be challenging and time-consuming.Image source:Wuppertal Institut ASEAN Guidelines on Light Electric Vehicles 19 Stage 2 Understanding the LEV Ecosystem Figure 3 LEV Ecosystem and Related Stakeholders The national government institutions responsible for EV uptake vary greatly across the AMS.Indonesia,for instance,requires the coordinated efforts of multiple government institutions to establish policy integration for EVs,including the Ministry of Transport,Ministry of Industry,Coordinating Ministry for Maritime and Investment Affairs,Ministry of Trade,Ministry of Energy and Mineral Resources,and Ministry of State-Owned Enterprises5.Meanwhile,the Philippines CREVI6 has established several responsible agencies for EV-related policies,including the Department of Energy,the Department of Trade and Industry,the Department of Interior and Local Government,the Department of Public Works and Highways,Local Government Units,the National Economic and Development Authority,the Department of Finance,the Department of Transport,the Energy Regulatory Commission,the DTI-Board of Investment,and the Department of Environment and Natural Resources.In Thailand,the government agencies responsible for EV-related policies include the Ministry of Energy,Ministry of Finance,Ministry of Industry,Ministry of Science and Technology,Ministry of Transportation,and the Thailand Board of Investment7.Meanwhile,Singapore takes a different approach by establishing the National Electric Vehicle Centre(NEVC)8 as the main driver in EV promotion to achieve the ICE phase-out by 2040.Led by Singapores Land Transport Authority,this institution comprises various government agencies and other stakeholders.Aside from improving the EV ecosystem in Singapore,this institution also develops new EV regulations and standards.ASEAN Guidelines on Light Electric Vehicles 20 Stage 2 Understanding the LEV Ecosystem Box 5 Electric Vehicle Working Group(EVWG),United States The Electric Vehicle Working Group(EVWG)9 is a government body with the mandate to provide recommendations on the integration of electric vehicles(EVs)into the United States transportation and energy systems.This encompasses light-duty vehicles such as cars,as well as medium and heavy-duty vehicles including trucks and buses.In addition to recommendations,the EVWG will serve as a central hub for communication and collaboration on EV adoption in the United States.This will include coordinating with existing government initiatives focused on electric vehicles,such as fleet conversion programs.Subsequently,the findings and recommendations of the EVWG will be presented to various government bodies,including the Secretaries of Energy and Transportation,as well as key Congressional committees with responsibility for transportation and infrastructure.Establishing designated authority for EV,which consists of the team to coordinate different governmental agencies and stakeholders to plan and develop policies for LEV uptake.The authority can carry out the following tasks:Be a focal point and ease coordination between different governmental agencies,particularly in developing cross-sectoral policies and aligning common goals.Work closely with the industry,EV association,and standardisation institutions and establish standards related to LEV.Collaborate with research institutes,academia,and related government agencies in initiating capacity-building and awareness-raising activities,both for the private and public sectors.ASEAN Guidelines on Light Electric Vehicles 21 Stage 3 Identifying Challenges and Opportunities 05.Identifying Challenges and Opportunities LEV Categories in AMS LEVs provide low-carbon,flexible,and energy-efficient transportation options that can accommodate various use cases in AMS.Motorised light vehicles,particularly motorcycles,are widely used in several AMS,including Viet Nam,Indonesia,Malaysia,and Thailand(refer to Annexe 3).Despite the prevalence of motorised light vehicles,the diffusion of LEVs in the region is still in its early stages(see Figure 4),making government intervention crucial to accelerate uptake.LEVs are available in various types and models to suit different use-cases in AMS.However,a uniform and consistent LEV categorisation system throughout AMS has not yet been defined.Several AMS countries(e.g.,Cambodia,Malaysia,Myanmar,Singapore,and Thailand)refer to the UNECE L category as their primary vehicle categorisation,with some adjustments made where necessary.Accordingly,this guideline refers to electric vehicles classified under the UNECE L category10(see Annexe 2).It also incorporates the European Unions sub-categorisation of L-Vehicles11(see Annexe 2),ensuring the inclusion of powered bicycles/e-bikes in category L1.Additionally,the guidelines consider electric micro-vehicles such as electric kick-scooters,which are stand-up vehicles powered by an electric motor and constructed with a large deck in the centre for the rider to stand.They can provide an efficient and comfortable means of personal transport,particularly for short-distance trips of less than 2km distance.E-kick-scooters and e-bikes are often provided as shared vehicles in city centres.Sharing schemes emerged over the recent years in cities globally and are most often operated by private companies.In an attempt to limit negative impacts on pedestrians and urban space use,and to better integrate these schemes with public transport,cities increasingly started regulating shared micro-vehicle schemes.Different types of LEVs are illustrated in Figure 5.Image source:Wuppertal Institut ASEAN Guidelines on Light Electric Vehicles 22 Stage 3 Identifying Challenges and Opportunities Figure 4 Share of LEVs in the total number of registered motorised light vehicles in several AMS Data source:Country Factsheet Contribution by AMS E-Kick Scooter Photo Source:Wuppertal Institute E-Powered Cycle or E-Bike(L1e-A)Photo Source:Torque E-Moped(L1e-B)Photo Source:SOLUTIONSplus E-Three-Wheel Moped(L2)Photo Source:SOLUTIONSplus E-Motorcycle(L3)Photo Source:Wuppertal Institute E-Motorcycle with Side-Cars(L4)Photo Source:Motorcycle Cruiser E-Powered Tricycle(L5)Photo Source:Wuppertal Institute E-Light Quadricycle(L6)Photo Source:eCar E-Heavy Quadricycle(L7)Photo Source:SOLUTIONSplus Figure 5 Different Types of LEVs in AMS Consistent standards for light vehicles in the ASEAN region can create a larger market by enabling economies of scale in production and reducing trade barriers.This can lead to lower prices for ASEAN Guidelines on Light Electric Vehicles 23 Stage 3 Identifying Challenges and Opportunities consumers and a wider variety of products available.However,not all types of LEVs are available and/or classified as motor vehicles in all of the AMS(see Table 2 LEGEND Available and regulated Available but unregulated-Not available X Not allowed a Definition slightly differs b Regulation available c not allowed to be registered for on-the-road use Table 2).For example,low-speed LEVs such as e-kick scooters or e-bikes are available in several AMS,including Brunei Darussalam,Lao PDR and Thailand,but remain unregulated.Inconsistent or lacking standards can create problems in areas such as law enforcement and road safety and may lead to uncertainties over whether such vehicles are allowed to be used.Speed Vehicle Category BN KH ID LA MY MM PH SG TH VN E2W Low(50 km/h)Motorcycle Refers to L3 in UNECE L Category E3W Motorcycle with Sidecar Refers to L4 in UNECE L Category -b Powered Tricycle Refers to L5 in UNECE L Category -b Light E4W Medium Low(25-50 km/h)Light Quadricycle Refers to L6 in UNECE L Category -X c Medium High(50 km/h)Heavy Quadricycle Refers to L7 in UNECE L Category -X LEGEND Available and regulated Available but unregulated-Not available X Not allowed a Definition slightly differs b Regulation available c not allowed to be registered for on-the-road use Table 2 Availability and Regulation Status for Different LEV Categories in AMS Data source:Country Factsheet Contribution by AMS Use-Cases of LEVs in AMS Motorised light vehicles are a critical mode of transportation in most AMS.There is a growing interest in cleaner transportation solutions,which could lead to innovative use cases for LEVs that cater to diverse market needs.This presents opportunities for innovative manufacturers and business models to explore the future of transportation,by incorporating LEV for different use cases.ASEAN Guidelines on Light Electric Vehicles 24 Stage 3 Identifying Challenges and Opportunities Personal Passenger Transport Suitable vehicles:E-kick scooters,e-bikes,and e-mopeds.L1/L2 vehicles for neighbourhood transport,e-motorcycles for longer-distance trips.Daily mileage:Low to medium Charging:Removable batteries and slow home charging are adequate(e.g.,overnight charging using a standard 230 V outlet.Either by removing the battery or cable charging).Potential elements of a vision:Short-to mid-term:Electrify the fleet of mopeds and motorcycles in AMS.Avoid that 2W are replaced with private passenger cars.Long-term:Reduce the use of mopeds and motorcycles and encourage the uptake of electric micro-vehicles(e-bikes,e-kick scooters)and active mobility,for example through traffic calming measures in inner cities.Personal transport is a common use case for motorised light vehicles in ASEAN countries,particularly for privately owned mopeds and motorcycles.Motorised light vehicles for private door-to-door transport offer flexibility,and convenience and are an affordable means of transport.L-1 mopeds are mainly used for short trips in the neighbourhood and L-2 motorcycles are also for longer trips(60 km).New e-vehicles such as e-kick scooters and e-bikes can complement the range of personal light vehicles.Two-wheelers are comparatively space-efficient compared to passenger cars,specifically in urban environments.Currently,ICE mopeds and motorcycles dominate the vehicle fleet in AMS.Despite their relative efficiency,they contribute significantly to air and noise pollution and congestion in cities.In the short to medium term,a shift towards electric vehicles can help alleviate air and noise pollution and contribute to more liveable urban areas.Despite these benefits,obstacles remain that limit the uptake and user acceptance of LEVs for private purposes.These include purchase costs,reservations regarding quality,or the availability of charging infrastructure.Purchase Costs A key barrier to private adoption of LEVs is the higher purchase price compared to their ICE counterparts.Compared to their ICE equivalents the retail price of electric mopeds and motorcycles is around 1.5 to 2 times higher(see Annexe 5).Several member states have introduced financial incentives to reduce the high upfront costs associated with the adoption of LEVs(see Table 17).However,incentives for service providers remain limited and government incentives for the purchase of LEVs,such as tax breaks or purchase premiums,are not as widespread as for electric cars12.Battery swapping has the potential to reduce the upfront costs associated with the adoption of LEVs,as the battery is considered a major cost in electric vehicles.By detaching batteries from vehicles,battery swapping can decrease the price of LEVs.This could be extended to the battery-as-a-service(BaaS)business model.Vehicle Quality and Public Perception Despite the potential benefits of LEVs,including lower costs and environmental advantages,challenges exist in both product quality and public perception.Inadequate quality assurance can result in poorly made LEVs,which may raise safety concerns and lead to breakdowns.Furthermore,inexpensive,low-quality LEV models often lack reliable after-sales service and readily available parts,discouraging repairs and creating a culture of disposable vehicles.Furthermore,the public often perceives LEVs as expensive,with shorter range,lower performance,and questionable quality compared to gasoline vehicles.This perception is compounded by a lack of mandatory testing procedures for some LEVs,particularly slower models,which leads to customer dissatisfaction,especially with battery reliability.To address these concerns,it is essential to implement stricter quality control measures,educate the public about the advancements in LEV technology,and encourage the government to adopt electric fleets.ASEAN Guidelines on Light Electric Vehicles 25 Stage 3 Identifying Challenges and Opportunities Charging Infrastructure and Grid Reliability Figure 6 Local electricity distribution grids in Bangkok Photo Source:Wuppertal Institute In general,most LEV models for personal use do not require additional charging infrastructure but can be charged at home.However,as the share of EVs increases,the additional energy demand from home charging may become an issue for fine distribution networks at the district level or for installations inside houses.Moreover,as mode-1 charging does not provide protective measures to control and communicate with the electric vehicle,it offers little safety for electric installations,the vehicle,and the person charging the electric vehicle.The risk of fire hazards,including the potential for house burns,can be mitigated by ensuring that local distribution and home installations are sufficient,current circuit breakers are in place,multiple batteries are not charged simultaneously,and batteries are used that have been safety-tested and equipped with charging controls.Mode-1 charging is prohibited in many states worldwide13.Strengths Weaknesses Easily and adequately chargeable with home-charging No profound changes in user behaviour when switching from its ICE counterparts.Relatively affordable for personal uses,compared to electric cars.Zero tailpipe emissions and reduced noise.Higher upfront cost compared to ICE equivalents.Limited range and potentially resulting range anxiety,particularly for longer-distance trips.May strain local and domestic electrical systems if multiple batteries are charged in parallel on the same circuit,creating electrical hazards and risk of fire.Opportunities Threats Plenty of incentives and opportunities from the government,such as exemption of registration fees,rebates for home-charging installation,and home-electricity discounts.High impact potential due to high numbers of users.Insufficient local/in-home power infrastructure.Lack of affordable high-quality LEVs,particularly the slow-speed ones.Fuel subsidies and non-internalisation of external costs could lead to under-priced fossil fuels and impair the competitiveness of LEVs.Table 3 SWOT Analysis of the Use of LEVs for Personal Passenger Transport Use Cases Ride-Hailing and Paratransit Services Suitable vehicles:E-mopeds,e-auto rickshaws,e-motorcycles,e-motorised tricycles,e-light quadricycles and e-quadricycles.Daily mileage:Medium to high Charging:Battery swapping,fast charging,overnight home charging Potential elements of a vision:Short-to mid-term:Electrify the existing fleet of commercial passenger transport vehicles through financial support,the provision of adequate charging infrastructure and regulations,such as zero-emission zones.Long-term:Integration of semi-formal and third party passenger transport with collective transport system.Ride-hailing services use real-time location data to connect passengers with nearby drivers,providing on-demand or pre-booked rides.They offer a flexible,third-party-mediated transportation system for ASEAN Guidelines on Light Electric Vehicles 26 Stage 3 Identifying Challenges and Opportunities efficient urban travel.Unlike ride-sharing,ride-hailing services provide personal transportation for customers,even though sharing the ride could also be possible for larger types of LEVs.Ride-hailing services that use smaller vehicles,particularly motorcycles,have become popular due to their affordable tariffs and their ability to navigate through heavily congested traffic.Paratransit refers to an informal or semi-formal transport system,often characterised by quasi-fixed routes and minimal regulation.Despite this lack of formal structure,it plays a critical role in providing essential access to jobs,goods and services where formal public transport is not available,particularly in low-and middle-income countries14.A typical use case would combine over-night slow charging at home or the depot with fast charging and/or battery swapping during the day.Other than for private purchasers,professional vehicle operators focus strongly on total costs of ownership(TCO)(purchase costs are only a component of TCO,besides cost for fuel,maintenance,insurance,vehicle downtimes,etc.)In general,electric vehicles have higher purchase costs,but lower operating costs(e.g.,energy cost,maintenance cost)than ICE counterparts.This makes LEVs particularly suited to intensive use cases,such as ride-hailing or paratransit,which have higher daily mileage.In some cases,charging and swapping providers also build partnerships with LEV fleet operators,offering service packages that can reduce operational costs even more.Some AMS,such as Malaysia and Indonesia,have established a relatively low fossil fuel price,which has reduced the gap between petrol and electricity prices.This has diminished the appeal of LEV operational costs in comparison to ICE.Moreover,an interviewed expert highlighted insurance tariffs for LEVs that are currently more costly than for comparable ICE models.Some insurance companies have attempted to offset this issue by offering lower coverage for the batteries.Box 6 GoJek and Electrum:Motorbike-Taxi Electrification,Indonesia Photo Source:The Jakarta Post Electrum,a joint venture between GoJek and TBS Energi Utama,helps accelerate motorbike-taxi fleet electrification by developing domestic e-motorcycles,supporting the battery ecosystem,and providing aftersales and maintenance services.By 2030,GoJek is aiming to electrify two million of its motorbike-taxi fleet.Electrum kickstarted the business by launching 350 e-motorcycles from different brands during its pilot phase,such as Gogoro and Gesits.By 2023,Electrum has launched two e-motorcycle models and more than 25 battery swapping stations.Along with transport sector decarbonisation,driver comfort is one of the key benefits that is highlighted by the company,as the reduced vibration from e-motorcycles significantly decreases drivers fatigue levels.Further information regarding this case study is provided in Annexe 6.ASEAN Guidelines on Light Electric Vehicles 27 Stage 3 Identifying Challenges and Opportunities Box 7 Ampersand:E-Moto Taxi,Rwanda Photo Source:Afrik21 Ampersand is one of the e-moto taxis and battery-swapping network pioneers in East Africa.Starting with around 20 e-motorcycles in 2019,Ampersands fleet significantly grew to 1,000 e-motorcycles in 2023.Ampersand batteries and its swapping network are designed to cater to the e-moto taxi drivers needs,notably with their extensive driving range(around 150 km daily)and limited downtime.Battery swapping system also increases the affordability of e-moto taxis,by disassociating the ownership of the vehicles and the batteries.This enables e-moto taxi drivers to buy,lease,or rent the e-motorcycle with a considerably lower upfront cost.Further information regarding this case study is provided in Annexe 6.Box 8 MuvMi:Tuk-Tuk Electrification,Thailand Photo Source:Wuppertal Institute Tuk Tuk is a 3W paratransit that has been operating in Thailand since the 1960s and is mostly powered by gasoline or LPG.MuvMi,a Bangkok-based start-up,has been developing and operating the Tuk Tuk on-demand ridesharing service that is 100%electric,safe,affordable,and environmentally friendly.MuvMi develops both the Tuk Tuk electrification and its supporting systems such as the ridesharing system,booking apps,and charging infrastructure.As of 2023,MuvMi already served more than 6 million passengers,supported by more than 500 EVs and reduced more than 1,400 tons CO2e15.In 2023,MuvMi operates in 12 different zones in Bangkok in more than 2,500 hop points,focusing on short-distance trips with up to six passengers per vehicle.Passengers can easily book a space in the vehicle through its apps,and the system will arrange the pooling system,allowing passengers with similar travel directions to share the vehicle and lower the fare.Strengths Weaknesses Lower operational costs compared to ICE,particularly for vehicles with high daily mileage.Lower vibration and noise enhance driver comfort,reducing fatigue during long driving shifts.No significant changes in user behaviour when switching from its ICE counterparts.Zero tailpipe emissions and reduced noise Higher upfront capital expenditure requirements as compared to ICE equivalents for vehicle owners(drivers/operators).Limited range per charge and potentially resulting in range anxiety,particularly for vehicles with unpredictable daily routes.Opportunities Threats ASEAN Guidelines on Light Electric Vehicles 28 Stage 3 Identifying Challenges and Opportunities Electrifying the entire fleet of a business entity simplifies the electrification process compared to electrifying personal vehicles.Commercial fleet operators tend to focus on the total cost of ownership which mitigates the impact of higher upfront purchase costs of e-vehicles.The electrification of vehicles that have high daily mileage has a greater potential for reducing emissions compared to those with lower daily mileage.Availability of battery swapping and fast charging infrastructure is still limited.Home charging equipment may not be sufficient in certain cases.Limited incentive availability for commercial purposes.Repairing LEVs may take longer than ICE vehicles due to parts availability,which could disrupt commercial activity.Table 4 SWOT Analysis of the Use of LEVs for Ride-Hailing and Paratransit Use Cass Shared Vehicle Services Suitable vehicles:E-kick scooters,e-bikes,e-mopeds(short-distance)and e-motorcycles,e-light quadricycles,e-quadricycles(medium-distance).Daily mileage:Medium Charging:Battery swapping,slow charging,fast charging.In some cases,service operators are responsible for charging the vehicles Potential elements of a vision:Short-to mid-term Encourage the introduction of shared micro-vehicles in AMS cities to provide access to innovative micro-mobility to the population.Accompany the emergence of shared micro-vehicles with a clear legal environment.Mid-to long-term Integration of shared micro-mobility with collective transport system as first-and last-mile connection.EVs are well suited for the sharing economy,as they are easier to maintain than conventional fuel vehicles and have lower fuel costs.Being used by many people,higher utilization rates and lower operational costs of those vehicles balance out the higher upfront cost of an EV sooner than for privately owned vehicles.Shared micro vehicles,particularly e-bikes,can also encourage people to use more active mobility.Bicycles have been a common and broadly accepted means of transport in many ASEAN cities since a few decades ago,but have been replaced mostly with motorised ICE 2Ws in recent times.Modern e-bikes can convey an improved image of cycling as a sophisticated,convenient and modern means of transport with increased range.Providing e-bikes as shared mobility solutions can make them affordable and accessible.Shared vehicles offer on-demand access through rental or peer-to-peer borrowing,with options for free-floating or docked locations16.It is available for a variety of vehicles,from micro-mobility devices to minivans or quadricycles.Shared vehicle services are particularly beneficial when integrated with Bus Rapid Transit(BRT)and other public transportation systems,serving as first-and last-mile connections,to expand the catchment area of the public transportation network.This is especially relevant for smaller and slower LEVs,such as e-kick scooters,e-bikes,and e-mopeds,which can improve accessibility to designated areas,such as campuses,recreational parks,and low-emission zones.Faster and larger LEVs(e.g.,e-light quadricycles,e-quadricycles)could also be used as rental vehicles and contract carriages for medium-and long-distance travel,for both passengers and freight.ASEAN Guidelines on Light Electric Vehicles 29 Stage 3 Identifying Challenges and Opportunities Box 10 Hamburger Hochbahn AG:E-Scooter and Metro Stations Integration,Germany Photo Source:SOLUTIONSplus To increase the metro trains first-and last-mile connectivity and expand the public transportation network,Hamburgs metro train operator(HOCHBAHN)collaborates with TIER Mobility in providing e-kick scooters at the metro stations.During the pilot phase,four designated e-kick scooter parking spaces were provided adjacent to the metro stations that are located on the outskirts of the city.Simultaneously,incentives such as free unlock and free minutes were given to eligible users.Integrating e-kick scooters with public transportation was crucial in enhancing users intermodality.The city of Hamburg continues to scale up this project approach,building up to 100 new e-kick scooter parking spaces by 2025.Further information regarding this case study is provided in Annexe 6 Strengths Weaknesses Provide the same level of flexibility as shared-vehicle services,but with greater power(compared to non-motorised shared vehicles)or no emissions(compared to ICE shared-vehicles).Reduce the cost of EV ownership.High upfront capital expenditure requirements and operational costs for service operators.Limited range and potentially resulting in range anxiety,particularly for users with limited experience of using LEVs.Opportunities Threats Box 9 Beam:E-Kick Scooter and E-Bike Sharing Service in Indonesia,Malaysia,and Thailand Photo Source:Beam Beam started vehicle-sharing in 2018,starting with e-kick scooters and expanding to e-bikes and Southeast Asia,particularly Indonesia,Malaysia,and Thailand17,18.In Malaysia,Beam operates e-kick scooters in 8 cities with over 5,500 fleets across the country19.Beam collaborated with the city councils in Malaysia,such as in Shah Alam and Petaling Jaya,to decarbonise transport and provide first-and last-mile solutions to the neighbourhood18.In Indonesia,Beam operates e-kick scooters and e-bikes with a monthly subscription-based model20.In Thailand,Beam provides e-kick scooters to increase accessibility in Chulalongkorn University,Bangkok and the tourism area in Phuket18.ASEAN Guidelines on Light Electric Vehicles 30 Stage 3 Identifying Challenges and Opportunities Improved urban access in low-emission zones Potential collaboration with local governments and public transit operators to expand the service.Additional space for charging infrastructure or parking may be required.Batteries from misplaced vehicles could harm the environment.Lack of affordable high-quality LEVs,particularly the slow-speed ones.Limited incentive availability for commercial purposes.Regulatory uncertainty,as some LEV types are not allowed in several AMS countries.Table 5 SWOT Analysis of the Use of LEVs for Shared Vehicle Service Use Case Urban Logistics Suitable vehicles:E-cargo bikes,e-mopeds,e-auto rickshaws,e-motorcycles,e-motorcycles with sidecar,e-motorised tricycles,e-light quadricycles and e-quadricycles.Daily mileage:Low to medium Charging:Battery swapping,fast charging,overnight slow charging Potential elements of a vision:Short-to mid-term Electrification of existing cargo-vehicle fleets.Avoid the proliferation of cargo-vans for last-mile delivery(N1 and N2)and define zero-emission freight zones.Mid-to long-term Diffusion of innovative urban logistic concepts:setting up a network of local micro-depots with charging infrastructure and promoting the use of innovative small vehicles for last-mile delivery.Parcel and local delivery services have a significant impact on traffic patterns,especially in urban areas.The increasing demand for on-time deliveries requires flexible and small-scale urban logistics solutions,especially for last-mile and on-demand deliveries.While heavy-duty vehicles are used for long-distance transport,electric vehicles are particularly suited to urban deliveries.This includes both the last mile of long-distance logistics and local deliveries.Last-mile delivery Last-mile delivery refers to the granular distribution of shipments,such as those from online orders to individual homes21.This process begins at a depot and ends at the customers chosen location.Innovative concepts for urban logistics include the creation of micro-hubs in inner cities.The hubs can be operated by individual logistic companies or be used by several companies in parallel.Last-mile delivery,which is often the source of urban road congestion,will be covered by smaller electric freight vehicles,such as 3-and 4-wheelers,both pedal-powered and supported by an electric motor,or fully electric.Logistic companies,both private and state-owned,have great leverage to directly electrify their fleets.Several countries in the AMS region are also adopting LEVs specifically as a flexible last-mile delivery option for smaller goods.For example,SingPost,the national postal service provider in Singapore,is piloting to replace its current fleet of combustion vehicles with EVs,including E3Ws,e-motorcycles and e-vans23.Similarly,parcel delivery services in Malaysia,such as Post Malaysia and DHL,have also adopted electric motorcycles for last-mile operations.ASEAN Guidelines on Light Electric Vehicles 31 Stage 3 Identifying Challenges and Opportunities Delivery Platforms On a smaller scale,on-demand delivery connects customers directly with suppliers via drivers through a platform.The final leg of the delivery is often completed by independent drivers or sub-contractors24.The rise of on-demand delivery platforms has also led to an increase in the use of LEVs for urban logistics.In Viet Nam,GoJek has partnered with Dat Bike to deploy e-motorcycles for food and delivery services25.Meanwhile,Foodpanda,a Singapore-based food delivery giant,has partnered with Cycle&Carriage and Gogoro to adopt e-scooters for its last-mile delivery26.Box 12 SingPost:Delivery Fleet Integration,Singapore Photo Source:SingPost Singapore Post(SingPost)became the first national postal service provider in Asia-Pacific to commit to a 100%electric delivery fleet by deploying E3W and E-Vans for their postal services by 202623.SingPost is planning to replace more than 700 ICE motorcycles and 140 ICE vans with electric ones by 2026.In 2023,SingPost launched a three-month trial for e-motorcycle usage for delivery,partnering with MO Batteries,a battery swapping provider company also based in Singapore28.The trial assessed the charging convenience,ease of use,maintainability,and energy efficiency of the e-motorcycles.MO Batteries offers battery swapping service and centralised charging facilities,enabling delivery of charged batteries to the fleet operators hubs and eliminating the need for fleet operators to build or maintain charging infrastructure28.Box 13 Zero-Emission Freight Zones in Dutch Cities Box 11 E-Cargo Bikes Pilot Project,Ecuador Photo Source:SOLUTIONSplus In 2020,Quitos Climate Action Plan established its Historic Centre of Quito(HCQ)as a zero-emission area22,limiting the usage of ICE vehicles for passengers and freight.To ease the movement of goods within HCQs commercial area,the E-Cargo Bikes pilot project was launched in 2022.These E-Cargo Bikes are designed to cater to different needs of different user groups,such as market deliveries,businesses moving their goods from their storage to their store at HCQ,couriers and postal services,and waste collection services.These users were previously using ICE cars/motorcycles and/or pushcarts.Along with decreased emissions,this shift also shows an increase in efficiency and potentially increases the users income.Further information regarding this case study is provided in Annexe 6 ASEAN Guidelines on Light Electric Vehicles 32 Stage 3 Identifying Challenges and Opportunities Cities in the Netherlands are subsequently introducing zero-emission freight zones.28 Dutch cities have announced to gradually ban combustion vehicles for urban logistic purposes.The Hague27,for example,plans to restrict access to its city centre to locally emission-free vehicles by 2030.Strengths Weaknesses Lower operational costs compared to ICE,particularly for vehicles with high daily mileage.Lower vibration&noise enhance driver comfort,reducing fatigue during long driving shifts.Zero tailpipe emissions and reduced noise.Higher upfront capital expenditure requirements compared to ICE equivalents for vehicle owners(drivers/operators).Limited range and potentially resulted in range anxiety,particularly for vehicles with unpredictable daily routes.Opportunities Threats Box 14 LEV Fleet Operators Fleet electrification enables the opportunities to further decarbonise commercial services.Potential use-cases for fleet operators include ride-hailing services,paratransit services,shared vehicle services,and urban logistics.Several established companies in the AMS region have been progressively transitioning their ICE fleets towards EVs.This includes GoJek and Grab,both providers of ride-hailing services,and SingPost,for urban logistics services.Meanwhile,some other businesses are focusing on the development of LEVs,solely operating electric fleets from the start.The companies include MuvMi(paratransit and ride-sharing services)and Beam(vehicle-sharing service).Targeting fleets,rather than individuals,opens a more efficient approach to decarbonising transport.Transitioning entire fleets involves major stakeholders,streamlining the transition for a much larger number of light vehicle electrifications at a time.In general,commercial use-cases also have relatively higher daily mileage compared to personal use,increasing the carbon reduction potential of electric vehicles.A large-scale transition also opens up opportunities for financial support through various financing schemes,such as public-private partnerships,government incentives,and manufacturer rebates.As electric vehicles tend to have lower operational costs per kilometre than their ICE counterparts,they are particularly suited to high-use commercial applications.Still,some issues,particularly those about the characteristics of commercial service fleets,have emerged as significant barriers to the large-scale electrification of fleets.In a survey conducted among LEV fleet operators,the lack of charging infrastructure,notably in rural areas and along overland routes,was identified as the main challenge in increasing LEV uptake for fleet operators.Other main challenges pertain to economic barriers,such as high upfront costs for vehicles and infrastructure,as well as inadequate fiscal incentives.Other challenges identified include the insufficient range of LEVs,which may be crucial for vehicles with high daily mileage.ASEAN Guidelines on Light Electric Vehicles 33 Stage 3 Identifying Challenges and Opportunities Electrifying the entire fleet of a business entity simplifies the electrification process compared to electrifying personal vehicles.Improved urban access in low-emission zones.Introducing new vehicle types(E3Ws and light E4Ws)to cater for freight capacity larger than motorcycles but less than vans or cars.Opportunity to use flexible,small-scale solutions,including e-cargo bikes Commercial fleet operators tend to focus on the total cost of ownership which mitigates the impact of higher upfront purchase costs of e-vehicles.Potential collaboration with delivery operators in financing fleet electrification.The electrification of vehicle fleets that have high daily mileage has a greater potential for reducing emissions compared to those with lower daily mileage.Utilising delivery route optimisation software in tackling limited range and speed.Battery swapping and fast charging infrastructure are still limited.Home charging equipment may not be sufficient in certain cases.Limited incentive availability for commercial purposes.Regulatory uncertainty,as some LEV types are not allowed in several AMS countries.Repairing LEVs may take longer than ICE vehicles due to parts availability,which could disrupt commercial activity.Table 6 SWOT Analysis of the Use of LEVs for Urban Logistics Use CaseBusinesses and Services Related to LEV in AMS Domestic Manufacturing of Vehicles and Components The LEV manufacturing industry in AMS is experiencing a significant expansion.Currently(by 2024),at least 63 LEV models are being produced by 17 companies across the region29.The leading manufacturers in this sector include Viar and Rakata(Indonesia),Treelektrik(Malaysia),BEMAC Electric(Philippines),Oyika(Singapore),Edison Motors(Thailand),as well as DIBAO and VinFast(Viet Nam).Mopeds and motorcycles account for the majority of production,with a limited number of E3W models.Several AMS countries are also significantly involved in the EV supply chain,encompassing everything from nickel mining and smelting to EV battery and component production,and vehicle assembly30.In addition,local manufacturers are also looking into prospects of retrofitting ICE mopeds and motorcycles to EVs,removing the internal combustion drive train and replacing it with an electric drive train and batteries,based on the desired vehicle performance.The recommended age for retrofitting for an ICE moped is 5 to 7 years,and between 6 to 8 years for ICE motorcycles,depending on the use intenstiy31.The 2022 ASEAN investment report noted that the electric vehicles sector was one of the main attractors of(foreign direct)investment activities in the ASEAN region32.The shift from combustion engines to e-vehicles forms a window of opportunity to challenge traditional vehicle producers(OEMs)and to set up EV value chains,as the production requires fewer parts than ICEs.Examples of new market entrances comprise Gojek(Indonesia)which started as a ride-hailing platform and turned into a technology company,including collaboration in a joint venture in the manufacturing of E2W and charging solutions.Moreover,EV battery manufacturing is also reported to contribute significantly to foreign direct investment in the region,especially in Indonesia,Malaysia and Thailand32.ASEAN Guidelines on Light Electric Vehicles 34 Stage 3 Identifying Challenges and Opportunities Figure 7 Share of Imported and Locally-Produced E-Mopeds,E-Three Wheel Mopeds,E-Motorcycle,and E-Powered Tricycle in AMS Data Source:UNEP29 Figure 8 Share of Available E-Mopeds,E-Three Wheel Mopeds,E-Motorcycle,and E-Powered Tricycle in AMS by Manufacturing Country Data Source:UNEP29 Box 15 E-Quad Pilot Project,Philippines Photo Source:SOLUTIONSplus A locally designed,manufactured,and assembled E-Quad was launched in Pasig,Philippines,aiming to cater to multi-purpose uses for both passengers and freight.This heavy quadricycle(L7)accommodates up to three people and is equipped with smart sensors and swappable batteries.The E-Quad was designed with a focus on flexibility,to make it easily adjustable to the needs of different users.The vehicle is owned by the government and is part of a vehicle-sharing system,which is relatively new in the Philippines.Supported by a booking app,the vehicle can be utilised by different governmental offices and employees.Further information regarding this case study is provided in Annexe 6 There are various advantages d from supporting local manufacturers of LEVs.A thriving local EV industry injects money into the community,boosting the local economy and increasing tax revenue.This growth creates new jobs,while also fostering innovation to reduce production costs and achieve economies of scale,ultimately making LEVs more affordable for consumers.Additionally,local manufacturing reduces the carbon footprint associated with shipping finished vehicles from overseas,further contributing to environmental goals.Most importantly,local manufacturers are in a position to design LEVs that are specifically suited to the unique characteristics and travel behaviours of a city,thereby ensuring a product that truly meets the needs of the community.ASEAN Guidelines on Light Electric Vehicles 35 Stage 3 Identifying Challenges and Opportunities Figure 9 Main Barriers for LEV Production in Southeast Asia Data source:Questionnaire on Private Sector Related to LEV Businesses and Services Nevertheless,this industry also confronts some issues that require immediate attention and governmental assistance.A survey of LEV OEM and component manufacturers in AMS(see Figure 9)revealed that the primary obstacles to LEV production in the region are regulatory instruments,production processes,market situations,production costs,and product design and development.26%of respondents identified regulatory instruments as a significant challenge,encompassing incentives such as tax and subsidies,as well as regulatory uncertainty.Furthermore,26%of respondents identified production process challenges,including product quality and component availability.The survey results also highlighted other issues related to the LEV market situation,particularly the impact of foreign competitors and product image,high production costs due to component pricing,and the lack of product fit-for-purpose.The high production costs of LEVs are driven by a lack of mass production and expensive components,which in turn result in inflated retail prices.Additionally,the scarcity of local producers hinders economies of scale.Securing financing for LEVs is another hurdle.Strict bank loan mechanisms often make it difficult for LEV businesses to secure funding.For example,some banks refuse loans for LEVs without batteries,while others impose high interest rates on loans for emerging technologies like LEVs.In addition,batteries remain the most expensive component of LEVs.While technical innovations will increase battery capacity and improve the performance of LEVs,the battery will remain the costliest part of the vehicle.Business models such as battery leasing or BaaS that provide swappable batteries may reduce the price of LEVs if batteries are not purchased together with the vehicle.However,the high cost of batteries may require a significant amount of upfront capital to start BaaS schemes.ASEAN Guidelines on Light Electric Vehicles 36 Stage 3 Identifying Challenges and Opportunities Consequently,business entities with limited financial resources are typically reluctant to invest in LEVs due to this challenge.Strengths Weaknesses Strong domestic market for motorised light vehicles.Limitations in vehicle classifications lead to a lack of certainty over whether vehicles are allowed for use.Higher upfront purchase costs for LEVs compared to ICE counterparts Subsidies for fossil fuels and high surcharges on electricity may distort the overall cost competitiveness of LEVs on a total cost of ownership basis.Opportunities Threats New technology facilitates market entries.Technological maturity may help to bring down the prices of parts of LEVs.The lack of fit-for-purpose vehicles may generate niche markets for local vehicle producers.Persisting reservations from individual customers,commercial,and public procurers.Table 7 SWOT Analysis of the OEM and Component Manufacturers BusinessOperation of Charging Infrastructure and Battery-as-a-Service(BaaS)Delivering energy for vehicle propulsion can be a profitable business proposition.Possible operating models for an e-vehicle charging network in AMS will depend on the specific national context.These may include a variety of arrangements,including purely private companies,public-private partnerships,state-owned infrastructure or a combination of these.In any case,the development of vehicle charging networks will require a supply-side planning and regulatory strategy.A purely demand-driven approach may result in investment being concentrated in regions with high demand,while areas with low penetration of EVs,such as rural areas and the outskirts of agglomerations,may remain underserved.Currently,the charging infrastructure for LEVs in ASEAN is not as developed as for larger EVs,and far less than for petrol,where there is a extensive supply infrastructure.This creates range anxiety for potential buyers,who worry about running out of power and difficulty finding charging stations.Even within countries with well-established networks,a significant challenge persists:charging stations are predominantly concentrated in city centres,leaving drivers venturing outside urban areas with limited options.This lack of infrastructure on the periphery can act as a significant barrier to long-distance trips and discourage wider LEV adoption.Box 16 Stallions:Domestic E-Motorcycle Manufacturer,Thailand Source:Stallions Stallions started their business as an ICE motorcycle manufacturer and entered the E2W production business for the last couple of years.The types of vehicles that are offered by Stallions range from scooters to imported off-road bikes.In ensuring a smooth customer experience,Stallions partnered with battery-swapping services such as Swap and Go and EGAT.Stallions also partners with local auto shops in running its aftersales and maintenance services,as well as providing EV-specific training for the mechanics.Further information regarding this case study is provided in Annexe 6.ASEAN Guidelines on Light Electric Vehicles 37 Stage 3 Identifying Challenges and Opportunities Energy security and grid stability is a precondition for the acceptance of e-mobility.Energy outages lead to unproductive downtimes of vehicles.While expert interviews mentioned that the grid is relatively stable in some AMS countries(e.g.,Malaysia,Thailand,Philippines),they also stated that power outages do occur in other AMS countries more often,particularly in rural areas.According to the 2023 World Bank study33,power outages are relatively common in Myanmar,Cambodia,and Lao PDR.An alternative option to ensure the operation of light vehicles with minimum downtimes is battery swapping.Currently,battery swapping stations are only available in Indonesia,Malaysia,Philippines,Thailand,Singapore,and Viet Nam.Moreover,standards to facilitate battery swapping are still very limited in AMS,and only available in Myanmar,Thailand,and Singapore,which is crucial for battery-swapping operators,manufacturers,and consumers(see Table 12).However,as setting up a dense network of fast charging stations is expensive,infrastructure investments and support programmes should be well targeted on high-use vehicles such as passenger transport,with fast charging at waiting areas.Battery swapping might be a good fit,especially for cities where scooters and motorised light vehicles dominate vehicle fleets.These smaller vehicles have batteries that are easy to handle by hand,letting people get back on the road faster than waiting for a full charge.The availability and reliability of public charging infrastructure and battery-swapping services are of pivotal importance in accelerating the large-scale transition to LEV.LEV-compatible public charging infrastructure is available in most AMS,although to varying degrees.There are approximately 2,200 charging stations across Thailand,some of which are specifically designed for LEVs.In the Philippines,Cambodia and Lao PDR,there are 95,36 and 34 public charging stations,respectively.In AMS,charging operators include TNB and Gentari(Malaysia)VinFast and EVIDA(Viet Nam).As conventional cable charging requires time and space for parking to recharge a depleted battery,battery swapping services(BSS)can provide a fast and practical solution for rapidly recharging LEV batteries.Battery swapping services for LEVs are available in several AMS,including Swap&Go(Thailand),VinFast(Viet Nam),Gogoro(Singapore),and Swap.ID and Oyika(Indonesia),and BlueShark,Oyika,and ChargeEV(Malaysia).Box 17 Trans-European Transport Network and Alternative Fuels Infrastructure Regulation The Trans-European Transport Network(TEN-T)aims at facilitating long-distance and cross-border mobility in the European Union.To support the shift towards e-mobility,ensuring adequate charging infrastructure for electric vehicles on this network becomes crucial.While the TEN-T Directive itself doesnt directly mandate charging station installation,it plays a vital role in setting the stage for a robust EV charging network across Europe.Currently,Europe faces a significant charging infrastructure gap,with disparities between member states and a concentration of charging points in urban areas.The TEN-T framework provides a strategic platform to address this by promoting the development of charging facilities along motorways and harmonized standards for charging points across the network.This ensures compatibility with various EV models and facilitates seamless charging experiences for users travelling long distances.While the TEN-T Directive lays the groundwork,the specific regulations for charging infrastructure come from the Alternative Fuels Infrastructure Regulation(AFIR).This regulation sets mandatory targets for member states,requiring a minimum number of charging points at regular intervals along the TEN-T core network by 2025.These targets specifically address the density of the charging network.It foresees the provision of fast chargers(min.150kW)at least every 60km for light-duty vehicles,and high-power charging stations for heavy-duty vehicles(min.350 kW)every 60km in the core network and every 100 km in the broader network.The implementation of a robust and reliant charging infrastructure and battery-swapping network offers numerous advantages to LEV users.These include the ability to address concerns related to range anxiety,a significant issue for those undertaking long-distance journeys or utilising LEVs for commercial purposes.With the availability of rapid and convenient battery-swapping stations,users ASEAN Guidelines on Light Electric Vehicles 38 Stage 3 Identifying Challenges and Opportunities can extend their journeys with confidence.Furthermore,this infrastructure is designed to cater to personal LEV owners who lack home charging capabilities,ensuring they have reliable power options.The establishment of a standardised network of stations and batteries can facilitate the development and adoption of industry standards,which in turn will lead to a more convenient LEV experience.In addition,depending on the ownership model,battery swapping can also reduce the high initial cost of LEVs.By maintaining and operating large quantities of batteries,battery swapping services can potentially ease the process of battery repurposing and recycling.Charging points can be located in private spaces,such as private garages and parking spaces,semi-public,i.e.,accessible for broader user groups but located on private property,or public.Table 8 presents an overview of those options.Private Charging Semi-Public Charging Public Charging Accessibility Restricted to the owner of the property Limited group(customers,employees,tenants,etc.)Not restricted Typical Location Home Workplaces,shopping centres,apartment blocks Public parking,curb side,highways Control and Operation Owner of property Business and property owner;charging network provider Public authority,Charging network provider Charging Mode Mode 1(direct connection)Mode 2(AC,in-cable control box)or 3(AC Wallbox)Mode 2(AC)or 3(DC Fast Charging)Mode 2(AC)or 3(DC Fast Charging)Table 8 Charging Types,Use Cases,and Main Characteristics The lack of interoperability between different vehicles presents a hurdle for charging stations and battery-swapping services,as different models may require different systems.In several AMS,charging stations and battery standards are available,but enforcement of these standards is challenging.Additionally,the high upfront costs of developing and providing these infrastructure and services,whether installing charging stations or setting up battery swapping networks,pose a significant financial barrier.Battery Interoperability Proprietary standards in charging connectors,battery types and charging protocols limit the interoperability between different LEV models and components.This lack of standardisation creates uncertainty regarding technological development,future compatibility with charging and vehicle standards,and the residual value of used vehicles.In addition,in most AMS,battery swapping-related standards are not mandatory or non-existent in some countries(see Table 14).The debate on vehicle battery standardisation is controversial:While too strict standards may discourage future technological innovations,unified specifications could facilitate the development of inter-operational charging networks,thereby accelerating the adoption of electric vehicles.Standardised batteries would be the key step towards a functional swapping system,potentially lowering the initial purchase cost of electric LEVs.This benefit would be particularly helpful to smaller manufacturers who currently struggle to compete with the bulk discounts that large companies receive on non-standard batteries.On a positive note,Thailand is currently working on a national battery swapping platform for electric motorcycles for standardised swappable batteries to be used across many operators34.Range anxiety is a crucial issue for high-kilometre-travelled users with inconsistent travel demand,such as ride-hailing and paratransit.This issue is exacerbated by the scarcity of charging and swapping infrastructure.Slow AC charging might not be convenient for medium to high-mileage uses and commercial applications.Reliable fast-charging infrastructure is required for high-demand use LEVs to limit unproductive vehicle downtimes(e.g.,E-Trikes in the Philippines).This can take the form of opportunity charging along the routes and at queuing stations,allowing drivers to re-charge their vehicles during waiting ASEAN Guidelines on Light Electric Vehicles 39 Stage 3 Identifying Challenges and Opportunities times.Recharging a 15kWh battery from 10%to 80pacity using a 50kW DC charger takes approximately 15 minutes,compared to roughly 1 hour on AC.Promoting LEVs for public transport purposes requires the installation of publicly accessible fast-charging infrastructure and the equipment of LEVs with DC fast-charging capabilities to benefit from opportunity charging.This includes the deployment of a standardized charging interface to ensure compatibility between vehicles and charging stations,and a convenient payment system to allow drivers to pay for charging easily.Box 18 PLN:Provision of Public Charging Infrastructure and Battery Swapping Station,Indonesia Photo Source:PLN PLN is an Indonesian state-owned electricity company which contributes to providing different types of charging and battery-swapping infrastructure.The electricity company offers three types of charging solutions across the country:SPLU:general public slow-charging infrastructure targeting E2W and small street vendors.SPKLU:public charging infrastructure targeted for EVs,specifically cars.Charging speed ranges from medium,fast,to ultra-fast charging35.SPBKLU:battery swapping services.It is reported that in Jakarta alone,PLN has supported 3.441 SPLU and 245 SPBKLU36.Box 19 Swap&Go:Battery Swapping Service,Thailand Photo Source:Wuppertal Institute Swap&Go is a Bangkok-based battery-swapping service operator,aiming to provide cleaner technology solutions for 2W in Thailand.The company was launched in 2020 and reach around 30 swapping stations across Bangkok in 2024.Aside from running the daily operation of battery swapping service,Swap&Go is also developing its battery technology and planning to manufacture the batteries themselves in the future.In expanding its network,Swap&Go is also partnering with other businesses,such as on-demand delivery riders through Grab.Further information regarding this case study is provided in Annexe 6.ASEAN Guidelines on Light Electric Vehicles 40 Stage 3 Identifying Challenges and Opportunities Box 21 Battery Swapping Station Roadmap,Indonesia Indonesia has established a roadmap for battery swapping stations(SPBKLU),indicating the targeted number and required investments until 2030.The designated locations for the battery swapping stations include shopping centres,malls,office buildings,gas stations,and apartments.The roadmap also defines targets for the installation of battery swapping stations,with an increase from 4,000 in 2020 to 22,500 in 2035.2020 2025 2030 2035 Battery Swapping Stations 4.000 10.000 15.625 22.500 E-Motorcycle(thousand)800 2.000 3.125 4.500 Investment(EUR mil)20 51 77 112 Table 9 Indonesias Battery Swapping Station Roadmap Data Source:Ministry of Energy and Mineral Resources of Indonesia37 Strengths Weaknesses Emerging market.Can provide use-case-specific solutions,including decentralised solutions in rural areas Requires upgrades to the electricity grid.An initial period of non-profitability until a critical mass of e-vehicles is on the road is reached Lack of unified battery standards,proprietary battery design Opportunities Threats The emergence of super-apps may facilitate unified payment.Creation of new jobs Lack of investment capital due to limited public and private financing.Insufficiency or inadequacy of electricity grids.Table 10 SWOT Analysis of Charging Infrastructure and Battery Swapping Services Vehicle and Battery Recycling The transition to LEVs raises new concerns due to the specific material requirements of these vehicles,including increased dependence on imported processed materials and negative environmental impacts from raw material extraction and disposal.Life cycle assessments show that a significant part of the environmental impact of LEVs comes from the mining and processing of raw materials,as well as the end-of-life disposal or recycling of batteries.Battery and vehicle recycling offers a potential solution by closing material loops and reducing dependence on raw materials,creating a more stable supply chain.This technology,however,remains nascent in the region despite the growing adoption of LEVs.Box 20 Gogoro:Battery Swapping Service,Taiwan Photo Source:Gogoro Gogoro is a Taiwan-based company that provides an e-mobility solutions ecosystem,notably battery-swapping services for e-mopeds.Claim as the worlds largest battery-swapping network,Gogoro started its services in Taiwan back in 2015 and has now expanded to nine different countries including Indonesia,the Philippines,and Singapore38.Aside from battery swapping,the services that are provided by Gogoro include powering AIoT hardware,a virtual power plant for the grid,and an AI-powered smart system related to battery swapping and smart city infrastructure.ASEAN Guidelines on Light Electric Vehicles 41 Stage 3 Identifying Challenges and Opportunities Box 22 Statement from ASEAN Circular Economy Framework“In preparing the region to be resilient and future-ready,ASEAN is committed to building a more circular economy by transforming the production and consumption pattern of its community to minimise waste.”The circular economy framework for ASEAN Economic Community39 established the long-term vision for the circular economy with three main strategic goals:resilient economy,resource efficiency,and sustainable growth.The key strategic priorities include standard harmonisation and efficient use of energy and resources,emphasizing the supply chain and production processes.The vast majority of the current LEV fleet uses lead batteries as their purchase is relatively cheap.These batteries,however,have a rather short lifespan of approximately 2 to 2.5 years and have to be replaced thereafter40.Thailand and Singapore are the few AMS countries with battery recycling businesses,such as Bangpoo Environmental Complex Co.in Thailand and TES in Singapore.South Korean e-mobility company,Verywords,also plan to initiate battery and vehicle recycling services in Cambodia41.Meanwhile,the state of vehicle recycling in AMS varies widely.Malaysia,for example,has a regulated system along with government support and incentives,whereas,in Indonesia and Thailand,this sector is largely unregulated and employs manual labour-intensive processes42.Nevertheless,the field of vehicle and battery recycling is also confronted with several challenges.The currently limited volume of retired batteries makes recycling an unprofitable venture for businesses,and the collection system for end-of-life batteries is in the early stages of development.Furthermore,existing lead-acid battery recycling techniques,such as pyrometallurgy,are energy-intensive and contribute to environmental pollution41.Lithium-ion batteries,on the other hand,require more advanced processing than lead-acid batteries,particularly concerning technical expertise and labour skills41.Additionally,the absence of clear standards for the recyclability of lithium-ion batteries presents a significant obstacle to the provision of recycling services.Strengths Weaknesses Complementarity with domestic e-vehicle manufacturing Strong and increasing demand in domestic and global markets for recycled material Battery collection systems are at the early stages of development Limited economic feasibility and scale until a critical mass of end-of-life batteries is reached.Lack of recycling standards for batteries and vehicles Opportunities Threats Box 23 TES:Li-Ion Battery Recycling Source:The Korean Herald TES is a Singapore-based company which offers Li-Ion battery recycling service,allowing them to recover valuable materials that can be reused in the global supply chain,such as nickel,lithium,and cobalt.Their commercial battery recycling facility in Singapore is capable of handling 14 tonnes of Li-Ion batteries daily and achieving 90%recovery rates from the batteries43.Other than Singapore,TES also operates globally such as in Korea,the Netherlands,China,and Australia.ASEAN Guidelines on Light Electric Vehicles 42 Stage 3 Identifying Challenges and Opportunities Support domestic material supply chains.Creation of new jobs.Funding and financing opportunities linked to the ASEAN circular economy framework Lack of financing High costs of recycling may limit competitiveness as compared to the use of primary raw materials.Table 11 SWOT Analysis of Battery and Vehicle Recycling Businesses Standards Related to LEV in AMS Standards play a crucial-but often neglected-role in promoting and accelerating the market diffusion of innovations.Standards are usually industry-driven and ensure that different products and components from various manufacturers can work together seamlessly.This is especially important for complex innovations that involve multiple parts or systems.Internationally or regionally aligned standards reduce development costs and risks by providing a common framework for developers,allowing them to focus on innovation within a defined set of parameters.This reduces the need for creating products from scratch and lowers development costs.Standards often incorporate safety and quality considerations,ensuring that innovative products meet baseline requirements before reaching the market.This builds trust among consumers and promotes wider acceptance,including for instance proper power delivery and heat management,preventing potential safety hazards.Finally,by increasing the compatibility of products,components,and related services,standards make it easier for new players to enter the market with innovative products that work with existing systems.This fosters competition and drives further innovation.The 2023 ASEAN Leaders Declaration on Developing a Regional Electric Vehicle Ecosystem3 explicitly encourages the“harmonisation of regional standards for the electric vehicle ecosystem to strengthen the regional value chain for the electric vehicle industry,to enhance trade facilitation,as well as to ensure interoperability and seamless cross-border mobility”.Based on a survey of businesses and services related to LEV in AMS,business stakeholders consider a regional standard within Southeast Asia a critical issue.As shown in Figure 10,76%of respondents consider this issue important.Figure 10 Importance of Regional Standard Harmonisation According to LEV-Related Companies Data source:Questionnaire on Private Sector Related to LEV Businesses and Services The LEV market in the AMS is still in the initial phase,making it imperative to ensure that the LEV ecosystems are already standardised during this early stage.The development and harmonisation of LEV standards are of critical importance to ensure the interoperability of LEV-supporting ecosystems(e.g.,charging infrastructure,battery swapping station),faci
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SPECIAL FOCUS ISSUE OCTOBER 2024Robots picking and packing with precision2 SPECIAL FOCUS ISSUE Tim Culverhouse,Editorial DirectorComments?E-mail me at Rethink Robotics redefines cobots once again Cognibotics HKM1800 robot arm provides flexible,scalable pick-and-place offeringFANUC America showcases new cobot arms,software,AI,motion control at Automate 2024CapSen Robotics introduces CapSen PiC 2.0 bin-picking software with programmable AICONTENTSEDITORS NOTECOVER PHOTO:GETTY IMAGES EXECUTIVE CONTACTSSenior Vice President/Group PublisherDarrell Dal P 774-505-0089 President and CEO,Peerless MediaBrian C 508-663-1553Editorial DirectorTim C 774-777-6024 Associate EditorDonald H 508-663-1563SALESInternational Sales RepresentativeTom C 973-214-6798Midwest/Eastern Regional ManagerMichael W 508-663-1561CLIENT SERVICESDirector of Client ServicesMary Ann S 508-663-1560Director of MarketingKaren B 508-663-1550Director Content ManagementGeorge K 508-663-1555Director Online TechnologyJohn BProduction DirectorKelly J 508-663-1554Webcast Project ManagerSteve P 617-281-7125PEERLESS MEDIAPick-and-place robot armsOnRobot gets a grip on robot end-of-arm tooling with D:PloyPickNik Robotics announces launch of MoveIt Pro Release 6 robotics software platformAWL deploys IDS Ensenso 3D cameras for DHL RotterdamZivid brings 3D 2D cameras to Fizyrs new vision packs at MODEX 2024How Prime Robotics Advanced Pallet Station makes picking efficientVecna Robotics closes$100 million series C,appoints new COOPickommerce secures$3.4M investment for robotic piece-picking technologyLiberty Robotics launches AI-powered VPick and VPack systemsTompkins Robotics develops modular,scalable sortation systemsContoro Robotics,Go!Retail Group partner to enhance warehouse operationsJohnson Electric announces Solligence fast rotary actuatorPlus One launches dual-arm parcel induction system at Automate 2024Grippers,software and camerasCase picking,packaging and palletizingSortation and handlingAutomation sys-tems,including robot arms,can help reduce physical strain on employees during picking,packing and shipping processes.Grippers,motors,sensors,cameras and software enable precise sorting and placing of items and boxes.Cobot arms and autonomous mobile robots are helping logistics warehouse em-ployees complete bin,piece and case picking with efficiency.Organizations continue to tackle order fulfillment in warehouses across the globe.Robotics and automation are front and center to expedite send-ing goods from seller to consumer.Optimizing workflows that reduce downtime and bottlenecks are at the heart of this portion of the material handling lifecycle.As we approach the peak holiday season,3PL,logistics and supply chain organizations will need to be at their best to handle increased demand.In this issue,well explore new robots,systems and sensors that create the precision needed to pick and pack a variety of items.Streamline YourOperationswww.universal-Watch On-Demand:Mastering Packaging&Palletizing Cobot Solutions:KeyComponents for SuccessUtilizing cobots for packaging andpalletizing presents variousadvantages,such as heightenedproductivity,enhanced flexibility,and improved safety,all whiledelivering a swift return oninvestment.But what are the keyfactors crucial for ensuring asuccessful solution?Learn the practical steps to getstarted with cobots for packagingand palletizing and elevate yourbusiness to new heights.4 SPECIAL FOCUS ISSUE Pick-and-place robot armsWith Halloween around the corner,you might soon see ghosts,monsters and zom-bies rise from the grave to trick-or-treat at your doorstep.In the commercial robotics industry,one company also seems to have risen from the dead-although less like a zombie and more like a phoenix.Founded in 2008,Rethink Robotics was known for its Baxter and Sawyer cobots.But these collaborative robots with human-like eyes arent com-ing back to haunt warehouses this Halloween.Rethink has relaunched,rebranded and over-hauled its robot portfolio to meet the needs of manufacturing and supply chain companies,learning from over a decade and a half of experience.Relaunch and rebranding at IMTS 2024Rethink Robotics was acquired by Germany-based HAHN Automation Group in 2018,and joined the United Robotics Group in 2021.The company recently debuted its new lineup of Reacher robot arms,Ryder autonomous mobile robots(AMRs)and the Riser mobile manipulation robot(MMR)at IMTS 2024.Greg McEntyre,Rethink Robotics VP of operations,said the companys new robots have been under development since HAHN took over.“IMTS was the right timing to be able to bring our products back to the market and show everybody what weve been up to.So it was kind of purposeful to make it a surprise.”Julia Astrid Riemenschneider,Rethink Robotics VP of business development,said in response to the shortcomings of its original robots,Rethink is relaunching with respect for past market perceptions.“It was important to us that we also make a promise that we can keep,”she said.“Our prom-ise-and maybe you saw that at the IMTS show-is Better.Faster.Stronger.And that refers to the products,where we have a comprehensive portfolio,as well as to our own self commitment to that project.”A breadth of new,robust robots for different applicationsChris Harbert,Rethink Robotics business development and sales consultant,said todays company is trying to continue its original vision.“Even though there were challenges with the original products robustness,it was a company that most people wanted to see succeed,”he said.“The cobot market still seems underserved somehow.Thats really whats behind Rethink-putting in those years of devel-opment work and wanting to come back and grow into a major player again,to help democra-tize accessibility to collaborative automation.“Sawyer was a single-length,five-kilogram payload robotic arm,”Harbert added.“It just wasnt versatile enough to have a single offering.What the Rethink team has done with this new development and this new prod-Rethink Robotics redefines cobots once againCollaborative robot company rebrands,rethinks its robots to improve workflow flexibilityBY DONALD HALSINGIn comparison to its original Baxter and Sawyer cobots,Rethink Robotics had created a wider lineup of cobot arms with different reaches and load capacities.Source:Rethink R SPECIAL FOCUS ISSUE 5Pick-and-place robot armsuct line is to broadly expand the range of payloads and reaches that are available.”McEntyre said IMTS attend-ees appreciated Rethinks wide offering of different robots,as well as their robustness.“A lot of people,historically,have used collaborative robots in non-collaborative ways,”he said.“Rethinks arms have the ability to flip into an industrial mode so that youre not limited to the collaborative restrictions of speed and capacity.“These arms are built a little bit more rigorously,”he added.“So there is the ability to have this as a dual-purpose robot.If it needs to be a fixed installation for a specific purpose with higher speeds and demands,we have that capacity.”Pain points with historical cobot,MMR applicationsEven at industrial speeds and capacities,robot arms are most useful if they are placed in the best locations within a facility to maximize efficiency.“When collaborative robots first came on the scene,one of the unspoken promises was that youre not going to have mono-liths of these caged robots taking up your floor space whether youre using them or not,”Har-bert said.“But you look at most collaborative robots,and theyre on a stand or a pedestal some-where,and they dont ever move.“All of those kinds of robots have led to basically the same outcome:lower footprint with the collaborative robots com-pared to the industrial-but still the same outcome,”he added.MMRs are one option to overcome the limitations of immovable cobot arms.Riemen-schneider said United Robotics Group already provides MMRs for laboratory automation.But customers have asked,“Why should I pay for an AMR thats sitting in front of a machine while the manipulator is loading or tending this machine?”Ryder AMR can relocate Reacher arms autonomouslyRethink Robotics lineup of cobot arms and AMRs can be com-bined to form a Riser mobile manipulation platform.Because the robots are designed to be combined,Ryder AMRs can also be used to relocate Reacher arms throughout a facility.“It really comes to the benefit of the workflow where we drop the cobot,and the AMR can take off and take care of other jobs while the robot arm is charging plus taking care of its task,”Rie-menschneider said.“If we look into the calculation of the ROI,that contributes and makes the solution much more affordable.”“One AMR can do fleet man-agement for multiple production cells,”McEntyre said.Harbert added the robot arm and AMR portions of an MMR are usually bolted together and not easily separated.“Using a mobile robot and a robotic arm series that can work together and also separate and do their own jobs and then come back together-that is a really new concept,”he said.“Its difficult to set up the same robot arm in front of the same machine 24/7,because pressure on man-ufacturers these days are smaller batches and more changeovers.“Its impractical to have tech-nicians unbolt an arm and move it by hand.It just doesnt work well.Its not realistic.”Harbert added.“Now you have a mobile robot that can deliver the robot arm from line two-where it was yes-terday-to line six,where it needs to be today.And you dont have to do that manually.That can be schemed,that can be timed,that can be sequenced,and its all done within that framework of Rethink Robotics Ryder AMRs can be used to shuttle Reacher cobot arms from workcell to workcell,maximizing efficiency and ROI.Source:Rethink Robotics6 SPECIAL FOCUS ISSUE Pick-and-place robot armsyour automation system.“This is really a potential start to a new journey of apply-ing collaborative robots in the manufacturing space in a much more end-user conscientious way,”he said.The control box and power supply for each Reacher arm is independent,and not physically connected to the Ryder AMR.McEntyre said the AMRs can dock robot arm units with a precision of seven millimeters,or about a quarter of an inch.Once a Reacher is docked,it needs to recalibrate based on its new position.“When it comes to the more finite machine tending,or needing to pick things up that are smaller,more accuracy is needed,”he said.“Putting a camera at the end of our tool will realign the robot arm no matter how far off it was,and well gain that performance back.”Automated flexibility thanks to interchangeable EOATInterchangeable end-of-arm tooling(EOAT)has provided Rethinks new robot arms with operational flexibility that was lacking with its original robots.“Baxter and Sawyer had cameras embedded in the arms,”Harbert said.“There was an ease because it came with a camera.The challenge,of course,was that it wasnt always the right camera for what you wanted the robot to do.“The original Rethink had their own grippers that they designed and fabricated,”he added.“Thats fine for some applications,but there were lim-itations in terms of the connec-tivity with other equipment.At IMTS,Rethink demon-strated EOAT interchangeability using OnRobot attachments.“The versatility of using end-of-arm tooling that has some quick disconnect features is you can have a self contained vacuum pickup,or you can have a gripper,so this can be flexible wherever it needs to be deployed,”McEntyre said.Applications that can bene-fit from interchangeable EOAT include picking and packaging.“Pick and pack is not usu-ally a static workflow.Youre not packing the same stuff into the same box every hour of every day,”Harbert said.“Theres changeover of different products.Theres different kits that might be going out.Theres changes to box sizes.Theres a lot of variabil-ity in that process flow.“The versatility of connectiv-ity allows you to have arms with certain cameras for kits that need can,or having certain types of grippers if you need to do pallet-izing,versus small item packing,”he added.“Having that connec-tivity right out of the box,you can put together your own Lego toolkit,essentially,of collabora-tive robots and whatever accesso-ries you need.“This new rethink portfolio has really addressed flexibil-ity on a much broader scale-everything from connectivity,to the pairing of AMRs with collaborative robot arms,to thinking about,How do you manage a holistic workflow?”Harbert said.“The spirit of Rethink that has continued-and still is in this new relaunching-is trying to solve real world problems,not just throw a robot at a process.”The new Riser MMR from Rethink Robotics.Source:Rethink RoboticsRethink Robotics Ryder AMRs can be used to shuttle Reacher cobot arms from workcell to workcell,maxi-mizing efficiency and ROI.Source:Rethink RoboticsAD#Contact our experts and discoverthe Yaskawa difference today!yaskawa- WHETHER ITS INDUSTRIAL ROBOTICS,drives,or motion control,Yaskawas industry-leading innovations elevate your competitive edge.Join the global leaders who trust Yaskawa to navigate the future of automation,and provide comprehensive support that ensures fast,flexible operations that are always moving for you!Yaskawa America,Inc.Motoman Robotics Division|Picking Applications in Action!AUTOMATIONEXCELLENCE1 0 0 Y E A R S O F P E R F O R M A N C E A N D P R E C I S I O N8 SPECIAL FOCUS ISSUE Pick-and-place robot armsCognibotics,a Swe-den-based developer of robotics technology,makes the argument that its HKM1800 robot arm can supply the most flexible,scal-able and fastest pick-and-place offering in the warehouse and distribution environments.The robot arm system marks the fourth Cognibotics product release since the companys founding in 2013.Reach,range at heart of HKM1800 robot armCognibotics worked with indus-try experts and company partners during the last decade to develop the HKM1800 to enhance pick-and-place operations signifi-cantly,according to the company.Cognibotics also said that its new robot boasts new features,benefits and implementation strategies that are noticeably dif-ferent from other offerings in the warehouse automation market.“At Cognibotics,were dedicated to pushing the bound-aries of robotics,”said Fredrik Malmgren,CEO of Cognibotics.“Easy-to-use,high-precision robots form affordable,versatile tools that support and comple-ment human capabilities for pro-ductivity and work quality.The HKM1800 represents a signifi-cant leap forward in automation capabilities,and were excited to share our latest progress and its potential with the world.”The HKM1800 has several key features that the company says set it apart from traditional pick-and-place robots:Unmatched speed with exceptional reach:Unlike traditional industrial robots,gantry,SCARA or delta robots,the HKM1800 can achieve a pick rate of over 2000 articles per hour,making it the fastest robot currently available on the market,according to Cognibot-ics.The HKM1800 also covers a workspace of 10 meters.Versatile range:With the capability to handle items weighing up to 7.5 kilograms in various sizes thanks to a smart tool changing system,the HKM1800 can offer versatil-ity and adaptability for a wide range of applications.Innovative technology:Featuring a novelty arm system configuration based on proven industrial compo-nents,including Active Motion Stabilization,the HKM1800 can ensure smooth and reliable performance even in the most demanding warehouse environ-ments,the company said.“The HKM1800 is designed for professionals involved in warehouse operations,robotics enthusiasts and anyone interested in the future of robot automation,”said Mats Jonsson,business unit manager for material handling at Cognibotics.“Whether youre seeking to optimize your current operations or explore the latest advancements in robotics technol-ogy,the HKM1800 offers impec-cable speed,reach and range.”Cognibotics HKM1800 robot arm provides flexible,scalable pick-and-place offeringPick-and-place offering designed for efficient warehouse automationBY ROBOTICS 24/7 STAFFCognibotics HKM1800 robot arm offering for pick-and-place can pick over 2,000 items per hour.Source:C SPECIAL FOCUS ISSUE 9Pick-and-place robot armsFANUC America recently unveiled its latest lineup of robot arms,cobots,and motion control systems at Automate 2024.The trade show was held May 6-9 at the McCor-mick Place Convention Center in Chicago,Ill.“Were excited to demonstrate our cutting-edge automation solutions at Automate,”said Lou Finazzo,FANUC America VP.“We are committed to helping our customers achieve their produc-tion goals,enhance productivity,and overcome labor constraints.”CRX cobots demonstrated palletizing,kitting and weldingAutomate attendees got a chance to experience FANUCs range of CRX cobots and learn how to program them using hand-guided programming or the Tablet TP interface.A new CRX-25iA food-grade cobot demonstrated collabora-tive palletizing and depalletizing from an infeed conveyor to two pallets.Designed to operate safely in food processing facili-ties,the CRX-25iAs white epoxy coating meets the USDA Inci-dental Food Contact Require-ments.It has an IP67 washdown rating and uses NSF H1 food grade lubricant.The demonstration featured the new PalletTool 3 software,which enables operators to create and modify unit loads directly from the Tablet TP with FANUCs PalletTool Turbo software using the newly updated user interface.A CRX-10iA food-grade option cobot demonstrated pack-ing meat and cheese gift boxes.Lincoln Electrics mobile welding cart featured its Power Wave R450 robotic welding platform and a FANUC CRX-10iA.Both robots demonstrated hand-guided and tablet programming.A CRX-20iA/L used iRVision FANUC America showcases new cobot arms,software,AI,motion control at Automate 2024Food grade SCARA and cobot arms demonstrated a variety of applicationsBY ROBOTICS 24/7 STAFFFANUC America demonstrated a variety of applications with its robot and cobot arms,including food-grade variants for direct and incidental contact,at Automate 2024.Source:FANUC America Corporation10 SPECIAL FOCUS ISSUE Pick-and-place robot arms3DV to locate and pick parts of different sizes from bins and place them onto a turntable.The table rotated the parts to a FANUC R-2000iD/210FH robot equipped with a Servo Gun that simulated spot welding the parts together.A CRX-5iA cobot assembled small gears using integrated force control.Put wall,picking and palletizing demonstrationsFANUCs Power Motion i Model A Plus(PMi-AP)moved tools to random or user specified loca-tions on a put wall.A CRX-10iA picked and placed items to and from order fulfillment bins from an access point.The PMi-AP offers CNC-style motion con-trol for automated assembly and other applications,integrating through ethernet connection for communication between robots and machines.The new M-710iD/50M,combined with two iRVision 3DV/1600 machine vision sen-sors and the FANUC iPC,used the iPCs AI box detection soft-ware to locate boxes within stock carts.The robot arm depalletized boxes from one cart and utilized PalletTool to palletize them on an opposite cart.FANUC said the tall stock carts highlight the advantage provided by the M-710iD/50Ms curved arm,while its AI-driven iPC enables picking in challenging lighting conditions and for boxes that have patterns that are difficult to segment and determine edge locations.A FANUC LR Mate used an overhead-mounted 3DV/400 iRVision sensor and line tracking with iRPickTool to find,track and pick candy from moving down a conveyor into a bin.FANUC said the system high-lights the vision sensors ability to detect the 3D orientation of objects on a noisy background.SCARA robots inspected,packed and assembled cheeseburgersFANUC recently expanded its line of four-axis SCARA robots to include the SR-3iA/U ceiling mount,featuring a full 360-degree work envelope with no dead zones.In addition,FANUCs SCARA lineup also includes the SR-3iA/C and SR-6iA/C cleanroom variants.The SR-3iA/U used iRVision 3DV and iRPickTool to pick var-ious parts from a moving circular conveyor,move them to a 2D camera for inspection,then place them onto an outfeed conveyor into the appropriate pass/fail locations.A FANUC SR-12iA robot with the environmental option packed and unpacked trays of medical vials into a bin,and then picked up and transferred full bins.The SR-12iA robot with the environmental option includes white epoxy coating,bellow cov-ers,anti-rust bolts and seals,and an IP65 rating to withstand dust and liquids.An LR Mate 200iD/7LC and SR-6iA/C-both cleanroom robots-also assembled cheese-burgers.The LR Mate 200iD series of tabletop industrial robots can be installed upright or inverted.Ten models include clean room and wash proof versions,each with various wrist speeds and reaches.The SR-6iA/C SCARA features a white epoxy coating and is rated IP54,meaning it is protected against contamination from limited amounts of dust and other particles as well as water spray.The SR-6iA/C can meet ISO Class 2 to ISO Class 5 for cleanroom operation and uses NSF-H1 food-grade grease and anti-rust bolts for food handling SPECIAL FOCUS ISSUE 11Pick-and-place robot armsCapSen Robotics,a Pittsburgh-based com-pany that produces 3D machine vision and motion planning software for robotic bin-picking applica-tions,recently introduced the v2.0 release of its CapSen PiC software.The system features a new user interface(UI)and program-mable AI designed to tackle chal-lenging high-mix,low-volume bin-picking tasks.CapSen PiC CapSen Robotics introduces CapSen PiC 2.0 bin-picking software with programmable AINew UI at heart of v2.0 software released at Automate 2024BY ROBOTICS 24/7 STAFFCapSen Robotics released v2.0 of its CapSen PiC 3D machine vision and motion planning software for robotic bin-picking ap-plications.Source:CapSen Robotics12 SPECIAL FOCUS ISSUE Pick-and-place robot arms2.0 made its debut at Automate 2024 in the Pittsburgh Robotics Network booth.Motion planning through 3D visionCapSen PiC v2.0 combines 3D vision,motion planning and con-trol algorithms to provide robots the ability to locate,pick and manipulate objects from cluttered bins and shelves.The system can accurately detect 3D objects in a range of different positions and orientations,even when theyre partially occluded or in tight workspaces.The new version release comes after the company released v1.0 in May 2023.The software can provide consistent and complete con-trol of a robot,end effector and 3D cameras within a robot cell,greatly lessening the integration burden of deploying a bin-pick-ing system.In addition,CapSen PiC 2.0 features programmable AI techniques that enable high-mix,low-volume bin-picking tasks in manufacturing.“Advances in black box AI algorithms for text and image generation have garnered a great deal of press lately,with some companies exploring their use within industrial automa-tion,”said Jared Glover,CEO of CapSen Robotics.“Safety and reliability requirements in manufacturing require a more structured approach,however,so while CapSen PiC 2.0 leverages AI tools to improve its 3D vision and motion planning algorithms,it does so within a constrained framework that provides the user control and peace of mind that the robot will work exactly as programmed,every time.”Repurpose your robot in a day CapSen PiC 2.0 is a hardware-ag-nostic platform.Its advanced motion planning algorithms can help ensure collision avoidance while enabling fast and accurate parts picking,regrasping and advanced tasks such as detan-gling and assembly of shiny metal objects,such as bolts,springs and washers.To ensure that the robot oper-ates as intended with every cycle,CapSen Robotics also developed a new user-friendly UI for setup(including part teaching,config-uration and calibration),deploy-ment,running and debugging.With enhanced programmable AI capabilities and a powerful new UI,CapSen PiC 2.0 is designed for modern manufacturing and warehouse applications that require flexibility.“Automation applications today often need to quickly adapt to new or custom parts or products,and CapSen PiC 2.0 addresses this by offering an easy-to-use means to deploy accurate and reliable high-mix,low-volume pick-and-place appli-cations,”Glover said.“When the need arises,companies can repurpose their bin-picking robot to accommodate a new part or product within a day.” SPECIAL FOCUS ISSUE 13Grippers,software and camerasRobots can do lots of things.Robots can do lots of things well.But when it comes to robots and multiple applications,things can potentially hit a snag.Get a grip.OnRobot started with grippersOnRobot was founded in Odense,Denmark in 2018 after a merger of three end-of-arm tooling companies-On Robot,OptoForce and Perception Robotics.The companys mission is to“break down automation barriers and bring the benefits of robotic automation to manufac-turers of all sizes.”OnRobots history is deeply rooted in robotic grippers.But by the end of 2022,the company took a step in the software direc-tion with D:Ploy.D:Ploy represents an“auto-mated platform for building,run-ning,monitoring and re-deploy-ing collaborative applications,”according to the company.The hardware robot cell represents the integration point,or the D:Ploy brain that connects to the robot arm.The software portion of D:Ploy opens an expansive world of end-of-arm attachments for a myriad of applications.“It was important for us as a company that we didnt want to be political or dictate what type of robot that any of the users would want to use,its up to their preference,”said Kristian Hul-gard,general manager of Ameri-cas at OnRobot.“We made sure that we had a software plugin for each robot operating system.This has been a massive R&D mission for us.”D:Ploy is compatible with over a dozen different types of robot vendors,enabling end users to utilize the robot arms already at their organizations and incorporate the platform to maximize efficiency for various applications.“We are in very close coop-eration with the different robot manufacturers,”said Jesper Fugl-sig,R&D director at OnRobot.“We understand their interface with the API between our grip-pers or D:Ploy.Together with them,we develop an interface between the two systems.”Expedite deployment and redeployment timeIts one thing to quickly deploy a robot for an application such as packaging,palletizing,picking or machine tending.Its another to take the same robot and change the end-of-arm attachment for another application in a couple minutes.“We have quick change technology where you can click the existing gripper off and click the new gripper on and thats all OnRobot gets a grip on robot end-of-arm tooling with D:PloySoftware platform helps customers develop applications on the flyBY TIM CULVERHOUSED:Ploy users can switch between a variety of applications through the platform and associated end-of-arm tooling options from OnRobot,including material handling,machine tending and more.Source:OnRobot14 SPECIAL FOCUS ISSUE Grippers,software and camerasI have to do from the end-of-arm tool perspective,”Hulgard said.“The rest is D:Ploy.Its already powered on and ready to go.”In the software platform,users are able to identify the robot brand,type of gripper,geographic space of the robot cell and utilize a template for a specific type of application in a matter of minutes.OnRobot has worked closely with its robot vendor partners to streamline the end user deployment pro-cess to a couple clicks in the D:Ploy platform,regardless of the application.“The whole point of D:Ploy is that you can standardize an application,sell it and meet the demand of the market,”Hulgard said.“With the same amount of engineering hours,we can deploy 10 times as many robots as the traditional way of integrating.”Standard grippers,with customizable features“Our hardware,generally speak-ing,is standard products out of the box with customizable features,”Hulgard added.Owing to its history as a gripper developer,OnRobot has a large toolbox of various elec-tric and vacuum grippers that attach to the end of robot arms.Hulgard and Fuglsig said that most customers utilize the stan-dard,off-the-shelf grippers that OnRobot has in its arsenal,but customization is an option.“Were experts in grippers,”Hulgard said.“Based on the shape,dimensions and the payload,we give customers a suggestion and put them in contact with our partners.They can get quoted and they can buy it.When we talk about D:Ploy,it promotes creating standard solutions with off-the-shelf automation that the integrators and distributors can sell to the customer.”OnRobot grippers have been featured at the International Space Station and inside ice cream freezers,and in conjunc-tion with vision sensors and force-torque sensors,robots deployed with D:Ploy can pick,palletize and pack a lot.Future focuses on software updates,more standard hardwareAs D:Ploy approaches its sec-ond year in the marketplace,OnRobot is continuing to integrate more hardware to its database.The company is also working with its customers to discover what new applications and features they want to incor-porate into their offerings.“Our partners and end customers say to us What kind of new features do you need either for palletizing or CNC,for example,”Fuglsig said.“Theres a lot of focus on bringing down the time you need to set up the first application in D:Ploy to the next application,thats what the future is about.We really want to minimize the teaching you have to do when you have to move a robot because thats time con-suming and thats what we try to get rid of.”Hulgard agreed,emphasizing that the standard solution option from robot vendors has been on his mind for the past five years.And,he explained how the future will look with a lot more robots in the field.“IFR predicts that well see 10 times as many robots in the next five years,”Hulgard said.“How are we going to reach that number if we are not exponentially gaining more engineering hours?We have the same amount of engineers but we have to install 10 times as many robots.The only way you can do that is by minimizing the amount of time needed to install each robot.Standardized solu-tions and software like D:Ploy is addressing that issue by minimizing the amount of time and money needed to deploy a robot.” SPECIAL FOCUS ISSUE 15Grippers,software and camerasPickNik Robotics,a Colorado-based developer of advanced robotic software offerings,announced the launch of MoveIt Pro Release 6,a platform the company says is“designed for the AI era.”This latest release enables organizations to quickly tackle robotics applications that previ-ously were not possible or economically feasible with previous generation systems.PickNik says that MoveIt Pro 6 has a new high-fidelity simulation engine for digital twins,pow-erful real-time control algorithms and support for MMRs.Further funding,innovation from PickNikThe company,which received$2 million in a pre-seed investment round in October 2023,has expanded its MoveIt platform.“The robotics industry has sorely needed a robotics manipu-lation engine-the equivalent of a video game engine-to enable innovative companies to quickly apply robotics to their industries.”said Dave Coleman,founder and chief product officer at PickNik Robotics.“Out of the box,the MoveIt Pro Runtime includes real-time object identification,force control,dynamic motion planning,and multi-step process-ing.The suite of intelligent deci-sion-making algorithms opens up a vast new set of opportunities.”PickNiks customers,accord-ing to the company,are bene-fitting from rapid development of their applications,with cost savings up to 75%.“Partnering with PickNik was a strategic decision that brought not only advanced technology but also a team of dedicated experts into our development process,”said Rishab Patwari,CEO at HiveboticsBridging the gap from pre-AI to AI-driven roboticsHistorically,robotics has been constrained by limitations such as expensive programing,limited flexibility,pre-planned movements and the need for highly structured environments.These constraints resulted in robots that could only perform simple,repetitive tasks and required significant expenses in adapting workspaces to suit the robots limited capabilities.MoveIt Pro Release 6 removes these limitations,according to PickNik.The release introduces:1.Real-time object recognition:Empowering PickNik Robotics announces launch of MoveIt Pro Release 6 robotics software platformCompany describes latest release as designed for the AI eraBY ROBOTICS 24/7 STAFFUsers can see a simulation of a robotic arm in the MoveIt Pro Release 6 software platform.Source:PickNik Robotics16 SPECIAL FOCUS ISSUE Grippers,software and camerasrobots to make intelligent choices and adapt to unexpected obstacles.2.Dynamic path planning:Enabling the identification of optimal paths on the fly.3.Force Compliant Control-lers:Allowing robots to handle and interact with objects of varying sizes and weights with precision using force-sensing technology.PickNik said these advance-ments unlock a multitude of new use cases,including adaptive cleaning in commercial build-ings,food processing plants,passenger trains and airlines;agriculture harvesting,planting,and weed removal;assembly and pre-assembly operations with mixed-part selection and place-ment in manufacturing;resi-dential and commercial building construction.Key distinguishing features of MoveIt Pro Release 6In MoveIt Pro Release 6,the software also contains:1.Intelligent Runtime Decision Makinga.Facilitates complex,multi-step operationsb.Overcomes unexpected obstacles,environmental changes and error condi-tionsc.Handles variations in object characteristics including size,weight and orientation2.Hardware Agnostic Designa.Supports a wide variety of hardware components-hundreds of robotic arms,end effectors,cameras and supporting componentsb.Allows matching of hard-ware to specific needs and budgetsc.Leverages off-the-shelf hardware to lower project costs3.Rapid Developmenta.High Fidelity Physics Simu-lation to accelerate develop-ing of novel applicationsb.Enable powerful digital twins for rapid prototypingc.Speed up development efforts due to powerful debugging tools“MoveIt Pro Release 6 is not just a software update;its a catalyst for innovation across industries,”said Dave Grant,CEO at PickNik Robotics.“Were enabling our clients to automate processes that were previously not possible,from adaptive manufacturing to agriculture and beyond.Cli-ents are only limited by their imagination.”The MoveIt Pro Release 6 platform features a high-fidelity simulation engine for digital twins and more.Source:PickNik R SPECIAL FOCUS ISSUE 17Grippers,software and camerasMachine vision system components provider Imaging Development Systems(IDS)recently announced a deployment of its cameras for DHL eCommerce in Rotterdam,Netherlands.The cameras are incorporated in depalletization robots supplied by global robotic manufacturer and integrator AWL Automation.RODE,an acronym for RObotic DEpalletizer,is an intelligent robotic depalletiza-tion system offered by AWL for the intralogistics market.In this machine,two Ensenso 3D cameras from IDS are imple-mented to provide the required image data.AWL RODE allows DHL to ensure continuous parcel processingIDS said one of the locations where RODE adds value is for DHL eCommerce in Rotter-dam.The robotic solution can efficiently process packages randomly arranged on a pallet.RODE processes up to 800 parcels per hour with a maximum weight of 31.5 kilograms each,about 69.4 pounds,and places them on the corresponding sort-ing belt.The intelligent robot-sup-ported depalletizer can auto-matically destack any packaged goods such as cartons,bags,or containers from pallets,which IDS said can help ensure contin-uous processing without delays or downtime.“Extra shifts”at peak times can be implemented at any time,such as to cope with the increased workload during Christmas and end-of-year holidays,IDS said.Deploying RODE can allow DHL to modify its labor productivity,freeing up staff for more qualified tasks such as processing consignments or handling customer inquiries.At the same time,RODE can relieve employees of physically and ergonomically-demanding tasks and can reduce the risk of injury,IDS said.Ensenso X36 3D cameras provide image data for AIIDS said the particular difficulty of depalletizing lies in the robots picking of parcels of different AWL deploys IDS Ensenso 3D cameras for DHL RotterdamRODE robotic depalletization system handles up to 800 packages per hourBY ROBOTICS 24/7 STAFF At DHL eCommerce in Rotterdam,Netherlands,integrator AWL deployed its RODE robotic depalletization cell,equipped with IDS Ensenso 3D vision cameras and AI software.Source:Imaging Development Systems(IDS)18 SPECIAL FOCUS ISSUE Grippers,software and camerassizes and weights.It must inde-pendently recognize the position of the objects in three-dimen-sional space and decide which package to pick next.It then has to determine the best gripping position and avoid collision with other parcels or the machine.“This intelligent robotic solution integrates AI image processing and high-tech gripper technology,”said Sander Lensen,AWL research and development manager.“The system recognizes products and can flip the items to ensure that the required long side is leading,”Two Ensenso X36 3D cam-eras provide the necessary image data for the AI software.IDS said its cameras are able to provide 2D and 3D information about products on a pallet measuring 1200 by 1200 millimeters,about 47 by 47 inches,and a maximum height of 2400 millimeters,about 94 inches.The integrated image process-ing system processes data further and enables the depalletizer to identify each individual package and determine the corresponding gripping position for robot-as-sisted picking.IDS camera system arrives assembled and pre-calibratedEach Ensenso X36 3D camera system consists of a projector unit and two GigE cameras with either 1.6 MP or 5 MP CMOS sensors.AWL has opted for the 5 MP variant for its sys-tem.Mounting and adjustment brackets,three lenses,as well as sync and patch cables for connecting the cameras to the projector unit are also included in the scope of delivery.Integrated FlexView2 tech-nology ensures an even better spatial resolution as well as robustness of the system with dark or reflective surfaces,IDS said.The 3D systems are deliv-ered assembled and pre-cali-brated.However,focusing and calibration is also easy to set up using the setup wizard integrated into the software.IDS said the RODE depal-letizer is also easy to integrate into its working environment and aims to give its users a competi-tive edge in the world of logistics automation.IDS and AWL are also partnered with machine vision software provider Fizyr,which announced its new partner pro-gram and certified vision packs at MODEX 2024 in Atlanta.AWLs RODE robotic depalletizing cell processes up to 800 parcels per hour,weighing up to 70 pounds each,sorting them onto corresponding belts.Source:Imaging Development Systems(IDS) SPECIAL FOCUS ISSUE 19Grippers,software and camerasFizyr,a provider of AI for robotic systems,welcomed Zivid to its partner program during MODEX 2024.Zivid cameras are integrated into several of Fizyrs new certi-fied vision packs,and integrators now have access to a variety of Vision Pack configurations to help work through complex auto-mation challenges.Extended vision capabilities with Zivid camerasFizyrs certified vision packs currently tackle six of the most complex automation challenges:Pick and Place Singulation Palletization/Depalletization Detection Trailer/Container Unloading LaundryIntegrators can choose from several configurations to secure the right combination of com-ponents,capabilities and costs to handle customer automation challenges.Through its partner program,Fizyr continues to develop new combinations and use cases for its vision packs.“Zivid has long been an inno-vative and collaborative partner to Fizyr,and developing some of our vision packs with them and their incredibly capable line of cameras has helped us get off to a fast start,just like the vision packs do for our integrators,”said Ken Fleming,Fizyr CEO.Pairing the Zivid 2 and 2 lines of cameras with Fizyrs deep learning vision AI can create a wide range of options for pick-and-place robotic cells that can handle a variety of challenging scenes and objects,including transparent plastic,polished cyl-inders or dark reflective parts.Fizyr identifies each item with segmentation,shape detection and material detection.Its algo-rithms prioritize the actions to be taken,utilizing cascade learning to analyze inputs,calculate optimal actions and direct the robot.After each pick,a new image allows Fizyr to recalculate,account for any changes that occurred,and direct the robots next step,all in a fraction of a second.“Zivid cameras help integrators solve the most complex automa-tion challenges their customers face,but great results require highly capable brains,”said Mikkel Orheim,SVP,sales and market-ing at Zivid.“Fizyrs Vision packs deploy proven combinations of the right camera,robot,gripper and brain to address common com-plex problems,and by doing this,they achieve the fast and reliable throughputs required by the most demanding customers.”Zivid brings 3D 2D cameras to Fizyrs new vision packs at MODEX 2024Zivid helps Fizyr vision packs see transparency and perform out of the boxBY ROBOTICS 24/7 STAFFZivid brings its 3D 2D cameras to Fizyrs vision packs,announced at MODEX 2024.Source:Fizyr20 SPECIAL FOCUS ISSUE Case picking,packaging and palletizingOptimization and effi-ciency are key,especially in picking operations.Dwell time,the time spent by an associate waiting for the next picking mission,is a major nemesis of warehouse management.An uninterrupted picking workflow reduces downtime and removes bottlenecks that affect all players in a warehouse operation.Advanced Pallet Station keeps the operation movingColorado-based Prime Robotics announced the release of its new Advanced Pallet Station(APS)at MODEX 2024.According to the company,APS represents an advancement in goods-to-person picking systems,utilizing robotic systems to elevate warehouse pro-ductivity and picking accuracy.“The hardest part is making sure youre keeping the picking station efficient and the picker never runs out of work,”said David Bell,VP of software at Prime Robotics.“Even if that means that the robot shows up right before the picker needs it,thats kind of the magic.We dont want to have robots sitting longer than they need to.”Long before Prime Robotics started developing this“magic”in conjunction with APS,the company worked in picking auto-mation and saw an opportunity to hone in on this movement,and palletizing with single and multi-SKU picks.“It became clear that there were a lot more missions with single SKUs required and a lot of missed opportunities to reuse that drive up to the pick station,”said Joe Hunt,COO of Prime Robotics.“If youre picking multiple orders,you could now take that same SKU and apply it to multiple orders.And so that drove us to think,Well,what if I have multiple on the target side as well?APS flowed out of cus-tomers finding more efficiency and ramping up their picking.”Prime Robotics Legacy Pallet Station(rebranded after Advanced Pallet Stations debut in early 2024)brought the com-pany into picking optimization,and after identifying the bot queue style and adjusting poten-tial optimization possibilities,APS was born.“It just became really clear that there was an opportunity to move even faster and to take more advantage of the ability to pre stage work and move it quickly between the source and the targets,”Hunt said.“Its really about that addi-tional flexibility in picking,”Bell added.“A key part of the APS design is really understanding the customers order profile.How many cases are they picking?How many items do they have in each order?Then you balance that with something like an APS.”More customer data is better for optimized pickingWhen Prime Robotics works with its customers for APS,data is king.Data is key.As Bell put it,How Prime Robotics Advanced Pallet Station makes picking efficientAPS looks to accelerate picking from single-SKU pallets to build multi-SKU palletsBY TIM CULVERHOUSELights and sensors guide pallet moving AMRs to optimize the picking process for warehouse employees thanks to Advanced Pallet Station from Prime Robotics.Source:Prime R SPECIAL FOCUS ISSUE 21Case picking,packaging and palletizing“the more data,the better.”APS performs a WMS level integration with an organization,receiving customer orders from this system.Then,Primes WES-called Prime Execution System-utilizes this data and turns it into robot missions.“What we struggled with initially in APS and we learned the right way to buffer and not over consume the robots,”Hunt said.“Its very easy to have 20 robots serving one station,but it requires a little bit of thought and planning to be able to use a smaller number of robots to keep locations busy.”Seasonality,peak demand and staff data collected from a customers WMS also help Prime optimize the number of robots and picking operations for ware-house staff,allowing them to reduce the dreaded dwell time.“We have a capability that we call pallet defrag,where we look at the positioning of the SKUs within the warehouse and cre-ate zones that we try and drive based on how frequently used a SKU is,”Hunt added.“When we first introduced that capability,we were doing it once a day.We quickly found that when youre running 24/7,thats not really helpful.We had to introduce that capability PES so anytime something is leaving a station or being replanned,we take that into account,and we choose the opti-mal location to keep the SKUs so we can reduce the drive time as much as possible to the APS.”Robot arm vs.human picker battle rages onAs part of APS,organizations can choose to integrate a robot arm into its picking operations.But,this isnt always the fastest or most efficient decision.“The more variability you have in your picking environ-ment,the more difficult it is for the arm to handle,”Bell said.“And it can be very simple things like if you have a mix of arms and humans picking.If somebody puts a case on a source pallet at a weird angle,the human has no problem with it.That may slow the arm down.”However,despite the enhancements in robot arms and automation,there are some instances where the picks-per-hour isnt a statistically signifi-cant difference.“Arms are sexy,and arms work really well for things that are hard for humans to do,whether its an inhospitable environment,or you have to reach high,or you have to lift something heavy,”Hunt added.“But what we hav-ent seen is the arms completely destroying human pickers from a cases-per-hour perspective.”Why is that the case?Simply put,the human brain.“In fact,it depends a lot on the packaging,”Hunt said.“If you have really consistent packaging,the arms can usually outperform the person.But when you have heavy items or lots of variability in what youre picking,we actu-ally often see in the APS that human pickers outperform arms,even though the robots are doing almost exactly the same thing.”Voice prompts turn,move pallets for simplified pickingVoice prompts also play a major role in APS.Standard wireless or Blue-tooth microphones enable users to keep the picking process moving through standardized prompts such as:“Prime,done picking”“Prime,spin source”“Prime,spin target”“The technologies for man-aging voice have advanced quite a bit,and its a very useful way to create a more conversational interaction with our software that keeps the picker from needing to walk up to the computer or use a mouse or a touchscreen,”Hunt said.“We find it to be very helpful.It gives us probably a 10 to 15%saving just by having voice,because pickers dont have to walk over and press a button.”Bell agreed.“Voice is the icing on the cake,”he said.“It makes it easier for the picker We had an earlier APS design where we actually had buttons that were at each stand so pickers could press a button and move pallets.We found there were more safety concerns with that.Any time youre moving pallets or youre moving goods,anything thats going to be in that floor space is problematic.Voice is also kind of a safety feature for us.”Prime Robotics also offers its own robotic arms to pick,pack and palletize products through APS.Source:Prime Robotics22 SPECIAL FOCUS ISSUE Case picking,packaging and palletizingVecna Robotics closes$100 million series C,appoints new COOGEODIS counting on funding to speed up case picking robot developmentBY ROBOTICS 24/7 STAFFFlexible material handling automation systems provider Vecna Robotics recently announced the close of its Series C funding round at$100 million,with$40 million in new funding including equity and debt,which nearly doubles the company valuation from the previous round.Tiger Global Management,Proficio Capital Partners and IMPULSE participated in the investment round.Vecna said the cash infusion will be used to fund new work-flow-specific innovations that can enable it to deliver rapid ROI to cost-conscious warehouse oper-ators served by the$165 billion pallet-moving autonomy market.“Finalizing this capital raise,with the help of our existing investors and a new financing Vecna Robotics will use$40 million in new funding to develop robots for case picking,packaging,and cross-dock applications.Source:Vecna R SPECIAL FOCUS ISSUE 23Case picking,packaging and palletizingpartner,is huge validation that we are on the right track,”said Craig Malloy,CEO,Vecna Robotics.“With fresh capital secured,we have the balance sheet to help us drive growth with our existing customers through improved product per-formance and the release of new automation technology.”GEODIS,Vecna developing new case-picking robotOver the past year,Vecna has combined cloud software updates and investments in its Pivotal Command Center remote monitoring and teleoperation service.The company said its service has helped customers including GEODIS,FedEx,DHL,Cater-pillar,Shape and others realize upwards of 70%performance improvements in ground-to-ground and low-lift warehouse workflows like case picking,packaging and cross-docking.In addition to these improvements,Vecna said the cash infusion will support the launch of next-generation platforms that will help the company provide more deploy-ment flexibility and reach into new workflows that are in high demand,while being able to continue delivering operator cost savings from day one.One ongoing initiative involves developing a new case picking robot for GEODIS that has the potential to double performance for the transporta-tion,logistics and supply chain provider.“We are counting on this recent cash infusion at the company to speed up develop-ment and launch of a complete,market-ready offering that can be deployed right away,”said Andy Johnston,senior director of innovation,GEODIS.Helmbrecht to oversee new initiatives as COOTo support its expansion,the company also announced the appointment of Michael Helm-brecht as Chief Operating Officer.Vecna said Helmbrecht will be instrumental in new initia-tives,overseeing operations,manufacturing,IT,product and customer success to ensure the company continues to meet its customer-defined performance guarantees.A former Dell,Lifesize and RingCentral executive,Helm-brecht brings nearly 20 years of operations,product and part-nership experience to Vecna Robotics.He joins the company after a year of scale,including triple-digit revenue growth,over 100%increase in deploy-ments,and the announcement of Vecna Robotics performance guarantee.24 SPECIAL FOCUS ISSUE Case picking,packaging and palletizingPickommerce,an Israel-based ware-house automation provider,announced it has secured$3.4 million in fund-ing to advance the development,production and marketing of its PickoBot piece-picking robot.The funding round was led by IL Ventures,a fund focused on disruptive technologies for legacy industries,and includes InNegev,Fusion VC,the Israel Innovation Authority and strategic investor ZIM Ventures,the corporate venture arm of maritime shipping company ZIM Integrated Ship-ping Services Ltd.The challenge of picking and packingTodays logistics warehouses are increasingly automated,with processes like crate col-lection and package unloading now predominantly handled by robots.However,the final“Pick and Pack”step largely relies Pickommerce secures$3.4M investment for robotic piece-picking technologyCompany also announced new installation of PickoBot at Israeli farmBY ROBOTICS 24/7 STAFFinventory for a wide range of items,reducing labor needs for repetitive tasks while improving performance and decreasing errors.“We appreciate the com-mitment from our investors,customers and partners,and we are seeing significant market demand for Pickobot,”said Kfir Nissim,co-founder and CEO of Pickommerce.“We are pushing the boundaries of the industry by offering unmatched flexibility with the PickoBots diverse grip-ping abilities.This is achieved through the seamless integration of advanced computer vision,a highly optimized packing algo-rithm and AI-powered deci-sion-making.”Computer vision and machine learning for adaptive pickingPickoBot,according to the company,has delivered the missing link in achieving a fully autonomous warehouse work-flow,providing a picking option for various industries such as apparel,retail,e-commerce,pharmaceutical,agricultural and spare parts.“Pickommerce is disrupting the logistics industry by deliv-ering advanced solutions that streamline automation opera-tions,significantly enhancing on human pickers,even in the most advanced warehouses.This presents a significant challenge,as there is a global shortage of tens of millions of workers in these roles.To fill this void,piece-pick-ing robots are quickly becoming a critical component of the modern automated warehouse.Pickommerce said piece-pick-ing robots can increase effi-ciency by picking and placing The Pickobot piece-picking robot from Pickommerce was recently deployed at an Israeli farm.Source:P SPECIAL FOCUS ISSUE 25Case picking,packaging and palletizingtheir overall efficiency,”said Yoni Heilbronn,managing partner at IL Ventures.“In an indus-try where manual picking still overwhelmingly dominates the process,this solution is poised to redefine standards and drive a new era thats more agile,respon-sive and cost-effective.Booming demand for Pickommerces tech-nology shows that the companys solutions cater to an urgent and essential market need.”PickoBot utilizes an advanced computer vision system powered by machine learning that can enable the safe and intelligent packaging of objects of different sizes,weights and textures.It features multiple gripping methods in a single station,including vac-uum,finger-based and patented adhesive-based grippers.An AI-driven decision-making algorithm selects the optimal gripper and grasp configuration for each item.Pickommerces patent-protected technologies allow the company to signifi-cantly increase the variety of products that can be handled by robots in logistics,as well as the level of autonomy those robots possess.PickoBot deployed on at Havivian Farm in IsraelPickommerces recent installa-tion at Havivian Farm,one of the largest organic farms in Israel,showcases the adaptability and precision-or in this case,gentle touch-of Pickommerces intelli-gent gripping technology.This organic farming enter-prise turned to Pickommerce to reduce operational costs by automating their high-volume fresh produce packing line.Unlike competitors,according to Pickommerce,PickoBot is profi-cient at adapting to and handling the complexities of picking and packing fresh produce at a rapid pace.This capability is valuable for any supermarket that accepts online orders.“At Havivian Farms,quality is at the core of everything we do.From planting seeds in the soil to harvesting our crops,we are committed to ensuring our customers receive the freshest,highest-quality goods,”said Boaz Havivian,owner of Haviv-ian Farms.“Pickommerce has been integral to this process.Their PickoBot enables us to efficiently handle and pack our produce for shipment,ensuring it reaches customers in perfect condition.”Pickommerce founders Amir Shapiro(left)and Kfir Nissim(right)secured a$3.4M funding for further development of the Pickobot piece-picking robot.Source:PickommercePickobot from Pickommerce can pick and pack with precision across industries.The system also contains an overhead camera system for added visibility and safety.Source:Pickommerce26 SPECIAL FOCUS ISSUE Case picking,packaging and palletizingLiberty Robotics,a Michi-gan-based supplier of 3D volumetric vision guidance systems for robot applica-tions,recently launched its flag-ship suite of robotic palletizing and depalletizing offerings,VPick and VPack.The robots use AI vision systems to enhance warehouse efficiency and reliability,accord-ing to the company.VPick for picking optionsVPick can guide robots in ware-house,distribution and fulfillment centers.The system can enhance warehousing processes with its accurate pick on first sight capa-bilities,achieving near 100%pick rates,according to the company.VPick is designed to pick from a diverse array of pallet types,including mono,mixed and rainbow pallets.It also sup-ports a wide range of operations such as palletizing,depalletizing and pallet decanting.VPick is equipped to provide reliable picking capabilities without the necessity for deep learning or pre-training box parameters.The system includes four features,each tailored to address different requirements in the material handling sector:1.Single pick of uniform box type:Tailored for depallet-ization of single boxes,enhancing efficiency in material handling.2.Multi-pick of uniform box type:Allows simultaneous depalletization of multiple boxes,optimizing throughput.3.Delayering of uniform box type:For delayering entire layers of boxes,ensuring seam-less operation in high-volume environments.4.Single pick of mixed box type:Adapts to varied box sizes within mixed pallets,maintaining precision and consistency.“These products are crafted to tackle the hurdles encountered in contemporary warehousing and logistics industries,which are in need of automation solu-tions that are both efficient and dependable,”said Bob Berry,president&CEO of Liberty Robotics.“We are excited to roll out these new products to industry.”VPack for packaging optionsLiberty Robotics said its VPack offers a novel approach to robotic packaging,featuring ad hoc pick-ing capabilities and digital twin technology to support efficient operations.The system measures box dimensions on conveyors in real-time,determining their optimal position on pallets for maximum packing efficiency.VPack is equipped with high-accuracy sensors for precise box detection,and its software simulates thousands of packing scenarios to find the most effi-cient arrangement.Key features of the system include smart pallet optimization,box anomaly detection,precision box handling technology,an enhanced parcel recovery system and dual-mode pallet handling,all designed to improve packaging efficiency and reliability.“We are proud to unveil VPick and VPack,which incor-porate our proprietary AI vision techniques that build upon current machine learning tools to enhance performance,”said G.Neil Haven,CTO of Liberty Robotics.“We believe that by enhancing the precision and efficiency of robotic material handling systems,we can offer solutions that support our clients in overcoming their operational challenges and achieving their business goals.”Liberty Robotics launches AI-powered VPick and VPack systemsRobotic offerings look to enhance efficiency,reliability in warehouse automationBY ROBOTICS 24/7 STAFFLiberty Robotics recently announced the launch of its AI-powered VPick and VPack picking and packaging robotic systems.Source:Liberty R SPECIAL FOCUS ISSUE 27Sortation and handlingTompkins Robotics develops modular,scalable sortation systemsTranscend platform and tSort robots can deliver adaptable small item and parcel sortationBY DONALD HALSINGCommercial robotic systems need not be complicated,expensive,or take up valuable floor space in perpetuity.Some robots are small,but mighty-providing adaptable and scalable options without sacrificing flexibility or breaking the bank.Tompkins Robotics develops and markets a wide range of ware-house robots,including its flagship tSort system.The growing family of tSort AMRs and their rela-tives,coupled with the companys Transcend platform,can provide flexible and scalable sortation for a variety of applications.Simple robots enable commercial viabilityRobotics 24/7 readers might have noted two similar company pages on our website:Tompkins Robot-ics and Tompkins Solutions.Their resemblance is no coincidence.Mike Futch,Tompkins Robotics president and CEO,said the Tomp-kins International board voted to split into two independent companies,effective Jan.1,2021.Tompkins Solutions is the legacy consulting and integration side of the business,while Tompkins Robotics con-centrates on developing products.“Were a product company.We make and sell software and robots,”Futch said.“A lot of our leadership are ex-consultants and people from industry who really understand logistics and supply chain distribution.”Leveraging the experience of its team,Tompkins Robotics has designed its robots to meet industry needs.“You need to find problems that need real-world solutions and then craft a robotic solution to meet that,”Futch said.“Weve built tech-nologies,applications,software and hardware to address real-world concerns and problems in a unique way.”One differentiator for Tompkins Robotics is its relatively simple tSort AMRs.“If you open up one of these robots,theres only 14 com-ponents,”Futch said.“If you make it too sophisticated,too expensive,you price yourself out of a good ROI and commercial viability.”Tompkins tSort system is flexible,modular,portable,and scalableTompkins Robotics tSort is a flexible sortation system designed to handle small parcels and indi-vidual items.AMRs operate on tabletop platforms,sorting loads into bins along the periphery.“With our system,its flexible,modular,scalable,even portable,”he said.“Nothing bolts to the floor.Everything is on wheels-even the platforms you see the robots running on are on wheels.”Tompkins Robotics tSort systems can plug into standard 110 volt outlets to collect power for robot charging.Tompkins Robotics tSort sortation systems can be expanded with multi-function sorters that combine the tSort3D,tSortLift,and automated baggers.Source:Tompkins RoboticsMike Futch,Tompkins Robotics president and CEO Source:Tompkins Robotics28 SPECIAL FOCUS ISSUE Sortation and handlingWithout the tethers of more traditional fixed automation systems-sometimes referred to as monuments or monoliths because they are immovable within a facility-tSort customers can adapt and expand their sys-tems through a“buy-as-you-go”business model.Futch said customers can integrate system expansions in as little as an hour.“Its a whole different mind-set,technology and flexibility-a game changer compared to the traditional sortation systems of the past,”he said.Applications of the tSort system include store replenish-ment,e-commerce fulfillment,reverse logistics,parcel sortation,microfulfillment,order picking,kitting,and other goods-to-per-son operations.Expanding destinations and functions with tStort3D,tSortLiftTabletop robotics can provide simple and flexible small item and parcel sortation.Now add a vertical element.Tompkins Robotics tSort3D is a robotic crane that can sort items into containers like a min-iature put wall.The module only takes up six spaces alongside a tSort table,but it can add as many as 60 destinations,depend-ing on container size.“This is a way for us to get higher density and more sort destinations in a smaller foot-print than we would normally with either the tSortPost or our traditional tSort applications,”Futch said.Applications for tSort3D include e-commerce and prescription pharmaceutical sortation,among others.But wait,tSort can rise even higher:Futch also described a multi-function sorter where item sortation is performed on a lower level,with packed order shipping sortation stacked on top.Operators pick completed orders from tSort3D,which serves as an order consolidation point.Items are packed through an automated bagger,then pass along a conveyor to a tSortLift elevator,which hands it off to a tSort AMR on the upper level for shipping sortation.“Instead of those being two separate operations,weve con-solidated them in one infrastruc-ture to save space and touches,”Futch said.“That will fully automate the entire process-from induction through shipping to the end destination.”“A lot of our innovation is sparked by touches,”said Bill Pelzar,Tompkins Robotics CTO.“Wherever theres a manual touch or a manual process,Mike and our other engineers have come up with innovative ways to automate those steps,which generally leads to an innovative product enhancement,or some-times a new product.”New tSortPost pedestal AMR enables adaptable mobile deploymentWith its latest addition to the tSort family,end users dont even need a full tSort tabletop system.Tomp-kins Robotics recently announced its tSortPost pedestal AMR.Futch said Tompkins Robotics differenti-ates its pedestal AMR from other vendors in three ways:1.An adjustable post height2.Divert mechanisms include both a cross belt or a tilt tray3.A scissor lift option for sorta-tion at multiple heightsWhile normal tSort systems are designed for volumes of 10,000 to 20,000 items per hour,tSortPost is designed for applica-tions that handle 1,000 to 5,000 items per hour.“If you can do that without the cost and the space of the tables,you just lowered the cost and increased the ROI for that application,”Futch said.Applications for tSortPost Tompkins Robotics product line includes its flagship tSort robot family,along with the PickPallet,PickPal,and xChange AMRs.Its newest addi-tion is the tSortPost pedestal AMR.Source:Tompkins R SPECIAL FOCUS ISSUE 29Sortation and handlinginclude conveyance and vehicle loading at last-mile delivery hubs.“The robots can just be rolled onto a truck for relocation,”Futch said.“If you need to pick up and move three months later to another location,you can do it.”“Were hoping its going to be a gateway product,”Pelzar said.“Somebody can start with our pedestal,and if they like it,and they like Tompkins,and they see the value in it,they may pur-chase a tSort,xChange,PickPal or other system from Tompkins.”Transcend software built from modular micro servicesOn top of its robots,Tompkins Robotics Transcend robotics execution software platform keeps the robots moving.Pelzar said the software comprises multiple layers:Transcend Control:a robot control system(RCS)onboard each robot Transcend Connect:an integration layer for fleet management Transcend Orchestrate:a system that handles customer workflow orchestration A visibility layer:User interfaces,including the Transcend Mobile app,control panels,and/or dashboardsUnlike a monolithic code block with interdependent services,the layers of Transcend are modular micro services that can be con-figured to connect with different products WMSes across different environments.Pelzar said Tomp-kins Robotics can deploy Tran-scend software locally on premises,in the cloud,or even as a hybrid.“The software has to adapt in kind with the way the hardware is,”Pelzar said.“If a customer has a bias toward one sort of deploy-ment model,we can go whatever direction they want to go.“We have one code base,so the software we deploy in the cloud is the same we deploy on premises,”he added.Transcend is sold as a sub-scription through a software-as-a-service(SaaS)model.Pelzar said the software is constantly being updated as research and devel-opment continues,passing along benefits to customers.AI and ML could deliver valuable insights in the futureTompkins Robotics can also pro-vide its customers with analytics to show how its products are meeting their business needs.“They can come back to us,and ask us to do different things down the line,”Pelzar said.“So what it does today isnt limited in perpetuity.”In the future,AI and machine learning could interpret insights from the enterprise data ware-house(EDW)data sets Tompkins Robotics is already collecting.“We see value in the data that were generating and capturing,”Pelzar said.“Data mining could be of value to customers to help them improve their operations.“Instead of just doing tasks that weve been asked to do relative to the robotics solutions that weve provided,we now may be able to offer back to them insights into their oper-ations to help our customers improve their operations going forward,”he added.“Thats the future that we see.”30 SPECIAL FOCUS ISSUE Sortation and handlingContoro Robotics,an Austin,Tx.-based robotics company,and Go!Retail Group have announced a partnership that will see Contoro robots unloading Go!containers to enhance warehouse operations.Go!Retail Group has over 650 stores across the U.S.and this collaboration marks a significant step in the companys mission to improve efficiency,reduce labor costs and boost worker safety.Central to the part-nership is Contoros advanced robotic offer-ing,which automates the offloading of floor-loaded shipping containers-one of the most challenging tasks in ware-house operations.With container temperatures reaching up to 140 degrees during Texas summers,this task has been both physically demanding and hazardous.Go!will use Contoros RaaS model“Were excited to have Contoro Robotics on board,”said Paul Hoffman,president of Go!Retail Group.“Their robots keep our workers out of unsafe environments and let machines handle the heavy lifting.This not only expands our opera-tional capacity but also aligns perfectly with our seasonal business model.”The partnership utilizes Con-toros Robot-as-a-Service(RaaS)model,where Go!Retail Group pays per container unloaded,ensuring cost efficiency and flexibility,especially during peak seasons.“Our robots are designed to adapt and learn from real-world challenges,”said John Cook,head of business development at Contoro Robotics.“Weve tailored our robots to meet Go!Retails specific needs and manage the fleet from our Austin command center to ensure smooth operations and continu-ous AI-driven improvements.”The collaboration has already shown promising results,accord-ing to the companies.Go!has seen faster unloading times and better working conditions for its employees.“Having the robot handle unloading allows our team to focus on other critical tasks,”said Kiyoshi Freeman,senior manager,receiving,at Go!Retail Group.“Its a win-win that enhances both productivity and safety.”Contoro Robotics,Go!Retail Group partner to enhance warehouse operationsGo!will utilize Contoro RaaS model to unload containersBY ROBOTICS 24/7 STAFFContoro Robotics and Go!Retail Group have partnered to deploy Contoro robots to unload shipping containers at Go!warehouse facilities.Source:Contoro R SPECIAL FOCUS ISSUE 31Sortation and handlingElectric motor and actuator,motion control subsystems,and related electro-me-chanical components provider Johnson Electric recently announced a new fast rotary actuator designed specifically for divert motion in sliding shoe sorters-high-speed automated sortation systems essential to large ecommerce,postal,distribu-tion and shipping operations.The unit,known as“Solli-gence,”can deliver actuation times as low as five microseconds-faster than a bolt of lightning-and can perform more than five complete cycles in less time than an average person can blink.Although shoe sorters have dominated the warehouse auto-mation industry for decades,increasing their performance has posed significant challenges.The Solligence fast rotary actu-ator was specifically designed to overcome long-standing obstacles,including divert speed limitations,heavy elec-tricity use,equipment health,unpredictability,noise,heat and unplanned downtime.Embedded AI can adjust for wear,alert for internal defectsThe unit integrates AI sensing capabilities to create closed-loop controlled motion,providing motion assurance for critical shoe sorter applications and data output that can optimize system performance.“Throughput is often reduced as components age,but the arti-ficial intelligence weve embed-ded in the technology ensures consistent performance over time,”said Vincent Sall,VP of business development at Johnson Electric.“Solligence monitors the motion profile multiple times every second,adjusting for wear,so theres no loss of speed.”The unit also triggers an alert when it detects wear that could cause a failure,helping to pre-vent costly unplanned downtime.“We can detect abnormal events on the product and anticipate when something is going wrong,”Sall said.Bistable actuator can reduce energy consumption,increase service lifeBecause Solligence is a bistable actuator,power is only required to change positions.Home or divert positions can be main-tained without power.Johnson Electric said this stability can reduce heat dissipation,allowing for faster continuous-duty oper-ation.The units voltage and cur-rent requirements(averaging less than 1.2 amps under standard operation)can reduce installa-tion and energy costs,enabling narrower-gauge wire and smaller,less expensive power supplies to be used.Integral onboard energy storage allows power to be slowly“sipped”from the main bus during the entire cycle,actuat-ing the solenoid with bursts of power to generate high velocity as needed.Johnson Electric said the integrated drive unit elimi-nates the needs for an external solenoid driver,control box,and assembly labor.Solligence fast rotary actu-ators generate minimal impact energy when activated,which Johnson Electric said can enable a service life rating of 25 mil-lion cycles or more and enable quiet operation.Units do not require lubrication,adjustment,nor maintenance for their entire lifecycle.Actuators come fully pre-programmed with auto-cal-ibration enabled,simplifying installation.Johnson Electric announces Solligence fast rotary actuatorBistable sliding shoe sorter actuator features AI monitoring,lower power usageBY ROBOTICS 24/7 STAFFEmbedded AI allows Johnson Electrics Solligence fast rotary actuator to alert operators to defective wear,and a bistable design reduces power usage,heat,and noise.Source:Johnson Electric32 SPECIAL FOCUS ISSUE Sortation and handlingPlus One Robotics,a pro-vider of AI machine vision software and systems for robotic parcel han-dling,recently announced the launch of InductOne-a dual-arm automated parcel induction system designed to optimize parcel singulation and induction in high-volume fulfillment and distribution centers.The company shared more details about its new technology during its launch event at Auto-mate 2024.Plus One Robotics said it has leveraged its industry knowl-edge and track record of over one billion picks to engineer InductOne as a solution for the parcel shipping industry.The companys learnings from han-dling over a million picks per day and the required reliability for such high-volume operations have been manifested in this new dual-arm machine.Induction robot engineered for efficiency and flexibilityA key characteristic of Induc-tOne is its dual-arm design,which Plus One said outperforms single-arm solutions.While a single-arm system typically tops out at around 1,600 picks per hour,the coordinated motion of InductOnes two arms can achieve sustained pick rates of 2,200 to 2,300 per hour.Induc-tOnes peak rate maxes out at 3,300 picks per hour.“Parcel variability is a signif-icant challenge of automation within the warehouse,”said Erik Nieves,CEO of Plus One Robotics.“Thats why InductOne is equipped with our innovative individual cup control gripper,which can precisely handle a wide range of parcel sizes and shapes.But its not just about what InductOne picks,its also about what it doesnt pick.The system avoids picking non-con-veyable items,allowing them to automatically convey to a desig-nated exception path and pre-venting the robots from wasting precious cycles handling items which should not be inducted.”The Plus One Robotics engi-neering team put a strong focus on the physical design of the InductOne system,engineering the machine to have the smallest possible footprint and lowest weight,all while maximizing its capabilities.The company said these features enable the system to integrate into brownfield facili-ties,while minimizing the need for site modifications.“The engineering approach behind InductOne has been focused on efficiency and flexi-bility,”Nieves said.“We designed the system to be as compact and lightweight as possible,making it easier to deploy in limited spaces,including on existing mezzanines.The modular and configurable nature of InductOne also allows it to seamlessly integrate into a vari-ety of fulfillment center layouts.”Plus One launches dual-arm parcel induction system at Automate 2024InductOne designed to maximize throughput in a small footprintBY ROBOTICS 24/7 STAFFPlus Ones new InductOne dual-arm parcel induction robot features its individual cup control gripper and can automatically sort non-conveyable items to an excep-tion path.Source:Plus One Robotics
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AUTOMOTIVE SUSTAINABILITY REPORT2023 DATAEnvironmental performance Social performance Economical performance2THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCONTENTS3 FOREWORD4 2023 SUSTAINABILITY SUMMARY6 INTRODUCTION16 CHAPTER 01:ENVIRONMENTAL PERFORMANCE24 CHAPTER 02:SOCIAL PERFORMANCE30 CHAPTER 03:ECONOMIC PERFORMANCE35 SIGNATORIES This years report is a waymark shedding light on how our industry has transformed over the past 25 years and signposting the road to future success.We look forward to working with the new government and its fresh policy agenda which will be pivotal to the next 25 years of success.CONTENTS3THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSA quarter of a century ago,the UK automotive industry made clear its commitment to sustainability with the publication of SMMTs first annual sustainability report.As consecutive reports over the following 25 years have shown,the industry has driven sustained success in social,environmental and business terms making production more efficient,reducing waste,and sourcing energy from renewables.The result is a major reduction in the carbon cost of vehicle production and the 25th edition of this report shows a significant milestone has been reached,with direct CO2 emissions per vehicle manufactured down by more than half since 1999.It is an achievement that comes through long-term dedication and grit,and against a backdrop of challenges the financial crash,Brexit,Covid-19 and the major global supply chain disruption that followed.2023 saw significant declines in CO2 emissions,energy and water usage as Britains factories turned out their highest volumes in five years,exceeding one million vehicles.But last year was also momentous for the huge investments secured in our net zero transition,with almost 24 billion announced to produce a new generation of zero emission vehicles,electric batteries and components in the UK.These position our industry well for the future.Such growth is the latest chapter in our green transition but its even more critical amid fierce global competition between rival countries seeking to attract international investment to their own industries.Maintaining a competitive edge is becoming harder but those commitments in 2023 underline the UK automotive industrys global appeal with a renowned R&D expertise,a highly skilled and flexible workforce,our first-class products and famous brands,and our economic openness.Industry cannot,however,rest on our laurels,nor can we alone deliver success.Collaboration between our sector and government,with the whole gamut of adjacent industries and stakeholders,is essential.Automotive can be the driving force behind Britains green growth agenda but we need a suitably ambitious industrial strategy,one that delivers our long-term sustainability goals.This includes clean and affordable energy,strong free trade agreements which provide access to critical raw materials,enhancing our zero emission supply chains,and a skilled up workforce thats fit for a greener future.Implement these measures and a million EVs will be rolling off our production lines every year by 2035,bringing massive environmental,economic and social benefits with them.This years report is a waymark,therefore,shedding light on how our industry has transformed over the past 25 years and signposting the road to future success.We look forward to working with the new government and its fresh policy agenda which will be pivotal to the next 25 years of success.Mike Hawes Chief ExecutiveThe Society of Motor Manufacturers and Traders(SMMT)LETTER FROM THE CEOFOREWORD4THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS2023 SUSTAINABILITY SUMMARYSUMMARYSINCE 19992023:ENVIRONMENTALTotal Scope 1&2 energy down-55%Lost time incidents down-91%VOC emissions down-53%Scope 1&2 energy per vehicle down-33%Water per vehicle down-42%CO2 per vehicle down-54%Manufacturing waste to landfill down-99%Exhaust emission NO2 down-78%Exhaust emission particulates down-89%Average new car tailpipe CO2 emissions down-2.2%Scope 1&2 CO2 emissions down-5.1%Scope 1&2 CO2 per vehicle down-18.2%Overall energy use down-4.8%Energy per vehicle produced down-18.0%Overall water use down-2.1%Water per vehicle produced down-17.7FGWh of on-site renewable generation-99%COCO2 2COCO2 2COCO2 25THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSSUMMARY2023:SOCIAL2023:ECONOMIC813,000 sector dependent jobs 131,447 training days delivered to staffLost time incidents down-14.3%New apprentices and trainees up 40.8%Proportion of employees that are women rises to 14.3!%more new zero emission vans sold17.8%more new zero emission cars soldManufacturing turnover up 19.4%Manufacturing GVA up 20.5%Engine production up 9.4r&CV production up 17%New car&CV registrations up 18.4 23 NEW6THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSINTRODUCTION6THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSIntroductionThis year marks the 25th anniversary of SMMTs annual sustainability report.In the years since this report began,UK automotive companies specialising in manufacturing,remanufacturing,supply chain,logistics,R&D and aftermarket have demonstrated a clear,ongoing commitment to improve their social,environmental and economic sustainability.7THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSINTRODUCTION7THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSSMMTs first sustainability report was published in 2000,presenting automotive sector data for 1999 and providing a clear industry commitment to make year-on-year and long-term progress across a variety of sustainability metrics.1 At the time,the key sustainability challenges for the sector were identified as:the strength of sterling against the Euro the impending introduction of the Climate Change Levy,and the UKs adoption of the EU End of Life Vehicle DirectiveSubsequent SMMT sustainability reports,published each year,have demonstrated and quantified the ongoing progress of the automotive industry.And while the number and makeup of signatories to our annual report has grown and evolved over the years,companies like BMW,Ford,Nissan,Bentley,Toyota,Unipart and Vauxhall(Stellantis)have provided data each year,every year since the reports inception.Most signatories to this report are certified to ISO 14001,which provides a framework to design and implement an Environmental Management System(EMS)and continually improve environmental performance.By adhering to this standard,organisations can ensure they are taking proactive measures to minimise their environmental footprint,comply with relevant legal requirements,and achieve their environmental objectives.2AUTOMOTIVE SUSTAINABILITY REPORT2023 DATAEnvironmental performance Social performance Econmical performance1 https:/www.smmt.co.uk/wp-content/uploads/1st-Sustainability-report.pdf2 https:/www.iso.org/standard/60857.html8THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS8THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS25 YEARS OF TRANSFORMATION AND CHANGEOver the past 25 years the UK has produced 38.6 million vehicles,of which 28.5 million(73.7%)have been exported.During this period,the sustainability progress made by the industry has coincided with a dramatic change in the UK automotive ecosystem.Back in 1999,when our first sustainability report was published,just under 2 million vehicles were produced by a dozen UK-based manufacturers,eight of which exceeded 100,000 units a year.62%of UK-built vehicles were exported overseas,with the remainder accounting for 28%of domestic registrations.Today,the UK is home to a breadth of volume,premium and high-value,small volume specialist manufacturers,with 4 manufacturers producing more than 100,000 vehicles a year.While the number of UK-manufactured vehicles has dropped to half of what it was in 1999,2023 production exceeded a million units for the first time since 2019,rising by 17.0%.Exports still dominate,accounting for 77.1%of production in 2023.At the time of SMMTs first sustainability report,all UK vehicles produced and registered were petrol(86%)or diesel(14%).However,this was also the year in which the Toyota Prius,the first mass-produced hybrid vehicle,arrived on the global market,firing the starting gun for the vehicle decarbonisation race that continues apace today.And while customer demand has driven much of the sustainability and decarbonisation progress of the industry to date,the regulatory environment has also expanded and transformed in this regard over the last 25 years.In 1999,the EU had only recently introduced regulations to monitor and reduce vehicle CO2 tailpipe emissions.However,it was not until 2008 that monitoring,along with a 140g/km CO2 fleet average limit,was made a mandatory requirement.Today,manufacturers have reduced their fleet-wide tailpipe average to below 109g/km CO2 as a result of investment in cleaner ICE and hybrid technologies and,more recently,the increased focus on zero emission vehicles.More than a million battery electric vehicles(BEVs)have been bought by UK customers.By 2030,the newly introduced Zero Emission Vehicle Mandate requires 80%of all new car and 70%of all new van registrations to be zero emission,with all major political parties committed to ending the sale of all non-zero emission road vehicles in the coming years.The UK automotive industry is proud of the progress it has made over the last 25 years,a period in which the sustainability landscape has transformed.The introduction,and subsequent amendment,of the UK Climate Change Act has created a legally binding commitment for UK Government to deliver the Paris Climate Change Goals and achieve net zero by 2050.The automotive industry has long-recognised its critical role in meeting this target,delivering the zero emission vehicles and technologies on which the UKs wider net zero economic progress relies,and also through the decarbonisation of its own manufacturing and supply chain activities.The industry has invested billions in the zero emission vehicle transition and there are now over 100 battery electric car and van models to choose from in the UK up from zero in 1999 and from just 16 a decade ago with an average driving range of 236 miles.3 Additionally there are 27 zero emission HGV models and 13 zero emission bus models available in the UK.While much of the regulatory attention to date has focussed on the decarbonisation of the vehicles themselves,decarbonisation of manufacturing processes has also seen significant improvement over this time.The Climate Change Levy(CCL),a tax added to electricity and fuel bills,was introduced in 2001 shortly after the publication of SMMTs first sustainability report.While the impact and cost of this levy was significant for a relatively energy-intensive automotive industry,the introduction of Climate Change Agreements(CCAs),alongside the CCL,has incentivised and supported manufacturers to reduce their energy use.CCAs are voluntary agreements made between UK industry and the Environment Agency to reduce energy use and carbon dioxide(CO2)emissions in return for a significant CCL discount.4 SMMT negotiated the automotive industrys CCA with the Environment Agency,and continues to facilitate it on behalf of the sector.5 Since 1999,welcome progress has been made by manufacturers in monitoring,measuring and reducing their direct scope 1 emissions(from owned or controlled sources)and indirect scope 2 emissions (from the generation of purchased energy).6 Since our first report,the average amount of scope 1&2 energy required to produce a vehicle in the UK has fallen by-14%but,over the same period,the corresponding average scope 1&2 CO2 per vehicle has been halved(-54%)due to the significant investments in lower carbon fuel sources,renewable electricity generation and energy efficiency measures,along with an increasingly decarbonised national grid.While automotive manufacturers seek to continuously build on the good progress made already in addressing scope 1&2 emissions,both government and industry understand the urgent need to also address indirect scope 3 emissions that occur in manufacturing value chains,including both upstream and downstream emissions.The challenges of this for a global automotive industry supply chain are significant,and explored in more detail later in this report.Continued engagement and partnership between industry and Government will be critical to ensure alignment with emerging international regulatory frameworks.While the decarbonisation agenda dominates many of todays headlines,the automotive sustainability progress of the last 25 years goes far beyond this.For example,vehicles produced in the UK today are manufactured using-23%less water and coated with paint that produces less than half the volume of volatile organic compounds(VOCs)per square metre(-53%).Soon after the publication of our first report in 2000,the EU adopted the End-of Life Vehicle Directive,requiring member states to introduce regulations to ensure end-of-life vehicles were recycled or reused,with targets rising by 2015 to 85%for reuse and recycling and 95%for reuse and energy recovery.The UK adopted this legislation in 2003.During this period,there has also been demonstrable progress made by UK automotive companies across a variety of social,as well as environmental,sustainability issues,particularly in regard to the safety,wellbeing and diversity of their workforce and customers.For example,lost time incidents today have reduced drastically by-91%since 1999.3 https:/www.smmt.co.uk/2024/05/brits-enjoy-best-ever-ev-choice-with-more-than-a-hundred-models-now-available/4 https:/www.gov.uk/guidance/climate-change-agreements-25 https:/www.smmt.co.uk/industry-topics/environment/energy-efficiency-regimes/6 https:/ghgprotocol.org/calculation-tools-faq7 https:/www.legislation.gov.uk/uksi/2003/2635/contents/made 8 https:/ec.europa.eu/commission/presscorner/detail/en/qanda_23_40439 https:/www.globalreporting.org/10 https:/ghgprotocol.org/corporate-standard11 https:/sciencebasedtargets.org/resources/files/SBTi-criteria.pdf12 https:/finance.ec.europa.eu/news/commission-adopts-european-sustainability-reporting-standards-2023-07-31_enINTRODUCTION9THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS9THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSand Tier 1 suppliers,in order to stay compliant and competitive as they transition and adapt.And while the focus of CSRD is on demonstrating data transparency,the EUs forthcoming Corporate Sustainability Due Diligence Directive(CSDDD)will increase the emphasis on demonstrating measurable reduction in environmental and social impact.So the need for accurate,representative,consistent data is clear.Importantly,ESRS has been designed to take specific account of ISSB and GRI,minimising the risk of duplicated,misaligned or competing requirements.In addition,the EUs European Financial Reporting Advisory Group(EFRAG)has recently developed sector-agnostic guidance for ESRS implementation,with sector-specific guidance to follow.At a UK level,the need to develop international reporting standards and globally comparable sustainability information has been recognised by successive governments.The Green Finance Strategy expressed support in principle for implementing ISSBs International Financial Reporting Standards(IFRS)in the UK,with a commitment to assess the suitability of both IFRS S114&IFRS S215 once they were published.As the new Government seeks to confirm a regulatory framework for implementing a single set of sustainability reporting standards across the UK,it must carefully consider the benefits of alignment with international regulatory frameworks and methodologies,minimising duplication and regulatory burden.The increasingly complicated reporting and compliance landscape is very much a cross-sectoral challenge.However,the automotive sector has some unique challenges related to the complex and global nature of its supply chain,significant cross-border trade,the complexity and high value of its products,and the energy intensity of its manufacturing processes.The increasing focus on sustainability data reporting also comes at a time of unprecedented transformation of the industry more broadly,with the rapid transition to zero emission vehicles creating new challenges related to technology development,access to raw materials and evolving global supply chains.Much of the automotive industrys progress over the last 25 years can be attributed,in part,to the raft of passionate sustainability experts employed within individual companies and throughout the sector.An efficient,aligned set of reporting requirements will reduce unnecessary regulatory burden and maximise resource and time that can otherwise be dedicated to guiding companies towards innovative and impactful sustainability improvements.Therefore,Government,industry and investors must work collaboratively to ensure that any UK regulatory framework for sustainability standards and data reporting is ambitious,achievable,and aligned across different sectors and markets.Such a framework should actively drive the UKs strategic sustainability outcomes and identify areas where further support or guidance is required.These strategic outcomes should be clarified within an overarching Green Automotive Transformation Strategy to supercharge UK automotive to achieve net zero,which enables innovation,attracts investment and secures manufacturing of clean technologies in the UK to deliver economic growth and zero emission mobility.THE GROWING DATA CHALLENGEWhile great strides have been made over the last 25 years,the automotive industry recognises that there is still a long way to go to fully embed net zero,circularity and social equity throughout the entire UK automotive industry and global supply chain.In doing so,the industry must continue to operate within a complex web of overlapping and interacting regulatory and market-led frameworks and initiatives.SMMTs first sustainability report,published 25 years ago,highlighted the increasingly complex business environment in which the automotive industry was seen to be operating at the time.It is a challenge that has clearly only continued to grow in the years since.Data is key to sustainability.As we look to the near future,the ability of automotive companies to measure their impact,track their progress,compare themselves to others,and reflect this information to customers in an open and digestible way is becoming increasingly critical.In this context,our industry must as a minimum ensure that we can continue to demonstrate compliance with an increasingly complex set of domestic and international reporting requirements.These include regulatory requirements,like those contained within the EUs European Sustainability Reporting Standards(ESRS),8 as well as those contained within more specific pieces of regulation,for example CO2 footprint requirements contained within the EU Batteries Regulation.There are also a variety of market-led initiatives,like the Global Reporting Initiative(GRI),9 GHG Protocol Corporate Standard,10 and the Science Based Targets Initiative(SBTi)11 which,while not mandated,are increasingly demanded by customers and investors.Current sustainability reporting requirements,largely driven by international regulations and standards,already demand significant investment of time,resource and expertise by companies operating in different sectors and across different markets.At a global level,the International Sustainability Standards Board(ISSB)has been established in recognition of the need to reduce reporting burden and align regulatory requirements.While the need for reliable,transparent sustainability data is beyond question,the work of the ISSB highlights the criticality of ensuring that regulatory and market-led reporting requirements across both domestic and international markets are aligned in such a way as to minimise duplication and maximise efficiency.At an EU level,the early signs are that this message has also been understood by policymakers and regulators.In July 2023,the EU Commission formally adopted the European Sustainability Reporting Standards(ESRS)covering the full range of environmental,social,and governance issues,including climate change,biodiversity and human rights.12 ESRS reporting is now mandatory for all companies subject to the Corporate Sustainability Reporting Directive(CSRD)13.CSRD requirements apply directly to any large or listed company operating in the EU market.For the purposes of this regulation,companies are considered in scope if they exceed two of the following three thresholds 50 million net turnover,25 million assets,250 employees.Non-EU companies,including those based in the UK,will also be in scope if their turnover exceeds 150 million in the EU market.In many cases,these reporting requirements will be passed on through the supply chain to SMEs,including those based in the UK and supplying to the EU.Many of these SMEs will need support and guidance from both government and their larger supply chain customers especially OEMs 13 https:/finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en14 https:/www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/15 https:/www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s2-climate-related-disclosuresINTRODUCTION10THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS10THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSINTRODUCTIONMAKING THE NEXT 25 YEARS A SUCCESSMAKING SUSTAINABILITY A COMPETITIVE ADVANTAGE IN THE UKAs the automotive industry seeks to continue its progress towards a circular,net zero economy,it must also maintain its global competitiveness,providing thousands of high-value,green jobs,and continuing to contribute significantly to the UKs economy through its turnover,investments and exports.It is a challenge to which the automotive industry is fully committed,and this years SMMT sustainability report provides an opportunity to assess progress to date,as well as looking ahead to the challenges and opportunities of the next 25 years.As part of this look-ahead,SMMT recently carried out a materiality assessment to identify the critical sustainability issues for the automotive industry and our stakeholders,both today and in the future.The details of this assessment are explored later in this report.However,the findings highlight a general concern expressed by both industry members and stakeholders alike relating to the significant expansion in the sheer number of issues considered likely to become critical over the next 5-10 years.Publishing a green automotive transformation strategy that sets out a holistic,joined-up approach and provides a pathway towards the UK automotive industrys ultimate sustainability and circularity goalsA dedicated,government-led strategy should ensure that sustainability and competitiveness go hand-in-hand.Such a strategy should include:a combination of regulatory reform to reduce red tape and speed up investment;global diplomacy to maximise trade opportunities and reduce supply chain risk;and generous incentives and subsidies that de-risk private capital investment.It should also provide a supportive policy and regulatory framework for reuse,remanufacturing and recycling,ensuring that circularity and producer responsibility are viewed as a competitive advantage in the UK.Introducing a package of fiscal,tax and regulatory support measures that attract new investment and ensure domestic vehicle producers are globally competitiveAccessible,abundant,low cost zero emission energy is a prerequisite to this,combined with the ability of the automotive sector to attract global net zero talent and expertise,retain and upskill its existing workforce,and effectively develop future domestic talent.Manufacturers should be encouraged to invest in decarbonised and more efficient plants,for example by enhancing the Industrial Energy Transformation Fund,ensuring that Climate Change Agreements are broadened to include new technologies like battery manufacturing,and accelerating electricity grid connections and upgrades.Providing support and guidance to empower a sustainable,transparent UK supply chainThere is a growing regulatory focus on scope 3 emissions and supply chain due diligence.Large OEMs and Tier 1 suppliers will need to work collaboratively with their smaller suppliers to support with sustainability data collection and reporting,maximise transparency across the entire value chain,and ensure regulatory compliance.Regulatory requirements should ensure smaller suppliers are given time and support to upskill their workforce and implement required changes to data processes.Mobilising a skilled,diverse,empowered UK workforceThe automotive industry must continue to embrace the full potential of the UKs expertise and creativity,from across all parts of society.Diversity,equity and inclusion(DEI)is not only driven by ethical choices,it is fundamental to the UKs competitive transition towards a net zero and circular economy.While the automotive industry has demonstrated clear ambition in this area,there is plenty of progress still to be made.The UK automotive skills of the future should be underpinned by:the creation of an online National Upskilling Platform to allow automotive businesses of all sizes to join the upskilling drive;a reformed Apprenticeship Levy that support existing workers to upskill in priority training areas such as electrification,decarbonisation and digitalisation;and a regular review of skilled visa routes and shortage occupation lists to reflect business needs as technology evolves.The materiality assessment highlights the growing regulatory,investor and customer pressures related to a variety of automotive manufacturing,supply chain and circularity issues,with significant reputational and financial risks for those that are not equipped to make the transition.However,the materiality assessment also highlights areas of potential growth and investment in our ever-evolving industry.With the right support and strategic approach,the transition to a net zero and circular economy will create new opportunities for a competitive,decarbonised,sustainable automotive sector.The automotive industry and government must work together to create a competitive transition to a net zero and circular economy by:11THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS11THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSINTRODUCTIONENABLING THE UKS SUSTAINABILITY LEADERSHIP ON A GLOBAL STAGE Developing a UK regulatory ecosystem in partnership with business that is ambitious,deliverable and harmonised with global regulatory requirements and international sustainability objectivesAs the UK seeks to become a global sustainability leader,the automotive industry and its supply chain must remain fully integrated within European and global markets,maintaining free and fair trade and removing tariff and customs barriers wherever possible.As a heavily regulated sector,divergence from EU and international regulatory requirements and standards presents a fundamental and hugely costly issue for UK automotive products and processes.A harmonised international approach to regulated requirements and methodologies protects UK automotive competitiveness and supports global efforts to achieve common,joined-up decarbonisation,sustainability and circularity goals.Ensuring UK sustainability data requirements match the high ambitions of automotive companies operating across global marketsAligning UK monitoring and reporting requirements with internationally adopted standards will support the efficient and effective use of data to drive sustainability progress,while also ensuring continued access to international markets.A consistent,transparent data ecosystem will help manufacturers,suppliers,policymakers and investors to understand and develop effective and joined-up regulations,practical and transferable methodologies,and targeted support mechanisms and guidance.It will also maximise opportunities for shared learning and skills across different sectors and markets,and empower customer decision-making through consistent messaging and information.Maintaining and further supporting access to critical raw materials and cross-border trade,building supply chain resilience to attract investment in zero emission and sustainability technologiesEstablishing and maintaining free trade agreements and innovative partnerships which support the net zero economy and circularity,including with mineral-rich countries to secure supplies of the critical raw materials on which a sustainable UK industry is increasingly reliant.As the UK automotive sector works towards full circularity and sustainability,we must create the best possible conditions for the sector to source vital materials and components from across global markets,while working in harmony with local communities and demonstrating best practice for environmental,social and economic sustainability.12THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS12 Unit1999%Change 2023 on 19992022(adjusted)2023%Change 2023 on 2022Environmental performanceManufacturing,logisitics and aftermarket activitiesASTotal combined energy use(GWh)7013-55%3,2883,128-4.8%of which is on-site renewable generation(GWh)N/AN/A23.2#.0%-0.1ppof which is green tariff(GWh)N/AN/A45.746.10.9%VMEnergy used per vehicle produced(MWh/unit)3.9-33%3.22.6-18.0%ASTotal combined water use(000m3)6090-41%3,6943,616-2.1%VMWater used per vehicle produced(m3/unit)5.3-42%3.73.1-17.7%ASTotal combined CO2 equivalents(Scope 1&2)(tonnes)2,182,926-72c5,441603,319-5.1%VMCO2 equivalents per vehicle produced(tonnes/unit)1.1-54%0.610.50-18.2%Volatile Organic Compounds emissions(cars)(g/m2)55.0-53%.625.60.2%AS-rProportion of waste to landfill(%)N/AN/A0.4%0.7%0.3ppProportion of waste recycled and reused(%)N/AN/A89.2.7%-1.5ppVehicle emissionsAverage new car CO2 emissions(g/km)N/AN/A111.4108.9-2.2%New zero emission cars sold(thousand)N/AN/A267.2314.717.8%ARShare of overall market new zero emission cars(%)N/AN/A16.56.54%-0.02ppNew zero emission vans sold(thousand)N/AN/A16.720.220.9%Share of overall market new zero emission vans(%)N/AN/A5.97%5.97%0.00ppSocial performanceWIJobs dependent on the sector907,000-130,500793,000-0.9%ASTotal employees95,214-14w,55982,1115.9%Lost time incidents per 1000 employees13.4-91%1.391.19-14.3%Training daysN/AN/A135,454131,447-3.0%New apprentices&traineesN/AN/A1145161340.8%Share of overall employees women(%)N/AN/A13.0.1%1.1ppEconomic performanceWIAutomotive manufacturing sector turnover(billion)N/AN/A77.786.010.7%Automotive manufacturing gross value added(billion)N/AN/A16.12236.6%Total new cars and CVs produced1,984,909-486,6141,025,47417.0%Total new car and CV registrations2,429,084-11%1,896,2022,244,50918.4%VM/EMTotal engines(re)manufacturedN/AN/A1,556,3841,703,0059.4%ASSignatories combined turnover(billion)N/AN/A58.273.225.8%VMTotal number of vehicles produced1,570,000-358,5191,017,26517.1%SUMMARY:2023 KEY PERFORMANCE INDICATORS(KPIs)INTRODUCTION13THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS13Key:WI whole industry data AR all car and van registrations in the UK AS all signatories VM vehicle manufacturers EM engine manufacturers AS-r all signatories except those whose business is specifically related to re-manufacturing,reuse and recycling activitiesThe 2022 data has been adjusted to ensure consistency with the current number of signatories and enable year-on-year comparisons.This reflects slight changes to signatories and methodologies for calculating the data.Sector turnover and jobs dependent on the sector are compiled from several official sources using expert SMMT analysis.Figures include manufacturing,distribution,refuelling and repair of vehicles where automotive is the main activity of the firms.All per vehicle figures also contain resources used during engine and battery production,some of which are destined for export.Production the complete vehicles as they leave the production line in a UK facility.Registrations vehicles registered for road use in the UK for the first time with the DVLA or the DVLAs equivalent organisation in Northern Ireland,Channel Islands or Isle of Man.Turnover the money/income that a business generates each year.Gross value added the contribution to the economy of an individual producer,industry or sector.CO2 calculated using UK Government GHG Conversion Factors for Company Reporting methodology.Scope 1:All direct GHG emissions.Scope 2:Indirect GHG emissions from consumption of purchased electricity,heat or steam.Green tariff:each unit of electricity purchased is linked to a specific unit of renewable generation(e.g.wind,hydroelectric or solar)purchased by a supplier on behalf of the customer,sending a signal for demand.This report has 19 signatories,including manufacturers of over 99%of all cars and commercial vehicles produced in the UK,as well as those that supply the automotive industry and those that import vehicles for sale.All data presented is for UK operations only,unless explicitly stated otherwise.In a revival of the industrys fortunes,UK vehicle production hit 1,025,474 units in 2023,up 17.0%on the previous year.The easing of pandemic-related challenges and increasing electrified model production combined to drive annual output above one million for the first time since 2019.Eight all-new vehicle models entered production in 2023 while 23.7 billion of private and public investment commitments were made more than in the previous seven years combined.These commitments continue to drive green economic growth,create jobs nationwide and transition the sector to electrified vehicle manufacturing.UK production of battery electric(BEV),plug-in hybrid(PHEV)and hybrid(HEV)vehicles surged to a record 346,451 units in 2023,up 48.0%from the previous year.Overall,UK car production rose 16.8%in 2023,its best growth rate since 2010,with the total retail value of all models exceeding 50 billion.While 191,247 cars were built for domestic buyers,77%of output was shipped overseas,highlighting the contribution of automotive to the UK economy.16The welcome ramp-up in the number of vehicles manufactured in the UK in 2023 was accompanied by an equally welcome increase in environmental performance.Despite increased production volumes,the industry as a whole reported using-4.8%less energy and-2.1%less water overall compared to 2022.Furthermore,manufacturing efficiencies related to economies of scale and reduced supply chain disruption meant that the average vehicle was produced using-18.0%less energy and-17.7%less water than in the previous year.In 2023,the UK automotive industry reported a-5.1%reduction in scope 1&2 CO2 emissions overall and,alongside the greater reported energy efficiencies,an-18.2%reduction in scope 1&2 CO2 emissions per vehicle manufactured.While much of the reported CO2 emissions reductions in 2023 were associated with an overall reduction in energy use across the sector,investment in on-site renewable generation has continued to play a critical role in minimising scope 1&2 emissions associated with manufacturing processes.For the second year in a row,46GWh of renewable energy electricity was generated at automotive manufacturing and supply chain sites across the country.A further 720GWh was purchased by the industry through green tariffs and,while this source of energy reduced in line with the more general trend of energy reduction,it maintained its share of 23%of overall industry energy use in 2023.There was little change in the level of volatile organic compounds(VOC)emissions from vehicle manufacturing processes in 2023.This follows a significant increase reported in 2022 which was partially explained by improvements to monitoring methodologies and changes to ownership and operation of some car manufacturing sites.While this requires close ongoing scrutiny,in comes in the context of significant longer-term reduction of-53%since 1999.Today,less than 1%of material leftover from original equipment manufacturing processes goes to landfill.Zero waste to landfill is the ultimate aim for the automotive industry and many manufacturers have achieved this already.The vast majority(87.2%)of leftover materials from production are reused or recycled,with the remainder going to recovery(including waste to energy)and incineration.Alongside its commitment to ongoing environmental improvements,the automotive industry continues to invest in its social and economic responsibilities.The strong automotive manufacturing and sales performance in 2023 was matched by a 5.9%increase in the number of people directly employed by signatories to this report,and an incremental increase in the share of women employees to just over 14%.Significant investment across the sector in the employees of the future saw the number of new apprentices and trainees rising by 40.8%compared to the previous year.While the number of reported training days fell slightly in 2023,this is likely to reflect a broader change in how training is delivered,with a rise in online and modular training that is less easy to capture and report.Future reports may need to consider how this data is reflected.16 SMMT calculations based on RRP and publicly available information 51.6 billion.INTRODUCTION14THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS14THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSSMMT MATERIALITY ASSESSMENT CHALLENGES AND OPPORTUNITIES AHEADSMMTs annual sustainability reports are generally retrospective,examining data provided for the previous year.However,this years 25th anniversary presents an opportunity to take stock of our long-term progress to date,while also highlighting the likely challenges and opportunities faced by the UK automotive industry over the next 25 years.In this context,SMMT carried out a materiality assessment between April and June 2024,in which we identified and presented a variety of environmental,social and economic issues facing the UK automotive industry.The materiality assessment was completed by 32 organisations,16 that were considered core automotive industry participants(8 OEMs&SVMs,8 supply chain,remanufacturing&aftermarket)and 16 that were drawn from a broader industry stakeholder pool(4 NGOs,3 trade associations,5 research&academia,4 other).Respondents were asked to score a total of 32 material issues on a scale of 1(least important)to 5(most important),considering the potential severity,scale,scope,significance and likelihood of each individual material issue.Respondents provided scores based on both their impact today,as well as their expected impact within the next 5-10 years.This provides a vector for how these issues are likely to evolve over time.Average scores for both industry and stakeholders,respectively,were subsequently calculated and recorded.Our materiality assessment was not created for business auditing purposes and our methodology was designed to be accessible to a broad range of participants covering an equally broad range of experiences and expertise.On this basis,we did not pursue a double materiality approach,as set out in CSRD and ESRS.For this reason,the scores assigned to each of these issues may reflect a combination of both:the impact of the automotive industry on each individual environmental,social and economic issue(impact materiality),or the impact of each individual environmental,social and economic issue on the automotive industrys profitability and competitiveness(financial materiality)While some will have more obvious and immediate explanations than others,SMMT will continue to carry out further engagement to understand in more detail the potentially myriad factors behind each of these material issues.In the meantime,initial results have been set out overleaf,with the views of the automotive industry plotted against the views of automotive stakeholders.Immediately,there is a clear pattern visible when comparing the views of the industry and stakeholders today versus the future.When looking ahead to the next 5-10 years,there is a clear shift of all issues towards the top right of the graph,reflecting a general increase in the perceived complexity,uncertainty and urgency associated with many of these sustainability issues in future.While today,only the issue of zero emission vehicles(ZEVs)and tailpipe CO2 scores a 4 or above for both industry and stakeholders alike,12 different issues achieve this threshold in the next 5-10 years,covering a range of environmental,social and economic issues.The materiality assessment results reflect a clearly increasing focus on the automotive supply chain over the next few years,reflecting a continuation of a trend that is already growing today.In the next 5-10 years,key supply chain issues such as scope 3 emissions and life cycle assessment,sustainable materials,critical raw materials,due diligence and compliance,and climate change resilience all score highly,reflecting expectations about the increasing scope and granularity of requirements in areas already considered critical today.Circularity is also recognised in this regard,with recycling and producer responsibility,and repair,reuse and remanufacturing scoring particularly highly for both industry and stakeholders alike.This provides a clear indication of the areas in which automotive and supply chain companies will need to expand and improve the scope,transparency and granularity of their reported data in the coming years,which will also need to be reflected in future SMMT sustainability reports.Equally,there are issues that are of perennial importance for the automotive industry.Vehicle safety,brand satisfaction,skills,DE&I and employee wellness remain as critical in the near future as they are today.And while it is easy to focus on just those issues that score the highest,these scores only provide a relative snapshot.In reality,every issue on this list represents a critical aspect of the automotive industry,and our success is very much dependent on ensuring all of these issues are managed effectively.INTRODUCTION15THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS5.04.54.03.53.02.52.0Auto industry15THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSEnvironmental Social Economic5.04.54.03.53.02.52.0Chart 1 TodayChart 2 Next 5-10 years3.53.52.52.54.54.52.02.01.51.54.04.03.03.0Auto stakeholdersAuto stakeholdersAuto industry5.05.0Climate change resilianceClimate change resilianceRecycling and producer responsibiltyRecycling and producer responsibiltyDue diligence and complianceDue diligence and complianceJust transitions and partnershipJust transitions and partnershipCritical raw materialsCritical raw materialsTaxation and trade tariffsTaxation and trade tariffsCAVs and AICAVs and AIPolicy and legislationPolicy and legislationProtected communitiesProtected communitiesChanging behavioursChanging behavioursHazardous substancesHazardous substancesZEVs and tailpipe C02(scope 3 in use)ZEVs and tailpipe C02(scope 3 in use)Sustainable materialsSustainable materialsWater and land pollutionWater and land pollutionRepair,re-use and remanRepair,re-use and remanIndustrial energyIndustrial energyAir qualityAir qualitySite emissions(scope 1 and 2)Site emissions(scope 1 and 2)Scope 3 and LCAScope 3 and LCACSRCSRDE&IDE&IVehicle safetyVehicle safetyBrand satisfactionBrand satisfactionFundingFundingSkillsSkillsEmployee wellnessEmployee wellnessEmployee powerEmployee powerCustomer data and green infoCustomer data and green infoEthical business practicesEthical business practicesWater useWater useBiodiversityBiodiversityCarbon accountingCarbon accountingINTRODUCTIONSMMT MATERIALITY ASSESSMENT 16THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS-18.2%reduction in scope 1&2 CO2 and-17.7%reduction in water per vehicle manufactured46GWh of renewable energy generated at automotive manufacturing and supply chain sites for second consecutive year17.8%more new zero emission cars and 20.9%more new zero emission vans soldENVIRONMENTAL PERFORMANCE17THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 1VEHICLE EMISSIONS AND AIR QUALITYTAILPIPE CO2 EMISSIONS AND THE ZERO EMISSION VEHICLE MANDATEAn increasing proportion of zero emission vehicles,combined with continuing investment in hybrid technologies,helped reduce average tailpipe CO2 emissions from cars by a further-2.2%compared to 2022,continuing a long term trend of reduction over the last 25 years.The introduction of the Zero Emission Vehicle(ZEV)Mandate for cars and vans at the start of 2024 means that fleet average CO2 regulation is no longer primarily responsible for driving down emissions of these vehicles in England,Scotland and Wales(with NI likely to follow in 2025).Instead,overall average tailpipe emissions will continue to be reduced significantly by the rapid introduction of zero emission vehicles(ZEVs)to the market,with a requirement that 80%of all new cars and 70%of all new vans by 2030 are ZEVs.Therefore,2023 is the final year in which cars and vans sold in GB were required to comply with EU-aligned CO2 emissions regulations,with the ZEV mandate subsequently delivered via the new Vehicle Emissions Trading Scheme(VETS)regulations.The ZEV mandate requires each manufacturer,as a proportion of their overall new vehicle registrations,to meet rising targets each year for new zero emission car and van registrations.In 2024,this target is 22%for cars and 10%for vans.With the right regulatory framework,the right flexibilities and the right support mechanisms,the UK automotive industry can deliver a successful and competitive ZEV transition.However,while there has been a rapid increase in the uptake of ZEVs over the last few years,this has given way to a more recent softening in demand from private consumers and businesses.SMMTs updated outlook for 2024 suggests that the overall market may fall short of the 2024 ZEV mandate targets for both cars and vans,and it is still some way below the subsequent 2025 target of 28%for cars and 16%for vans.Many OEMs will rely on allowance trading and flexibilities within the regulation that allow them to manage their non-linear progress over time.Overall,battery electric vehicles(BEVs)accounted for one in six new cars registered in 2023,with the majority taken by business and fleet buyers who benefit from compelling tax incentives.In contrast,one in 11 private buyers chose a BEV.The UK ended the Plug-in Car Grant in June 2022,but is now the only market with mandated minimum targets for new ZEV registrations for cars and vans.With mainstream consumer demand flat,the industry is calling on government to support private buyers by halving VAT on new BEVs for three years.This temporary cut would give private consumers access to fiscal support at a level similar to that enjoyed by business buyers.Chart 3 Average new car CO2%change(RHS)CO2 g/km NEDCe(LHS)CO2 g/km WLTP(LHS)19020222021202020192018201720162015201420132012201120102009200820072006200520042003200220011801701601501401301201101009086420-2-4-6-8-10-1220002023Source:SMMT18THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 1For vans,ensuring BEV demand matches supply presents a major challenge.Immediate action to reduce existing barriers to uptake is crucial,therefore,with the single biggest obstacle being the insufficient number of van-suitable public chargers requiring significant infrastructure investment in every UK region.At the same time,a long-term commitment to the Plug-in Van Grant will be necessary to make the switch accessible and equitable for operators across all sectors and parts of the country.Looking ahead,the UK automotive industry is committed to playing its role in delivering the UK Governments decarbonisation ambition and achieving net zero by 2050.However,we need to see greater support for consumers and businesses in making the transition across all vehicle types,and greater and more strategic investment in charging infrastructure.While the ZEV Mandate has provided regulatory certainty for cars and vans up to 2030,we still do not know what non-zero emission technologies can be sold between 2030(80%ZEV target)and 2035(100%ZEV target).We also urgently need clarity on the decarbonisation pathway for heavy goods vehicles17,buses18 and coaches.Chart 4 SMMT Market Outlook-UK new BEV car market shareRolling year basisChart 5 SMMT Market Outlook-UK new BEV van market shareRolling year basisBEV ActualBEV ActualBEV-outlook April 2417 https:/www.smmt.co.uk/wp-content/uploads/The-Road-Ahead-delivering-a-more-rapid-zero-emission-HGV-transition.pdf18 https:/www.smmt.co.uk/wp-content/uploads/Next-stop-Net-Zero-the-route-to-a-decarbonised-UK-bus-market.pdfCASE STUDY:TOYOTAHYDROGEN FUEL CELL HILUXToyota Motor Manufacturing UK,in collaboration with highly skilled UK-based technical engineering partners Ricardo,ETL,D2H and Thatcham Research,have established a project to adopt second generation Toyota fuel cell components(as used in the latest Toyota Mirai)for the transformation of a Hilux into a fuel cell electric vehicle.The consortium successfully applied for APC(Advanced Propulsion Centre)funding in 2021.While TMUK led the project,a team from Toyota Motor Europe(TME)R&D provided expert technical support to enable the UK-based teams to build its own expertise and self-sufficiency to develop next generation hydrogen drivetrain capabilities.In order to support the development of the Hilux and further promote and build confidence in the hydrogen sector,TMUK in collaboration with colleagues from Toyota(GB),built the“Beyond Centre”on site at the Burnaston plant.This centre includes an electrolyser,hydrogen storage and refueller and explains Toyotas journey towards carbon neutrality.This centre has welcomed thousands of people through its doors since its inauguration in January 2023,allowing stakeholders from various sectors including government through to industry to learn about hydrogen,its generation and use.Prototype vehicles were produced at the TMUK site in Burnaston throughout 2023.Following successful initial testing results,the next step is to gather feedback from potential customers allowing for real-world evaluation of the performance and capabilities of the vehicle.These activities build on over 20 years of experience during which Toyota has developed a multi-path approach to carbon neutrality by offering a diverse vehicle line-up including a variety of electrified technologies,Hybrid Electric,Plug-in Hybrid Electric,Battery Electric and Fuel Cell Electric.0%5 %Jan-17Jan-18Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Jan-250%5%Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Jan-25BEV-outlook April 24Source:SMMTSource:SMMT19THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 1AIR QUALITYWhile this sustainability report generally reflects 2023 data collected directly from the industry,air quality data is provided by the National Atmospheric Emissions Inventory(NAEI),with 2021 being the most recently published dataset.NAEI provides the latest available published air quality data,based on continuously updated modelling methodologies.19 2021 data still reflects an industry,and broader economy,recovering in the aftermath of the Covid-19 pandemic.According to NAEI data,air pollution from road transport in the UK has reduced significantly since the 1970s as a result of changes to fuels and improvements in vehicle technology.The introduction of progressive emissions standards in new vehicles has led to a-78%reduction in NO2 exhaust emissions,and an-89%reduction in PM10 and PM2.5 exhaust emissions,since 1999.Road transport now accounts for just 10%of all PM2.5 emissions.Significant air quality improvements have been achieved through the introduction of newer,cleaner,more efficient vehicles over time.Where areas of local air quality concern remain,support for fleet renewal is the quickest way to further reduce emissions from road transport.Chart 7 PM2.5 exhaust emissions 1990-2021Chart 6 PM10 exhaust emissions 1990-2021 Passenger CarsLGVsHGVsPassenger CarsLGVsHGVsBuses and CoachesCombinedBuses and CoachesCombinedChart 9 PM10 non-exhaust emissions 1990-2021 Chart 8 NO2 exhaust emissions 19902021Passenger CarsLGVsHGVsPassenger CarsLGVsHGVsBuses and CoachesCombinedBuses and CoachesCombined201820202021201620142012201020082006200420022000199819961994199219900246810121416181,40020181,2001,00080060040020002020202120162014201220102008200620042002200019981996199419921990201820202021201620142012201020082006200420022000199819961994199219903025201510502018202020212016201420122010200820062004200220001998199619941992199030252015105019 https:/naei.beis.gov.uk/data/Source:NAEISource:NAEISource:NAEISource:NAEI20THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSVEHICLE MANUFACTURINGSCOPE 1&2 ENERGY&CO2 EMISSIONS Between 2000 and 2014,the amount of scope 1&2 energy required to manufacture each vehicle in the UK reduced as a result of improved efficiencies in production processes.During the same period,there was a corresponding,correlated reduction in the volume of CO2 generated per vehicle.Shortly after 2014,the amount of scope 1&2 energy per vehicle started to increase with the transition towards new vehicle technologies and more intensive manufacturing processes.More recently,this rise has been exacerbated by supply chain disruption and resulting inefficiencies related to major market externalities like Covid-19 and the war in Ukraine.However,while there has been a demonstrable rise in scope 1&2 energy used per vehicle since 2016,the correlation with scope 1&2 CO2 emissions has been broken.Requiring more energy,manufacturers have managed to maintain and,more recently,reduce scope 1&2 CO2 emissions per vehicle through a combination of increased on-site renewable generation and changes to fuel sources.In 2023,as UK vehicle production continued its post-pandemic recovery,scope 1&2 energy per vehicle reduced by-18%compared to 2022,with corresponding scope 1&2 CO2 per vehicle down by-18.2%.Renewable energy generation and supply remain a critical part of automotive manufacturers journeys towards net zero.In 2023,vehicle manufacturers and their suppliers generated 46GWh of renewable energy generation,matching the output reported in 2022.CHAPTER 1JLR has partnered with Wykes Engineering Ltd,a leader in the renewable energy sector,to develop one of the largest energy storage systems in the UK to harness solar and wind power using second-life Jaguar I-PACE batteries.A single Wykes Engineering Battery Energy Storage System(BESS)utilises 30 second-life I-PACE batteries,and can store up to 2.5MWh of energy at full capacity.The batteries supplied were taken from prototype and engineering test vehicles,and JLR aims to supply enough batteries to store a total of 7.5MWh of energy enough to power 750 homes for a day.Each BESS,which is linked to an advanced inverter to maximise efficiency and manage energy,is capable of supplying power directly to the National Grid during peak hours as well as drawing power out of the grid during off-peak hours to store for future use.Battery storage systems like this are critical to decarbonising the Grid,as they can deal with rapid peaks in demand,and maximise solar and wind energy capture during sunny or windy conditions for use when needed.With no need for additional manufacturing steps or the removal of battery modules,the batteries are simply removed from the Jaguar I-PACE and slotted into racks in the containers on-site.JLRs batteries are engineered to the highest standards and can therefore be deployed in low-energy situations once their health falls below the stringent requirements of an electric vehicle,which typically leaves a 70-80%residual capacity.CASE STUDY:JLRRENEWABLE ENERGY STORAGE FROM USED CAR BATTERIESChart 10 Energy and CO2(scope 1&2)per vehicle manufactured-500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,50000.20.40.60.81.01.21.4200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023kWh per vehicle(VMs)C02 per vehicle(tonnes)C02 (tonnes)Energy(kWh)Source:SMMT21THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSSCIENCE BASED TARGETSIn 2023,several signatories updated their commitments to Science Based Targets.20 These targets are set in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement agreed at COP21 limiting global warming to well-below 2C above pre-industrial levels and pursuing efforts to limit it to 1.5C.Automotive manufacturers have two near-term target temperature alignments,first for scope 1 and 2 emissions and,second,for scope 3 category 11 emissions covering the use of sold products(i.e.their vehicles and components).CHAPTER 1CompanyNear term-Target StatusNear term Target ClassificationNear term-Target YearNet-Zero by 2050Aston Martin LagondaCommittedCommittedBMW GroupTargets Set1.5C/Well-below 2C2030CommittedFord Motor CompanyTargets Set1.5C/Well-below 2C2035CommittedJaguar Land Rover AutomotiveTargets Set1.5C/Well-below 2C2030CommittedMcLaren RacingTargets Set1.5C 2030Targets SetMercedes-Benz AGTargets Set1.5C/Well-below 2C2030MichelinTargets Set1.5C/Well-below 2C2030CommittedNissan Motor CoTargets Set1.5C/Well-below 2C2030CommittedPACCAR(Leyland Trucks)Targets Set1.5C/Well-below 2C2030PSA Automobiles SATargets Approved2C2034Robert Bosch GmbHTargets Set1.5C2030Scania CVTargets Set1.5C2025CommittedToyota Motor CorporationTargets Set1.5C/Well-below 2C2035/2030Unipart GroupTargets Set1.5C2030Targets SetVolkswagen AG(inc.Bentley)Targets Set1.5C/Well-below 2C2030/2025Volvo Car GroupTargets Set1.5C/Well-below 2C2030CommittedCASE STUDY:BENTLEY10TH ANNIVERSARY OF SOLAR POWER Bentley Motors has increased the number of on-site solar panels at its carbon neutral dream factory in Crewe.The announcement of this work in 2023 coincided with the 10th anniversary of the first solar panels at the Pyms Lane site,where all Bentley models are built.Today,36,418 solar panels cover an area of 60,911m2,equivalent to nine football pitches or 311 tennis courts.The additional state-of-the-art panels are highly efficient and produce nearly 60 per cent more power per panel than the original units,which date back to 2013.They will add another two megawatts of energy generation to the Bentley site,bringing a total of 10MW of generation capacity.The combined systems will produce up to 75 per cent of Bentleys daytime electricity demands on average,equivalent to the energy needed to power more than 2,370 homes per year.All electricity used to manufacture Bentley cars is solar,or certified green.20 https:/sciencebasedtargets.org/22THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSWATER The longer-term trend for water use in vehicle manufacturing shows a direct correlation between vehicle production volumes and water use.More vehicles being produced tends to require more water.However,in 2023,the automotive industry managed a-2.1%reduction in overall water use,despite a 17%increase in the number of vehicles produced.This greater production volume also led to a-17.7crease in the volume of water used per vehicle.This reflects greater efficiencies of scale and less disruption to manufacturing processes and supply chain,both of which were a particular issue in 2022,and reflected in the previous years figures.WASTE AND RESOURCEToday,less than 1%of material leftover from original equipment manufacturing processes goes to landfill.Zero waste to landfill is the ultimate aim for the automotive industry and many manufacturers have achieved this already.The vast majority(87.7%)of leftover materials from production is reused or recycled,with recovery(including waste to energy)and incineration also playing a much smaller role.Data is not presented here for how the vehicles themselves are eventually dealt with at end of life,and the relative contributions of remanufacturing,repurposing,second life and recycling in that process.However,this process is covered by strict targets within the ELV Directive,which requires automotive manufacturers to meet 95%recovery and 85%recycling targets by average weight of each ELV.VOLATILE ORGANIC COMPOUNDS(VOCS)Vehicle manufacturers have invested heavily in the most efficient paint shops,enabling them to comply and go beyond the strict legal requirement of limiting VOC emissions.In 2023,VOC emissions in car manufacturing processes remained broadly steady compared to the previous year.However,the longer-term trend is one of a steady decrease in VOC emissions over time,with todays car manufacturers reporting less than half the VOC emissions compared to our first report 25 years ago.CHAPTER 1VehiclesWater(m3)20002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022202301234567-200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000100806040200202020182016201420122010200820062004202220232000199920012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023020406080100Chart 11 Water per vehicle manufacturedChart 12 Destination of leftover materialChart 13 Car production VOC emissionsWater per vehicle manufacturedUK vehicle productionReuse and recyclingLandfillRecoveryIncinerationg/m2Source:SMMTSource:SMMTSource:SMMT23THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 1The Burnaston site is a global leader for biodiversity amongst TOYOTA manufacturing sites,with the maturity expected from decades of working with nature.Established balancing lakes provide a Wildlife-Trust-recognised Site of Biological Importance.The lake connects with a network of green corridors that include hedgerows and meadows planted between the factory buildings and woodland containing 150-year old trees.Over 400 species have been recorded,including 25 species of butterfly,19 species of bumblebee and 11 species of bat.The Deeside factory faces the challenge of being located in the middle of an industrial site built upon a reclaimed sand bank.However,it has still managed to create a valuable wildflower area centred around a large pond adjacent to the factory,allowing staff to interact with nature during their break,use a purpose-built bird hide and take lunch at the picnic tables.In a few short years Deesides wildlife pond has experienced a 400%increase in species,many previously unseen.Burgh Heath is one of only 12 sites nationally to achieve a Biodiversity Benchmark certification,awarded by Surrey Wildlife Trust.Its rich habitat and the installation of 11 roosting boxes has led to a 180%increase in bat activity.Encouraging and enhancing wildlife onto site is part of TOYOTAs normal business.Biodiversity activity can have many wider benefits,such as supporting mental health and community engagement.Toyota has embraced biodiversity at its Burnaston and Deeside manufacturing sites,as well as its HQ at Burgh Heath.All three locations have integrated nature into the very fabric of their sites,through the introduction of wildflower meadows,ponds,mini-woodlands and butterfly banks.All of this work has been supported through partnerships with the respective wildlife trusts for Derbyshire,North Wales and Surrey whilst Royal Botanic Gardens Kew have provided expert botanical advice and training.In 2023,Bentley Motors was awarded Net Zero Plastic to Nature status for a second consecutive year.The internationally-recognised accreditation,from the climate company,South Pole,followed a rigorous waste stewardship appraisal of the companys campus and local operations.Bentley was the first car manufacturer to receive the ground-breaking certification in 2022,but South Poles latest endorsement reflects the firms ongoing efforts to support ambitious environmental commitments,across its manufacturing operations to the end-consumer.South Poles first in-depth appraisal in 2021 resulted in a widespread re-assessment of Bentleys plastics footprint on the environment.The assessment covered operational macro-plastic parts packaging used in logistics and manufacturing,and the disposal of plastic protection downstream at global retailers.It also assessed micro-plastic emissions from tyre abrasion as part of the logistics and product lifecycle.Bentley has significantly increased the level of waste management and traceability for its plastic waste,with 97 per cent of plastic waste processed in 2022.All inbound logistics packaging is now processed,including zero waste-to-landfill and export minimisation.Bentley subsequently invested in certified units supporting Second Life Thailand,a plastic waste collection project focussing on ocean-bound and land plastic recovery,recycling and reuse.The amount of funding towards mitigation matched the full volume of non-processed plastic waste found in 2022.CASE STUDY:TOYOTA CASE STUDY:BENTLEYHABITAT CREATION AND BIODIVERSITY NET ZERO PLASTIC TO NATURE ACCREDITATION24THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS SOCIAL PERFORMANCE1,613 new apprentices&trainees up 40.8%Proportion of employees that are women rises to 14.11,447 training days delivered to existing staff25THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 2The automotive industry continues to recognise the criticality of a skilled,diverse workforce in delivering the technologies and innovations that will underpin the UKs net zero future.Almost 200,000 people work in automotive manufacturing,with many of those jobs outside London and the South East.Auto workers typically earn 13%more than the national average,which might be considerably higher compared with in-region earnings.Some 813,000 UK jobs were dependent on the automotive sector in 2023.DIVERSITY,EQUITY AND INCLUSION In 2023,82,111 people were employed by signatories to this report,representing a rise of 5.9%compared to the previous year and reflecting the continuing recovery of the automotive sector following the Covid-19 pandemic.The proportion of industry employees that are women also rose incrementally to just over 14%.While this is positive and continuous progress,it demonstrates the size of the ongoing challenge and the importance of ongoing efforts to ensure a diverse,representative and skilled workforce.In this context,the Automotive Council,through its Diversity Equity and Inclusion Charter,has committed to increasing the proportion of women in the workforce to 30%by 2030.The Charter has 27 signatories that have pledged to:Create a respectful and inclusive company culture for all colleagues Embed DE&I policies into company values and ensure they are reflected in all communications Improve recruitment practices and targeting to remove bias,encourage diversity of applicants and increase the diversity of talent pipelines at every level Create a flexible working environment for all,with a focus on delivery Support career opportunities and progression for every employee,through training,talent management,mentoring and sponsorship programmes Appoint a board-level DE&I champion to lead change from the top and implement line manager training Engage and collaborate with our suppliers and the wider automotive sector to champion diversity,equity and inclusion and share best practice Collect DE&I data,and report and publish our progress annually to the Automotive CouncilIn March 2024,SMMT celebrated its 3rd International Womens Day event on the theme Inspire Inclusion.The event brought together around 40 members and stakeholders to discuss the challenges faced by women in the automotive sector.As part of SMMTs programme at this years Commercial Vehicle Show,SMMT hosted the Women in Commercial Vehicles dinner sponsored by Oaklin.This event allowed women at various stages of their career to share their experiences and also consider how we might introduce more women to the sector.26THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 2Stellantis UK is the proud recipient of a Gold Award under the Defence Employer Recognition Scheme for services supporting the Armed Forces.The initiative is dedicated towards organisations that pledge,demonstrate and advocate support to defence and the armed forces community.The award followed Stellantis UK signing the Armed Forces Covenant in 2021,pledging further support and dedication towards those who have served the country.Stellantis is a member of Mission Automotive,the Armed Forces Engagement initiative delivered by Mission Motorsport(The Forces Motorsport Charity in partnership with The Royal Foundation of the Prince and Princess of Wales,the SMMT and supported by the Ministry of Defence).Since signing the Covenant,Stellantis UK has launched a series of initiatives and services directed towards supporting the armed forces community,such as free training for service leavers,veterans and family members from the Stellantis Performance Training Academy.Stellantis UK has also dedicated time to welcoming servicemen and women into the company,with representatives attending career fairs,a new employee HR policy dedicated to Reserve Employees,and launching a Stellantis Armed Forces Network to support veterans and service leavers with their transition into civilian life.Aston Martin has committed to a workplace and culture where its people feel connected to Aston Martins purpose,that they have a voice,are listened to and will receive equal treatment to develop and reach their full potential.Aston Martins Inclusion Network,I AM Inclusion,meets monthly to support employees and seeks to break potential stigma across the organisation by talking about issues that affect its employees.Five dedicated strands within the network focus on different areas of equity,diversity,and inclusion.The strands are I AM Gender,I AM Pride,I AM Ability,I AM Embraced,I AM Well.The Inclusion Network has spearheaded numerous initiatives to promote LGBTQ inclusion and continued to raise awareness of LGBTQ issues,providing colleagues with practical advice.They continue to work closely with Racing Pride,an innovative movement to promote LGBTQ within the motorsport industry and among its technological and commercial partners.Racing Pride supported the annual induction of Aston Martins new Early Careers starters,attended their Open Day at Gaydon,and provided a toolkit on Allyship.In addition,as part of International Womens Day,Aston Martin and Aston Martin Aramco Formula One Team joined forces to host a prominent engagement event which included a series of panel discussions to an audience of young female students and workshops.Aston Martin also continues to integrate diversity and inclusion training into its day to day operations.During 2023,inclusion training was part of 110 Aston Martin Values training sessions.These two-hour sessions were based on Aston Martins core values of Unity,Openness,Trust,Ownership and Courage and included many conversations around how employees live,work and interact with each other,with a strong focus on all areas of inclusion.CASE STUDY:ASTON MARTININCLUSION NETWORK AND VALUES TRAININGCASE STUDY:STELLANTIS UKARMED FORCES EMPLOYER RECOGNITION SCHEME AWARD27THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 2APPRENTICESHIPS AND TRAININGIn 2023,there was a 40.8%rise in the number of apprentices and trainees taken on within the industry,further building on the 45.3%post-Covid rebound of 2022.For existing employees,a combined 131,447 training days were provided,a slight reduction on the previous year.However,there is a growing view that this is no longer an optimal metric for assessing the level of training in light of the increasing use of online,more modular,self-directed training being offered,which is more difficult to capture as a metric.JLR has launched an all-new Schools Partnership Programme to help 40,000 students from diverse backgrounds build electrifying future careers in areas such as electrical and software engineering,digital and data roles and automated technologies.The programme is focused on improving opportunities for groups underrepresented in the industry including young females,pupils from challenging socio-economic backgrounds and those with English as a second language,creating a pipeline of talent to build JLRs next generation of modern luxury vehicles.In collaboration with The Careers and Enterprise Company,JLR identified 40 secondary schools that reflected the companys diversity and inclusion aspirations.The schools are located close to JLR sites in Coventry&Warwickshire,Birmingham,the Black Country,Solihull and Liverpool as well as local University Technical Colleges.CASE STUDY:JLRSCHOOLS PARTNERSHIP PROGRAMME FOR STUDENTS FROM DIVERSE LOCAL COMMUNITIESA skills partnership between Nissan and Sunderland College that bridges the gap between education and the world of work was launched in June 2023.The Nissan Academy,which will be based at the Colleges City Campus,will see students study for a specialised engineering qualification alongside their GCSEs.Supported by the College and a team of experts from Nissan,pupils will be able to hone the technical skills needed for a career in advanced manufacturing and engineering.Upon successful completion of the programme,they will be guaranteed an apprenticeship assessment with Nissan.Academy students will split their time between the Colleges technical City Campus and the Nissan plant where they will benefit from access to industry experts,state-of-the-art equipment and facilities,as well as unique projects and experiences.Students will study for a Level 2 qualification in Engineering,the equivalent of a GCSE.The new partnership will build on Nissans established and successful commitment to school engagement through the Nissan Skills Foundation.Over the last eight years,the Foundation has seen 85,000 young people aged 9-18 attend one of their unique STEM activities.In a separate project,pupils across the UK have been given a digital learning boost thanks to the donation of 3,000 recycled computers from Nissans UK entities.The initiative,a partnership between Nissan and STEM Learning UK,a not-for-profit organisation,will provide computers to young people in schools that experience digital poverty,helping them gain vital technical skills for their future careers.The computers were available after an equipment upgrade at Nissans five sites across the UK.More will also be donated in the coming months.CASE STUDY:NISSANACADEMY LAUNCHED IN SUNDERLAND28THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 2CASE STUDY:BENTLEYRECORD NUMBER OF TRAINEE POSITIONSCASE STUDY:ASTON MARTINCOMMUNITY ENGAGEMENTInspiring young people about the exciting possibilities offered by a career in manufacturing and promoting Science,Technology,Engineering and Mathematics(STEM)is an important part of making sure that Aston Martin can access talent that is the bedrock of its future success.In 2023,it increased its STEM activity,more than doubling the number of visits to schools,colleges and universities,which increased from 20 in 2022 to 54.The company has long-standing partnerships and extensive engagement with local schools and colleges around its major facilities and this years engagements included careers events at WMG Academy,Warwick University,De Montfort University,Myton and Kineton secondary schools,and the Houses of Parliament.The companys apprentices and other employees helped educate students about automotive manufacturing and engineering,as well as supporting mock interviews with Year 10/11 students in Cowbridge comprehensive.They conducted interviews based on the CVs and personal statements submitted by students and provided constructive feedback,as well as industry insight to help students decide on their next steps after completing their GCSEs.Furthermore,Aston Martin organised a DT Derby with Whitchurch School,which involved Aston Martins apprentices helping design and engineer remote-control cars with GCSE students to race around a created track,with the winning team getting a visit around the factory.In addition to school engagements,in 2023,Aston Martin hosted two open days at its Gaydon and St Athan sites to welcome employees and their families,alongside local community representatives to see first-hand its companys products,design and manufacturing facilities.The biennial Gaydon open day event marked the 20-year anniversary since the establishment of the Aston Martin headquarters at Gaydon,with around 10,000 people visiting during the weekend to enjoy a variety of activities for this unique,behind the scenes experience.This year,Bentley Motors will welcome 169 roles,a record number of trainee opportunities.Career prospects across the company for Graduates and Industrial Placements were made available on the company careers portal,with Apprentice applications opening in February 2024.Nearly a quarter of the positions were focused on Bentleys R&D department as the luxury brand continues to look for the industrys brightest talents to support its Beyond100 strategy,seeking sustainable luxury mobility leadership.Of the 169 2024 roles,38 are for three or four-year Apprenticeship positions,31 are two-year Graduate roles,and 100 are for 12-month Industrial Placements.Additional departments include Manufacturing,Sales and Marketing,Finance and Human Resources.In parallel to the vacancies opening,Bentley has welcomed its 117-strong 2023 cohort to join the 4,000 colleague workforce in Crewe,including a record high 48%/52male/male gender split of the new starters.29THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 2HEALTH AND SAFETY Health and safety continues to be a priority for the industry and all manufacturers strive for zero lost time incidents.Over the longer term,there has been a significant-91%reduction in the rate of lost time incidents per employee since 1999.Following a reported increase in the rate of these incidents in 2022,potentially due to interruptions to normal processes and work patterns as a result of Covid-19 related supply chain disruption,it is a welcome sign that this trajectory has been immediately reversed in 2023,falling by-14.3%compared to the previous year.Chart 14 Lost time incidentsTotal of lost-time incidents(LHS)Number of lost time incidents per 000 employees(RHS)200220032004200520062007200820092010201120122013201420152016201720182019202020212022202302468101214160100200300400500600700800Source:SMMT 30THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS93 billion turnover up 19.4 billion GVA up 20.5%.Vehicle production up 17%Vehicle registrations up 18.4ONOMICPERFORMANCEStellantis has launched a new maritime logistics service,in partnership with Suardaz and Peel Ports,in order to supply parts to its Ellesmere Port manufacturing plant,reducing carbon emissions in line with its Dare Forward 2030 Strategic Plan.The Ellesmere Port plant completed its full transformation to manufacture its compact electric van(Vauxhall/Opel Combo Electric,Peugeot e-Partner and Citron e-Berlingo)in September 2023,becoming the UKs only all-electric manufacturing facility.A number of sheet metal parts and components required for production will be supplied from partner companies that are based near the Vigo plant in Spain the other Stellantis plant that manufactures these electric light commercial vehicles.In order to improve the supply chain flows to Ellesmere Port,a new end-to-end logistical service has been established.This includes a new twice weekly shipping service from Vigo Port to Queen Elizabeth II Eastham docks,Merseyside.The new 891 nautical miles maritime route will take an estimated 14,700 lorry journeys off the roads of the UK and continental Europe annually saving around 17.5 million kilometres(c.11 million miles)of road travel.Each ship will be able to take up to 95 lorries whose cargo will comprise around 47 different part lines of sheet metal parts and components that will be used in the assembly of the all-electric compact vans.The packaging used to transport the parts is then taken back to Vigo Port on the return leg in order to be reused for subsequent trips.The journey time from Vigo Port to Queen Elizabeth II Eastham docks is around 50 hours a comparable time to the current road journey.However,compared to road transport,the direct maritime route has 30%lower CO2 emissions over the course of a full year as well as 37%less energy consumption.Suardaz will manage the end-to-end logistical service from one plant to another.Peel Ports will provide a 9.4-acre site at the Queen Elizabeth II Eastham dock to enable this new maritime route.Peel Ports and Suardaz have invested a combined 10million in recommissioning a berth at the Queen Elizabeth II Eastham dock and installing the infrastructure needed to support the processing of the Roll-on Roll-off(RoRo)ships and their cargo.The dock is conveniently located two miles from the Stellantis Ellesmere Port plant with direct access to the River Mersey and the Manchester Ship Canal.CASE STUDY:STELLANTISMARINE LOGISTICS SERVICE FOR ELLESMERE PORTThe automotive industry is a vital part of the UK economy.In 2023,automotive-related manufacturing contributed 93 billion turnover(up 10.7%on 2022)and 22 billion value added(up 20.5%on 2022)to the UK economy.The automotive sector also supports jobs in other key sectors,including advertising,chemicals,finance,logistics and steel.The sector received a boost at the very end of 2023 with the deferral of tougher rules of origin for batteries and EVs traded between the UK and EU.The move will help safeguard the competitiveness of the sector in the UK and Europe,providing valuable time to ramp up local production of batteries and associated components.31THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSCHAPTER 332CHAPTER 3THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSPRODUCTION AND EXPORTSUK vehicle production hit 1,025,474 units in 2023,up 17.0%on the previous year.The easing of Covid-19 pandemic-related challenges and increasing electrified model production combined to drive annual output above one million for the first time since 2019.Eight all-new vehicle models entered production in 2023 while 23.7 billion of private and public investment commitments were made more than in the previous seven years combined.These commitments continue to drive green economic growth,create jobs nationwide and transition the sector to electrified vehicle manufacturing.UK production of battery electric(BEV),plug-in hybrid(PHEV)and hybrid(HEV)vehicles surged to a record 346,451 units in 2023,up 48.0%from the previous year.Overall,UK car production rose 16.8%in 2023,its best growth rate since 2010,with the total retail value of all models exceeding 50 billion.In the same period,UK commercial vehicle(CV)production increased by 18.5%,with 120,357 vans,trucks,taxis,buses and coaches leaving factory lines.While 191,247 cars were built for domestic buyers,713,870 units(79%of units manufactured in the UK)were shipped overseas,highlighting the contribution of automotive to the UK economy.Year on year,car exports rose 17.6%compared with a 13.7%rise in output for the British market.And for CV manufacturing,exports were also responsible for the bulk of growth over the year,with global demand for British-built commercial vehicles rising more than a quarter(25.8%)to 76,953 units.Almost two thirds(63.9%)of CV production was for overseas markets,up from 60.2%in another 13-year high.The EU remained by far the sectors largest global market.60.3%of car exports were destined for the EU,with shipments up almost a quarter(23.2%)to 430,411 units.The US was the next biggest destination with a 10.3%share of exports(73,571 units),followed by China with 7.2%(51,202 units),despite shipments to both slipping by-9.1%and-2.7%respectively.Turkey,conversely,saw exports surge 223.8%to 27,346 units,making it the UKs fourth biggest global market ahead of Japan,Australia,South Korea,Canada,UAE and Switzerland.For CVs,the EU was responsible for 94.2%of all exports as 72,461 units were shipped to the bloc in 2023.A further 1,085 and 1,016 units were shipped to Australia and the US,respectively.051015202530350.00.40.81.21.62.0201320142015201620172018201920202021202220232013201420152016201720182019202020212022202301020304050607080901000.000.250.500.751.001.251.501.752.00Chart 15 UK vehicle production and car BEV/hybrid shareChart 16 UK vehicle productionCarsCVsExportsTotalBEV car shareHybrid car shareExport shareMIllionsMIllionsShare%Source:SMMTSource:SMMT33THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSChart 17 UK new car registrations by fuel type(millions)BEVPHEVHEVPetrolDieselChart 18 UK new LCV registrations by fuel type(thousands)BEVOther3.02.52.01.51.00.50.02023F2024F20222021202020192018201720162025F25030035020015010050020232024F20222021202020192016201520182017201420134002025FCHAPTER 3REGISTRATIONSIn 2023,the UK new car market recorded its best year since the pandemic with just over 1.9 million new cars reaching the road an increase of 17.9%on the previous year.Growth was driven entirely by fleet investment as the previous years supply constraints faded and helped fulfil pent-up demand.Fleet deliveries rebounded by 38.7%year on year,raising the value of new car sales by more than 10 billion to around 70 billion,with 288,991 additional vehicles reaching the road.However,private consumer demand remained stable at 817,673 units after a strong recovery in 2022,with cost of living pressures and high interest rates constraining growth.As the industry transitions away from fossil fuels,drivers continued to invest heavily in low and zero emission cars which meant average new car CO2 fell by-2.2%to 108.9 g/km.Battery electric vehicle(BEV)uptake reached a record volume up by almost 50,000 units with 314,687 new registrations the second largest market in Europe.Indeed,2023 saw more BEVs reach the road than in 2020 and 2021 combined.BEV share,however,plateaued at 16.5%.Hybrid electric vehicles(HEVs)also recorded robust growth,up 27.1%to reach a 12.6%market share.Plug-in hybrids(PHEVs)also enjoyed a strong year,with a 39.3%increase in registrations to account for 7.4%of the market.UK demand for new light commercial vehicles(LCVs)grew by 21.0%to reach 341,455 units in 2023,with a record number of zero emission vans joining Britains roads.Uptake of new battery electric vans hit record volumes in the year as volumes matched the overall markets growth of 21.0%.20,253 units were registered in 2023 across 28 different models representing 5.9%of the market.More than 58,000 battery electric vans have joined UK roads,helping make the UK the third largest LCV BEV market in Europe by volume.Heavy commercial vehicle(HCV)registrations rose by 13.5%in 2023 to 46,227 units,marking a third consecutive year of growth and just over 2,000 units short of the pre-Covid 2019 market.0.5%of the HCV market were ZEVs in 2023.The bus and coach market posted its first growth in several years in 2023,up 44.6%to 4,932 units.The UK is a global leader in zero emission buses and has for many years developed both ultra-low and zero emission bus technologies for the UK market and for export.21 21 https:/www.smmt.co.uk/reports/next-stop-net-zero-the-route-to-a-decarbonised-uk-bus-market/Source:SMMTSource:SMMT34THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSThe Society of Motor Manufacturers and Traders(SMMT)is one of the largest and most influential trade associations,representing the automotive industry in the UK.The automotive industry is a vital part of the UK economy,integral to growth,the delivery of net zero and the UK as a global trade hub.It contributes 93 billion turnover and 22 billion value added to the UK economy,and invests around 4 billion each year in R&D.With 198,000 people employed directly in manufacturing and some 813,000 across the wider automotive industry.Many of these automotive manufacturing jobs are outside London and the South-East,with wages that are around 13%higher than the UK average.The sector accounts for 12%of total UK exports of goods with more than 140 countries importing UK produced vehicles,generating 115 billion of trade in total automotive imports and exports.The UK manufactures almost every type of vehicle,from cars,to vans,taxis,trucks,buses and coaches,as well as specialist and off-highway vehicles,supported by more than 2,500 component providers and some of the worlds most skilled engineers.In addition,the sector has vibrant aftermarket and remanufacturing industries.The automotive industry also supports jobs in other key sectors including advertising,chemicals,finance,logistics and steel.35THE SOCIETY OF MOTOR MANUFACTURERS AND TRADERSSIGNATORIES REFERENCES AND ONLINE CONTENTReferences and detailed data on the automotive industry performance can be found at:www.smmt.co.uk/sustainabilityThe webpage also contains links to signatories sustainability websites.DISCLAIMERThis publication contains general information and,although SMMT endeavours to ensure that the content is accurate and up-to-date at the date of publication,no representation or warranty,express or implied,is made as to its accuracy or completeness and therefore the information in this publication should not be relied upon.Readers should always seek appropriate advice from a suitably qualified expert before taking,or refraining from taking,any action.The contents of this publication should not be construed as advice or guidance and SMMT disclaims liability for any loss,howsoever caused,arising directly or indirectly from reliance on the information in this publication.Signatories to this reportUK BrandsAlexander Dennis Alexander DennisAston Martin Lagonda Aston Martin,LagondaAutocraft Autocraft Bentley Motors BentleyBMW Group UK,including Rolls-Royce Motor Cars BMW,MINI,Rolls-RoyceRobert Bosch BoschCaterpillarCaterpillar,PerkinsFord Motor Company Ford GSM AutomotiveJLRJaguar,Range Rover,Defender,DiscoveryLeyland TrucksDAF TrucksMcLaren AutomotiveMcLarenNissan Motor Manufacturing UK Nissan Technical CentreNissanScania UKScaniaStellantisAbarth,Alfa Romeo,Citron,DS,Fiat,Fiat Professional,Jeep,Maserati,Peugeot,VauxhallToyota(GB)plc Toyota Motor Manufacturing(UK)Toyota Logistics Services Lexus,ToyotaUnipart Unipart LogisticsVolkswagen Group(UK)Audi,Cupra,SEAT,KODA,Volkswagen Passenger Cars,Volkswagen Commercial VehiclesVolvo Car UK VolvoTHE SOCIETY OF MOTOR MANUFACTURERS AND TRADERS LIMITED 71 Great Peter Street,London,SW1P 2BN Tel: 44(0)20 7235 7000 E-mail:communicationssmmt.co.uk SMMT SMMTwww.smmt.co.ukSMMT,the S symbol and the Driving the motor industry brandline are registered trademarks of SMMT Ltd Disclaimer This publication contains general information and,although SMMT endeavours to ensure that the content is accurate and up-to-date at the date of publication,no representation or warranty,express or implied,is made as to its accuracy or completeness and therefore the information in this publication should not be relied upon.Readers should always seek appropriate advice from a suitably qualified expert before taking,or refraining from taking,any action.The contents of this publication should not be construed as advice or guidance and SMMT disclaims liability for any loss,howsoever caused,arising directly or indirectly from reliance on the information in this publication.
2024-12-05
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The 2023 EPA Automotive Trends Report Greenhouse Gas Emissions,Fuel Economy,and Technology since 1975 EPA-420-R-23-033 December 2023 This technical report does not necessarily represent final EPA decisions,positions,or validation of compliance data reported to EPA by manufacturers.It is intended to present technical analysis of issues using data that are currently available and that may be subject to change.Historic data have been adjusted,when appropriate,to reflect the result of compliance investigations by EPA or any other corrections necessary to maintain data integrity.The purpose of the release of such reports is to facilitate the exchange of technical information and to inform the public of technical developments.This edition of the report supersedes all previous versions.Table of Contents Introduction.1 A.Whats New This Year.1 B.Manufacturers in this Report.2 C.Fuel Economy and CO2Metrics in this Report.3 D.Other Sources of Data.5 Fleetwide Trends Overview.6 Overall Fuel Economy and CO2 Trends.6 Production Trends.9 Manufacturer Fuel Economy and CO2 Emissions.10 Vehicle Attributes.15 A.Vehicle Class and Type.15 B.Vehicle Weight.22 C.Vehicle Power.26 D.Vehicle Footprint.31 E.Vehicle Type and Attribute Tradeoffs.34 Vehicle Technology.41 A.Technology Overview.41 B.Vehicle Propulsion.44 C.Vehicle Drivetrain.69 D.Technology Adoption.76 Manufacturer GHG Compliance.84 A.Footprint-Based CO2 Standards.86 B.Model Year Performance.90 C.GHG Program Credits and Deficits.118 D.End of Year GHG Program Credit Balances.131 i List of Figures Figure 2.1.Estimated Real-World Fuel Economy and CO2 Emissions.6 Figure 2.2.Trends in Fuel Economy and CO2 Emissions Since Model Year 1975.7 Figure 2.3.Distribution of New Vehicle CO2 Emissions by Model Year.8 Figure 2.4.New Vehicle Production by Model Year.10 Figure 2.5.Changes in Estimated Real-World Fuel Economy and CO2 Emissions by Manufacturer.11 Figure 3.1.Regulatory Classes and Vehicle Types Used in This Report.16 Figure 3.2.Production Share and Estimated Real-World CO2 Emissions.17 Figure 3.3.Vehicle Type Distribution by Manufacturer for Model Year 2022.19 Figure 3.4.Car-Truck Classification of SUVs with Inertia Weights of 4000 Pounds or Less.20 Figure 3.5.Average New Vehicle Weight by Vehicle Type.23 Figure 3.6.Inertia Weight Class Distribution by Model Year.24 Figure 3.7.Relationship of Inertia Weight and CO2 Emissions.25 Figure 3.8.Average New Vehicle Horsepower by Vehicle Type.27 Figure 3.9.Horsepower Distribution by Model Year.28 Figure 3.10.Relationship of Horsepower and CO2 Emissions.29 Figure 3.11.Calculated 0-to-60 Time by Vehicle Type.30 Figure 3.12.Footprint by Vehicle Type for Model Years 20082022.32 Figure 3.13.Footprint Distribution by Model Year.32 Figure 3.14.Relationship of Footprint and CO2 Emissions.33 Figure 3.15.Relative Change in Fuel Economy,Weight,Horsepower,and Footprint.35 Figure 4.1.Vehicle Energy Flow.41 Figure 4.2.Manufacturer Use of Emerging Technologies for Model Year 2022.43 Figure 4.3.Production Share by Engine Technology.45 Figure 4.4.Gasoline Engine Production Share by Number of Cylinders.47 Figure 4.5.Percent Change for Specific Gasoline Engine Metrics.49 Figure 4.6.Engine Metrics for Different Gasoline Technology Packages.51 Figure 4.7.Gasoline Turbo Engine Production Share by Vehicle Type.53 Figure 4.8.Gasoline Turbo Engine Production Share by Number of Cylinders.53 Figure 4.9.Distribution of Gasoline Turbo Vehicles by Displacement and Horsepower,Model Year 2011,2014,and 2022.54 Figure 4.10.Non-Hybrid Stop/Start Production Share by Vehicle Type.56 Figure 4.11.Non-Hybrid Stop/Start Production Share by Number of Cylinders.56 Figure 4.12.Gasoline Hybrid Engine Production Share by Vehicle Type.58 Figure 4.13.Gasoline Hybrid Engine Production Share by Number of Cylinders.58 Figure 4.14.Gasoline Hybrid Engine Production Share Hybrid Type.59 Figure 4.15.Production Share of EVs,PHEVs,and FCVs.61 Figure 4.16 Impact of EVs,PHEVs,and FCVs.62 Figure 4.17.Electric Vehicle Production Share by Vehicle Type.63 Figure 4.18.Plug-In Hybrid Vehicle Production Share by Vehicle Type.63 ii Figure 4.19.Charge Depleting Range and Fuel Economy for EVs and PHEVs.64 Figure 4.20.EV Energy Consumption by Weight and Vehicle Type.65 Figure 4.21.Diesel Engine Production Share by Vehicle Type.67 Figure 4.22.Diesel Engine Production Share by Number of Cylinders.67 Figure 4.23.Percent Change for Specific Diesel Engine Metrics.68 Figure 4.24.Transmission Production Share.71 Figure 4.25.Transmission By Engine Technology,Model Year 2022.72 Figure 4.26.Average Number of Transmission Gears.73 Figure 4.27.Comparison of Manual and Automatic Transmission Real-World Fuel Economy for Comparable Vehicles.74 Figure 4.28.Front-,Rear-,and Four-Wheel Drive Production Share.75 Figure 4.29.Industry-Wide Car Technology Penetration after First Significant Use.77 Figure 4.30.Manufacturer Specific Technology Adoption over Time for Key Technologies.79 Figure 5.1.The GHG Compliance Process.84 Figure 5.2.20122022 Model Year CO2 Footprint Target Curves.86 Figure 5.3.Changes in 2-Cycle Tailpipe CO2 Emissions by Manufacturer.92 Figure 5.4.Model Year 2022 Production of EVs,PHEVs,and FCVs.94 Figure 5.5.HFO-1234yf Adoption by Manufacturer.97 Figure 5.6.Fleetwide A/C Credits by Credit Type.99 Figure 5.7 Total A/C Credits by Manufacturer for Model Year 2022.99 Figure 5.8.Off-Cycle Menu Technology Adoption by Manufacturer,Model Year 2022.101 Figure 5.9.Total Off-Cycle Credits by Manufacturer for Model Year 2022.110 Figure 5.10.Performance and Standards by Manufacturer,Model Year 2022.119 Figure 5.11.Early Credits by Manufacturer.128 Figure 5.12.Total Credits Transactions.131 Figure 5.13.Manufacturer Credit Balance After Model Year 2022.134 Figure 5.14.Industry Performance and Standards,Credit Generation and Use.138 iii List of Tables Table 1.1.Model Year 2022 Manufacturer Definitions.3 Table 1.2.Fuel Economy and CO2 Metrics Used in this Report.4 Table 2.1.Production,Estimated Real-World CO2,and Fuel Economy for Model Year 19752023.12 Table 2.2.Manufacturers and Vehicles with the Highest Fuel Economy,by Year.13 Table 2.3.Manufacturer Estimated Real-World Fuel Economy and CO2 Emissions for Model Year 20212023.14 Table 3.1.Vehicle Attributes by Model Year.36 Table 3.2.Estimated Real-World Fuel Economy and CO2 by Vehicle Type.37 Table 3.3.Model Year 2022 Vehicle Attributes by Manufacturer.38 Table 3.4.Model Year 2022 Estimated Real-World Fuel Economy and CO2 by Manufacturer and Vehicle Type.39 Table 3.5.Footprint by Manufacturer for Model Year 20212023(ft2).40 Table 4.1.Production Share by Powertrain.80 Table 4.2.Production Share by Engine Technologies.81 Table 4.3.Production Share by Transmission Technologies.82 Table 4.4.Production Share by Drive Technology.83 Table 5.1.Manufacturer Footprint and Standards for Model Year 2022.89 Table 5.2.Production Multipliers by Model Year.93 Table 5.3.Model Year 2022 Off-Cycle Technology Credits from the Menu,by Manufacturer and Technology(g/mi).106 Table 5.4.Model Year 2022 Off-Cycle Technology Credits from an Alternative Methodology,by Manufacturer and Technology(g/mi).109 Table 5.5.Manufacturer Performance in Model Year 2022,All(g/mi).112 Table 5.6.Industry Performance by Model Year,All(g/mi).113 Table 5.7.Manufacturer Performance in Model Year 2022,Car(g/mi).114 Table 5.8.Industry Performance by Model Year,Car(g/mi).115 Table 5.9.Manufacturer Performance in Model Year 2022,Truck(g/mi).116 Table 5.10.Industry Performance by Model Year,Truck(g/mi).117 Table 5.11.Credits Earned by Manufacturers in Model Year 2022,All.121 Table 5.12.Total Credits Earned in Model Years 20092022,All.122 Table 5.13.Credits Earned by Manufacturers in Model Year 2022,Car.123 Table 5.14.Total Credits Earned in Model Years 20092022,Car.124 Table 5.15.Credits Earned by Manufacturers in Model Year 2022,Truck.125 Table 5.16.Total Credits Earned in Model Years 20092022,Truck.126 Table 5.17 Credit Expiration Schedule.129 Table 5.18.Example of a Deficit Offset with Credits from Previous Model Years.132 Table 5.19.Final Credit Balance by Manufacturer for Model Year 2022(Mg).135 Table 5.20.Distribution of Credits by Expiration Date(Mg).136 iv Introduction This annual report is part of the U.S.Environmental Protection Agencys(EPA)commitment to provide the public with information about new light-duty vehicle greenhouse gas(GHG)emissions,fuel economy,technology data,and auto manufacturers performance in meeting the agencys GHG emissions standards.Since 1975,EPA has collected data on every new light-duty vehicle model sold in the United States either from testing performed by EPA at the National Vehicle Fuel and Emissions Laboratory in Ann Arbor,Michigan,or directly from manufacturers using official EPA test procedures.These data are collected to support several important national programs,including EPA criteria pollutant and GHG standards,the U.S.Department of Transportations National Highway Traffic Safety Administration(NHTSA)Corporate Average Fuel Economy(CAFE)standards,and vehicle Fuel Economy and Environment labels.This expansive data set allows EPA to provide a uniquely comprehensive analysis of the automotive industry since 1975.A.Whats New This Year This report is updated each year to reflect the most recent data available to EPA for all model years,relevant regulatory changes,methodology changes,and any other changes relevant to the auto industry.These changes can affect multiple model years;therefore,this version of the report supersedes all previous reports.Significant developments relevant for this edition of the report include the following:In April 2023,EPA proposed revised light-duty GHG standards beginning in model year 2027.In July 2023,NHTSA proposed revised Corporate Average Fuel Economy standards,also beginning in model year 2027.Since these proposals have not been finalized,they are not reflected in this report.Any applicable regulatory changes finalized by EPA or NHTSA will be included in future versions of this report.Increasing production of electric vehicles continues to impact the automotive industry.In model year 2022,Lucid and Rivian entered the market as all-EV manufacturers.Several more manufacturers,including Canoo,Faraday,Lordstown,and Vinfast,have labeled vehicles for production in model year 2023.This release of the report now tracks engines that use both gasoline direct injection and port fuel injection(GDPI)for the first time.Previously these engines had been 1 included with port fuel injection engines,but the increasing use of engines that can use both fuel injection strategies has necessitated additional analysis.This release of the report also splits hybrid vehicles into“strong”hybrids and“mild”hybrids for the first time.Increasing rates of vehicle hybridization have made this an important distinction among hybrids.Readers of this report often have questions about the status of vehicles as cars or trucks under EPA and NHTSA regulations.To help explain car and truck definitions,this report added a flow chart in Appendix F.B.Manufacturers in this Report The underlying data for this report include every new light-duty vehicle offered for sale in the United States.These data are presented by manufacturer throughout this report,using model year 2022 manufacturer definitions determined by EPA and NHTSA for implementation of the GHG emission standards and CAFE program.For simplicity,figures and tables in the executive summary and in Sections 1-4 show only the top 14 manufacturers,by production volume.These manufacturers produced at least 150,000 vehicles each in the 2022 model year and accounted for more than 97%of all production.The compliance discussion in Section 5 includes all manufacturers,regardless of production volume.Table 1.1 lists all manufacturers that produced vehicles in the U.S.for model year 2022,including their associated makes,and their categorization for this report.Only vehicle brands produced in model year 2022 are shown in this table;however,this report contains data on many other manufacturers and brands that have produced vehicles for sale in the U.S.since 1975.When a manufacturer grouping changes under the GHG and CAFE programs,EPA applies the new manufacturer definitions to all prior model years for the analysis of estimated real-world CO2 emission and fuel economy trends in Sections 1 through 4 of this report.This maintains consistent manufacturer and make definitions over time,which enables better identification of long-term trends.However,the compliance data that are discussed in Section 5 of this report maintain the previous manufacturer definitions where necessary to preserve the integrity of compliance data as accrued.2 Table 1.1.Model Year 2022 Manufacturer Definitions Manufacturer Makes in the U.S.Market LargeManufacturers BMW Ford General Motors(GM)Honda Hyundai Kia Mazda Mercedes Nissan Stellantis Subaru Tesla Toyota Volkswagen(VW)BMW,Mini,Rolls Royce Ford,Lincoln,Roush,Shelby Buick,Cadillac,Chevrolet,GMC Acura,Honda Genesis,Hyundai Kia Mazda Maybach,Mercedes Infiniti,Nissan Alfa Romeo,Chrysler,Dodge,Fiat,Jeep,Maserati,Ram Subaru Tesla Lexus,Toyota Audi,Bentley,Bugatti,Lamborghini,Porsche,Volkswagen Other ManufacturersJaguar Land Rover Lucid Mitsubishi Rivian Volvo Aston Martin*Ferrari*McLaren*Jaguar,Land Rover Lucid Mitsubishi Rivian Lotus,Polestar,Volvo Aston Martin Ferrari McLaren*Small Volume Manufacturers C.Fuel Economy and CO2 Metrics in this Report All data in this report for model years 1975 through 2022 are final and based on official data submitted to EPA and NHTSA as part of the regulatory process.In some cases,this report will show data for model year 2023,which are preliminary and based on data provided to EPA by automakers prior to the model year,including projected production volumes.All data in this report are based on production volumes delivered for sale in the U.S.by model year.The model year production volumes may vary from other publicized data based on calendar year sales.The report does not examine future model years,and past performance does not necessarily predict future industry trends.3 The carbon dioxide(CO2)emissions and fuel economy data in this report fall into one of two categories based on the purpose of the data and the subsequent required emissions test procedures.The first category is compliance data,which is measured using laboratory tests required by law for CAFE and adopted by EPA for GHG compliance.Compliance data are measured using EPA city and highway test procedures(the“2-cycle”tests),and fleetwide averages are calculated by weighting the city and highway test results by 55%and 45%,respectively.These procedures are required for compliance;however,they no longer accurately reflect real-world driving.Compliance data may also encompass optional performance credits and adjustments that manufacturers can use towards meeting their emissions standards.The second category is estimated real-world data,which is measured using additional laboratory tests to capture a wider range of operating conditions(including hot and cold weather,higher speeds,and faster accelerations)encountered by an average driver.This expanded set of tests is referred to as“5-cycle”testing.City and highway results are weighted 43%city and 57%highway,consistent with fleetwide driver activity data.The city and highway values are the same values found on new vehicle fuel economy labels;however,the label combined value is weighted 55%city and 45%highway.Unlike compliance data,the method for calculating real-world data has evolved over time,along with technology and driving habits.Table 1.2.Fuel Economy and CO2 Metrics Used in this Report CO2 and Fuel Economy Data Category Purpose Current City/Highway Weighting Current Test Basis Compliance Basis for manufacturer compliance with standards 55%/45%2-cycle Estimated Real-World Best estimate of real-world performance 43%/57%5-cycle This report will show estimated real-world data except for the discussion specific to the GHG regulations in Section 5 and Executive Summary Figures ES-6 through ES-8.The compliance CO2 data generally should not be compared to the real-world CO2 data presented elsewhere in this report.For a more detailed discussion of the fuel economy and CO2 data used in this report,including the differences between real-world and compliance data,see Appendices C and D.4 D.Other Sources of Data EPA continues to update detailed data from this report,including all years of the light-duty GHG standards,to the EPA Automotive Trends website.We encourage readers to visit https:/www.epa.gov/automotive-trends and explore the data.EPA will continue to add content and tools on the web to allow transparent access to public data.Additional detailed vehicle data is available on www.fueleconomy.gov,which is a web resource that helps consumers make informed fuel economy choices when purchasing a vehicle and achieve the best fuel economy possible from the vehicle they own.EPA supplies the underlying data,much of which can be downloaded at https:/fueleconomy.gov/feg/download.shtml.In addition,EPAs Green Vehicle Guide is an accessible,transportation-focused website that provides information,data,and tools on greener options for moving goods and people.This report does not provide data about NHTSAs CAFE program.For more information about CAFE and manufacturer compliance with the CAFE fuel economy standards,see the CAFE Public Information Center,which can be accessed at https:/one.nhtsa.gov/cafe_pic/home.5 Fleetwide Trends Overview The automotive industry continues to make progress towards lower tailpipe CO2 emissions and higher fuel economy in recent years.This section provides an update on the estimated real-world tailpipe CO2 emissions and fuel economy for the overall fleet,and for manufacturers based on final model year 2022 data.The unique,historical data on which this report is based also provide an important backdrop for evaluating the more recent performance of the industry.Using that data,this section will also explore basic fleetwide trends in the automotive industry since EPA began collecting data in model year 1975.Overall Fuel Economy and CO2 Trends In model year 2022,the average Figure 2.1.Estimated Real-World estimated real-world CO2 emission Fuel Economy and CO2 Emissions rate for all new vehicles fell by 10 g/mi to 337 g/mi,the lowest ever measured.Real-world fuel economy increased by 0.6 mpg,to a record high 26.0 mpg.1 This is the largest single year improvement in CO2 emission rates and fuel economy in nine years.Since model year 2004,CO2 emissions have decreased 27%,or 123 g/mi,and fuel economy has increased 35%,or 6.7 mpg.Over that time,CO2 emissions have improved in fifteen of eighteen years.The trends in CO2 emissions and fuel economy since 1975 are shown in Figure 2.1.Preliminary data suggest that CO2 emissions and fuel economy in 1 EPA generally uses unrounded values to calculate values in the text,figures,and tables in this report.This approach results in the most accurate data but may lead to small apparent discrepancies due to rounding.6 model year 2023 will improve from the levels achieved in 2022.The preliminary model year 2023 data are based on production estimates provided to EPA by manufacturers months before the vehicles go on sale.The data are a useful indicator,however there is always uncertainty associated with such projections,and we caution the reader against focusing only on these data.Projected data are shown in Figure 2.1 as a dot because the values are based on manufacturer projections rather than final data.While the most recent annual changes often receive the most public attention,the greatest value of the Trends database is to document long-term trends.The magnitude of changes in annual CO2 emissions and fuel economy tend to be small relative to longer,multi-year trends.Figure 2.2 shows fleetwide estimated real-world CO2 emissions and fuel economy for model years 19752022.Over this timeframe there have been three basic phases:1)a rapid improvement of CO2 emissions and fuel economy between 1975 and 1987,2)a period of slowly increasing CO2 emissions and decreasing fuel economy through 2004,and 3)decreasing CO2 emissions and increasing fuel economy through the current model year.Figure 2.2.Trends in Fuel Economy and CO2 Emissions Since Model Year 1975 7 Vehicle CO2 emissions and fuel economy are inversely related for gasoline and diesel vehicles,but not for electric vehicles.Since gasoline and diesel vehicles have made up the vast majority of vehicle production since 1975,Figure 2.2 shows an inverted,but highly correlated relationship between CO2 emissions and fuel economy.Electric vehicles,which account for a small but growing portion of vehicle production,have zero tailpipe CO2 emissions,regardless of fuel economy(as measured in miles per gallon equivalent,or mpge).If electric vehicles continue to capture a larger market share,the overall relationship between fuel economy and tailpipe CO2 emissions will change.Another way to look at CO2 emissions over time is to examine how the distribution of new vehicle emission rates have changed.Figure 2.3 shows the distribution of real-world tailpipe CO2 emissions for all vehicles produced within each model year.Half of the vehicles produced each year are clustered within a small band around the median CO2 emission rate,as shown in blue.The remaining vehicles show a much wider spread,especially in recent years as the production of electric vehicles with zero tailpipe emissions has increased.The lowest CO2-emitting vehicles have all been hybrids or electric vehicles since the first hybrid was introduced in model year 2000,while the highest CO2-emitting vehicles are generally performance vehicles or large trucks.Figure 2.3.Distribution of New Vehicle CO2 Emissions by Model Year2 2 Electric vehicles prior to 2011 are not included in this figure due to limited data.However,those vehicles were available in small numbers only.8 It is important to note that the methodology used in this report for calculating estimated real-world fuel economy and CO2 emission values has changed over time to reflect changing vehicle technology and operation.For example,the estimated real-world fuel economy for a 1980s vehicle is somewhat higher than it would be if the same vehicle were being produced today.These changes are small for most vehicles,but larger for very high fuel economy vehicles.See Appendices C and D for a detailed explanation of fuel economy metrics and their changes over time.Production Trends This report is based on the total number of vehicles produced by manufacturers for sale in the United States by model year.Model year is the manufacturers annual production period,which includes January 1 of the same calendar year.A typical model year for a vehicle begins in fall of the preceding calendar year and runs until late in the next calendar year.However,model years vary among manufacturers and can occur between January 2 of the preceding calendar year and the end of the calendar year.Model year production data is the most direct way to analyze emissions,fuel economy,technology,and compliance trends because vehicle designs within a model year do not typically change.The use of model year production may lead to some short-term discrepancies with other sources,which typically report calendar year sales;however,sales based on the calendar year generally encompass more than one model year,which complicates any analysis.Since the inception of this report,production of vehicles for sale in the United States has grown roughly 0.5%year over year,but there have been significant swings up or down in any given model year due to the impact of multiple market forces.For example,in model year 2009,economic conditions resulted in the lowest model year production since the start of this report,at 9.3 million vehicles.Production rebounded over the next several model years,reaching an all-time high of more than 17 million vehicles in model year 2017.Model year 2020 production fell 15%from the previous year,as the COVID-19 pandemic had wide-ranging impacts on the economy and vehicle production.Production in model years 2021 and 2022 have not rebounded to pre COVID-19 levels,due at least in part to supply chain disruptions affecting the availability of semiconductors and other components.Figure 2.4 shows the production trends by model year for model years 1975 to 2022.9 Figure 2.4.New Vehicle Production by Model Year Manufacturer Fuel Economy and CO2 Emissions Along with the overall industry,most manufacturers have improved new vehicle CO2 emission rates and fuel economy in recent years.Manufacturer trends over the last five years are shown in Figure 2.5.This span covers the approximate length of a vehicle redesign cycle,and it is likely that most vehicles have undergone design changes in this period,resulting in a more accurate depiction of recent manufacturer trends than focusing on a single year.Changes over this time period can be attributed to both vehicle design and changing vehicle production trends.The change in production trends,and the impact on the trends shown in Figure 2.5 are discussed in more detail in the next section.For model year 2022 alone,Teslas all-electric fleet had by far the lowest tailpipe CO2 emissions of all large manufacturers.Tesla was followed by Hyundai,Kia,Honda,Subaru,and Toyota.Stellantis had the highest new vehicle average CO2 emissions and lowest fuel economy of the large manufacturers in model year 2022,followed by GM and Ford.Tesla also had the highest overall fuel economy,followed by Hyundai,Honda,Kia,Subaru,and Toyota.10 Figure 2.5.Changes in Estimated Real-World Fuel Economy and CO2 Emissions by Manufacturer 11 Table 2.1.Production,Estimated Real-World CO2,and Fuel Economy for Model Year 19752023 Model Year 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Production Re(000)CO2(g/mi)al-World Real-World FE(MPG)10,224 681 13.1 12,334 625 14.2 14,123 590 15.1 14,448 562 15.8 13,882 560 15.9 11,306 466 19.2 10,554 436 20.5 9,732 425 21.1 10,302 426 21.0 14,020 424 21.0 14,460 417 21.3 15,365 407 21.8 14,865 405 22.0 15,295 407 21.9 14,453 415 21.4 12,615 420 21.2 12,573 418 21.3 12,172 427 20.8 13,211 426 20.9 14,125 436 20.4 15,145 434 20.5 13,144 435 20.4 14,458 441 20.2 14,456 442 20.1 15,215 451 19.7 Model Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023(prelim)Production Real-World Real-World(000)CO2(g/mi)FE(MPG)16,571 15,605 16,115 15,773 15,709 15,892 15,104 15,276 13,898 9,316 11,116 12,018 13,449 15,198 15,512 16,739 16,278 17,016 16,260 16,139 13,721 13,812 12,857 450 19.8 453 19.6 457 19.5 454 19.6 461 19.3 447 19.9 442 20.1 431 20.6 424 21.0 397 22.4 394 22.6 399 22.3 377 23.6 368 24.2 369 24.1 360 24.6 359 24.7 357 24.9 353 25.1 356 24.9 349 25.4 347 25.4 337 26.0 320 26.9 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends.12 Table 2.2.Manufacturers and Vehicles with the Highest Fuel Economy,by Year Model Year Manufacturer Manufacturer with Highest with Lowest Fuel Economy3 Fuel Economy(mpg)(mpg)Overall Vehicle with Highest Fuel Economy4 Gasoline(Non-Hybrid)Vehicle with Highest Fuel Economy Real-World FE Engine Vehicle(mpg)Type Real-World FE Gasoline Vehicle(mpg)1975 Honda Ford Honda Civic 28.3 Gas Honda Civic 28.3 1980 VW Ford VW Rabbit 40.3 Diesel Nissan 210 36.1 1985 Honda Mercedes GM Sprint 49.6 Gas GM Sprint 49.6 1990 Hyundai Mercedes GM Metro 53.4 Gas GM Metro 53.4 1995 Honda Stellantis Honda Civic 47.3 Gas Honda Civic 47.3 2000 Hyundai Stellantis Honda Insight 57.4 Hybrid GM Metro 39.4 2005 Honda Ford Honda Insight 53.3 Hybrid Honda Civic 35.1 2010 Hyundai Mercedes Honda FCX 60.2 FCV Smart Fortwo 36.8 2011 Hyundai Mercedes BMW Active E 100.6 EV Smart Fortwo 35.7 2012 Hyundai Stellantis Nissan i-MiEV 109.0 EV Toyota iQ 36.8 2013 Hyundai Stellantis Toyota IQ 117.0 EV Toyota iQ 36.8 2014 Mazda Stellantis BMW i3 121.3 EV Mitsubishi Mirage 39.5 2015 Mazda Stellantis BMW i3 121.3 EV Mitsubishi Mirage 39.5 2016 Mazda Stellantis BMW i3 121.3 EV Mazda 2 37.1 2017 Honda Stellantis Hyundai Ioniq 132.6 EV Mitsubishi Mirage 41.5 2018 Tesla Stellantis Hyundai Ioniq 132.6 EV Mitsubishi Mirage 41.5 2019 Tesla Stellantis Hyundai Ioniq 132.6 EV Mitsubishi Mirage 41.6 2020 Tesla Stellantis Tesla Model 3 138.6 EV Mitsubishi Mirage 41.6 2021 Tesla Stellantis Tesla Model 3 139.1 EV Mitsubishi Mirage 41.6 2022 Tesla Stellantis Lucid Air G 131.4 EV Mitsubishi Mirage 41.6 2023(prelim)Tesla Stellantis Lucid Air Pure 140.3 EV Mitsubishi Mirage 40.0 3 Manufacturers below the 150,000 threshold for“large”manufacturers are excluded in years they did not meet the threshold.4 Vehicles are shown based on estimated real-world fuel economy as calculated for this report.These values will differ from values found on the fuel economy labels at the time of sale.For more information on fuel economy metrics see Appendix C.13 Table 2.3.Manufacturer Estimated Real-World Fuel Economy and CO2 Emissions for Model Year 20212023 Manufacturer MY 2021 Final MY 2022 Final MY 2023 Preliminary MY 2023 Preliminary Real-World Real-World FE CO2(mpg)(g/mi)FE Change CO2 Change Real-World from Real-World from FE MY 2020 CO2 MY 2020(mpg)(mpg)(g/mi)(g/mi)RealReal-RealReal-World FE World FE World COWorld CO2 2(mpg)(mpg)(g/mi)(g/mi)BMW 25.8 339 25.3-0.5 344 5 27.4 310 Ford 22.9 385 23.1 0.2 380-5 23.1 376 GM 21.6 414 22.0 0.4 406-9 22.2 399 Honda 28.5 312 28.7 0.2 309-2 28.7 310 Hyundai 28.5 310 29.1 0.6 302-8 29.1 300 Kia 28.7 310 28.6-0.1 306-4 29.7 293 Mazda 27.4 324 27.0-0.3 328 4 27.5 323 Mercedes 23.6 376 23.8 0.1 371-5 28.0 298 Nissan 28.6 311 27.4-1.1 322 12 27.8 314 Stellantis 21.3 417 21.3 0.1 415-2 22.0 397 Subaru 28.8 309 27.9-0.8 318 9 28.0 316 Tesla 123.9 0 119.3-4.7 0 0 120.7 0 Toyota 27.1 327 27.8 0.7 319-7 28.2 314 VW 24.7 352 26.1 1.3 333-20 28.9 292 All Manufacturers 25.4 347 26.0 0.6 337-10 26.9 320 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends.14 Vehicle Attributes Vehicle CO2 emissions and fuel economy are strongly influenced by vehicle design parameters,including weight,power,acceleration,and size.In general,vehicles that are larger,heavier,and more powerful typically have lower fuel economy and higher CO2 emissions than other comparable vehicles.This section focuses on several key vehicle design attributes that impact CO2 emissions and fuel economy and evaluates the impact of a changing automotive marketplace on overall fuel economy.A.Vehicle Class and Type Manufacturers offer a wide variety of light-duty vehicles in the United States.Under the CAFE and GHG regulations,new vehicles are separated into two distinct regulatory classes,passenger cars and light trucks,and each vehicle class has separate GHG and fuel economy standards5.Vehicles can qualify as light trucks based on the vehicles functionality as defined in the regulations(for example if the vehicle can transport cargo on an open bed or the cargo carrying volume is more than the passenger carrying volume).Vehicles that have a gross vehicle weight rating6(GVWR)of more than 6,000 pounds or have four-wheel drive and meet various off-road requirements,such as ground clearance,can also qualify as light trucks.Vehicles that do not meet these requirements are considered cars.For more information on car and truck regulatory definitions,see Appendix F.Pickup trucks,vans,and minivans are classified as light trucks under NHTSAs regulatory definitions,while sedans,coupes,and wagons are generally classified as cars.Sport utility vehicles(SUVs)can fall into either category depending on the relevant attributes of the specific vehicle.Based on the CAFE and GHG regulatory definitions,most two-wheel drive SUVs under 6,000 pounds GVW are classified as cars,while most SUVs that have four-wheel drive or are above 6,000 pounds GVW are considered trucks.SUV models that are less than 6,000 pounds GVW can have both car and truck variants,with two-wheel drive versions classified as cars and four-wheel drive versions classified as trucks.As the fleet has changed over time,the line drawn between car and truck classes has also evolved.This 5 Passenger vehicles(cars)and light trucks(trucks)are defined by regulation in EPAs 40 CFR 86.1818-12 which references the Department of Transportations 49 CFR 523.4-523.5.6 Gross vehicle weight rating is the combined weight of the vehicle,passengers,and cargo of a fully loaded vehicle.15 report uses the current regulatory car and truck definitions,and these changes have been propagated back throughout the historical data.This report further separates the car and truck regulatory classes into five vehicle type categories based on their body style classifications under the fuel economy labeling program.The regulatory car class is divided into two vehicle types:sedan/wagon and car SUV.The sedan/wagon vehicle type includes mini-compact,subcompact,compact,midsize,large,and two-seater cars,hatchbacks,and station wagons.Vehicles that are SUVs under the labeling program and cars under the CAFE and GHG regulations are classified as car SUVs in this report.The truck class is divided into three vehicle types:pickup,minivan/van,and truck SUV.Vehicles that are SUVs under the labeling program and trucks under the CAFE and GHG regulations are classified as truck SUVs.Figure 3.1 shows the two regulatory classes and five vehicle types used in this report.The distinction between these five vehicle types is important because different vehicle types have different design objectives,and different challenges and opportunities for improving fuel economy and reducing CO2 emissions.Figure 3.1.Regulatory Classes and Vehicle Types Used in This Report Fuel Economy and CO2 by Vehicle Type The production volume of the different vehicle types has changed significantly over time.Figure 3.2 shows the production shares of each of the five vehicle types since model year 1975.The overall new vehicle market continues to move away from the sedan/wagon vehicle type towards a combination of truck SUVs,car SUVs,and pickups.Sedan/wagons 16 were the dominant vehicle type in 1975,when more than 80%of vehicles produced were sedan/wagons.Since then,their production share has generally been falling,and with a market share of only 27%in model year 2022,sedans/wagons now hold about a third of the market share they held in model year 1975.The overall new vehicle market has been trending away from the sedan/wagon vehicle type towards a combination of truck SUVs and car SUVs for many years.Vehicles that could be classified as a car SUV or truck SUV were a very small part of the production share in 1975 but now account for more than half of all new vehicles produced.In model year 2022,the market share for both car SUVs and truck SUVs fell by about one percentage point compared to model year 2021.Given the longer-term trends and projected data for model year 2023,this does not appear to be a reversal of market trends.Truck SUVs remained near a record high production share in model year 2022,at 44%,while Car SUVs accounted for 10%of production.The production share of pickups has fluctuated over time,peaking at 19%in 1994 and then falling to 10%in 2012.Pickups have generally increased in recent years and accounted for 16%of the market in model year 2022.Minivan/vans captured less than 5%of the market in 1975,increased to 11%in model year 1995 but have fallen since to 3%of vehicle production in model year 2022.The projected 2023 data shows a vehicle type distribution that is similar to model year 2022.Figure 3.2.Production Share and Estimated Real-World CO2 Emissions 17 The truck regulatory class(including pickups,minivan/vans,and truck SUVs)has increased production share every year for the last decade,increasing from 36%to 63%of all new vehicle production.While the increase between model year 2021 and 2022 was the smallest increase over that span(at 0.2 percentage points),trucks are projected to increase overall production share again in 2023,so this is unlikely to be a change in the longer-term trend towards trucks.In Figure 3.2,the dashed line between the car SUVs and truck SUVs shows the split in car and truck regulatory class.Figure 3.2 also shows estimated CO2 emissions for each vehicle type since 1975.Four of the five vehicle types are at record low CO2 emissions and record high fuel economy in model year 2022.Car SUVs decreased CO2 emissions by 27 g/mi to become the vehicle type with the lowest CO2 emissions,falling below sedan/wagons for the first time.Pickups decreased CO2 emissions by 18 g/mi,sedan/wagons decreased by 11 g/mi,and truck SUVs decreased by 4 g/mi.Minivan/vans,which accounted for less than 3%of new vehicle production in model year 2022,were the only vehicle type that had higher CO2 emissions in 2022 compared to 2021,increasing by 17 g/mi.In the preliminary model year 2023 data(shown as a dot on Figure 3.2),all five vehicle types are expected to improve CO2 emissions from model year 2022.In terms of fuel economy,car SUVs increased fuel economy by 2.4 g/mi to become the vehicle type with the highest fuel economy,surpassing sedan/wagons for the first time.Sedans/wagons increased fuel economy by 1.0 mpg,pickups increased by 0.7 mpg,and truck SUVs increased by 0.2 mpg,while minivans/vans had lower fuel economy in 2022,decreasing by 1.3 mpg from 2021.All vehicle types,except for pickups,now achieve fuel economy more than double what they achieved in 1975.All five vehicle types are expected to improve fuel economy from model year 2022 based on preliminary model year 2023 data.Overall fuel economy and CO2 emissions trends depend on the trends within the five vehicle types,but also on the market share of each of the vehicle types.The trend away from sedan/wagons,and towards vehicle types with lower fuel economy and higher CO2 emissions,has offset some of the fleetwide benefits that otherwise would have been achieved from the improvements within each vehicle type.18 Vehicle Type by Manufacturer The model year 2022 production breakdown by vehicle type for each manufacturer is shown in Figure 3.3.There are clear variations in production distribution by manufacturer.Nissan had the highest production of sedan/wagons at 55%.For other vehicle types,Tesla had the highest percentage of car SUVs at 46%;Mazda had the highest percentage of truck SUVs at 85%;Ford had the highest percentage of pickups at 37%,and Stellantis had the highest percentage of minivan/vans at 10%.The changes in vehicle type distributions by manufacturer between model year 2021 and 2022 were mixed.Mazda increased truck SUV production by 24 percentage points,at the expense of car SUVs,down 19 percentage points,and some sedan/wagons.Hyundai increased truck SUV production by 19 percentage points,while reducing the percentage of sedan/wagons by 13 percentage points and car SUV by 6 percentage points.All other vehicle type production shifts within each manufacturer were less than 10 percentage points.Figure 3.3.Vehicle Type Distribution by Manufacturer for Model Year 2022 19 A Closer Look at SUVs SUV Classification Since 1975,the production share of SUVs in the United States has increased in all but 10 years,and now accounts for more than 54%of all vehicles produced(see Figure 3.2).This includes both the car and truck SUV vehicle types.Based on the regulatory definitions of cars and trucks,SUVs that are less than 6,000 pounds GVWR can be classified as either cars or trucks,depending on design requirements such as minimum angles and clearances,and whether the vehicle has 2-wheel drive or 4-wheel drive.This definition can lead to similar vehicles having different car or truck classifications,and different requirements under the GHG and CAFE regulations.One trend of particular interest is the classification of SUVs as either car SUVs or truck SUVs.This report does not track GVWR,but instead tracks weight using inertia weight classes,where inertia weight is the weight of the empty vehicle,plus 300 pounds(see weight discussion on the next page).Figure 3.4 shows the breakdown of SUVs into the car and truck categories over time for vehicles with an inertia weight of 4,000 pounds or less.Heavier vehicles were excluded,as these vehicles generally exceed 6,000 pounds GVWR and are classified as trucks.The relative percentage of SUVs with an inertia weight of 4,000 pounds or less that meet the current regulatory truck definition increased to 71%in model year 2022,which is the highest percentage of production since at least model year 2000.Projected model year 2023 data maintains the same ratio of truck SUVs.Figure 3.4.Car-Truck Classification of SUVs with Inertia Weights of 4000 Pounds or Less 20 For some manufacturers,changes in the mix of vehicle types they produce has also led to a significant impact on their overall new vehicle CO2 emissions and fuel economy.Over the last five years,as shown in Figure 2.5,Toyota achieved the largest reduction in CO2 emissions,at 32 g/mi.Toyota decreased emissions across all vehicle types and decreased overall emissions even as their truck SUV share increased from 27%to 38%.Kia achieved the second largest reduction in overall CO2 tailpipe emissions,at 21 g/mi,and Mercedes had the third largest reduction in overall CO2 tailpipe emissions at 14 g/mi.Hyundai,Ford,Nissan,Stellantis,and VW also achieved overall emission reductions.Over the same five-year period,Mazda had the largest increase at 22 g/mi,due to a shift in production from 29%to 85%truck SUVs,along with increased CO2 emission rates within their sedan/wagon vehicle types.GM had the second largest increase at 17 g/mi,and Honda had the third largest increase at 7 g/mi.Shifts in production towards larger vehicles combined with increased CO2 emission rates for pickups more than offset emission improvements in all other vehicle types for GM and Honda.21 B.Vehicle Weight Vehicle weight is a fundamental vehicle attribute,both because it can be related to utility functions such as vehicle size and features,and because vehicles with a higher weight,other things being equal,will require more energy to move.For vehicles with an internal combustion engine,this higher energy requirement generally results in more CO2 emissions and decreased fuel economy.For electric vehicles(EVs),the higher energy required to move a vehicle with more weight will likely decrease fuel economy,measured in miles per gallon of gasoline equivalent(mpge),but will not increase CO2 emissions,since EVs do not have tailpipe emissions regardless of the weight of the vehicle.Due to the weight of battery packs,electric vehicles are likely to weigh more than comparable internal combustion engine vehicles and can even result in the vehicle falling under different regulatory requirements.All vehicle weight data in this report are based on inertia weight classes.Each inertia weight class represents a range of loaded vehicle weights,or vehicle curb weights7 plus 300 pounds.Vehicle inertia weight classes are in 250-pound increments for classes below 3,000 pounds,while inertia weight classes over 3,000 pounds are divided into 500-pound increments.Vehicle Weight by Vehicle Type Figure 3.5 shows the average new vehicle weight for all vehicle types since model year 1975.From model year 1975 to 1981,average vehicle weight dropped 21%,from 4,060 pounds per vehicle to about 3,200 pounds;this was likely driven by both increasing fuel economy standards(which,at the time,were universal standards,and not based on any type of vehicle attribute)and higher gasoline prices.From model year 1981 to model year 2004,the trend reversed,and average new vehicle weight began to slowly but steadily climb.By model year 2004,average new vehicle weight had increased 28%from model year 1981 and reached 4,111 pounds per vehicle,in part because of the increasing truck share.Average vehicle weight in model year 2022 was about 5ove 2004 and is currently at the highest point on record,at 4,303 pounds.Preliminary model year 2023 data suggest that weight will continue to increase.In model year 1975,the difference between the heaviest and lightest vehicle types was about 215 pounds,or about 5%of the average new vehicle.By model year 2022,the 7 Vehicle curb weight is the weight of an empty,unloaded vehicle.22 difference between the heaviest and lightest vehicle types was about 1,575 pounds,or about 37%of the average new vehicle weight.Between model year 1975 and 2022,the weight of an average new sedan/wagon fell 11%while the weight of an average new pickup increased 29%.In 1975,the average new sedan/wagon outweighed the average new pickup by about 45 pounds,but the different weight trends over time for each of these vehicle types led to a very different result in model year 2022,with the average new pickup outweighing the average new sedan/wagon by about 1,575 pounds.Pickups are below their model year 2014 high of 5,484 pounds per vehicle,due to vehicle redesigns of popular truck models and the use of weight saving designs,such as aluminum bodies.Figure 3.5.Average New Vehicle Weight by Vehicle Type Figure 3.6 shows the annual production share of different inertia weight classes for new vehicles since model year 1975.In model year 1975,there were significant sales in all weight classes from 2,750 pounds to 5,500 pounds.In the early 1980s,the largest vehicles disappeared from the market,and light cars 2,750 pounds inertia weight briefly captured more than 25%of the market.Since then,cars in the 2,750-pound inertia weight class have all but disappeared,and the market has moved towards heavier vehicles.23 Interestingly,the heaviest vehicles in model year 1975 were mostly large cars,whereas the heaviest vehicles today are largely pickups and truck SUVs,along with a few minivan/vans and a small number of luxury sedan/wagons.Figure 3.6.Inertia Weight Class Distribution by Model Year Vehicle Weight and CO2 Emissions Heavier vehicles require more energy to move than lower-weight vehicles and,if all other factors are the same,will have lower fuel economy and higher CO2 emissions.The wide array of technology available in modern vehicles complicates this comparison,but it is still useful to evaluate the relationship between vehicle weight and CO2 emissions,and how these variables have changed over time.Figure 3.7 shows estimated real-world CO2 emissions as a function of vehicle inertia weight for model year 19788 and model year 2020.On average,CO2 emissions increase linearly with vehicle weight for both model years,although the rate of change as vehicles get heavier is different.At lower weights,vehicles from model year 2022 produced about two 8 Model year 1978 was the first year for which complete horsepower data are available,therefore it will be used for several historical comparisons for consistency.24 thirds of the CO2 emissions of 1978 vehicles.The difference between model year 2022 and 1978 increases for heavier vehicles,as the heaviest model year 2022 vehicles produce about half of the CO2 emissions of 1978 vehicles.Figure 3.7.Relationship of Inertia Weight and CO2 Emissions Electric vehicles,which do not produce any tailpipe CO2 emissions regardless of weight,are visible along the 0 g/mi axis of Figure 3.7.As more electric vehicles are introduced into the market,the relationship between average vehicle CO2 emissions and inertia weight will continue to evolve.25 C.Vehicle Power Vehicle power,measured in horsepower(hp),has changed dramatically since model year 1975.In the early years of this report,horsepower fell,from an average of 137 hp in model year 1975 to 102 hp in model year 1981.Since model year 1981,however,horsepower has increased almost every year.The average new vehicle in model year 2022 produced 88%more power than a new vehicle in model year 1975,and 153%more power than an average new vehicle in model year 1981.The average new vehicle horsepower is at a record high,increasing from 253 hp in model year 2021 to 259 hp in model year 2022.The preliminary value for model year 2023 is 272 hp,which would be another record-high for horsepower.Many EVs have high hp ratings,however determining vehicle horsepower for EVs and PHEVs can be more complicated than for vehicles with internal combustion engines.The power available at the wheels of an EV may be limited by numerous electrical components other than the motor.In addition,some EVs have multiple motors and the total available power may be less than the sum of the individual motor ratings.PHEVs,which have an internal combustion engine,at least one motor,and complicated control strategies,can be even more complicated to accurately assign one static power value.Therefore,horsepower values for the increasing number of EVs and PHEVs are more difficult to determine and may have higher uncertainty.Vehicle Power by Vehicle Type As with weight,the changes in horsepower are also different among vehicle types,as shown in Figure 3.8.Horsepower for sedan/wagons increased 64tween model year 1975 and 2022,74%for truck SUVs,118%for car SUVs,68%for minivan/vans,and 137%for pickups.Horsepower has generally been increasing for all vehicle types since about 1985,but there is more variation between model types in the last decade.The projected model year 2023 data shows a large increase of about 13 hp across all new vehicles.This is due,in part,to the projected increase of electric vehicle penetration,many of which have high horsepower ratings.The projected data shown horsepower increases for all vehicle types.26 Figure 3.8.Average New Vehicle Horsepower by Vehicle Type The distribution of horsepower over time has shifted towards vehicles with higher horsepower,as shown in Figure 3.9.While few new vehicles in the early 1980s had greater than 200 hp,the average vehicle in model year 2022 had 259 hp.In addition,vehicles with more than 250 hp make up more than half of new vehicle production,and the maximum horsepower for an individual vehicle is now 1,600 hp.Horsepower is projected to increase again in model year 2023,with 7%of vehicles projected to reach 400 hp or higher.27 Figure 3.9.Horsepower Distribution by Model Year Vehicle Power and CO2 Emissions The relationship between vehicle power,CO2 emissions,and fuel economy has become more complex as new technology and vehicles have emerged in the marketplace.In the past,higher power generally increased CO2 emissions and decreased fuel economy,especially when new vehicle production relied exclusively on gasoline and diesel internal combustion engines.As shown in Figure 3.10,model year 1978 vehicles with increased horsepower generally had increased CO2 emissions.In model year 2022,CO2 emissions increased with increased vehicle horsepower at a much lower rate than in model year 1978,such that model year 2022 vehicles nearly all had lower CO2 emissions than their model year 1978 counterparts with the same amount of power.Technology improvements,including turbocharged engines and hybrid packages,have reduced the incremental CO2 emissions associated with increased power.Electric vehicles are present along the 0 g/mi line in Figure 3.10 because they produce no tailpipe CO2 emissions,regardless of horsepower,further complicating this analysis for modern vehicles.28 Figure 3.10.Relationship of Horsepower and CO2 Emissions Vehicle Acceleration Vehicle acceleration is closely related to vehicle horsepower.As new vehicles have increased horsepower,the corresponding ability of vehicles to accelerate has also increased.The most common vehicle acceleration metric,and one of the most recognized vehicle metrics overall,is the time it takes a vehicle to accelerate from 0 to 60 miles per hour,also called the 0-to-60 time.Data on 0-to-60 times are not directly submitted to EPA but are calculated for most vehicles using vehicle attributes and calculation methods developed by MacKenzie and Heywood(2012).9 The relationship between power and acceleration is different for EVs than for vehicles with internal combustion engines.Electric motors generally have maximum torque available from a standstill,which is not true for internal combustion engines.The result is that EVs can have very fast 0-60 acceleration times,and the calculation methods used for vehicles 9 MacKenzie,D.Heywood,J.2012.Acceleration performance trends and the evolving relationship among power,weight,and acceleration in U.S.light-duty vehicles:A linear regression analysis.Transportation Research Board,Paper NO 12-1475,TRB 91st Annual Meeting,Washington,DC,January 2012.29 with internal combustion engines are not valid for EVs.PHEVs and hybrids may also use their motors to improve acceleration.Acceleration times for EVs,PHEVs,and hybrids must be obtained from external sources,and as with horsepower values,there may be more uncertainty with these values.Since the early 1980s,there has been a clear downward trend in 0-to-60 times.Figure 3.11 shows the average new vehicle 0-to-60 time since model year 1978.The average new vehicle in model year 2022 had a 0-to-60 time of 7.6 seconds,which is the fastest average 0-to-60 time for any model year and less than half of the average 0-to-60 time of the early 1980s.The calculated 0-to-60 time for model year 2023 is projected to decrease again,to 7.3 seconds.The long-term downward trend in 0-to-60 times is consistent across all vehicle types.The continuing decrease in pickup truck 0-to-60 times is likely due to their increasing power,as shown in Figure 3.8.While much of that power is intended to increase towing and hauling capacity,it also decreases 0-to-60 times.Increasing EV production will likely continue,and perhaps accelerate,the trend towards lower 0-to-60 acceleration times.Figure 3.11.Calculated 0-to-60 Time by Vehicle Type 30 D.Vehicle Footprint Vehicle footprint is an important attribute since it is the basis for the current CO2 emissions and fuel economy standards.Footprint is the product of wheelbase times average track width(the area defined by where the centers of the tires touch the ground).This report provides footprint data beginning with model year 2008,although footprint data from model years 20082010 were aggregated from various sources and EPA has less confidence in the precision of these data than that of formal compliance data.Beginning in model year 2011,the first year when both car and truck CAFE standards were based on footprint,automakers began to submit reports to EPA with footprint data at the end of the model year,and these official footprint data are reflected in the final data through model year 2022.EPA projects footprint data for the preliminary model year 2023 fleet based on footprint values from the previous model year and,for new vehicle designs,publicly available data.Vehicle Footprint by Vehicle Type Figure 3.12 shows overall new vehicle and vehicle type footprint data since model year 2008.Between model year 2008 and 2022,the overall average footprint increased 6%,from 48.9 to 51.6 square feet.All five vehicle types have increased average footprint since model year 2008.Car SUVs and truck SUVs have each increased in 1.4 square feet,pickups have increased 1.6 square feet,and sedan/wagons and minivans/vans have increased 1.8 square feet.The overall increase in footprint is impacted by both the trends within each vehicle type and the changing mix of vehicles over time,as the market has shifted towards larger vehicles.The distribution of footprints across all new vehicles,as shown in Figure 3.13,also shows a slow reduction in the number of smaller vehicles with a footprint of less than 45 square feet,along with growth in larger vehicle categories.This is consistent with the changes in market trends towards larger vehicles,as seen in Figure 3.2 and elsewhere in this report.Projected data for model year 2023 suggest that overall average footprint will increase to 52.0 square feet,1%more than model year 2022.31 Figure 3.12.Footprint by Vehicle Type for Model Years 20082022 Figure 3.13.Footprint Distribution by Model Year 32 Vehicle Footprint and CO2 Emissions The relationship between vehicle footprint and CO2 emissions is shown in Figure 3.14.Vehicles with a larger footprint are likely to weigh more and have more frontal area,which leads to increased aerodynamic resistance.Increased weight and aerodynamic resistance increase CO2 emissions and decreases fuel economy.The general trend of increasing footprint and CO2 emissions holds true for vehicles from model year 2008 and model year 2022,although vehicles produced in model year 2022 are projected to produce roughly 20%less CO2 emissions than model year 2008 vehicles of a comparable footprint.Electric vehicles are shown in Figure 3.14 with zero tailpipe CO2 emissions,regardless of footprint.As more electric vehicles enter the market,the relationship between footprint and tailpipe CO2 emissions will become much flatter,or less sensitive to footprint.Figure 3.14.Relationship of Footprint and CO2 Emissions 33 E.Vehicle Type and Attribute Tradeoffs The past 45 years of data show striking changes in the mix of vehicle types,and the attributes of those vehicles,produced for sale in the United States.In the two decades prior to 2004,technology innovation and market trends generally resulted in increased vehicle power and weight(due to increasing vehicle size and content)while average new vehicle fuel economy steadily decreased and CO2 emissions correspondingly increased.Since model year 2004,the combination of technology innovation and market trends have resulted in average new vehicle fuel economy increasing 35%,horsepower increasing 23%,and weight increasing 5%.Footprint has increased 6%since EPA began tracking it in model year 2008.These metrics are all at record highs,and horsepower,weight,and footprint are projected to increase again in model year 2023,as shown in Figure 3.15.The changes within each of these metrics is due to the combination of design and technology changes within each vehicle type,as well as the market shifts between vehicle types.For example,overall new vehicle footprint has increased within each vehicle type since model year 2008,but the average new vehicle footprint has increased more than the increase in any individual vehicle type over that time span,due to market shifts towards larger vehicle types.Fuel economy has also increased in all vehicle types since model year 2008,however the market shift towards less efficient vehicle types has offset some of the fleetwide fuel economy and CO2 emission benefits that otherwise would have been achieved through improving technology.Vehicle fuel economy and CO2 emissions are clearly related to vehicle attributes investigated in this section,namely weight,horsepower,and footprint.Future trends in fuel economy and CO2 emissions will be dependent,at least in part,by design choices related to these attributes.34 Figure 3.15.Relative Change in Fuel Economy,Weight,Horsepower,and Footprint 35 Table 3.1.Vehicle Attributes by Model Year Model Year 1975 1980 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023(prelim)Real-World Real-World Car Truck CO2 FE Weight Horsepower 0 to 60 Footprint Production Production(g/mi)(mpg)(lbs)(HP)(s)(ft2)Share Share 681 13.1 4,060 137-80.7.3F6 19.2 3,228 104 15.6-83.5.5A7 21.3 3,271 114 14.1-75.2$.8B0 21.2 3,426 135 11.5-70.4).6C4 20.5 3,613 158 10.1-63.56.5E0 19.8 3,821 181 9.8-58.8A.2D7 19.9 4,059 209 9.0-55.6D.494 22.6 4,001 214 8.8 48.5 62.87.299 22.3 4,126 230 8.5 49.5 57.8B.277 23.6 3,979 222 8.5 48.8 64.45.668 24.2 4,003 226 8.4 49.1 64.15.969 24.1 4,060 230 8.3 49.7 59.3.760 24.6 4,035 229 8.3 49.4 57.4B.659 24.7 4,035 230 8.3 49.5 55.3D.757 24.9 4,093 234 8.2 49.8 52.6G.453 25.1 4,137 241 8.0 50.4 48.0R.056 24.9 4,156 245 7.9 50.8 44.4U.649 25.4 4,166 246 7.8 50.9 43.9V.147 25.4 4,289 253 7.7 51.5 37.1b.937 26.0 4,303 259 7.6 51.6 36.9c.120 26.9 4,439 272 7.3 52.0 34.6e.4%To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 36 Table 3.2.Estimated Real-World Fuel Economy and CO2 by Vehicle Type Model Year Sedan/Wagon Car SUV Truck SUV Minivan/Van Pickup Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)1975 80.6f0 13.5 0.1y9 11.1 1.76 11.0 4.50 11.1 13.1t6 11.9 1980 83.5D6 20.0 0.0a0 14.6 1.6g6 13.2 2.1b9 14.1 12.7T1 16.5 1985 74.687 23.0 0.6D3 20.1 4.5S8 16.5 5.9S7 16.5 14.4H9 18.2 1990 69.881 23.3 0.5G2 18.8 5.1T1 16.4 10.0I8 17.8 14.5Q1 17.4 1995 62.079 23.4 1.5I9 17.8 10.5U5 16.0 11.0I2 18.1 15.0R6 16.9 2000 55.188 22.9 3.7I7 17.9 15.2U5 16.0 10.2G8 18.6 15.8S4 16.7 2005 50.579 23.5 5.1D0 20.2 20.6S1 16.7 9.3F0 19.3 14.5V1 15.8 2010 54.540 26.2 8.286 23.0 20.7E2 19.7 5.0D2 20.1 11.5R7 16.9 2011 47.844 25.8 10.078 23.5 25.5D9 19.8 4.3B4 20.9 12.3Q6 17.2 2012 55.022 27.6 9.481 23.3 20.6D5 20.0 4.9A8 21.3 10.1Q6 17.2 2013 54.113 28.4 10.065 24.3 21.8B7 20.8 3.8B2 21.1 10.4P9 17.5 2014 49.213 28.4 10.164 24.4 23.9A2 21.6 4.3A8 21.3 12.4I3 18.0 2015 47.206 29.0 10.253 25.1 28.16 21.9 3.98 21.8 10.7G4 18.8 2016 43.803 29.2 11.538 26.2 29.10 22.2 3.9A0 21.7 11.7G1 18.9 2017 41.0)3 30.2 11.639 26.1 31.798 22.3 3.699 22.2 12.1G0 18.9 2018 36.7(6 30.8 11.324 27.4 35.084 23.1 3.189 22.8 13.9F6 19.1 2019 32.7(5 30.9 11.723 27.5 36.578 23.5 3.496 22.4 15.6F7 19.0 2020 30.97 31.7 13.010 28.4 38.774 23.8 2.979 23.4 14.4F5 19.2 2021 25.70 32.2 11.48 31.0 44.768 24.1 2.222 27.3 16.1F3 19.3 2022 26.5&0 33.2 10.4%0 33.4 43.864 24.2 2.939 26.0 16.4D4 20.0 2023(prelim)22.5%0 33.9 12.1!9 36.8 46.744 25.3 2.231 26.5 16.5B0 20.9 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 37 Table 3.3.Model Year 2022 Vehicle Attributes by Manufacturer Manufacturer BMW Ford GM Honda Hyundai Kia Mazda Mercedes Nissan Stellantis Subaru Tesla Toyota VW Other All Manufacturers Real-World Real-World CO2 FE Weight Horsepower 0 to 60 Footprint(g/mi)(mpg)(lbs)(HP)(s)(ft2)344 25.3 4585 313 6.2 50.5 380 23.1 4639 295 6.9 55.9 406 22.0 4686 276 7.6 56.0 309 28.7 3810 208 8.0 48.3 302 29.1 3756 201 8.2 48.3 306 28.6 3790 210 8.1 48.8 328 27.0 3860 196 8.9 46.3 371 23.8 4688 299 6.6 52.2 322 27.4 4018 221 8.3 49.1 415 21.3 4837 310 7.1 56.7 318 27.9 3977 203 8.9 46.3 0 119.3 4364 452 4.2 50.8 319 27.8 4137 225 8.0 49.7 333 26.1 4302 261 7.3 48.6 299 28.1 4490 296 7.7 49.2 337 26.0 4303 259 7.6 51.6 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 38 Table 3.4.Model Year 2022 Estimated Real-World Fuel Economy and CO2 by Manufacturer and Vehicle Type Manufacturer Sedan/Wagon Car SUV Truck SUV Minivan/Van Pickup Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)BMW 43.513 27.8 6.944 25.8 5071 23.4-Ford 3.0B6 20.9 8.4 1 38.5 5190 22.8 2.559 24.8 35.36 21.7 GM 11.06 31.0 14.006 29.0 387 21.9-37.0H0 18.7 Honda 46.1&5 33.5 6.201 29.5 3944 25.9 5.777 23.6 3.3B4 21.0 Hyundai 30.5$2 35.6 27.703 29.1 4245 25.7-Kia 46.3$3 35.3 6.118 28.0 4363 24.4 4.786 23.0-Mazda 15.4(9 30.6-8536 26.5-Mercedes 28.825 26.7 13.235 26.3 522 22.1 6.04 22.0-Nissan 54.93 32.2 6.15 32.3 2577 23.6-14.6C6 20.4 Stellantis 11.2A1 21.6 1.836 26.4 4498 22.0 10.347 25.0 32.3F6 19.2 Subaru 18.117 28.0-8218 27.9-Tesla 47.3%0 125.7 45.9%0 113.5 7%0 117.4-Toyota 33.2%2 35.1 9.413 28.4 3941 26.0 3.7$9 35.7 15.3C3 20.5 VW 36.000 28.9 2.59 36.4 6257 24.4-Other 14.1!6 36.9 21.0(7 29.8 5947 25.0 0.640 26.2 4.9%0 69.1 All Manufacturers 26.5&0 33.2 10.4%0 33.4 4464 24.2 2.939 26.0 16.4D4 20.0 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 39 Table 3.5.Footprint by Manufacturer for Model Year 20212023(ft2)Manufacturer Final MY 2021 Final MY 2022 Preliminary MY 202Preliminary MY 2023 3 Car Truck All Car Truck All Car Car Truck Truck All All BMW 48.1 52.7 50.1 48.3 52.8 50.5 47.7 52.8 49.6 Ford 47.6 58.8 57.2 48.1 56.9 55.9 49.2 58.9 58.0 GM 45.4 60.0 56.9 46.1 59.3 56.0 46.2 59.5 56.3 Honda 46.6 49.5 47.9 46.3 50.4 48.3 46.2 50.5 48.2 Hyundai 46.5 52.4 47.9 46.9 50.3 48.3 47.8 50.5 48.9 Kia 46.1 49.6 47.6 46.6 51.2 48.8 46.3 49.5 48.0 Mazda 45.5 47.0 46.4 44.2 46.7 46.3 43.2 47.4 46.9 Mercedes 49.1 52.4 50.9 50.6 53.4 52.2 51.0 52.8 51.8 Nissan 46.1 51.1 47.6 46.6 52.9 49.1 46.9 51.4 49.3 Stellantis 50.3 56.3 55.5 51.5 57.5 56.7 52.8 56.6 56.2 Subaru 44.9 46.0 45.9 45.2 46.5 46.3 45.3 46.3 46.2 Tesla 50.6 51.4 50.6 50.7 51.7 50.8 50.6-50.6 Toyota 46.5 51.9 49.7 46.5 52.0 49.7 46.9 52.7 50.7 VW 47.1 50.8 49.6 46.2 50.1 48.6 46.0 49.8 48.0 Other 44.7 50.8 49.0 45.7 51.1 49.2 47.3 54.6 53.5 All Manufacturers 46.9 54.3 51.5 47.2 54.2 51.6 47.5 47.5 54.4 54.4 5252.0.0 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 40 Vehicle Technology Since model year 1975,the technology used in vehicles has continually evolved.Todays vehicles utilize an increasingly wide array of technological solutions developed by the automotive industry to improve vehicle attributes discussed previously in this report,including CO2 emissions,fuel economy,vehicle power,and acceleration.Automotive engineers and designers are constantly creating and evaluating new technology and deciding how,or if,it should be applied to their vehicles.This section of the report looks at vehicle technology from two perspectives;first,how the industry has adopted specific technologies over time,and second,how those technologies have impacted CO2 emissions and fuel economy.A.Technology Overview All vehicles use some type of engine or motor to convert energy stored on the vehicle,usually in a fuel or battery,into rotational energy to propel the vehicle forward.Internal combustion engines,for example,typically combust gasoline or diesel fuel to rotate an output shaft.Internal combustion engines are paired with a transmission to convert the rotational energy from the relatively narrow range of speeds available at the engine to the appropriate speed required for driving conditions.The transmission is connected to a driveline that transfers the rotational energy from the transmission to the two or four wheels being used to move the vehicle.Each of these components has energy losses,or inefficiencies,which ultimately increase vehicle CO2 emissions and decrease fuel economy.A basic illustration of the energy flow through a gasoline vehicle is shown in Figure 4.1.Figure 4.1.Vehicle Energy Flow 41 Manufacturers have been adopting many new technologies to improve gasoline internal combustion engines.Figure 4.2 illustrates manufacturer-specific technology adoption for model year 2022,where larger circles represent higher adoption rates.For gasoline engines,technologies such as turbocharged engines(Turbo)and gasoline direct injection(GDI)allow for more efficient engine design and operation.A growing number of engines can use GDI or port fuel injection(GDPI);these engines are included with GDI engines in Figure 4.2 for the first time this year.Cylinder deactivation(CD)allows for only using part of the engine when less power is needed.Transmissions that have seven or more speeds,and continuously variable transmissions(CVTs),allow an engine to more frequently operate near its peak efficiency,providing more efficient average engine operation and a reduction in fuel usage.Engine stop/start systems can turn off the engine entirely when the vehicle is stopped to save fuel.Manufacturers are also adopting hybrids,plug-in hybrid electric vehicles(PHEVs),electric vehicles(EVs),and fuel cell vehicles(FCVs).Hybrid vehicles store some propulsion energy in a battery,and often recapture braking energy,allowing for a smaller,more efficiently operated engine.The hybrid category includes“strong”hybrid systems that can temporarily power the vehicle without engaging the engine and smaller“mild”hybrid systems that cannot propel the vehicle on their own.Plug-in hybrids operate similarly to hybrids,but their batteries can be charged from an external source of electricity,and generally have a longer electric only operating range.Electric vehicles operate only on energy stored in a battery that is charged from an external source of electricity and rely exclusively on electric motors for propulsion instead of an internal combustion engine.Fuel cell vehicles use a fuel cell stack to create electricity from an onboard fuel source(usually hydrogen),which then powers an electric motor or motors to propel the vehicle.PHEVs,EVs,and FCVs offer fundamentally different architectures than shown in Figure 4.1 and require different metrics10 and an evolving analysis of vehicle technology.Hybrids,PHEVs,and EVs are a growing portion of the fleet,and most manufacturers have made recent public announcements committing to billions of dollars in research towards electrification,and in some cases,manufacturers have announced specific targets for entirely phasing out internal combustion engines.The technologies in Figure 4.2 are all being used by manufacturers to reduce CO2 emissions and increase fuel economy.Each of the fourteen largest manufacturers have adopted several of these technologies into their vehicles,with many manufacturers achieving high penetrations of several technologies as shown in Figure 4.2.It is also clear that 10 See Appendix E for a detailed discussion of EV and PHEV metrics.42 manufacturers strategies to develop and adopt technologies are unique and vary significantly.Each manufacturer is choosing technologies that best meet the design requirements of their vehicles,and in many cases,that technology is changing quickly.The rest of this section will explore how vehicle technology has changed since 1975,the impact of those technology changes,and the rate at which technology is adopted by the industry.Figure 4.2.Manufacturer Use of Emerging Technologies for Model Year 2022 43 B.Vehicle Propulsion As discussed above,all vehicles use some type of engine or motor to convert stored energy into rotational energy to propel the vehicle forward.Over the last 45 years that EPA has been collecting data,gasoline internal combustion engines have been the dominant propulsion technology used in vehicles.Over that time,the technology used in combustion engines has continually evolved.Modern gasoline combustion engines are continuing that trend,employing technologies such as direct injection,turbocharging,and cylinder deactivation to improve efficiency and performance.A growing portion of new vehicles rely on partial or full electrification to achieve operational improvements,reduce tailpipe CO2 emissions,and increase fuel economy.Many new vehicles utilize stop-start technology,which turns off the engine during idle conditions and uses the vehicle battery to restart the engine when needed.Mild hybrids generally employ stop-start systems and have an electric motor that can assist the engine with moving the vehicle forward at launch.Strong hybrids generally have larger batteries and motors that can provide more power to move the vehicle or can directly drive the vehicle without the engine.Plug-in hybrids(PHEVs)add the capability of charging the vehicle battery from an external source,namely electricity from the power grid.Full electric vehicles(EVs)rely on electric motors to provide propulsion and use energy stored onboard in a battery.EVs are charged with electricity from the power grid,and do not have an internal combustion engine.Most hybrids,PHEVs,and EVs also utilize regenerative braking to recapture braking energy that otherwise would have been lost as heat,and further improve vehicle efficiency.This“spectrum of electrification”is creating a wide range of technology implementation strategies on modern vehicles,and offering numerous pathways to improve vehicle efficiency,emissions,and performance.The trend in vehicle propulsion technology since model year 1975 is shown in Figure 4.3.Vehicles that use an engine that operates exclusively on gasoline(including hybrids,but not plug-in hybrids which also use electricity)have held at least 95%of the light-duty vehicle market in almost every year prior to model year 2022(vehicles with diesel engines briefly captured almost 6%of the market in model year 1981).In model year 2022,the combination of EVs,PHEVs,FCVs,and diesel vehicles accounted for 7.5%of all production.The production of EVs is expected to grow in future model years,transitioning to a technology found across multiple vehicle types and models.Projected model year 2023 data suggests EVs alone will capture almost 10%of the market,and perhaps begin to challenge the dominance of vehicles relying exclusively on gasoline internal combustion engines.44 Figure 4.3.Production Share by Engine Technology 45 Engines that use gasoline as a fuel(including hybrids and plug-in electric hybrids)are further divided based on three broad parameters for Figure 4.3:fuel delivery,valve timing,and number of valves per cylinder.These parameters enable better control of the combustion process,which in turn can allow for lower CO2 emissions,increased fuel economy,and/or more power.Fuel delivery refers to the method of creating an air and fuel mixture for combustion.The technology for fuel delivery has changed over time from carburetors to fuel injection systems located in the intake system,and more recently to gasoline direct injection(GDI)systems that spray gasoline directly into the engine cylinder.Figure 4.3 also breaks out engines that can use GDI or port fuel injection(GDPI)depending on the engine operating conditions.The valves on each cylinder of the engine determine the amount and timing of air entering and exhaust gases exiting the cylinder during the combustion process.Valve timing has evolved from fixed timing to variable valve timing(VVT),which can allow for much more precise control.In addition,the number of valves per cylinder has generally increased,again offering more control of air and exhaust flows.Combined,these changes have led to modern engines with much more precise control of the combustion process.Figure 4.3 shows many different engine designs as they have entered,and in many cases exited,the automotive market.Some fleetwide changes occurred gradually,but in some cases(for example trucks in the late 1980s),engine technology experienced widespread change in only a few years.Evolving technology offers opportunities to improve fuel economy,CO2 emissions,power,and other vehicle parameters.The following analysis will look at technology trends within gasoline engines(including hybrids),diesel engines,and will spotlight emerging trends in PHEVs and EVs,a rapidly growing segment of the market.Each of these categories of engine technologies has unique properties,metrics,and trends over time.Gasoline Engines Since EPA began tracking vehicle data in 1975,over 650 million vehicles have been produced for sale in the United States.As shown in Figure 4.3,vehicles relying on a gasoline engine as the only source of power have been the overwhelmingly dominant technology for that time span,although EVs and PHEVs are now capturing a growing portion of new vehicle production.For the purposes of this report,hybrid vehicles are included with gasoline engines,as are“flex fuel”vehicles that are capable of operating on gasoline or a blend of 85%ethanol and 15%gasoline(E85).46 Engine Size and Displacement Engine size is generally described in one of two ways,either the number of cylinders or the total displacement of the engine(the total volume of the cylinders).Engine size is important because larger engines strongly correlate with higher fuel use.Figure 4.4 shows the trends in gasoline engine size over time,as measured by number of cylinders;note the gap between the top of the stacked bar and the 100%threshold corresponds to the share of vehicles relying on technologies other than gasoline engines,primarily diesel engines in the 1980s and EVs more recently.Figure 4.4.Gasoline Engine Production Share by Number of Cylinders11 In the mid and late 1970s,the 8-cylinder gasoline engine was dominant,accounting for well over half of all new vehicle production.Between model year 1979 and 1980,there was a 11 Figure 4.4 shows the trends in gasoline engine size over time,as measured by number of cylinders;note the gap between the top of the stacked bar and the 100%threshold corresponds to the share of vehicles without gasoline engines,primarily diesel engines in the 1980s and EVs in the post-2010 era.47 significant change in the market,as 8-cylinder engine production share dropped from 52%to 23%,and those engines were replaced with smaller 4-cylinder and some 6-cylinder engines.From model year 1987 through 2004,production moved back towards larger 6-cylinder and 8-cylinder engines.This trend reversed again in 2005 as production began trending back towards 4-cylinder engines.Four-cylinder gasoline engines are now the most popular engine option,capturing about 55%of the market in model year 2022.Overall engine size,as measured by the total volume of all the engines cylinders,is directly related to the number of cylinders.As vehicles have moved towards engines with a lower number of cylinders,the total engine size,or displacement,is also at an all-time low.The average new vehicle in model year 1975 had a displacement of nearly 300 cubic inches,compared to an average of 171 cubic inches in model year 2022.Gasoline engine displacement per cylinder has been relatively stable over the time of this report(around 35 cubic inches per cylinder since 1980),so the reduction in overall new vehicle engine displacement is almost entirely due to the shift towards engines with fewer cylinders.The contrasting trends in gasoline-powered vehicle horsepower(at an all-time high)and engine displacement(at an all-time low)highlight the continuing improvement in gasoline engines.These improvements are due to the development of new technologies and ongoing design improvements that allow for more efficient use of fuel or reduce internal engine friction.One additional way to examine the relationship between gasoline engine horsepower and displacement is to look at the trend in specific power(HP/Displacement),which is a metric to compare the power output of an engine relative to its size.Specific power has doubled between model year 1975 and model year 2022.The rate at which specific power has increased has been remarkably steady,as shown in Figure 4.5.The specific power of new vehicle gasoline engines has increased by about 0.02 horsepower per cubic inch every year for 45 years.Considering the numerous and significant changes to engines over this time span,changes in consumer preferences,and the external pressures on vehicle purchases,the long-standing linearity of this trend is noteworthy.The roughly linear increase in specific power does not appear to be slowing.Turbocharged engines,direct injection,higher compression ratios,and many other engine technologies are likely to continue increasing engine specific power.Figure 4.5 also shows two other important engine metrics,the amount of fuel consumed compared to the overall size of the engine(Fuel Consumption/Displacement),and the amount of fuel consumed relative to the amount of power produced by an engine(Fuel Consumption/HP).The amount of fuel consumed by a gasoline engine in model year 2022,relative to the total displacement,is about 13%lower than in model year 1975.Fuel 48 consumption relative to engine horsepower has fallen more than 70%since model year 1975.Taken as a whole,the trend lines in Figure 4.5 clearly show that gasoline engine improvements over time have been steady and continual and have resulted in impressive improvements to internal combustion engines.Figure 4.5.Percent Change for Specific Gasoline Engine Metrics Fuel Delivery Systems and Valvetrains All gasoline engines require a fuel delivery system that controls the flow of fuel delivered into the engine.The process for controlling fuel flow has changed significantly over time,allowing for much more control over the combustion process and thus more efficient engines.In the 1970s and early 1980s,nearly all gasoline engines used carburetors to meter fuel delivered to the engine.Carburetors were replaced over time with fuel injection systems;first throttle body injection(TBI)systems,then port fuel injection(PFI)systems,and more recently gasoline direct injection(GDI)and combined gasoline direct and port injection engines(GDPI),as shown in Figure 4.3.TBI and PFI systems use fuel injectors to electronically deliver fuel and mix it with air outside of the engine cylinder;the resulting air and fuel mixture is then delivered to the engine cylinders for combustion.Engines that utilize GDI spray fuel directly into the air in the engine cylinder for better control of the 49 combustion process.Engines using GDI were first introduced into the market with very limited production in model year 2007.The use of GDI has increased in subsequent years to the point where 73%of the model year 2022 fleet had either GDI or GDPI.In model year 2022,GDI engines were installed in 52%of model year 2022 vehicles,while GDPI engines were installed in 21%of the new vehicles.Another key aspect of engine design is the valvetrain.Each engine cylinder must have a set of valves that allow for air(or an air/fuel mixture)to flow into the engine cylinder prior to combustion and for exhaust gases to exit the cylinder after combustion.The number of valves per cylinder and the method of controlling the valves(i.e.,the valvetrain)directly impacts the overall efficiency of the engine.Generally,engines with four valves per cylinder instead of two,and valvetrains that can alter valve timing during the combustion cycle can provide more engine control and increase engine power and efficiency.This report began tracking multi-valve engines(i.e.,engines with more than two valves per cylinder)for cars in model year 1986 and for trucks in model year 1994.Since that time,about 90%of the fleet has converted to multi-valve design.While some three-and five-valve engines have been produced,the majority of multi-valve engines are based on four valves per cylinder.Engines with four valves generally use two valves for air intake and two valves for exhaust.In addition,this report began tracking variable valve timing(VVT)technology for cars in model year 1990 and for trucks in model year 2000,and since then nearly the entire fleet has adopted this technology.Figure 4.3 shows the evolution of engine technology,including fuel delivery method and the introduction of VVT and multi-valve engines.As shown in Figure 4.3,fuel delivery and valvetrain technologies have often been developed simultaneously.Nearly all carbureted engines relied on fixed valve timing and had two valves per cylinder,as did early port-injected engines.Port-injected engines largely developed into engines with both multi-valve and VVT technology.Engines with GDI are almost exclusively using multi-valve and VVT technology.These four engine groupings,or packages,represent a large share of the engines produced over the timespan covered by this report.Figure 4.6 shows the changes in specific power and fuel consumption per horsepower for each of these engine packages over time.There is a very clear increase in specific power of each engine package as engines moved from carbureted engines to engines with two valves,fixed timing and port fuel injection,then to engines with multi-valve VVT and port fuel injection,and finally to GDI engines.Some of the increase for GDI engines may also be due to the fact that GDI engines are often paired with turbochargers to further increase 50 power.Vehicles with fixed valve timing and two valves per cylinder have been limited in recent years and are no longer included in Figure 4.6 after model year 2015 due to very limited production.Figure 4.6.Engine Metrics for Different Gasoline Technology Packages 51 Turbocharging Turbochargers increase the power that an engine can produce by forcing more air,and thus fuel,into the engine.An engine with a turbocharger can produce more power than an identically sized engine that is naturally aspirated or does not have a turbocharger.Turbochargers are powered using the pressure of the engine exhaust as it leaves the engine.Superchargers operate the same way as turbochargers but are directly connected to the engine for power,instead of using the engine exhaust.Alternate turbocharging and supercharging methods,such as electric superchargers,are also beginning to emerge.A limited number of new vehicles utilize both a turbocharger and supercharger in one engine package.Gasoline turbocharged engines have grown steadily in the marketplace,accounting for more than 35%of all production in model year 2022,as shown in Figure 4.7.Many of these engines are applying turbochargers to create“turbo downsized”engine packages that can combine the improved fuel economy of smaller engines during normal operation but can provide the power of a larger engine by engaging the turbocharger when necessary.As evidence of this turbo downsizing,about 70%of gasoline turbocharged engines are 4-cylinder engines in model year 2022 with most other turbochargers being used in 6-cylinder and 3-cylinder engines.Model year 2023 is projected to be a similar distribution,as shown in Figure 4.8.Most of the current gasoline turbocharged engines also use GDI and VVT.This allows for more efficient engine operation,helps increase the resistance to premature combustion(engine knock),and reduces turbo lag(the amount of time it takes for a turbocharger to engage).In model year 2022,almost 90%of new vehicles with gasoline turbocharged engines also used GDI.Figure 4.9 examines the distribution of engine displacement and power of gasoline turbocharged engines over time.In model year 2011,turbochargers were used mostly in cars,and were available on engines both above and below the average engine displacement.The biggest increase in turbocharger use over the last few years has been in cars with engine displacement well below the average displacement.The distribution of horsepower for turbocharged engines is much closer to the average horsepower,even though the displacement is smaller,reflecting the higher power per displacement of turbocharged engines.This trend towards adding turbochargers to smaller,less powerful engines is consistent with the turbo downsizing trend.52 Figure 4.7.Gasoline Turbo Engine Production Share by Vehicle Type Figure 4.8.Gasoline Turbo Engine Production Share by Number of Cylinders 53 Figure 4.9.Distribution of Gasoline Turbo Vehicles by Displacement and Horsepower,Model Year 2011,2014,and 2022 54 Cylinder Deactivation Cylinder deactivation is an engine management approach that turns off the flow of fuel to one or more engine cylinders,and the corresponding spark plugs,when driving conditions do not require full engine power.This effectively allows a large engine to act as a smaller engine when the additional cylinders are not needed,increasing engine efficiency and fuel economy.The use of cylinder deactivation in gasoline vehicles steadily climbed through model year 2021,but fell slightly,less than one percentage point,in model year 2022 to 16%of all new vehicles.Projected model year 2023 data suggests another small drop in the use of cylinder deactivation across new vehicles.Stop/Start Engine stop/start technology allows the engine to be automatically turned off at idle and very quickly restarted when the driver releases the brake pedal.By turning the engine off,a vehicle can eliminate the fuel use and CO2 emissions that would have occurred if the engine was left running.This report began tracking stop/start technology in model year 2012 at less than one percent.Since then,the use of stop/start has increased to about 50%of all new vehicles in model year 2022,excluding hybrid vehicles.While non-hybrid stop/start systems have been used in a wide range of applications,they are found more often in larger vehicles and engines,as shown in Figure 4.10 and Figure 4.11.55 Figure 4.10.Non-Hybrid Stop/Start Production Share by Vehicle Type Figure 4.11.Non-Hybrid Stop/Start Production Share by Number of Cylinders 56 Hybrids Gasoline hybrid vehicles feature a battery pack that is larger than the battery found on a typical gasoline vehicle,which allows these vehicles to store and strategically apply electrical energy to supplement the gasoline engine.The result is that the engine can be smaller than what would be needed in a non-hybrid vehicle,and the engine can be operated near its peak efficiency more often.Hybrids also frequently utilize regenerative braking,which uses a motor/generator to capture energy from braking instead of losing that energy to friction and heat,as in traditional friction braking,and stop/start technology to turn off the engine at idle.The combination of these strategies can result in significant reductions in fuel use and CO2 emissions.The hybrid category includes“strong”hybrid systems that can temporarily power the vehicle without engaging the engine.It also includes“mild”hybrid systems that are capable of regenerative braking and many of the same functions as other hybrids,but utilize a smaller battery and electrical motor that cannot directly drive the vehicle.For the purposes of this report,vehicles with a 48V battery or smaller have been classified as“mild”hybrids,while larger batteries are classified as“strong”hybrids.Hybrids were first introduced in the U.S.marketplace in model year 2000 with the Honda Insight.As more models and options were introduced into the market,hybrid production increased to 3.8%of all vehicles in model year 2010,before slowly declining to 1.8%of new vehicle production in model year 2016.Since model year 2016 however,the percent of new vehicles that are hybrids has steadily grown and reached a new high of 10.2%of all new vehicles in model year 2022.Hybrid growth is projected to continue growing in model year 2023,to 13.6%of new vehicle production.Early hybrids were mostly the sedan/wagon vehicle type,but recent growth in other vehicle types,particularly truck SUVs,has propelled recent growth,as shown in Figure 4.12.In model year 2020,the production of hybrids in the truck SUV category surpassed the production of sedan/wagon hybrids for the first time and did so by more than 50%.Hybrids have also begun to penetrate the pickup and minivan/van vehicle types.Sedan/wagon hybrids accounted for only 25%of all hybrid production in model year 2022.Hybrid vehicles typically use a 4-cylinder engine,although an increasing number of 6-and 8-cylinder engines are being used in hybrid systems,as shown in Figure 4.13.While strong hybrids have grown market penetration in recent years,the growth of mild hybrids from very limited numbers to current production has contributed to the overall market share rise for hybrids.Mild hybrids accounted for about 40%of hybrid production in model year 2022,as shown in Figure 4.14.57 Figure 4.12.Gasoline Hybrid Engine Production Share by Vehicle Type Figure 4.13.Gasoline Hybrid Engine Production Share by Number of Cylinders 58 Figure 4.14.Gasoline Hybrid Engine Production Share Hybrid Type Plug-In Hybrid Electric,Electric,and Fuel Cell Vehicles PHEVs and EVs are two types of vehicles that can store electricity from an external source onboard the vehicle,utilizing that stored energy to propel the vehicle.PHEVs are similar to gasoline hybrids discussed previously,but the battery packs in PHEVs can be charged from an external electricity source;this cannot be done in gasoline hybrids.EVs operate using only energy stored in a battery from external charging.Fuel cell vehicles use a fuel cell stack to create electricity from an onboard fuel source(usually hydrogen),which then powers an electric motor or motors to propel the vehicle.EVs rely on electricity stored in a battery for fuel.Combustion does not occur onboard the vehicle,and therefore there are no tailpipe emissions created by the vehicle.The electricity used to charge EVs can create emissions at the power plant.The amount of emission varies depending on the fuel source of the electricity,which can in turn vary based on location and time of day.The electric grid in the US has also been changing over time,as natural gas and renewable energy resources make up a growing portion of electricity generation across the US.Depending on the source of electricity,EVs often result in lower CO2 emissions over their lifetime compared to gasoline vehicles.59 Since EVs do not use gasoline,the familiar metric of miles per gallon cannot be applied to EVs.Instead,EVs are rated in terms of miles per gallon-equivalent(mpge),which is the number of miles that an EV travels on an amount of electrical energy equivalent to the energy in a gallon of gasoline.This metric enables a direct comparison of energy efficiency between EVs and gasoline vehicles.EVs generally have a much higher energy efficiency than gasoline vehicles because electric motors are much more efficient than gasoline engines.PHEVs can operate either on electricity stored in a battery,or gasoline,allowing for a wide range of engine designs and strategies for the utilization of stored electrical energy during typical driving.Most PHEVs will operate on electricity only,like an EV,for a limited range,and then will operate like a strong hybrid until their battery is recharged from an external source.The use of electricity to provide some or all of the energy required for propulsion can significantly lower fuel consumption and tailpipe CO2 emissions.For a much more detailed discussion of EV and PHEV metrics,as well as upstream emissions from electricity,see Appendix E.The production of EVs and PHEVs has increased rapidly in recent years.Prior to model year 2011,EVs were available,but generally only in small numbers for lease in California.12 In model year 2011 the first PHEV,the Chevrolet Volt,was introduced along with the Nissan Leaf EV.Many additional models have been introduced since,and in model year 2022 combined EV/PHEV production reached almost 7%of all new vehicles.Combined EV and PHEV production is projected to reach a new high of almost 12%of all production in model year 2023.In model year 2022 there were five hydrogen FCVs produced,but they were only available in the state of California and Hawaii and in very small numbers.However there continues to be interest in FCVs as a future technology.The trend in EVs,PHEVs,and FCVs are shown in Figure 4.15.12 At least over the timeframe covered by this report.EVs were initially produced more than 100 years ago.60 Figure 4.15.Production Share of EVs,PHEVs,and FCVs13 The inclusion of model year 2022 EV,PHEV,and FCV production reduced the overall new vehicle average CO2 emissions by 22 g/mi and increased new vehicle average fuel economy by 1.2 mpg,as shown in Figure 4.16.Without EV,PHEV,and FCV production,the CO2 emissions and fuel economy of the remaining new vehicles was relatively flat.13 EV production data were supplemented with data from Wards and other publicly available production data for model years prior to 2011.The data only include offerings from original equipment manufacturers and does not include data on vehicles converted to alternative fuels in the aftermarket.61 Figure 4.16 Impact of EVs,PHEVs,and FCVs Figure 4.17 and Figure 4.18 show the production share by vehicle type for EVs and PHEVs.Early production of EVs was mostly in the sedan/wagon vehicle type,but recent model years have shown growth in car SUVs and truck SUVs.Electric pickup trucks first entered the market in model year 2022,along with new EV models across many of the vehicle types.Production of PHEVs has shifted from exclusively sedan/wagons to mostly truck SUVs,with limited production across the sedan/wagon,car SUV,and minivan/van vehicle types.62 Figure 4.17.Electric Vehicle Production Share by Vehicle Type Figure 4.18.Plug-In Hybrid Vehicle Production Share by Vehicle Type 63 Figure 4.19 shows the range and fuel economy trends for EVs and PHEVs14.The average range of new EVs has climbed substantially.In model year 2022,the average new EV range is 305 miles,or more than four times the range of an average EV in 2011.The range values shown for PHEVs are the charge-depleting range,where the vehicle is operating on energy in the battery from an external source.This is generally the all-electric range of the PHEV,although some vehicles also use the gasoline engine in small amounts during charge depleting operation.The average charge depleting range for PHEVs has remained largely unchanged since model year 2011.Figure 4.19.Charge Depleting Range and Fuel Economy for EVs and PHEVs The fuel economy of electric vehicles has also improved about 10%since model year 2011,as measured in miles per gallon of gasoline equivalent(mpge).In model year 2022 the fuel economy of average new EVs fell,mostly due to the introduction of larger vehicles that have lower overall fuel economy ratings.The combined fuel economy of PHEVs has been more variable but is about 30%lower in model year 2022 than in model year 2011 and is expected to decrease further in 2023.This may be attributable to the growth of truck SUV 14 The range and fuel economy values in this figure are the combined values from the fuel economy label,which weights city and highway driving 55%and 45%,as compared to the rest of the report,which uses a 43%city and 57%highway weighting.See Appendix C for more information.64 PHEVs,as shown in Figure 4.18.For more information about EV and PHEV metrics,see Appendix E.As the number of electric vehicles available continues to increase and diversify,comparing technology trends across electric vehicles will become more meaningful and important.Figure 4.20 shows the distribution of EV energy consumption,in terms of kWh per 100 miles,compared to vehicle inertia weight class.There is a general trend that heavier EVs have a higher energy consumption,but there is a large spread at each inertia weight class.Within the 5500-pound inertia weight class in particular,EVs have a range of energy consumption from nearly 25 to 50 kWh per hundred miles.Pickups and truck SUVs represent the heaviest EVs and are somewhat less efficient than other vehicle types,consistent with trends across the broader industry.Figure 4.20.EV Energy Consumption by Weight and Vehicle Type 65 Diesel Engines Vehicles with diesel engines have been available in the U.S.at least as long as EPA has been collecting data.However,sales of diesel vehicles have rarely broken more than 1%of the overall market.Diesel vehicle sales peaked at 5.9%of the market in model year 1981 but have been at or below 1%of production per year since 1985.In MY 2022,diesel vehicles were slightly below 1%of all new vehicles produced.Vehicles that rely on diesel fuel often achieve higher fu
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WORLD AIR CARGO FORECAST2024-2043 City nameFORECASTWorld Air Cargo Forecast 2024-2043ContentsForeword.1Executive summary.2 Air cargo industry overview.3Inter-regionalEast Asia-North America.7East Asia-Europe.8Europe-North America.9Latin America-North America.10Latin America-Europe.11Africa-East Asia.12Africa-Europe.13South Asia-East Asia.14South Asia-Europe.15RegionalNorth America.16Intra-East Asia and Oceania.17Domestic China.18Intra-Europe.19Domestic India .20Freighter fleet forecast.21 Methodology and sourcing.23Glossary.24Appendix.25City name1World Air Cargo Forecast 2024-2043The World Air Cargo Forecast(WACF)is the Boeing Companys biennial overview and long-term outlook for the air cargo industry.It summarizes the worlds major air trade markets,identifies industry trends,and presents forecasts for future development of markets and the global freighter fleet.This document provides our customers,stakeholders and industry with valuable information that informs decision-making for the future of air cargo and global trade.A special thank you to contributors:Sharon FelixGregg GildemannTom HoangCalvin JinDiego RodriguezWendy SowersAaron TaylerDiane TchakiridesThe next WACF will be published in the fourth quarter of 2026.Feedback welcome:Boeing Air Cargo Market AnalysisBoeing Commercial AirplanesP.O.Box 3703,MC 9U7-12Seattle,WA 98124 USA Focal:Calvin JinFreighter Fleet Forecast Focal:Aaron TaylerForeword1City name2World Air Cargo Forecast 2024-2043Air Cargo Traffic Forecast by FlowExecutive Summary*Note:Long-term Compound Annual Growth Rates(CAGRs)may change across WACF editions due to base year volatility Quick Stats7.0%2.3%3.9%7.0%3.5%5.7%2.9%2.7%5.5%5.3%2.8%2.6%4.0%4.20100150Domestic IndiaIntra-EuropeS Asia&EuropeS Asia&E AsiaAfrica&EuropeAfrica&E AsiaL America&EuropeL America&N AmericaDomestic ChinaIntra-E Asia&OceaniaN AmericaEurope&N AmericaE Asia&EuropeE Asia&N AmericaTraffic(billion CTKs)2023 trafficAdded traffic thru 2043CAGR 2024-20434.0P%Traffic(billion Cargo Tonne-Kilometers)City name3World Air Cargo Forecast 2024-2043Express carriersAir Cargo Industry Overview18%Express carrier share of traffic,2023 2.6%Historical air trade growth,2003-232.1x Volumes in 2043 vs.2023Air cargo plays a unique role in global trade due to its unparalleled reliability,speed,and security.Nearly 99%of world trade consists of low-value bulk commodities transported via ocean freight such as oil,metal ores,and grains.Though less than 1%of trade volumes are transported via air,air freight commodities tend to be perishable,high-value,or time-sensitive goods which collectively generate around 35%of world trade value.The two main types of air cargo have been express and general.In recent years,e-commerce has emerged as a significant third,often overlapping the other two.There are several distinct airline business models for air cargo:Belly-only operators provide air cargo capability using existing passenger networks and fleets All-cargo operators offer dedicated main-deck freighter capability for general freight,charter operations,and special or outsize cargo needs Combination carriers use both dedicated main-deck freighters as well as the belly capacity of passenger aircraft to serve a broad network and diverse markets Express carriers operate main-deck freighter fleets of all sizes to provide time-definite services from first-mile pickup to last-mile delivery,as well as general air cargo capability 18%of global air cargo traffic Includes first-mile pick up and last-mile delivery Total control of logistics flow from shipper to consignee Optimized air network around main and regional hubs Extensive ground network Usually move documents and small packages 82%of global air cargo traffic Capacity is sold to freight forwarders Responsible for moving freight from airport to airport Usually move larger,bulky shipments(more than 70kg)Air Cargo Industry OverviewGeneral cargo carriersCity name4World Air Cargo Forecast 2024-2043Freighters are essential to the global air cargo market.Though widebody passenger airplanes offer ample lower hold cargo capacity on the worlds major cargo flows,approximately 54%of global air cargo traffic measured in Cargo Tonne-Kilometers(CTKs)has historically been transported by main-deck freighters.Consequently,airlines operating freighters generated 90%of total air cargo industry revenues in 2023.Key reasons why freighters are preferred in air cargo markets include:Most passenger networks do not serve key air cargo hubs Widebody passenger schedules often do not meet shipper timing needs Hazardous and outsize cargo cannot be transported in the lower holds of passenger aircraft Payload-range considerations on passenger airplanes may limit cargo carriage The COVID-19 pandemic underscored the critical role of freighter aircraft in global trade.Approximately 60-70%of air cargo traffic between 2020 and 2023 was carried by freighters due to the significant reduction in passenger flights.0 0Pp010015020025030020002005201020152020Traffic(billion CTKs)Freighter CTKLower Hold CTKFreighter shareFreighter/Lower Hold Share of Air Cargo Traffic Freighter/Lower Hold Share of Air Cargo TrafficAir Cargo Industry Revenues by Airline Business ModelAirlines with freighters generate 90%of industry revenues Air Cargo Industry OverviewExpress 48%Combination Carrier32%All-Cargo Carrier10%Passenger Belly Only10 23$144 Billion90%City name5World Air Cargo Forecast 2024-2043The air cargo market faced significant challenges in early 2023 due to global economic uncertaintybut experienced a strong recovery in the latter half of the year,driven by a surge in demand for Chinese e-commerce goods,which continues in 2024.While the past year highlights short-term volatility,the industry has demonstrated long-term resilience.Despite multiple downturns,the industry has grown at an average of 2.6%per year over the last 20 years.9/11Global financialcrisisEurozone crisisChinese stock crashU.S.-China trade relations;COVID Wars;high inflation050100150200250300Global CTKs,Indexed 2000=100Our forecast for the global air cargo industry is primarily driven by the projected growth of global real GDP,which is expected to increase 2.6%annually over the next 20 years.South Asia,China,Southeast Asia,and Africa will lead this growth as their economies continue to develop and mature.Global trade and industrial production,also drivers of air cargo,are projected to grow 2.9%and 2.2%annually over the same period.Another significant factor contributing to future air cargo growth is supply chain diversification.The rise of geopolitical risk and the COVID-19 pandemic exposed the vulnerabilities of single-source supply chains,including labor,shipping,and manufacturing constraints.In response,manufacturers have begun diversifying their operations and supply chains to other parts of Asia.Southeast Asian countries,for example,have significantly increased their industrial capabilities and global air exports since 2017 as a result of these shifts.Increasingly,multi-node supply chains will depend on air cargo for reliable and timely connectivity across different stages of the manufacturing process.Growth of e-commerce and express networks will provide a further boost to air cargo demand.The entry of new e-commerce market players significantly accelerated air cargo growth in the latter half of 2023 and into 2024,underscoring the importance of air cargos unmatched speed to serve the digital economy.Global e-commerce revenues are forecast to rise around 9%per year through 2029,with the fastest growth in the emerging markets of South Asia and Southeast Asia.Air cargo networks will play an essential role in this expansion.World Air Cargo Market ResilienceAir Cargo Industry OverviewCity name6World Air Cargo Forecast 2024-20434.0GR020040060080020232043WorldTraffic(billion CTKs)baselowhigh3.6GR5.8GR020040060080020232043WorldTraffic(billion CTKs)GeneralExpressIndustry totalIndustry by carrier segment18%used on these factors,we forecast that global air cargo traffic,measured in CTKs,will average 4.0%annual growth from 2024 to 2043.With a 2019 base year,this Compound Annual Growth Rate(CAGR)is 3.4%.Express carriers,which accounted for 18%of total industry traffic in 2023,are expected to grow at an average annual rate of 5.8%.Due to their greater flexibility in handling express cargo,general cargo as well as e-commerce,these carriers are anticipated to outpace overall industry growth and increase their market share to 25%by 2043.However,other types of carriers will remain essential to e-commerce transport,particularly as e-commerce shipments become denser over time.Global ForecastAir Cargo Industry OverviewCAGR:Compound Annual Growth RateCity nameHISTORICALCOMMODITIES,2023FORECAST7World Air Cargo Forecast 2024-2043East Asia-North America21%Share of global traffic,2023 1.1%Historical air trade growth,2013-232.3x Volumes in 2043 vs.2023East Asia-North America is the largest air cargo market in the world,as measured by CTKs.Because of the high industrial output of East Asiaespecially in advanced technologyand the large consumer market of North America,air trade tends to be imbalanced with nearly twice as much cargo flying eastbound to North America compared to westbound.Air trade on this flow is heavily concentrated.The United States accounts for nearly 90%of North American trade with East Asia,while China is the largest East Asian air trade partner of North America with a 55%share of North American air imports and 37%share of exports.As a result,the overall transpacific market tends to be highly dependent on relations between the two large economies.Risks posed by geopolitical tensions and pandemic-era disruptions have prompted companies to diversify their supply chains beyond China to Vietnam,Thailand,and Malaysia,raising those countries collective share of North American imports from 10%in 2017 to 17%in 2023.Supply chain diversification,rising economies in Southeast Asia,and growth of e-commerce on both sides of the Pacific are expected to drive air trade growth.Though the challenge of directionality is expected to remain in the future,volumes in the total market are projected to more than double by 2043.DRIVERS Growing economies and consumer demand Supply chain diversification bolstering industrial capabilities of Southeast Asia Increasing trade cooperation across the Pacific Developing e-commerce marketsRISKS Geopolitical tensions Supply chain disruptions and near-shoring to North America Demographic transitions in Northeast Asian countries Weather events and climate threatsSeoul4.5GR3.5GR024682023204320232043E Asia to N AmericaN America to E AsiaVolumes(million tonnes)baselowhigh26&%8%7#%Technology&Professional EquipmentMachinery&Electrical EquipmentDocuments&Small PackagesTextiles,Leather&ApparelChemical ProductsOtherMachinery&Electrical EquipmentChemical ProductsPerishablesDocuments&Small PackagesTechnology&Professional EquipmentOtherE Asia to N AmericaN America to E Asia0246201320152017201920212023Volumes(million tonnes)E Asia to N America TotalN America to E AsiaCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALCOMMODITIES,2023FORECAST8World Air Cargo Forecast 2024-20430246201320152017201920212023Volumes(million tonnes)E Asia to EuropeEurope to E Asia TotalEast Asia-Europe18%Share of global traffic,2023 1.9%Historical air trade growth,2013-232.2x Volumes in 2043 vs.2023East Asia-Europe is the worlds second-largest air cargo market,as measured by CTKs.Freighter capacity between the two regions nearly doubled over the past two years due to passenger belly capacity reductions following escalation of the Russo-Ukrainian War in 2022.Capacity remains elevated because of supply chain disruptions related to the Red Sea crisis and high demand for Chinese e-commerce.Unlike the directionality on transpacific flows,volumes on this trade lane are fairly balanced.The East Asia-to-Europe direction is dominated by consumer goods,whereas Europe-to-East Asia is driven by manufacturing and industrial goods.However,European exports of consumer goods,luxury items,and perishables have increased in recent years as East Asias middle class and consumer base continue to grow.Sixth-Freedom carriers centrally located on this trade lane have risen to prominence in recent years.Their ability to link the two regions and beyond by efficiently connecting cargo through their hubs has allowed them to capture market share and lead industry growth,particularly given the Russia overflight restrictions faced by many other carriers.Strong economic fundamentals and expanding e-commerce markets on both sides of this trade lane will drive air cargo growth at around 4.0%per year over the next 20 years.DRIVERS Rising middle class in East Asia Expanding economies in Europe and East Asia Strong cross-border e-commerce growth Free trade agreements and inter-regional partnershipsRISKS Regional conflicts and geopolitical tensions Weak economic growth in major European economies Rising nationalism Increased trade tariffsHong Kong3.8GR4.2GR024682023204320232043E Asia to EuropeEurope to E AsiaVolumes(million tonnes)baselowhigh43 %8%44%9%7%Machinery&Electrical EquipmentTechnology&Professional EquipmentTextiles,Leather&ApparelChemical ProductsPerishablesOtherMachinery&Electrical EquipmentPerishablesChemical ProductsTechnology&Professional EquipmentTextiles,Leather&ApparelOtherE Asia to EuropeEurope to E AsiaCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALCOMMODITIES,2023FORECAST9World Air Cargo Forecast 2024-2043Frankfurt11%Share of global traffic,2023 2.5%Historical air trade growth,2013-231.7x Volumes in 2043 vs.2023Europe-North AmericaAir trade between Europe and North America has been volatile in recent years due to the effects of COVID-19,high inflation,and slowing of the global economy.However,long-term growth has remained positive.Although the 300 to 600 daily widebody passenger flights each way across the North Atlantic(depending on season)provide more than enough lower hold capacity to fulfill all air cargo demand,regulations,special cargo requirements,and logistics infrastructure often limit the use of this capacity.As a result,dedicated freighters continue to transport over 40%of cargo traffic between the two regions.Germany,the UK,Italy,France,and the Netherlands were the top five European air trade partners of North America in 2023,together accounting for over 60%of the market.At the same time,the United States contributed over 90%of North American air cargo volumes traded with Europe.Countries in Eastern Europe and the Balkans have steadily been increasing their share over the last decades as their economies and industrial capabilities have grown.Our forecast takes baseline Gross Domestic Product(GDP)growth of 1.4%per year in Europe and 1.8%per year in North America as the broadest-based driver of air trade between these larger economies.Ongoing efforts to strengthen high-tech industrial production on both sides of the Atlantic,as well as growth in Central and Eastern Europe,will boost future air cargo growth faster than historical trend.DRIVERS Advanced economies and growing emerging economies Further deregulation of European trade European Union expanding Services growth boosting consumer growthRISKS Geopolitical conflicts impacting supply chains and energy prices Redirection of capital investments toward Asia Trade tensions,tariffs,and restrictions Rise of nationalism hampering regional cooperation012345201320152017201920212023Volumes(million tonnes)Europe to N America Total N America to Europe27%9# %8%Machinery&Electrical EquipmentChemical ProductsDocuments&Small PackagesPerishablesTechnology&Professional EquipmentOtherMachinery&Electrical EquipmentChemical ProductsTechnology&Professional EquipmentDocuments&Small PackagesMetal ProductsOtherEurope toN AmericaN America to Europe2.8GR2.4GR0123452023204320232043Europe to N AmericaN America to EuropeVolumes(million tonnes)baselowhighCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALCOMMODITIES,2023FORECAST10World Air Cargo Forecast 2024-2043Mexico City4%Share of global traffic,2023 1.6%Historical air trade growth,2013-231.7x Volumes in 2043 vs.2023Latin America-North AmericaDespite global volatility,air trade between Latin America and North America remains robust,driven by strong economic ties,growing commodity flows,and geographic proximity.In 2023,around 65%of freighter capacity between these regions passed through Miami,underscoring the citys key role.Over the past 20 years,Colombia,Chile,and Ecuador have more than doubled their exports to the U.S.,largely driven by the resilience of perishables as essential commodities.Nicaragua now exports three times the volume it did in 2003,with shipments primarily consisting of perishables and a growing share of electrical equipment.Mexico and Brazil,the largest Latin American economies with strong ties to North America,accounted for over 40%of all Latin American air exports to North America by value.However,by tonnage,Colombia,Chile,and Ecuador represented around 65%of exports to North America,reflecting their dominance in lower-value commodities like perishables and flowers.Our forecast anticipates accelerated growth of air trade between these regions over the next 20 years.Policies like the United States-Mexico-Canada Agreement will lower trade barriers and foster increased volumes.Air trade will be further stimulated by expanding consumer economies,rising e-commerce,and U.S.efforts to nearshore manufacturing to Latin American countries.DRIVERS Strong economic ties and trade agreements Proximity and growing regional cooperation Resilience of perishables as essential time-sensitive cargo Robust e-commerce and consumer goods demandRISKS Geopolitical volatility and trade tensions Economic slowdowns in key markets Capacity constraints and infrastructure challenges Increased regulatory burdens and compliance costs2.4GR3.5GR01232023204320232043L America to N AmericaN America to L AmericaVolumes(million tonnes)baselowhigh72%8%6%3%3%85%7%6%PerishablesMachinery&Electrical EquipmentBeverages&OilsTechnology&Professional EquipmentTextiles,Leather&ApparelOtherMachinery&Electrical EquipmentChemical ProductsTechnology&Professional EquipmentTransportation EquipmentMetal ProductsOtherL America toN AmericaN America toL America0.00.51.01.52.0201320152017201920212023Volumes(million tonnes)L America to N America TotalN America to L AmericaCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALCOMMODITIES,2023FORECAST11World Air Cargo Forecast 2024-2043Sao Paulo4%Share of global traffic,2023 1.3%Historical air trade growth,2013-231.8x Volumes in 2043 vs.2023Latin America-EuropeAir trade between Latin America and Europe is supported by strong trade relationships and diverse commodity exchanges,resulting in relatively balanced air cargo volumes in each direction.Routings through Miami and West Africa link these two distant markets and allow operators to efficiently build loads along the way.Spain,Germany,and the Netherlands account for over 60%of total trade tonnage from Europe,while Mexico and Brazil represent over 50%on the Latin American side.Emerging economies such as Paraguay,Uruguay,and Peru are among the fastest-growing.These three countries have expanded exports of fruits and vegetables,which rely on air cargo to meet freshness and quality requirements,as well as textiles.Paraguay has also increased its export of spirits,particularly rum,which enjoys strong demand in Europe.Expanding consumer markets in Latin America will drive future air cargo demand between these regions.Strategic partnerships,technological advancements,and evolving trade policies such as the EU-Mercosur trade agreement will further foster air trade growth.DRIVERS Strategic partnerships and bilateral agreements Development of intra-regional logistics networks Increased trade collaboration Growing e-commerce and consumer marketsRISKS Economic volatility Rise of nationalism hampering regional cooperation Insufficient infrastructure investment Capacity constraints and regulatory hurdles0.00.51.01.5201320152017201920212023Volumes(million tonnes)Europe to L America TotalL America to Europe33%9%8 %5%4%4%3%6%Machinery&Electrical EquipmentChemical ProductsPerishablesTransportation EquipmentMetal ProductsOtherPerishablesMachinery&Electrical EquipmentTechnology&Professional EquipmentMetal ProductsChemical ProductsOtherEurope to Latin AmericaLatin America to Europe3.1GR2.6GR0.00.51.01.52023204320232043Europe to L AmericaL America to EuropeVolumes(million tonnes)baselowhighCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALCOMMODITIES,2023FORECAST12World Air Cargo Forecast 2024-2043East Asia is Africas second largest air cargo partner.In contrast to the established Africa-Europe market,traffic between Africa and East Asia has grown rapidly over the past decade.Whereas Europe is the main destination for African air exports,East Asia is the primary source of imports to the continent.Most of these goods come from China.Trade with China greatly expanded and paralleled growing Chinese investment and engagement across Africa in the 21st century.Africa imports a diverse array of industrial and manufactured commodities from East Asia.African e-commerce is boosting demand for Asia-sourced consumer products and has huge potential to expand.Today,the African e-commerce market is largely untapped.Although nearly one-fifth of the worlds population lives in Africa,the continent accounts for less than half a percent of global e-commerce sales.African e-commerce is expected to grow at double-digit rates in coming years to meet this demand,driving continued air cargo growth.The Africa-East Asia air cargo market will continue to grow rapidly over the next two decades.It will triple in volume and surpass Europe as Africas largest air cargo market.Africas population is expected to double to 2.5 billion people by 2050,by which time one-quarter of the worlds population will live on the continent.A significant increase in the working age population,coupled with industrialization and economic development,will raise incomes and boost consumption.Industrialization in Africa will also generate demand for machinery and manufacturing inputs from East Asia.Africa-East Asia2%Share of global traffic,2023 7.2%Historical air trade growth,2013-233.0 x Volumes in 2043 vs.2023Addis AbabaDRIVERS African demographics and rising consumption African e-commerce market growth Economic growth and diversifying sources of foreign direct investment African economic diversification and industrializationRISKS Transportation and digital infrastructure investment Internet use levels,currency differences,and lack of customs process harmonization Limited direct air connectivity to East Asia markets Political and economic instability discouraging investment0.00.20.40.60.81.0201320152017201920212023Volumes(million tonnes)Africa-E Asia Total404%9%4%4%8(%9%5#%Metal ProductsPerishablesEnergy&MiningChemical ProductsWood&Paper ProductsOtherMachinery&Electrical EquipmentTextiles,Leather&ApparelTechnology&Professional EquipmentChemical ProductsMetal ProductsOtherAfrica to E AsiaE Asia to Africa5.7GR0.00.51.01.52.02.520232043Africa-E Asia TotalVolumes(million tonnes)baselowhighCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALCOMMODITIES,2023FORECAST13World Air Cargo Forecast 2024-2043Africa-EuropeEurope remains Africas largest air cargo partner and the destination for roughly two-thirds of all African air exports.The market is mature,with tonnage flat over the past decade.Fresh horticultural exportsespecially cut flowers,fruits,and vegetablesdominate African air cargo to Europe.After Colombia and Ecuador,Kenya and Ethiopia are the worlds third and fourth largest producers of fresh cut flowers,respectively.Nearly all African flowers are exported by air with the majority destined for European markets,especially the Netherlands,though the Middle East is also emerging as a destination.The global flower market is expected to grow strongly at 5%per year through 2030.Imports to Africa are more diversified and cover an array of industrial and manufactured goods,reflecting limited industrialization that does not meet local demand.Because of these different commodity mixes,African imports are up to ten times more valuable per tonne than perishable exports.Future growth in Africa-Europe air cargo will be driven by continued demand for perishables in Europe and African economic development.However,improving the sustainability of air cargo,via methods such as sustainable aviation fuel(SAF)and next-generation freighters,will be critical for meeting European initiatives to decarbonize fresh produce supply chains.African GDP is expected to grow at 3.7%,outpacing the global average of 2.6%.Increasing African industrialization will diversify air exports as air trade expands to also include finished products and generates more import demand for intermediate goods.2%Share of global traffic,2023 0.1%Historical air trade growth,2013-232.0 x Volumes in 2043 vs.2023NairobiDRIVERS Demand for perishables in Europe African economic diversification and industrialization African demographics and rising consumptionRISKS European initiatives to drastically decarbonize supply chains Slow adoption of trade union and air liberalization initiatives African transportation infrastructure investment Foreign exchange shortages in Africa2.3GR4.8GR0.00.20.40.60.81.01.22023204320232043Africa to EuropeEurope to AfricaVolumes(million tonnes)baselowhigh73%4%3%2%6 %7#%PerishablesMetal ProductsMachinery&Electrical EquipmentNon-Metallic ProductsTextiles,Leather&ApparelOtherMachinery&Electrical EquipmentChemical ProductsPerishablesTechnology&Professional EquipmentMetal ProductsOtherAfrica to EuropeEurope to Africa0.00.20.40.60.81.01.2201320152017201920212023Volumes(million tonnes)Africa to EuropeEurope to Africa TotalCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALCOMMODITIES,2023FORECAST14World Air Cargo Forecast 2024-2043SaigonSouth Asia-East Asia1%Share of global traffic,2023 2.3%Historical air trade growth,2013-233.9x Volumes in 2043 vs.2023East Asia is South Asias largest air cargo partner,and traffic between the two generated impressive growth prior to the pandemic.East Asia is a major source of air imports for South Asian markets,including semiconductors used to feed growing electronics manufacturing in India and raw textiles to be sewn into garments in Bangladesh.India is the largest air cargo market in South Asia and will be the primary driver of its continued growth.India demonstrates how economic development plans can boost air cargo.For example,the country is striving to transform into a hub of advanced manufacturing through its“Make in India”program,which provides incentives for foreign companies to manufacture in India.Targeted industriessuch as personal electronics,semiconductors,and automobilesgenerate demand for air cargo through their supply chains and exports of finished products.Supply chain diversification throughout the Indo-Pacific will complement Indias manufacturing initiatives and accelerate demand for air cargo.Air cargo between South Asia and East Asia is expected to grow nearly fourfold in volume over the next two decades.Imports from East Asia will remain the larger share of this trade,especially driven by the need to support accelerating e-commerce demand in the region.Expanding manufacturing will lift exports to East Asia,especially as prominent global brands expand production in India and some develop export-oriented products targeted at East Asian markets.DRIVERS Accelerating e-commerce in South Asia Manufacturing sector poised for rapid growth Supply chain diversification trends Strong global demand for fashion industry will boost garment value chainRISKS Sluggish foreign investment could restrain export-oriented manufacturing in South Asia Income levels,unemployment,and infrastructure challenges in South Asia Political tensions between India and ChinaMumbai6.8GR7.4GR0.00.51.01.52.02023204320232043E Asia to S AsiaS Asia to E AsiaVolumes(million tonnes)baselowhigh0.00.20.40.60.81.0201320152017201920212023Volumes(million tonnes)E Asia to S AsiaS Asia to E Asia Total36X%9%7%6%8%Machinery&Electrical EquipmentTextiles,Leather&ApparelChemical ProductsTechnology&Professional EquipmentPerishablesOtherPerishablesTextiles,Leather&ApparelMachinery&Electrical EquipmentChemical ProductsMetal ProductsOtherE Asia to S AsiaS Asia to E AsiaCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALCOMMODITIES,2023FORECAST15World Air Cargo Forecast 2024-2043New DelhiSouth Asia-Europe1%Share of global traffic,2023 0.6%Historical air trade growth,2013-232.1x Volumes in 2043 vs.2023Air cargo between South Asia and Europe has largely recovered from the successive impacts of Indias economic slowdown in 2019 and the pandemic.In contrast to the import-heavy trade from East Asia,South Asias air trade with Europe is mostly westbound exports.Nearly half of South Asian air exports to Europe are apparel and clothing,reflecting the regions well-established garment industry.Pharmaceuticals are also an important export,particularly from India.The country is one of the worlds largest pharmaceutical producers and leads the branded generics market,producing one-fifth of global pharmaceuticals by volume and nearly two-thirds of vaccines.Projected to grow more than tenfold by the countrys centenary of independence in 2047,Indias pharmaceutical industry will drive demand for air cargo exports.This will be true of both finished products and intermediate goods needed by the rest of the industry,such as active pharmaceutical ingredients.The South AsiaEurope air cargo market will more than double in volume over the coming two decades.South Asias rapidly growing population and rising household incomes will strengthen demand for imports of European products,while manufacturing will require European-sourced intermediate goods.Economic reforms,competitive production costs,and the imperative to diversify supply chains are making South Asia an increasingly attractive place to do business and will propel air exports as well.DRIVERS South Asian economic development and population growth Manufacturing growth,especially in advanced commodities Pharmaceutical industry growth Fashion industry demand boosting garment value chainRISKS Infrastructure challenges,especially in cold chain logistics Sluggish foreign investment restraining advanced manufacturing growth in South Asia Low incomes and unemployment in developing economies0.00.20.40.60.81.0201320152017201920212023Volumes(million tonnes)S Asia to EuropeEurope to S Asia Total54%6%49%8%7%7 %Textiles,Leather&ApparelPerishablesMachinery&Electrical EquipmentChemical ProductsMetal ProductsOtherMachinery&Electrical EquipmentChemical ProductsTechnology&Professional EquipmentMetal ProductsPerishablesOtherS Asia to EuropeEurope to S Asia3.5GR4.5GR0.00.20.40.60.81.02023204320232043S Asia to EuropeEurope to S AsiaVolumes(million tonnes)baselowhighCAGR:Compound Annual Growth RateBar length:volumes in tonnes,2023;Percentages:commodity share of directional flowCity nameHISTORICALFORECAST16World Air Cargo Forecast 2024-2043U.S.FREIGHT BY MODE,2023ChicagoNorth America10%Share of global traffic,2023 3.5%Historical air trade growth,2013-231.7x Volumes in 2043 vs.2023North American air cargo is dominated by the domestic U.S.market,which represented over 95%of the regions total traffic in 2023.Though air cargo contributed less than 1%of total transported tonnage within the U.S.,its value as a mode of transportnearly 80 times that of truck transport is unmatched.More than 90%of air cargo traffic in this region was moved on freighters in 2023,with express carriers alone accounting for over 70%of traffic.The market has seen above-trend growth in recent years,largely due to a 16%annual increase in U.S.e-commerce from 2017 to 2023.While e-commerce growth is projected to slow to high single-digits,expansion into segments such as healthcare,pharmaceuticals,groceries,and perishables will sustain growth and ensure that e-commerce remains an important driver of air cargo demand.The North American air cargo market is expected to grow at an annual rate of 2.8%over the next 20 years,driven by steady retail growth and continued e-commerce expansion.Weak consumer demand,increasing capability of alternate modes of transport,and realigning consumer preferences of cost vs.speed may require operators to adjust their business strategies.However,the unique value proposition of air cargo in high-priority,time-sensitive,and secure shipments will sustain future growth.DRIVERS E-commerce growth Steady economic growth and consumer demand Renewed government focus on infrastructure developmentRISKS Weakening consumer demand E-commerce growth lagging expectations Labor availability to support logistics Increased competition from alternative transportation modes 010203040201320152017201920212023Traffic(billion CTKs)U.S.DomesticNorth America Total2.8GR010203040506020232043North America TotalTraffic(billion CTKs)baselowhigh12,015 1,113 644 2$918$201$276$75,348$0$20,000$40,000$60,000$80,00005,00010,00015,000TruckRailWaterAirRevenue,$/tonMillion tons transportedCAGR:Compound Annual Growth RateCity nameHISTORICALFORECAST17World Air Cargo Forecast 2024-2043SUPPLY CHAIN SHIFTSIntra-East Asia and OceaniaAir trade within East Asia and Oceania is closely tied to the East Asia-North America and East Asia-Europe flows.However,geopolitical tensions,the COVID-19 pandemic,and economic uncertainty have hurt intra-regional traffic over the last decade.The market,though,is recovering in 2024 and will return to fast-paced growth in the future.Industrial machinery,semiconductors,and consumer electronics account for nearly half of all goods carried in the market,highlighting the regions specialization in industrial and electronic sectors.China remains the dominant player due to its immense manufacturing output and is expected to continue to play a crucial role in global supply chains.At the same time,Southeast Asia is poised to grow its market share as its economies mature,private consumption rises,and industrial capabilities expand due to diversifying global supply chains.This trend is already reflected in the increase of Northeast and Southeast Asias share of regional air exports to the U.S.from 37%in 2017 to 50%in 2023.As the digital economy in East Asia and Oceania grows,express and e-commerce networks will develop in conjunction.China,Japan,and South Korea represent the largest digital economies in the region,but Southeast Asia is poised to grow the fastestover 15%annually through 2030with the Philippines,Vietnam,Thailand,and Indonesia leading growth.5%Share of global traffic,2023-1.1%Historical air trade growth,2013-232.8x Volumes in 2043 vs.2023DRIVERS Growing economies and consumer demand Supply chain diversification bolstering industrial capabilities of Southeast Asia Increasing regional trade cooperation Developing express and e-commerce markets RISKS Geopolitical tensions Supply chain disruptions and near-shoring Demographic transitions in Northeast Asian countries Climate eventsTaipei0246810201320152017201920212023Volumes(million tonnes)Intra-East Asia and OceaniaSE AsiaChinaNE Asia-20%-15%-10%-5%0%5P7090110130150Change in mkt share,2023 v.20172023 volume index,2017=100U.S.Air Imports from East AsiaBubble size=2023 mkt share1005.3GR0510152020232043Intra-East Asia and OceaniaVolumes(million tonnes)baselowhighCAGR:Compound Annual Growth RateCity nameFORECAST18World Air Cargo Forecast 2024-2043ONLINE RETAIL SALESHISTORICALDomestic ChinaChina maintained its position as the worlds largest manufacturing country for the 14th consecutive year in 2023,accounting for approximately 30%of global manufacturing output,with key industries including apparel,automotive,computing,electronics,and telecommunications.Manufacturing remains a key driver of economic growth,accounting for over 25%of Chinas total GDP.Consumer demand in Chinas rapidly developing cities has become an important stimulus of domestic air cargo growth over the past decade as China shifts to a consumer economy and experiences high e-commerce growth.Over 60%of the Chinese population shops online,resulting in the largest e-commerce market in the world valued at more than$3 trillion in 2023nearly three times larger than the worlds second-largest e-commerce market,the United States.Chinese e-commerce is forecast to grow by over 11%per year,faster than the global average of 9%.This will provide a substantial boost to the domestic air cargo market,particularly in the express segment.Establishment of centrally-located air cargo hubs like the new Ezhou Airport reflect the rising demand for efficient domestic air cargo networks to support this growth.Domestic Chinese air cargo traffic faced significant volatility during the pandemic but is normalizing.The market has grown 5.1%annually over the last two decades and is projected to rise an average of 5.5%per year over the forecast period.DRIVERS Large online consumer and vendor base Widespread adoption of secure digital payment networks Expansion of e-commerce into live-streaming and social networking platforms Growing domestic supply chains for manufacturingRISKS Economic headwinds Continued domestic logistics infrastructure investment required Sustainability of e-commerce business models Increased competition from alternative transportation modesShanghai3%Share of global traffic,2023 1.3%Historical air trade growth,2013-232.9x Volumes in 2043 vs.20235.5GR05101520232043Domestic ChinaVolumes(million tonnes)baselowhigh05001,0001,5002,0002,5003,0003,50020132023USD BillionsU.S.China 26%/year 16%/year0123456201320152017201920212023Volumes(million tonnes)Domestic ChinaCAGR:Compound Annual Growth RateCity nameFORECAST19World Air Cargo Forecast 2024-2043HISTORICALAIR EXPRESS SHIPMENTSIntra-EuropeIntra-European air cargo is dominated by express shipments.Integrated express carrier traffic has been the main driver of air cargo growth in this region since the late 1990s and,as such,has accounted for more than half of the regions traffic since 2003.This market has remained highly volatile since the COVID-19 pandemic;in fact,traffic declined nearly 9%year-on-year in 2023 and remains 31low 2019 levels.High eurozone inflation and uncertainty arising from wars and geopolitical tensions within and directly adjacent to the region have posed further challenges to the market.But despite weak overall performance,pandemic-related shifts in consumer behavior have resulted in express shipment and e-commerce growth since 2019.Sustainability efforts promoting the development and use of surface transport such as rail or road create competition with air cargo within this region.Furthermore,the rise of nationalism and slower-than-anticipated growth in major European economies may hamper trade.Nevertheless,growing express shipments,normalizing inflation,and expanding consumer and e-commerce markets in Eastern and Southern Europe will support intra-European air cargo growth at an average of 2.3%per year over the next 20 years.1%Share of global traffic,2023 1.8%Historical air trade growth,2013-231.6x Volumes in 2043 vs.2023DRIVERS Express and e-commerce growth Expanding Eastern and Southern European economies New air cargo networks and operators in Eastern EuropeRISKS Slow economic growth in major economies High operating cost environment Sustainability efforts boosting surface transport competitiveness Rising nationalismAmsterdam2.3GR01234520232043Intra-EuropeTraffic(billion CTKs)baselowhigh02004006008001,000201320152017201920212023Number of shipments,thousands01234201320152017201920212023Traffic(billion CTKs)Intra-EuropeCAGR:Compound Annual Growth RateCity nameHISTORICALFORECAST20World Air Cargo Forecast 2024-2043PROJECTED E-COMMERCE GROWTHDomestic IndiaIndias domestic air cargo traffic grew significantly prior to the pandemic and recovered quickly.This reflects the strong fundamentals of the Indian market.The country is one of the fastest-growing large economies in the world,rising from the worlds 10th largest in 2014 to the fifth largest by 2023.It is projected to become the third largest by the end of this decade.Favorable demographic trends,especially a growing working-age population and improving public health,are priming India for further development.Rising household incomes,high internet penetration,and widespread smartphone adoption are powering a booming e-commerce market.Although still relatively small in volume compared to established e-commerce markets like China,the U.S.,or the EU,Indian e-commerce volumes are growing faster than almost anywhere else at more than 25%per year.In addition to a massive internet user base,the India Stack ecosystem facilitates digital transactions and allows more Indians to make online purchases.Higher household incomes across the board,along with a rising affluent class,will drive explosive e-commerce growth and demand for distribution via domestic air cargo.Economic growth,expanding manufacturing,and an enormous domestic consumer market will propel a fourfold increase in Indian air cargo over the next 20 years.Growing air cargo will support Indias goal to become a developed country by its 2047 centenary of independence,and the government is investing heavily in aviation and cargo infrastructure.1%Share of global traffic,2023 7.3%Historical air trade growth,2013-233.9x Volumes in 2043 vs.2023DRIVERS Rapid economic growth and favorable demographics Government support for air cargo and infrastructure development Large and fast-growing e-commerce market“Make in India”bolstering manufacturing growthRISKS Barriers to trade hinder manufacturing growth Unevenly developed infrastructure impedes domestic logistics Insufficient domestic freighter capacity Developing economy facing low incomes,unemployment,and low literacy ratesAgra60120320202220252030India E-commerce GMV($B)6x growth7.0GR0123420232043Domestic IndiaVolumes(million tonnes)baselowhigh0.00.20.40.60.81.0201320152017201920212023Volumes(million tonnes)Domestic IndiaCAGR:Compound Annual Growth RateGMV:Gross Merchandise ValueCity name21World Air Cargo Forecast 2024-2043Of the 2,845 freighter deliveries,approximately 45%will replace retiring airplanes,while the remainder will grow the fleet to meet projected traffic growth.Freighter Fleet ForecastStandard Body80 tonnesBoeing 727Boeing 767Boeing 747Boeing 737Boeing DC-10Boeing 777Boeing 757Airbus A300/A310Boeing MD-11Boeing MD-80Airbus A330Airbus A350Boeing DC-9Ilyushin IL-76Antonov An-124Airbus A320 SeriesIlyushin IL-96Building on the World Air Cargo Forecast,the Freighter Fleet Forecast translates projected traffic growth into demand for dedicated freighters over the next 20 years.Dedicated freighters typically carry more than half of global air cargo traffic,and we expect this to continue.The fleet forecast categorizes freighters into three segments by payload capacity measured in tonnes.Each segment is also distinguished by its typical share of factory-produced freighters relative to freighters converted from used passenger airplanes.Standard body freighters offer less than 40 tonnes of payload,are almost all conversions,and have the same fuselage cross-sections as single-aisle airplanes.Medium widebody freighters have 40 to 80 tonnes of payload.They have medium twin-aisle cross-sections and are roughly evenly split between production and converted freighters.Large widebody freighters provide more than 80 tonnes of payload and are derivatives of large twin-aisle passenger airplanes.Although large freighters have historically come from both factory production and conversion,as was the case with the 747,we forecast that future demand will favor factory-produced freighter models.Carriers value the superior efficiency,lowest unit cost,higher utilization,and greater capability offered by new,factory-build large widebody freighters.Large widebody freighters account for more than three-quarters of global dedicated freighter capacity Available Cargo Tonne Kilometers(ACTKs),with the remainder split between medium widebody and standard body freighters.2,3401,0551,2851,5603,9002023 FleetRetainedFleetReplacementGrowth2043 Fleet05001,0001,5002,0002,5003,0003,5004,0004,500The Freighter Fleet Forecast projects the global freighter fleet to grow by approximately 66%from 2,340 airplanes in 2023 to 3,900 airplanes in 2043.Freighter deliveries will total 2,845,with roughly two-thirds being converted passenger airplanes.Of those conversions,nearly 70%will be standard body freighters.City name22World Air Cargo Forecast 2024-2043The Asia Pacific and North American regions will require the most freighter deliveries.Roughly one-third of all freighter demand will come from Asia Pacific carriersreflecting the expansion of cross-border e-commerce traffic,supply chain diversification,and growing cargo demand within the region.North American carriers will receive another third of projected freighter deliveries,with more than 70%replacing older airplanes.Freighter Fleet ForecastDeliveries 2024-20431,250785810Deliveries 2024-20432,845 Standard body 80 tonnesMedium widebody 40-80 tonnesNew and Converted Freighter Deliveries by Region 2024-2043Eurasia includes Europe,Russia and Central AsiaStandardBodyLargeWidebodyMediumWidebody98095550524516002004006008001,000Asia PacificNorth AmericaEurasiaMiddle East&AfricaLatin America344%9%6%of world totalCity name23World Air Cargo Forecast 2024-2043Data represented as historical in this document were compiled from multiple sources,including:Airports Council International Association of Asia Pacific Airlines Boeing Air Cargo Traffic Database Cirium Diio Mi Civil Aviation Administration of China Directorate General of Civil Aviation India Eurostat HM Revenue&Customs International Air Transport Association International Civil Aviation Organization S&P Global U.S.Department of Commerce U.S.Department of Transportation The World Air Cargo Forecast is integrated with Boeings annual Commercial Market Outlook.Find out more: and SourcingEconometric modeling Econometric modeling is used for our long-term forecasts to determine the importance of underlying economic factors such as GDP,industrial production,and world trade to historical and future air cargo traffic.Qualitative evaluation Qualitative evaluation accounts for unexpected changes in non-econo-metric growth factors such as geopolitical agreements,evolving supply chains,shifting consumer behaviors,and changes in trade patterns.Freighter fleet forecast Boeings long-term market forecast of demand for dedicated freighters projects the change in the freighter fleet size and composition from the current year to 20 years in the future.City name24World Air Cargo Forecast 2024-2043GlossaryACTK:Available Cargo Tonne-Kilometer.A metric of freight capacity defined as the weight that can be carried multiplied by the distance flown.CAGR:Compound Annual Growth Rate.Cargo:For the purposes of this document,freight,express or airmail.Chartered operations:The business of reserving aircraft for private transport of goods or passengers.Combination carrier:A scheduled and chartered commercial operator that carriers both passengers and cargo on revenue flights with a fleet of passenger and freighter aircraft.CTK:Cargo Tonne-Kilometer.A metric of freight traffic defined as the weight carried multiplied by the distance flown.Express cargo:Goods which are guaranteed time-definite service.In addition to airport-to-airport transport,such cargo is also offered door-to-door pickup and delivery.Feedstock:Retired passenger aircraft available for conversion to freighters.Freight forwarder:A business that manages the shipment of goods from originators to end markets,consumers,or distribution locations.Nonscheduled operations:Aircraft flights operated as demand warrants rather than on predetermined schedules.Outsize cargo:Freight too large for standard pallets and often carried by large widebody freighters.Payload:The portion of an aircraft load that provides revenue.Scheduled operations:Aircraft flights operated on predetermined schedules.Sixth Freedom of the Air:The right to transport,via a carriers home state,passengers or cargo between two other states.Utilization:The number of hours effectively flown by an airplane in a given unit of time.REGIONSAfrica:Entire continent of Africa plus Cabo Verde,Comoros,Madagascar,Mauritius,Mayotte,Runion,So Tom and Prncipe,and the Seychelles.East Asia:ASEAN member nations,Australia,China,Hong Kong,Japan,Macau,Mongolia,New Zealand,South Korea,and Taiwan.Europe:All EU member states plus Albania,Bosnia and Herzegovina,Gibraltar,Iceland,Macedonia,Montenegro,Norway,Serbia,Switzerland,Trkiye,and the United Kingdom.Latin America:The Caribbean Basin,Central America including Mexico,and South America.Middle East:Bahrain,Iran,Iraq,Israel,Jordan,Kuwait,Lebanon,Oman,the Palestinian territories,Qatar,Saudi Arabia,Syria,the United Arab Emirates,and Yemen.North America:Canada and the United States.Russia and Central Asia:Armenia,Azerbaijan,Belarus,Georgia,Kazakhstan,Kyrgyzstan,Moldova,the Russian Federation,Tajikistan,Turkmenistan,Ukraine,and Uzbekistan.South Asia:Afghanistan,Bangladesh,Bhutan,India,the Maldives,Nepal,Pakistan,and Sri Lanka.City name25World Air Cargo Forecast 2024-2043APPENDIX:Air Cargo Traffic DatabaseTRAFFIC BY DOMICILECTKs in millions20232022202120202019201820172016201520142013Africa5,4455,4015,0343,8254,4064,2034,2453,3953,2893,2793,045Scheduled Cargo39789190074421019417913914212598Nonscheduled Cargo5,8426,2925,9334,5694,6164,3974,4243,5343,4313,4043,143Total20232022202120202019201820172016201520142013Asia Pacific80,24973,90481,16369,03785,35790,68888,38181,83279,67977,94271,928Scheduled Cargo1,7455,9246,8835,2611,020268360865845590790Nonscheduled Cargo81,99479,82988,04674,29886,37890,95688,74082,69680,52578,53272,718Total20232022202120202019201820172016201520142013Europe47,99148,65451,91642,76851,57351,18949,43044,60942,58343,69142,775Scheduled Cargo5,7245,4273,7703,0702,5833,7052,1931,5691,2991,2581,371Nonscheduled Cargo53,71554,08155,68645,83854,15554,89551,62246,17843,88244,94944,146Total20232022202120202019201820172016201520142013Latin America7,2596,8806,0046,4717,0416,9666,3846,0615,8935,8115,687Scheduled Cargo3282332011365064862151238598118Nonscheduled Cargo7,5877,1126,2056,6077,5477,4526,5996,1845,9785,9095,805Total20232022202120202019201820172016201520142013Middle East33,13931,14836,08429,64032,97334,72533,63830,76428,46325,21122,841Scheduled Cargo315784228286261343615412393136Nonscheduled Cargo33,45431,93236,31329,92533,23434,75933,67430,91828,58625,30422,978Total20232022202120202019201820172016201520142013North America46,99150,48751,36045,41151,44351,78950,15646,39745,26344,51742,250Scheduled Cargo25,11026,06825,64121,50112,89012,36810,0808,6518,2168,1178,884Nonscheduled Cargo72,10276,55577,00166,91364,33464,15760,23655,04853,47952,63451,134TotalCity name26World Air Cargo Forecast 2024-2043TRAFFIC BY DOMICILECTKs in millionsAPPENDIX:Air Cargo Traffic Database20232022202120202019201820172016201520142013Russia&Central Asia5,7566,6149,6378,4159,2749,7109,8577,9946,1495,6155,271Scheduled Cargo9181,4874,1652,8159931,2821,070812810823846Nonscheduled Cargo6,6758,10113,80211,23010,26710,99210,9288,8066,9596,4396,117Total20232022202120202019201820172016201520142013South Asia2,6512,3991,4741,3332,6953,4623,0882,4532,5522,6642,629Scheduled Cargo27184140280010000Nonscheduled Cargo2,6772,5831,6141,3622,6953,4623,0882,4532,5522,6642,629Total20232022202120202019201820172016201520142013World229,482225,486242,672206,900244,762252,733245,178223,505213,872208,730196,426Scheduled Cargo34,56440,99841,92833,84118,46418,33714,13212,31311,52011,10412,244Nonscheduled Cargo264,046266,484284,600240,741263,226271,070259,311235,818225,392219,834208,670TotalFor more information,visit our statements contained herein are based on good faith assumptions and provided for general information purposes only.These statements do not constitute an offer,promise,warranty,or guarantee of performance.Actual results may vary depending on certain events or conditions.This document should not be used or relied upon for any purpose other than that intended by Boeing,Copyright 2024 Boeing.All rights reserved.
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The 2024 EPA Automotive Trends Report Greenhouse Gas Emissions,Fuel Economy,and Technology since 1975 EPA-420-R-24-022 November 2024 This technical report does not necessarily represent final EPA decisions,positions,or validation of compliance data reported to EPA by manufacturers.It is intended to present technical analysis of issues using data that are currently available and that may be subject to change.Historic data have been adjusted,when appropriate,to reflect the result of compliance investigations by EPA or any other corrections necessary to maintain data integrity.The purpose of the release of such reports is to facilitate the exchange of technical information and to inform the public of technical developments.This edition of the report supersedes all previous versions.November 25,2024 This year marks the 50th anniversary of the U.S.Environmental Protection Agencys Automotive Trends Report.This report,which provides the public unparalleled insight into the automotive industry,exemplifies not only the important work that the EPA is doing today,but also the long and rich history of the agencys commitment to science,data and transparency.The EPA was founded with strong bipartisan support to protect our environment and public health.The EPAs partnership with the automotive industry was established from the very beginning,as the Clean Air Act of 1970 tasked the fledgling agency with the ambitious goal of reducing car pollution.In the years that followed,the EPAs emissions standards have catalyzed widespread use of new,clean technologies;eliminated lead in gasoline;reduced evaporative emissions from vehicles;and ultimately led to an impressive 99 percent reduction of common vehicle-tailpipe pollutants,such as hydrocarbons,carbon monoxide,nitrogen oxides and particulate matter.These improvements have made direct impacts on our air quality,improved peoples health and saved lives.Through all the incredible change and innovation that has taken place in the auto industry since 1975,the Trends Report has been there to provide data,insight and transparency to the American public.The EPA has been gathering and maintaining data that covers every new light-duty vehicle produced for sale in the United States since model year 1975,and this unique dataset forms the foundation of this annual resource.As with each iteration,this edition adds new analysis and more data,including new layers of transparency through its online companion data tools.The report also provides a detailed look at how automotive manufacturers are doing under the EPAs current light-duty greenhouse gas standards,providing critical transparency on this important program.By understanding our history and by setting a common baseline for where we are today,the Trends Report is part of the backbone of what the EPA and the automotive industry have accomplished and will be able to accomplish in the future.I am proud to introduce the 50th anniversary EPA Automotive Trends Report.This report continues to be a critical way that the EPA delivers on its mission to protect human health and the environment for more than half a century and counting.Congratulations to the incredible career team at the EPA who have made this report possible.I hope that everyone who relies on this authoritative report finds it as insightful and informative as ever.Michael S.Regan This page left intentionally blank.Table of Contents 1.Introduction.1 A.Whats New This Year.1 B.Manufacturers in this Report.2 C.Fuel Economy and CO2Metrics in this Report.3 D.Other Sources of Data.5 2.Fleetwide Trends Overview.6 A.Overall Fuel Economy and CO2 Trends.6 B.Production Trends.10 C.Manufacturer Fuel Economy and CO2 Emissions.11 3.Vehicle Attributes.17 A.Vehicle Class and Type.17 B.Vehicle Weight.23 C.Vehicle Power.29 D.Vehicle Footprint.35 E.Vehicle Type and Attribute Tradeoffs.40 4.Vehicle Technology.47 A.Vehicle Propulsion.53 B.Vehicle Drivetrain.77 C.Technology Adoption and Comparison.83 5.Manufacturer GHG Compliance.92 A.Footprint-Based CO2 Standards.94 B.Model Year Performance.98 C.GHG Program Credits and Deficits.127 D.GHG Program Credit Balances.141 i Table of Figures Figure 2.1.Estimated Real-World Fuel Economy and CO2 Emissions.6 Figure 2.2.Trends in Fuel Economy and CO2 Emissions Since Model Year 1975.8 Figure 2.3.Distribution of New Vehicle CO2 Emissions by Model Year.9 Figure 2.4.New Vehicle Production by Model Year.11 Figure 2.5.Changes in Estimated Real-World Fuel Economy and CO2 Emissions by Manufacturer.13 Figure 3.1.Regulatory Classes and Vehicle Types Used in This Report.18 Figure 3.2.Production Share and Estimated Real-World CO2 Emissions.19 Figure 3.3.Vehicle Type Distribution by Manufacturer for Model Year 2023.21 Figure 3.4.Car-Truck Classification of SUVs with Inertia Weights of 4000 Pounds or Less.22 Figure 3.5.Average New Vehicle Weight by Vehicle Type.24 Figure 3.6.Inertia Weight Class Distribution by Model Year.25 Figure 3.7.Average New Vehicle Weight by Vehicle Type and Powertrain.27 Figure 3.8.Relationship of Inertia Weight and CO2 Emissions.28 Figure 3.9.Average New Vehicle Horsepower by Vehicle Type.30 Figure 3.10.Horsepower Distribution by Model Year.31 Figure 3.11.Average New Vehicle Horsepower by Vehicle Type and Powertrain.32 Figure 3.12.Relationship of Horsepower and CO2 Emissions.33 Figure 3.13.Calculated 0-to-60 Time by Vehicle Type.35 Figure 3.14.Footprint by Vehicle Type for Model Years 20082023.36 Figure 3.15.Footprint Distribution by Model Year.37 Figure 3.16.Average New Vehicle Footprint by Vehicle Type and Powertrain.38 Figure 3.17.Relationship of Footprint and CO2 Emissions.39 Figure 3.18.Relative Change in Fuel Economy,Weight,Horsepower,and Footprint.41 Figure 4.1.Vehicle Energy Flow for an Internal Combustion Engine Vehicle.47 Figure 4.2.Manufacturer Use of Electrification Technologies for Model Year 2023.50 Figure 4.3.Manufacturer Use of Emerging Technologies for Model Year 2023.52 Figure 4.4.Gasoline Engine Production Share by Number of Cylinders.54 Figure 4.5.Percent Change for Specific Gasoline Non-Hybrid Engine Metrics.56 Figure 4.6.Production Share by Engine Technology.58 Figure 4.7.Engine Metrics for Different Gasoline Technology Packages.60 Figure 4.8.Gasoline Turbo Engine Production Share by Vehicle Type.62 Figure 4-9.Gasoline Turbo Engine Production Share by Number of Cylinders.62 Figure 4.10.Gasoline Non-Hybrid Stop/Start Production Share by Vehicle Type.64 Figure 4.11.Gasoline Non-Hybrid Stop/Start Production Share by Number of Cylinders.64 Figure 4.12.Gasoline Hybrid Engine Production Share by Vehicle Type.66 Figure 4.13.Gasoline Hybrid Engine Production Share by Number of Cylinders.66 Figure 4.14.Gasoline Hybrid Engine Production Share Hybrid Type.67 Figure 4.15.Production Share of BEVs,PHEVs,and FCEVs.69 ii Figure 4.16.Impact of BEVs and PHEVs.70 Figure 4.17.Battery Electric Vehicle Production Share by Vehicle Type.71 Figure 4.18.Plug-In Hybrid Vehicle Production Share by Vehicle Type.71 Figure 4.19.Charge Depleting Range and Fuel Economy for BEVs and PHEVs.72 Figure 4.20.BEV Energy Consumption by Weight and Vehicle Type.73 Figure 4.21.Diesel Engine Production Share by Vehicle Type.75 Figure 4.22.Diesel Engine Production Share by Number of Cylinders.75 Figure 4.23.Percent Change for Specific Diesel Engine Metrics.76 Figure 4.24.Transmission Production Share.79 Figure 4.25.Transmission By Engine Technology,Model Year 2023.80 Figure 4.26.Average Number of Transmission Gears.81 Figure 4.27.Front-,Rear-,and Four-Wheel Drive Production Share.82 Figure 4.28.Industry-Wide Car Technology Penetration after First Significant Use.84 Figure 4.29.Manufacturer Specific Technology Adoption over Time for Key Technologies.86 Figure 5.1.The GHG Compliance Process.92 Figure 5.2.20122023 Model Year CO2 Footprint Target Curves.95 Figure 5.3.Changes in 2-Cycle Tailpipe CO2 Emissions by Manufacturer.100 Figure 5.4.Model Year 2023 Production of BEVs,PHEVs,and FCEVs.103 Figure 5.5.Model Year 2023 Advanced Technology Credits by Manufacturer.103 Figure 5.6.HFO-1234yf Adoption by Manufacturer.106 Figure 5.7.Fleetwide A/C Credits by Credit Type.108 Figure 5.8.Total A/C Credits by Manufacturer for Model Year 2023.108 Figure 5.9.Off-Cycle Menu Technology Adoption by Manufacturer,Model Year 2023.110 Figure 5.10.Total Off-Cycle Credits by Manufacturer for Model Year 2023.119 Figure 5.11.Performance and Standards by Manufacturer,Model Year 2023.128 Figure 5.12.Early Credits by Manufacturer.137 Figure 5.13.Total Credits Transactions.140 Figure 5.14.Manufacturer Credit Balance After Model Year 2023.143 Figure 5.15.Industry Performance and Standards,Credit Generation and Use.147 iii Table of Tables Table 1.1.Model Year 2023 Manufacturer Definitions.3 Table 2.3.Manufacturer Estimated Real-World Fuel Economy and CO2 Emissions for Model Year Table 3.4.Model Year 2023 Estimated Real-World Fuel Economy and CO2 by Manufacturer and Table 5.3.Model Year 2023 Off-Cycle Technology Credits from the Menu,by Manufacturer and Table 5.4.Model Year 2023 Off-Cycle Technology Credits from an Alternative Methodology,by Table 1.2.Fuel Economy and CO2 Metrics Used in this Report.4 Table 2.1.Production,Estimated Real-World CO2,and Fuel Economy for Model Year 19752024.14 Table 2.2.Manufacturers and Vehicles with the Highest Fuel Economy,by Year.15 20222024.16 Table 3.1.Vehicle Attributes by Model Year.42 Table 3.2.Estimated Real-World Fuel Economy and CO2 by Vehicle Type.43 Table 3.3.Model Year 2023 Vehicle Attributes by Manufacturer.44 Vehicle Type.45 Table 3.5.Footprint by Manufacturer for Model Year 20222024(ft2).46 Table 4.1.Production Share by Drive Technology for Model Year 2023.51 Table 4.2.Production Share by Powertrain.87 Table 4.3.Production Share by Fuel Delivery Method.88 Table 4.4.Production Share by Gasoline Engine Technologies.89 Table 4.5.Production Share by Transmission Technologies.90 Table 4.6.Production Share by Drive Technology.91 Table 5.1.Manufacturer Footprint and Standards for Model Year 2023.97 Table 5.2.Production Multipliers by Model Year.102 Technology(g/mi).115 Manufacturer and Technology(g/mi).118 Table 5.5.Manufacturer Performance in Model Year 2023,All(g/mi).121 Table 5.6.Industry Performance by Model Year,All(g/mi).122 Table 5.7.Manufacturer Performance in Model Year 2023,Car(g/mi).123 Table 5.8.Industry Performance by Model Year,Car(g/mi).124 Table 5.9.Manufacturer Performance in Model Year 2023,Truck(g/mi).125 Table 5.10.Industry Performance by Model Year,Truck(g/mi).126 Table 5.11.Credits Earned by Manufacturers in Model Year 2023,All.130 Table 5.12.Total Credits Earned by Model Year,All.131 Table 5.13.Credits Earned by Manufacturers in Model Year 2023,Car.132 Table 5.14.Total Credits Earned by Model Year,Car.133 Table 5.15.Credits Earned by Manufacturers in Model Year 2023,Truck.134 Table 5.16.Total Credits Earned by Model Year,Truck.135 Table 5.17 Credit Expiration Schedule.138 Table 5.18.Example of a Deficit Offset with Credits from Previous Model Years.141 iv Table 5.19.Final Credit Balance by Manufacturer for Model Year 2023(Mg).144 Table 5.20.Distribution of Credits by Expiration Date(Mg).145 v 1.Introduction This annual report is part of the U.S.Environmental Protection Agencys(EPA)commitment to provide the public with information about new light-duty vehicle greenhouse gas(GHG)emissions,fuel economy,technology data,and auto manufacturers performance in meeting the agencys GHG emissions standards.Since 1975,EPA has collected data on every new light-duty vehicle model sold in the United States either from testing performed by EPA at the National Vehicle Fuel and Emissions Laboratory in Ann Arbor,Michigan,or directly from manufacturers using official EPA test procedures.These data are collected to support several important national programs,including EPA criteria pollutant and GHG standards,the U.S.Department of Transportations National Highway Traffic Safety Administration(NHTSA)Corporate Average Fuel Economy(CAFE)standards,and vehicle Fuel Economy and Environment labels.This expansive data set allows EPA to provide a uniquely comprehensive analysis of the automotive industry since 1975.A.Whats New This Year This report is updated each year to reflect the most recent data available to EPA for all model years,relevant regulatory changes,methodology changes,and any other changes relevant to the auto industry.These changes can affect multiple model years;therefore,this version of the report supersedes all previous reports.Significant developments relevant for this edition of the report include the following:This edition of the report is the 50th anniversary of the report and now contains data spanning 50 years of automotive history.The report has continually evolved since its inception,with this edition adding or updating many figures and analysis to better explore recent industry electrification trends.In March 2024,EPA finalized revised light-duty GHG standards for model year 2027-2032,and in 2024 NHTSA subsequently published revised fuel economy standards for model years 2027-2031.This report has been updated to reflect these changes wherever relevant.EPA has also updated the data available on the report webpage to provide more details on the data used for this report.The report data webpage can be found here:https:/www.epa.gov/automotive-trends/explore-automotive-trends-data.1 B.Manufacturers in this Report The underlying data for this report include every new light-duty vehicle offered for sale in the United States.These data are presented by manufacturer throughout this report,using model year 2023 manufacturer definitions determined by EPA and NHTSA for implementation of the GHG emission standards and CAFE program.For simplicity,figures and tables in the executive summary and in Sections 1-4 show only the top 14 manufacturers,by production volume.These manufacturers produced at least 150,000 vehicles each in the 2023 model year and accounted for more than 97%of all production.The compliance discussion in Section 5 includes all manufacturers,regardless of production volume.Table 1.1 lists all manufacturers that produced vehicles in the U.S.for model year 2023,including their associated makes,and their categorization for this report.Only vehicle brands produced in model year 2023 are shown in this table;however,this report contains data on many other manufacturers and brands that have produced vehicles for sale in the U.S.since 1975.When a manufacturer grouping changes under the GHG and CAFE programs,EPA applies the new manufacturer definitions to all prior model years for the analysis of estimated real-world CO2 emission and fuel economy trends in Sections 1 through 4 of this report.This maintains consistent manufacturer and make definitions over time,which enables better identification of long-term trends.However,the compliance data that are discussed in Section 5 of this report maintain the previous manufacturer definitions where necessary to preserve the integrity of compliance data as accrued.2 Table 1.1.Model Year 2023 Manufacturer Definitions Manufacturer Makes in the U.S.Market LargeManufacturers BMW Ford General Motors(GM)Honda Hyundai Kia Mazda Mercedes Nissan Stellantis Subaru Tesla Toyota Volkswagen(VW)BMW,Mini,Rolls Royce Ford,Lincoln,Roush,Shelby Buick,Cadillac,Chevrolet,GMC Acura,Honda Genesis,Hyundai Kia Mazda Maybach,Mercedes Infiniti,Nissan Alfa Romeo,Chrysler,Dodge,Fiat,Jeep,Maserati,Ram Subaru Tesla Lexus,Toyota Audi,Bentley,Bugatti,Lamborghini,Porsche,Volkswagen Other Manufacturers Fisker Jaguar Land Rover Lucid Mitsubishi Rivian Volvo Aston Martin*Ferrari*McLaren*Fisker Jaguar,Land Rover Lucid Mitsubishi Rivian Lotus,Polestar,Volvo Aston Martin Ferrari McLaren*Small Volume Manufacturers C.Fuel Economy and CO2 Metrics in this Report All data in this report for model years 1975 through 2023 are final and based on official data submitted to EPA and NHTSA as part of the regulatory process.In some cases,this report will show data for model year 2024,which are preliminary and are based on data,including projected production volumes,provided to EPA by automakers prior to releasing vehicles for sale to the public.All data in this report are based on production volumes delivered for sale in the U.S.by model year.The model year production volumes may vary from other publicized data based on calendar year sales.The report does not examine 3 future model years,and past performance does not necessarily predict future industry trends.The carbon dioxide(CO2)emissions and fuel economy data in this report fall into one of two categories based on the purpose of the data and the subsequent required emissions test procedures.The first category is compliance data,which is measured using laboratory tests required by law for CAFE and adopted by EPA for GHG compliance.Compliance data are measured using EPA city and highway test procedures(the“2-cycle”tests),and fleetwide averages are calculated by weighting the city and highway test results by 55%and 45%,respectively.These procedures are required for compliance;however,they no longer accurately reflect real-world driving.Compliance data may also encompass optional performance credits and adjustments that manufacturers can use towards meeting their emissions standards.The second category is estimated real-world data,which is measured using additional laboratory tests to capture a wider range of operating conditions(including hot and cold weather,higher speeds,and faster accelerations)encountered by an average driver.This expanded set of tests is referred to as“5-cycle”testing.City and highway results are weighted 43%city and 57%highway,consistent with fleetwide driver activity data.The city and highway values are the same values found on new vehicle fuel economy labels;however,the label combined value is weighted 55%city and 45%highway.Unlike compliance data,the method for calculating real-world data has evolved over time,along with technology and driving habits.Table 1.2.Fuel Economy and CO2 Metrics Used in this Report CO2 and Fuel Economy Data Category Purpose Current City/Highway Weighting Current Test Basis Compliance Basis for manufacturer compliance with standards 55%/45%2-cycle Estimated Real-World Best estimate of real-world performance 43%/57%5-cycle This report will show estimated real-world data except for the discussion specific to the GHG regulations in Section 5 and Executive Summary Figures ES-6 through ES-8.The compliance CO2 data generally should not be compared to the real-world CO2 data presented elsewhere in this report.For a more detailed discussion of the fuel economy and 4 CO2 data used in this report,including the differences between real-world and compliance data,see Appendices C and D.D.Other Sources of Data EPA continues to update detailed data from this report,including all years of the light-duty GHG standards,to the EPA Automotive Trends website.We encourage readers to visit https:/www.epa.gov/automotive-trends and explore the data.EPA will continue to add content and tools on the web to allow transparent access to public data.Additional detailed vehicle data is available on www.fueleconomy.gov,which is a web resource that helps consumers make informed fuel economy choices when purchasing a vehicle and achieve the best fuel economy possible from the vehicle they own.EPA supplies the underlying data,much of which can be downloaded at https:/fueleconomy.gov/feg/download.shtml.In addition,EPAs Green Vehicle Guide is an accessible,transportation-focused website that provides information,data,and tools on greener options for moving goods and people.This report does not provide data about NHTSAs CAFE program.For more information about CAFE and manufacturer compliance with the CAFE fuel economy standards,see the CAFE Public Information Center,which can be accessed at https:/one.nhtsa.gov/cafe_pic/home.5 6 2.Fleetwide Trends OverviewThe automotive industry continues to make progress towards lower tailpipe CO2 emissions and higher fuel economy in recent years.This section provides an update on the estimated real-world tailpipe CO2 emissions and fuel economy for the overall fleet,and for manufacturers based on final model year 2023 data.The unique,historical data on which this report is based also provide an important backdrop for evaluating the more recent performance of the industry.Using that data,this section will also explore basic fleetwide trends in the automotive industry since EPA began collecting data in model year 1975.A.Overall Fuel Economy and CO2 TrendsThe downward trend for the average new vehicle real-world CO2 emission rate continued in model year 2023.The average model year 2023 vehicle produced 319 grams per mile(g/mi)of CO2,which is 18 g/mi less than the previous model year,and the lowest emission rate on record.Real-world fuel economy increased by 1.1 mpg to a record high 27.1mpg.1 The trends in CO2 emissions and fuel economy since 1975 are shown in Figure 2.1.Many factors are responsible for decreasing new vehicle CO2 emissions,including increased production of a wide range of technologies.This includes increased production of battery electric vehicles(BEVs)and plug-in hybrids(PHEVs)which have noticeably influenced the overall trends.Without BEVs and PHEVs,the average new 1 EPA generally uses unrounded values to calculate values in the text,figures,and tables in this report.This approach results in the most accurate data but may lead to small apparent discrepancies due to rounding.Model Year197519851995200520152025162024.9MPGWithoutBEVs/PHEVs27.1MPGAll VehiclesMY 2023600500400300700357g/miWithoutBEVs/PHEVs319g/miAll VehiclesMY 2023Figure 2.1.Estimated Real-World Fuel Economy and CO2 Emissions vehicle real-world CO2 emission rate was 37 g/mi higher,and the year over year improvement in model year 2023 was only 1.4 g/mi.Preliminary data suggest that the average new vehicle CO2 emission rate and fuel economy will continue to improve in model year 2024,and that the impact of BEVs and PHEVs will continue to grow.The preliminary model year 2024 data are based on production estimates provided to EPA by manufacturers months before the vehicles go on sale.The data are a useful indicator,however there is always uncertainty associated with such projections,and we caution the reader against focusing only on these data.Projected data are shown in Figure 2.1 as a dot because the values are based on manufacturer projections rather than final data.While the most recent annual changes often receive the most public attention,the greatest value of the Trends database is to document long-term trends.The magnitude of changes in annual CO2 emissions and fuel economy tend to be small relative to longer,multi-year trends.Figure 2.2 shows fleetwide estimated real-world CO2 emissions and fuel economy for model years 19752023.Over this timeframe there have been three basic phases:1)a rapid improvement of CO2 emissions and fuel economy between 1975 and 1987,2)a period of slowly increasing CO2 emissions and decreasing fuel economy through 2004,and 3)decreasing CO2 emissions and increasing fuel economy through the current model year.Vehicle CO2 emissions and fuel economy are inversely related for gasoline and diesel vehicles,but not for electric vehicles.Since gasoline and diesel vehicles have made up the vast majority of vehicle production since 1975,Figure 2.2 shows an inverted,but highly correlated relationship between CO2 emissions and fuel economy.BEVs,which account for a small but growing portion of vehicle production,have zero tailpipe CO2 emissions,regardless of fuel economy(as measured in miles per gallon equivalent,or mpge).The fuel economy of BEVs,in mpge,is included in the fleet average shown in Figure 2.2 and elsewhere in this report.If electric vehicles continue to capture a larger market share,the overall relationship between fuel economy and tailpipe CO2 emissions will change.7 Figure 2.2.Trends in Fuel Economy and CO2 Emissions Since Model Year 1975 Another way to look at CO2 emissions over time is to examine how the distribution of new vehicle emission rates have changed.Figure 2.3 shows the distribution of real-world tailpipe CO2 emissions for all vehicles produced within each model year.Half of the vehicles produced each year are clustered within a small band around the median CO2 emission rate,as shown in blue.The remaining vehicles show a much wider spread,especially in recent years as the production of electric vehicles with zero tailpipe emissions has increased.The lowest CO2-emitting vehicles have all been hybrids or battery electric vehicles since the first hybrid was introduced in model year 2000,while the highest CO2-emitting vehicles are generally performance vehicles or large trucks.The introduction of zero tailpipe emission BEVs in model year 2011 and their growth past 5%market share in model year 2022 are both visible in Figure 2.3.8 Figure 2.3.Distribution of New Vehicle CO2 Emissions by Model Year2Real-World CO2(g/mi)1000 Bottom 25P0 Top 25%0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Model Year Worst Vehicle Best 5P%of Vehicles Worst 5st Vehicle It is important to note that the methodology used in this report for calculating estimated real-world fuel economy and CO2 emission values has changed over time to reflect changing vehicle technology and operation.For example,the estimated real-world fuel economy for a 1980s vehicle is somewhat higher than it would be if the same vehicle were being produced today.These changes are small for most vehicles,but larger for very high fuel economy vehicles.See Appendices C and D for a detailed explanation of fuel economy metrics and their changes over time.2 Electric vehicles prior to 2011 are not included in this figure due to limited data.However,those vehicles were available in small numbers only.9 10 B.Production Trends This report is based on the total number of vehicles produced by manufacturers for sale in the United States by model year.Model year is the manufacturers annual production period,which includes January 1 of the same calendar year.A typical model year for a vehicle begins in fall of the preceding calendar year and runs until late in the next calendar year.However,model years vary among manufacturers and can occur between January 2 of the preceding calendar year and the end of the calendar year.Model year production data is the most direct way to analyze emissions,fuel economy,technology,and compliance trends because vehicle designs within a model year do not typically change.The use of model year production may lead to some short-term discrepancies with other sources,which typically report calendar year sales;however,sales based on the calendar year generally encompass more than one model year,which complicates any analysis.Since the inception of this report,production of vehicles for sale in the United States has grown on average roughly 0.4%year over year,but there have been significant swings up or down in any given model year due to the impact of multiple market forces.For example,in model year 2009,economic conditions resulted in the lowest model year production since the start of this report,at 9.3 million vehicles.Production rebounded over the next several model years,reaching an all-time high of more than 17 million vehicles in model year 2017.Model year 2020 production fell 15%from the previous year,as the COVID-19 pandemic had wide-ranging impacts on the economy as well as vehicle production and supply chains.Figure 2.4 shows the production trends by model year for model years 1975 to 2023.Model year 2023 production was 14,196,404 vehicles.Figure 2.4.New Vehicle Production by Model Year Annual Production(000)20,000 15,000 10,000 5,000 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Model Year C.Manufacturer Fuel Economy and CO2 Emissions Along with the overall industry,most manufacturers have improved new vehicle CO2 emission rates and fuel economy in recent years.Manufacturer trends over the last five years are shown in Figure 2.5.This span covers the approximate length of a vehicle redesign cycle,and it is likely that most vehicles have undergone design changes in this period,resulting in a more accurate depiction of recent manufacturer trends than focusing on a single year.Changes over this time period can be attributed to both vehicle design and changing vehicle production trends.The change in production trends,and the impact on the trends shown in Figure 2.5 are discussed in more detail in the next section.Over the last five years,as shown in Figure 2.5,nine of the fourteen largest manufacturers selling vehicles in the U.S.decreased new vehicle estimated real-world CO2 emission rates.Tesla was unchanged because their all-electric fleet produces no tailpipe CO2 emissions.Between model years 2018 and 2023,Mercedes achieved the largest reduction in CO2 11 emissions at 73 g/mi.Volkswagen(VW)achieved the second largest reduction in overall CO2 tailpipe emissions,at 44 g/mi,and BMW had the third largest reduction in overall CO2 tailpipe emissions at 34 g/mi.Ford,Hyundai,Kia,Nissan,Stellantis,and Toyota also achieved overall emission reductions.Four manufacturers increased new vehicle CO2 emission rates between model years 2018 and 2023(Honda,Mazda,GM,and Subaru).Honda had the largest increase at 18 g/mi.Mazda had the second largest increase at 12 g/mi,and General Motors(GM)had the third largest increase at 11 g/mi.For model year 2023 alone,Teslas all-electric fleet had the lowest tailpipe CO2 emissions of all large manufacturers at 0 g/mi.Tesla was followed by Kia at 289 g/mi,Hyundai at 292 g/mi,and Mecedes at 304 g/mi.At 402 g/mi,Stellantis had the highest new vehicle average CO2 emissions and lowest fuel economy of the large manufacturers in model year 2023,followed by GM at 396 g/mi and Ford at 374g/mi.Tesla also had the highest overall fuel economy,followed by Kia,Hyundai,and Nissan.Figure 2.5 is organized according to increasing fuel economy values,but the order would change if based on CO2 emission rates.This is due the fact that BEVs and PHEVs have a different relationship between tailpipe emissions and fuel economy than other vehicles,and different rates of adoption of BEVs and PHEVs between manufacturers.For vehicles powered only with gasoline,fuel economy and tailpipe CO2 emissions are related via a straightforward inverse relationship where increasing fuel economy decreases CO2 emissions.However,the relationship between fuel economy and tailpipe CO2 emissions is different for PHEVs,which use electricity in addition to gasoline,and EVs,which use only electricity.For PHEVs and BEVs,the electricity used by the vehicle results in 0 g/mi of tailpipe CO2 emissions.However,the overall efficiency of PHEVs and BEVs is reported in terms of mpge,or miles-per-gallon-of-gasoline-equivalent,which is a measure of the total energy the vehicle uses,in terms of the amount of energy in a gallon of gasoline.Therefore,the relationship between mpge and tailpipe CO2 emission is not the same for PHEVs and BEVs as it is for gasoline vehicles.As a result,manufacturers who produce more BEVs and PHEVs will have lower CO2 emissions relative to their fuel economy than other manufacturers that produce fewer BEVs and PHEVs.For example,in model year 2023 BMW and Mazda had the same average fuel economy of 27.6 mpge,but BMW,which produced both BEVS and PHEVs,has a lower average CO2 rate than Mazda,which did not produce BEVs or PHEVs.12 Figure 2.5.Changes in Estimated Real-World Fuel Economy and CO2 Emissions by Manufacturer Fuel Economy(MPG),2018 2023 CO2 Emissions(g/mi),2018 2023 Tesla 0 50 100 150 13 30035040045035331940940238639639737436131737730434832231032230533929631431031132730531129231928920242832All Manufacturers25.127.121.721.823.022.422.423.227.024.623.527.525.527.528.727.627.626.030.028.328.728.427.128.928.629.827.830.4 Table 2.1.Production,Estimated Real-World CO2,and Fuel Economy for Model Year 19752024 Model Year 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Production Real-World Real-World(000)CO2(g/mi)FE(MPG)10,224 12,334 14,123 14,448 13,882 11,306 10,554 9,732 10,302 14,020 14,460 15,365 14,865 15,295 14,453 12,615 12,573 12,172 13,211 14,125 15,145 13,144 14,458 14,456 15,215 681 625 590 562 560 466 436 425 426 424 417 407 405 407 415 420 418 427 426 436 434 435 441 442 451 13.1 14.2 15.1 15.8 15.9 19.2 20.5 21.1 21.0 21.0 21.3 21.8 22.0 21.9 21.4 21.2 21.3 20.8 20.9 20.4 20.5 20.4 20.2 20.1 19.7 Model Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024(prelim)Production Real-World Real-World(000)CO2(g/mi)FE(MPG)16,571 15,605 16,115 15,773 15,709 15,892 15,104 15,276 13,898 9,316 11,116 12,018 13,449 15,198 15,512 16,739 16,278 17,016 16,260 16,139 13,721 13,812 12,860 14,196 450 453 457 454 461 447 442 431 424 397 394 399 377 368 369 360 359 357 353 356 349 347 337 319 305 19.8 19.6 19.5 19.6 19.3 19.9 20.1 20.6 21.0 22.4 22.6 22.3 23.6 24.2 24.1 24.6 24.7 24.9 25.1 24.9 25.4 25.4 26.0 27.1 28.0 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends.14 Table 2.2.Manufacturers and Vehicles with the Highest Fuel Economy,by Year Model Year Manufacturer Manufacturer with Highest with Lowest Fuel Economy3 Fuel Economy(mpg)(mpg)Overall Vehicle with Highest Fuel Economy4 Gasoline(Non-Hybrid)Vehicle with Highest Fuel Economy Real-World FE Engine Vehicle(mpg)Type Real-World FE Gasoline Vehicle(mpg)1975 Honda Ford Honda Civic 28.3 Gas Honda Civic 28.3 1980 VW Ford VW Rabbit 40.3 Diesel Nissan 210 36.1 1985 Honda Mercedes GM Sprint 49.6 Gas GM Sprint 49.6 1990 Hyundai Mercedes GM Metro 53.4 Gas GM Metro 53.4 1995 Honda Stellantis Honda Civic 47.3 Gas Honda Civic 47.3 2000 Hyundai Stellantis Honda Insight 57.4 Hybrid GM Metro 39.4 2005 Honda Ford Honda Insight 53.3 Hybrid Honda Civic 35.1 2010 Hyundai Mercedes Honda FCX 60.2 FCEV Smart Fortwo 36.8 2015 Mazda Stellantis BMW i3 121.3 BEV Mitsubishi Mirage 39.5 2016 Mazda Stellantis BMW i3 121.3 BEV Mazda 2 37.1 2017 Honda Stellantis Hyundai Ioniq 132.6 BEV Mitsubishi Mirage 41.5 2018 Tesla Stellantis Hyundai Ioniq 132.6 BEV Mitsubishi Mirage 41.5 2019 Tesla Stellantis Hyundai Ioniq 132.6 BEV Mitsubishi Mirage 41.6 2020 Tesla Stellantis Tesla Model 3 138.6 BEV Mitsubishi Mirage 41.6 2021 Tesla Stellantis Tesla Model 3 139.1 BEV Mitsubishi Mirage 41.6 2022 Tesla Stellantis Lucid Air G 131.4 BEV Mitsubishi Mirage 41.6 2023 Tesla Stellantis Lucid Air AWD 140.3 BEV Mitsubishi Mirage 41.6 2024(prelim)Tesla Stellantis Hyundai Ioniq 6 137.0 BEV Mitsubishi Mirage 40.0 3 Manufacturers below the 150,000 threshold for“large”manufacturers are excluded in years they did not meet the threshold.4 Vehicles are shown based on estimated real-world fuel economy as calculated for this report.These values will differ from values found on the fuel economy labels at the time of sale.For more information on fuel economy metrics see Appendix C.15 Table 2.3.Manufacturer Estimated Real-World Fuel Economy and CO2 Emissions for Model Year 20222024 Manufacturer MY 2022 Final MY 2023 Final MY 2024 Preliminary Real-World Real-World FE CO2(mpg)(g/mi)FE Change CO2 Change Real-World from Real-World from FE MY 2022 CO2 MY 2022(mpg)(mpg)(g/mi)(g/mi)Real-World Real-World FE CO2(mpg)(g/mi)BMW 25.3 344 27.6 2.3 305-39 29.1 285 Ford 23.1 380 23.2 0.1 374-6 23.8 365 GM 22.0 406 22.4 0.4 396-9 23.9 366 Honda 28.7 309 28.3-0.4 314 4.4 29.8 296 Hyundai 29.1 302 29.8 0.7 292-11 30.0 286 Kia 28.6 306 30.4 1.7 289-17 29.6 289 Mazda 27.0 328 27.6 0.5 322-6 27.8 319 Mercedes 23.7 372 27.5 3.7 304-68 30.2 268 Nissan 27.4 322 28.9 1.4 305-17 28.6 306 Stellantis 21.3 415 21.8 0.5 402-13 23.3 360 Subaru 27.9 318 28.4 0.4 311-7 28.0 316 Tesla 119.3 0 120.6 1.3 0 0 117.4 0 Toyota 27.8 319 27.5-0.3 322 2 28.3 310 VW 26.1 333 27.0 1.0 317-16 27.9 305 All Manufacturers 26.0 337 27.1 1.1 319-18 28.0 305 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends.16 3.Vehicle Attributes Vehicle CO2 emissions and fuel economy are strongly influenced by vehicle design parameters,including weight,power,acceleration,and size.In general,vehicles that are larger,heavier,and more powerful typically have lower fuel economy and higher CO2 emissions than other comparable vehicles.This section focuses on several key vehicle design attributes that impact CO2 emissions and fuel economy and evaluates the impact of a changing automotive marketplace on overall fuel economy.A.Vehicle Class and Type Manufacturers offer a wide variety of light-duty vehicles in the United States.Under the CAFE and GHG regulations,new vehicles are separated into two distinct regulatory classes,passenger cars and light trucks,and each vehicle class has separate GHG and fuel economy standards5.Vehicles can qualify as light trucks based on the vehicles functionality as defined in the regulations(for example if the vehicle can transport cargo on an open bed or the cargo carrying volume is more than the passenger carrying volume).Vehicles that have a gross vehicle weight rating6(GVWR)of more than 6,000 pounds or have four-wheel drive and meet various off-road requirements,such as ground clearance,can also qualify as light trucks.Vehicles that do not meet these requirements are considered cars.For more information on car and truck regulatory definitions,see Appendix F.Pickup trucks,vans,and minivans are classified as light trucks under NHTSAs regulatory definitions,while sedans,coupes,and wagons are generally classified as cars.Sport utility vehicles(SUVs)can fall into either category depending on the relevant attributes of the specific vehicle.Based on the CAFE and GHG regulatory definitions,most two-wheel drive SUVs under 6,000 pounds GVW are classified as cars,while most SUVs that have four-wheel drive or are above 6,000 pounds GVW are considered trucks.SUV models that are less than 6,000 pounds GVW can have both car and truck variants,with two-wheel drive versions classified as cars and four-wheel drive versions classified as trucks.As the fleet has changed over time,the line drawn between car and truck classes has also evolved.This 5 Passenger vehicles(cars)and light trucks(trucks)are defined by regulation in EPAs 40 CFR 86.1818-12 which references the Department of Transportations 49 CFR 523.4-523.5.6 Gross vehicle weight rating is the combined weight of the vehicle,passengers,and cargo of a fully loaded vehicle.17 report uses the current regulatory car and truck definitions,and these changes have been propagated back throughout the historical data.This report further separates the car and truck regulatory classes into five vehicle type categories based on their body style classifications under the fuel economy labeling program.The regulatory car class is divided into two vehicle types:sedan/wagon and car SUV.The sedan/wagon vehicle type includes mini-compact,subcompact,compact,midsize,large,and two-seater cars,hatchbacks,and station wagons.Vehicles that are SUVs under the labeling program and cars under the CAFE and GHG regulations are classified as car SUVs in this report.The truck class is divided into three vehicle types:pickup,minivan/van,and truck SUV.Vehicles that are SUVs under the labeling program and trucks under the CAFE and GHG regulations are classified as truck SUVs.Figure 3.1 shows the two regulatory classes and five vehicle types used in this report.The distinction between these five vehicle types is important because different vehicle types have different design objectives,and different challenges and opportunities for improving fuel economy and reducing CO2 emissions.Figure 3.1.Regulatory Classes and Vehicle Types Used in This Report Fuel Economy and CO2 by Vehicle Type The production volume of the different vehicle types has changed significantly over time.Figure 3.2 shows the production shares of each of the five vehicle types since model year 1975.The overall new vehicle market continues to move away from the sedan/wagon 18 vehicle type towards a combination of truck SUVs,car SUVs,and pickups.Sedan/wagons were the dominant vehicle type in 1975,when more than 80%of vehicles produced were sedan/wagons.Since then,their production share has generally been falling,and with a market share of only 25%in model year 2023,sedans/wagons now hold less than a third of the market share they held in model year 1975.Vehicles that could be classified as a car SUV or truck SUV were a very small part of the production share in 1975 but now account for more than half of all new vehicles produced.In model year 2023,both car and truck SUVs increased market share,to their highest combined percentage of market share.Truck SUV production share reached 45%,while Car SUV production share reached 12%.The production share of pickups has fluctuated over time,peaking at 19%in 1994 and then falling to 10%in 2012.Pickups have generally increased in recent years and accounted for 15%of the market in model year 2023.Minivan/vans captured less than 5%of the market in 1975,increased to 11%in model year 1995 but have fallen since to less than 3%of vehicle production in recent years.The projected 2024 data shows a vehicle type distribution that is similar to model year 2023.Figure 3.2.Production Share and Estimated Real-World CO2 Emissions The truck regulatory class(including pickups,minivan/vans,and truck SUVs)fell slightly in the model year 2023,for the first time in twelve years.However,the overall truck production share remained near an all-time high of 62%.Trucks are projected to increase 19 800432800339800356800190800249PickupVanMinivan/SUVTruckSUVCarWagonSedan/CarsTrucksModel Year1975198519952005201520250%Pu07519851995200520152025Model YearProduction ShareCarsTrucksSedan/WagonCar SUVTruck SUVMinivan/VanPickup overall production share slightly in 2024.In Figure 3.2,the dashed line between the car SUVs and truck SUVs shows the split in car and truck regulatory class.Figure 3.2,also shows estimated CO2 emissions for each vehicle type since 1975.In model year 2023,compared to model year 2022,the four largest vehicle types continued their trends of reduced CO2 emissions and increased fuel economy.Minivan/vans,which accounted for less than 3%of new vehicle production in model year 2023,had CO2 emissions that were unchanged.Most notable is the 60 g/mi,or 24%,reduction,in the average new vehicle real-world CO2 emissions within car SUVs.This improvement in CO2 emissions stems from the influx of BEVs within car SUVs,with BEVs now accounting for 36%of all MY 2023 car SUVs.The car SUV vehicle type now has the lowest average new vehicle CO2 emissions.In the preliminary model year 2024 data(shown as a dot on Figure 3.2),all vehicle types except Car SUV are expected to improve CO2 emissions from model year 2023,while car SUV CO2 emissions are projected to remain the same.In terms of fuel economy,car SUVs increased fuel economy by 7.2 mpg,to become the vehicle type with the highest fuel economy.Sedan/wagons increased fuel economy by 0.9 mpg,pickups increased by 0.5 mpg,and truck SUVs increased by 0.4 mpg,while minivans/vans decreased by 0.1 mpg.Four of the five vehicle types,pickups being the exception,now achieve fuel economy more than double what they achieved in 1975.Four of the five vehicle types are also expected to improve fuel economy further based on preliminary model year 2024 data,with only car SUVs declining slightly.Overall fuel economy and CO2 emissions trends depend on the trends within the five vehicle types,but also on the market share of each of the vehicle types.Since 1975,the market has shifted dramatically away from sedan/wagons and towards truck SUVs and car SUVs.Until recently,the sedan/wagon vehicle type was the most efficient,so the market shifts toward other vehicle types with lower fuel economy and higher CO2 emissions offset some of the fleetwide benefits that otherwise would have been achieved from the improvements within each vehicle type.However,the growth of electric vehicles,particularly within the car SUV vehicle type,is changing the relationship between vehicle types and overall average new vehicle real-world CO2 emissions.The model year 2023 production breakdown by vehicle type for each manufacturer is shown in Figure 3.3.There are clear variations in production distribution by manufacturer.BMW had the highest production of sedan/wagons at 47%,Tesla had the highest percentage of car SUVs at 55%,Mazda had the highest percentage of truck SUVs at 89%,Ford had the highest percentage of pickups at 44%,and Stellantis had the highest 20 percentage of minivan/vans at 10%.The distribution of production between vehicle types remained similar between model year 2022 and 2023.Nissan,Tesla,and VW each decreased sedan/wagon production by more than 10 percentage points,moving production towards a combination of car and truck SUVs.GM increased their pickup production share by 12 percentage points,while decreasing the percentage of truck SUVs.All other vehicle type production shifts within each manufacturer were less than 10 percentage points.Figure 3.3.Vehicle Type Distribution by Manufacturer for Model Year 2023 Vehicle Type Sedan/Wagon Car SUV Truck SUV Minivan/Van Pickup Production Share Lower average CO2 Emissions 0%Pu0%For some manufacturers,changes in the mix of vehicle types they produce has also led to a significant impact on their overall new vehicle CO2 emissions and fuel economy.As shown in Figure 2.5,Honda had the largest increase in average CO2 emission over the last five years,at 18 g/mi.The increase in emissions for Honda was due to a shift in production towards truck SUVs and pickups along with increases in the emission rates within both of those vehicle types compared to model year 2018.Mazda had the second largest increase at 12 g/mi,due entirely to a shift from 36%to 89%truck SUV production.21 A Closer Look at SUVs SUV Classification Since 1975,the production share of SUVs in the United States has increased in all but 10 years,and now accounts for 58%of all vehicles produced(see Figure 3.2).This includes both the car and truck SUV vehicle types.Based on the regulatory definitions of cars and trucks,SUVs that are less than 6,000 pounds GVWR can be classified as either cars or trucks,depending on design requirements such as minimum angles and clearances,and whether the vehicle has 2-wheel drive or 4-wheel drive.This definition can lead to similar vehicles having different car or truck classifications,and different requirements under the GHG and CAFE regulations.One trend of particular interest is the classification of SUVs as either car SUVs or truck SUVs.This report does not track GVWR,but instead tracks weight using inertia weight classes,where inertia weight is the weight of the empty vehicle,plus 300 pounds(see weight discussion on the next page).Figure 3.4 shows the breakdown of SUVs into the car and truck categories over time for vehicles with an inertia weight of 4,000 pounds or less.Heavier vehicles were excluded,as these vehicles generally exceed 6,000 pounds GVWR and are classified as trucks.The relative percentage of SUVs with an inertia weight of 4,000 pounds or less that meet the current regulatory truck definition increased to 72%in model year 2023,which is the highest percentage of production since at least model year 2000.Model year 2024 data is projected to have a slightly lower ratio of truck SUVs.Figure 3.4.Car-Truck Classification of SUVs with Inertia Weights of 4000 Pounds or Less 22 B.Vehicle Weight Vehicle weight is a fundamental vehicle attribute and an important metric for analysis because vehicles with a higher weight,other things being equal,will require more energy to move.For vehicles with an internal combustion engine,this higher energy requirement generally results in more CO2 emissions and decreased fuel economy.Among battery electric vehicles(BEVs),increased weight will likely decrease the overall efficiency of the vehicle,measured either in kilowatt-hours per 100 miles or miles per gallon of gasoline equivalent(mpge).However,it will not increase tailpipe CO2 emissions,since BEVs do not have tailpipe emissions regardless of the weight of the vehicle.Due to the weight of battery packs,electric vehicles are likely to weigh more than comparable internal combustion engine vehicles.All vehicle weight data in this report are based on inertia weight classes.Each inertia weight class represents a range of loaded vehicle weights,or vehicle curb weights7 plus 300 pounds.Vehicle inertia weight classes are in 250-pound increments for classes below 3,000 pounds,while inertia weight classes over 3,000 pounds are divided into 500-pound increments.Vehicle Weight by Vehicle Type Figure 3.5 shows the average new vehicle weight for all vehicle types since model year 1975.From model year 1975 to 1981,average vehicle weight dropped 21%,from 4,060 pounds per vehicle to about 3,200 pounds;this was likely driven by both increasing fuel economy standards(which,at the time,were universal standards,and not based on any type of vehicle attribute)and higher gasoline prices.From model year 1981 to model year 2004,the trend reversed,and average new vehicle weight began to slowly but steadily climb.By model year 2004,average new vehicle weight had increased 28%from model year 1981 and reached 4,111 pounds per vehicle,in part because of the increasing truck share.Average vehicle weight in model year 2023 was about 6ove 2004 and is currently at the highest point on record,at 4,371 pounds.Preliminary model year 2024 data suggest that weight will continue to increase.In model year 1975,the difference between the heaviest and lightest vehicle types was about 215 pounds,or about 5%of the average new vehicle.In contrast,for model year 7 Vehicle curb weight is the weight of an empty,unloaded vehicle.23 2023,the difference between the heaviest and lightest vehicle types was about 1,535 pounds,or about 35%of the average new vehicle weight.In 1975,the average new sedan/wagon outweighed the average new pickup by about 45 pounds,but the different weight trends over time for each of these vehicle types led to a very different result in model year 2023,with the average new pickup outweighing the average new sedan/wagon by about 1,535 pounds.Pickups are below their model year 2014 high of 5,485 pounds per vehicle,due in part to vehicle redesigns of popular truck models and the use of weight saving designs,such as aluminum bodies.However other trends,such as the growth in battery electric vehicles(BEVs),appears to be pushing vehicle weights back up.Figure 3.5.Average New Vehicle Weight by Vehicle Type 2500 3000 3500 4000 4500 5000 5500Weight(lbs)2500 3000 3500 4000 4500 5000 5500 ALL Sedan/Wagon Car SUV Truck SUV Minivan/Van Pickup 30%Since MY 1975 8%Since MY 1975 Since MY 1975 8%Since MY 1975-10%Since MY 1975 2%Since MY 1975 1975 1985 1995 2005 2015 2025 1975 1985 1995 2005 2015 2025 1975 1985 1995 2005 2015 2025 Model Year.Figure 3.6 shows the annual production share of different inertia weight classes for new vehicles since model year 1975.In model year 1975,there were significant sales in all weight classes from 2,750 pounds to 5,500 pounds.In the early 1980s,the largest vehicles 24 disappeared from the market,and light cars 2,750 pounds inertia weight briefly captured more than 25%of the market.Since then,cars in the 2,750-pound inertia weight class have all but disappeared,and the market has moved towards heavier vehicles.Interestingly,the heaviest vehicles in model year 1975 were mostly large cars,whereas the heaviest vehicles today are largely pickups and truck SUVs.Figure 3.6.Inertia Weight Class Distribution by Model Year 0%Pu0%Production Share 2015 2020 2025 6000 Weight Model Year Vehicle Weight and Technology In addition to the changes in vehicle type,the changing powertrain technologies used in recent model years have also impacted typical vehicle weight.For example,BEVs require a battery that can store enough energy to propel the vehicle over the design range of the vehicle,which for many current BEVs is more than 300 miles.The large battery required to hold that amount of energy increases the weight of the vehicle,often making it heavier than an equivalent internal combustion engine vehicle.25 Figure 3.7 shows the average weight,by vehicle type,of internal combustion engine(ICE)vehicles(including those with stop/start,but not hybrids or PHEVs)compared to BEVs and PHEVs.The average of all vehicles within each vehicle type(including hybrids,PHEVs,and FCEVs)is also shown as a solid black bar.For each vehicle type,BEVs and PHEVs are heavier than their ICE counterparts.BEVs and PHEVs appear to be increasing the overall weight within each vehicle type,with the magnitude of the impact dependent on the uptake of BEVs and PHEVs within each vehicle type.Overall vehicle weight has generally been trending upwards for several decades,as shown in Figure 3.5.This trend has driven by many factors,including market shifts between vehicle types.The weight difference between ICE vehicles and BEV/PHEV vehicles shown for most vehicle types in Figure 3.7 is comparable to the difference in weight between ICE sedan/wagons and ICE truck SUVs.Overall vehicle production has by and large been moving away from sedan/wagons towards truck SUVs,as shown in Figure 3.2,for decades.This market shift over time has,to date,had much more of an impact on overall new vehicle average weight than the recent emergence of BEVs and PHEVs.It is also important to note that even within vehicle types shown in Figure 3.7,the BEVs and PHEVs available may not be exactly comparable to the ICE vehicles.For example,the only electric vehicle pickup trucks are large full-sized pickups,while the ICE category includes some smaller pickup trucks.This difference is likely increasing the weight difference shown for pickups in Figure 3.7.26 Figure 3.7.Average New Vehicle Weight by Vehicle Type and Powertrain Inertia Weight(lbs)7000 6000 5000 4000 3000 2000 1000 0 Fleet Average Gasoline ICE BEV/PHEV Sedan/Wagon Car Truck Minivan/Van Pickup SUV SUV Vehicle Type Vehicle Weight and CO2 Emissions Heavier vehicles require more energy to move than lower-weight vehicles and,if all other factors are the same,will have lower fuel economy and higher CO2 emissions.Figure 3.8 shows estimated real-world CO2 emissions and fuel economy as a function of vehicle inertia weight for several model year 2023 technologies.Increased weight correlates to lower fuel economy and higher CO2 emissions for ICE and hybrid technologies and may also correlate for PHEVs.For BEVs,weight does not impact tailpipe emissions,since all BEVs have zero tailpipe emissions,however increasing BEV weight likely correlates to reduced vehicle efficiency,as measure in miles per gallon of gasoline equivalent(mpge).Limited data did not allow for trendlines in Figure 3.8 for PHEV and BEV data.27 200030004000500060007000 200030004000500060007000 200030004000500060007000 200030004000500060007000 200030004000500060007000 200030004000500060007000 Figure 3.8.Relationship of Inertia Weight and CO2 Emissions Gasoline ICE Gasoline ICE Stop/Start MHEV HEV PHEV BEV 1000 750 500 250 0 100 50 Inertia Weight(lbs)28 C.Vehicle Power Vehicle power,measured in horsepower(hp),has changed dramatically since model year 1975.In the early years of this report,horsepower fell,from an average of 137 hp in model year 1975 to 102 hp in model year 1981.Since model year 1981,however,horsepower has increased almost every year.The average new vehicle in model year 2023 produced 94%more power than a new vehicle in model year 1975,and 160%more power than an average new vehicle in model year 1981.The average new vehicle horsepower is at a record high,increasing from 259 hp in model year 2022 to 266 hp in model year 2023.The preliminary value for model year 2024 is 267 hp,which would be another record-high for horsepower.Electric motors provide power differently than internal combustion engines.For example,internal combustion engines need to achieve a high rotation speed(rotations per minute,or RPM)before they can achieve maximum horsepower.In addition,many BEVs have high hp ratings due to the large amount of power electric motors can generate.Determining the overall vehicle horsepower for BEVs can be complicated for vehicles that have more than one electric motor,depending on how the multiple motors are integrated.PHEVs,which have an internal combustion engine,at least one motor,and complicated control strategies,can be even more difficult to assess.Therefore,horsepower values for the increasing number of BEVs and PHEVs may have higher uncertainty.Vehicle Power by Vehicle Type As with weight,the changes in horsepower are also different among vehicle types,as shown in Figure 3.9.Horsepower for sedan/wagons increased 69tween model year 1975 and 2023,139%for car SUVs,77%for truck SUVs,72%for minivan/vans,and 141%for pickups.Horsepower has generally been increasing for all vehicle types since about 1985,but there is more variation between model types in the last decade.29 Figure 3.9.Average New Vehicle Horsepower by Vehicle Type 100 150 200 250 300 350 100 150 200 250 300 350 Horsepower Pickup Minivan/Van Truck SUV Car SUV Sedan/Wagon ALL Since MY 1975 94i%Since MY 1975 139%Since MY 1975 77%Since MY 1975 72%Since MY 1975 Since MY 1975 14175 1985 1995 2005 2015 2025 1975 1985 1995 2005 2015 2025 1975 1985 1995 2005 2015 2025 Model Year The distribution of horsepower over time has shifted towards vehicles with higher horsepower,as shown in Figure 3.10.While few new vehicles in the early 1980s had greater than 200 hp,the average vehicle in model year 2023 had 266 hp.In addition,vehicles with more than 250 hp make up more than half of new vehicle production,and the maximum horsepower for an individual vehicle is now 1,600 hp.Horsepower is projected to increase again in model year 2024,with almost 10%of vehicles projected to reach 400 hp or higher.30 Figure 3.10.Horsepower Distribution by Model Year 100uP%050400 400450 450 300350 250300 200250 150200 100150 50100 Horsepower 1975 1985 1995 2005 2015 2025 Model Year Production Share Vehicle Power and Technology Electric vehicles utilize an electric motor,instead of a gasoline internal combustion engine,to move the vehicle.Electric motors have the advantage of having maximum torque available from a standstill and can be used to create vehicles with high horsepower.Figure 3.11 shows the average horsepower,by vehicle type,of internal combustion engine(ICE)vehicles(including those with stop start,but not hybrids or PHEVs)compared to PHEVs and BEVs.For each of the four most popular vehicle types,PHEVs and BEVs have higher horsepower than their ICE counterparts.For minivan/vans,the average PHEV and BEV have lower horsepower,but there are also limited vehicles available to compare.The average of all vehicles within each vehicle type is also shown.PHEVs and BEVs do appear to be increasing the overall horsepower within each vehicle type(except for minivan/vans in part due perhaps to very limited offerings within this vehicle type)with the overall impact dependent on the uptake of PHEVs and BEVs within each vehicle type.31 Figure 3.11.Average New Vehicle Horsepower by Vehicle Type and Powertrain Horsepower 500 400 300 200 100 0 Fleet Average Gasoline ICE BEV/PHEV Sedan/Wagon Car Truck Minivan/Van Pickup SUV SUV Vehicle Type Vehicle Power and CO2 Emissions As with weight,higher horsepower vehicles are generally less efficient and have higher CO2 emissions,if all other factors are the same.However,the relationship between vehicle power,CO2 emissions,and fuel economy has become more complex as new technology and vehicles have emerged in the marketplace.Figure 3.12,shows estimated real-world CO2 emissions and fuel economy as a function of vehicle horsepower for several model year 2023 technologies.Increased horsepower correlates to lower fuel economy and higher CO2 emissions for ICE,hybrid,and PHEV vehicles.For BEVs,horsepower does not impact tailpipe emissions,since all BEVs have zero tailpipe emissions,however the relationship between increasing BEV horsepower and vehicle efficiency,as measure in miles per gallon of gasoline equivalent(mpge),is less clear.Limited data did not allow for trendlines in Figure 3.12 for BEV data.32 0500100015002000 0500100015002000 0500100015002000 0500100015002000 0500100015002000 0500100015002000 Figure 3.12.Relationship of Horsepower and CO2 Emissions Gasoline ICE Gasoline ICE Stop/Start MHEV HEV PHEV BEV 1000 750 500 250 0 100 50 Horsepower 33 Vehicle Acceleration Vehicle acceleration is closely related to vehicle horsepower.As new vehicles have increased horsepower,the corresponding ability of vehicles to accelerate has also increased.The most common vehicle acceleration metric,and one of the most recognized vehicle metrics overall,is the time it takes a vehicle to accelerate from 0-to-60 miles per hour,also called the 0-to-60 time.Data on 0-to-60 times are not directly submitted to EPA but are calculated for most vehicles using vehicle attributes and calculation methods developed by MacKenzie and Heywood(2012).8 The relationship between power and acceleration is different for BEVs than for vehicles with internal combustion engines.Electric motors generally have maximum torque available from a standstill,which is not true for internal combustion engines.The result is that BEVs can have very fast 0-to-60 acceleration times,and the calculation methods used for vehicles with internal combustion engines are not valid for BEVs.PHEVs and hybrids may also use their motors to improve acceleration.Acceleration times for BEVs,PHEVs,and hybrids must be obtained from external sources,and as with horsepower values for these vehicles,there may be more uncertainty with these values.Since the early 1980s,there has been a clear downward trend in 0-to-60 times.Figure 3.13 shows the average new vehicle 0-to-60 time since model year 1978.The average new vehicle in model year 2023 had a 0-to-60 time of 7.3 seconds,which is the fastest average 0-to-60 time for any model year and less than half of the average 0-to-60 time of the early 1980s.The calculated 0-to-60 time for model year 2024 is projected to increase slightly to 7.4 seconds.The long-term downward trend in 0-to-60 times is consistent across all vehicle types.Increasing BEV production will likely continue,and perhaps increase,the trend towards lower 0-to-60 acceleration times.8 MacKenzie,D.Heywood,J.2012.Acceleration performance trends and the evolving relationship among power,weight,and acceleration in U.S.light-duty vehicles:A linear regression analysis.Transportation Research Board,Paper NO 12-1475,TRB 91st Annual Meeting,Washington,DC,January 2012.34 Figure 3.13.Calculated 0-to-60 Time by Vehicle Type ALL Sedan/Wagon Car SUV 18 15 12 9-50%Since MY 1978-46%Since MY 1978-46%Since MY 1978 Seconds Truck SUV Minivan/Van Pickup 18 15 12 9-43%Since MY 1978-50%Since MY 1978-43%Since MY 1978 Model Year D.Vehicle Footprint Vehicle footprint is an important attribute since it is the basis for the current CO2 emissions and fuel economy standards.Footprint is the product of wheelbase times average track width(the area defined by where the centers of the tires touch the ground).This report provides footprint data beginning with model year 2008,although footprint data from model years 20082010 were aggregated from various sources and EPA has less confidence in the precision of these data than that of formal compliance data.Beginning in model year 2011,the first year when both car and truck CAFE standards were based on footprint,automakers began to submit reports to EPA with footprint data at the end of the model year,and these official footprint data are reflected in the final data through model year 2023.EPA projects footprint data for the preliminary model year 2024 fleet based on footprint values from the previous model year and,for new vehicle designs,publicly available data.35 Vehicle Footprint by Vehicle Type Figure 3.14 shows overall new vehicle and vehicle type footprint data since model year 2008.Between model year 2008 and 2023,the overall average footprint increased 6%,from 48.9 to 51.8 square feet.All five vehicle types have increased average footprint since model year 2008,with sedan wagons increasing 4.9%,Car SUVs and minivans/vans increasing 4.5%,truck SUVs increasing 3.7%,and pickups increasing 3.4%.This increase,which is larger than the increase within any individual vehicle type,was impacted by both the trends within each vehicle type and the changing mix of vehicles over time,as the market has shifted towards larger vehicles.Figure 3.14.Footprint by Vehicle Type for Model Years 20082023 Footprint(sq ft)70 60 50 40 Pickup Minivan/Van Truck SUV Car SUV Sedan/Wagon 2008 2010 2012 2014 2016 2018 2020 2022 2024 Model Year The distribution of footprints across all new vehicles,as shown in Figure 3.15,also shows a slow reduction in the number of smaller vehicles with a footprint of less than 45 square feet,along with growth in larger vehicle categories.This is consistent with the changes in market trends towards larger vehicles,as seen in Figure 3.2 and elsewhere in this report.Projected data for model year 2024 suggest that overall average footprint will decrease slightly to 51.6 square feet.36 Figure 3.15.Footprint Distribution by Model Year 100%Production Share 75P%0 08 2010 2012 2014 2016 2018 2020 2022 2024 Footprint 65 6065 5560 5055 4550 4045 40 Model Year Vehicle Footprint and Technology Figure 3.16 shows the average footprint,by vehicle type,of internal combustion engine(ICE)vehicles(including those with stop start,but not hybrids or PHEVs)compared to BEVs and PHEVs.For all vehicle types,BEVs and PHEVs have slightly larger footprints than their ICE counterparts.The average of all vehicles within each vehicle type is also shown,with the overall impact dependent on the uptake of BEVs and PHEVs within each vehicle type.37 Figure 3.16.Average New Vehicle Footprint by Vehicle Type and Powertrain Footprint(sq ft)70 60 50 40 30 20 10 0 Fleet Average Gasoline ICE BEV/PHEV Sedan/Wagon Car Truck Minivan/Van Pickup SUV SUV Vehicle Type Vehicle Footprint and CO2 Emissions Vehicles with a larger footprint are likely to weigh more and have more frontal area,which leads to increased aerodynamic resistance.Increased weight and aerodynamic resistance increase CO2 emissions and decrease fuel economy.Figure 3.17 shows estimated real-world CO2 emissions and fuel economy as a function of vehicle footprint for several model year 2023 technologies.Increased footprint correlates to lower fuel economy and higher CO2 emissions for ICE and hybrid technologies and may also correlate for PHEVs.For BEVs,footprint does not impact tailpipe emissions,since all BEVs have zero tailpipe emissions,however increasing BEV footprint likely correlates to reduced vehicle efficiency,as measure in miles per gallon of gasoline equivalent(mpge).Limited data did not allow for trendlines in Figure 3.17 for PHEV and BEV data.38 Figure 3.17.Relationship of Footprint and CO2 Emissions 1000 750 500 250 0 Gasoline ICE Gasoline ICE Stop/Start MHEV HEV PHEV BEV 100 50 40 50 60 70 40 50 60 70 40 50 60 70 40 50 Footprint(sq.ft.)60 70 40 50 60 70 40 50 60 70 39 E.Vehicle Type and Attribute Tradeoffs The past 50 years of data show striking changes in the mix of vehicle types,and the attributes of those vehicles,produced for sale in the United States.Between 1975 and the early 1980s,average new vehicle fuel economy increased rapidly,while the vehicle weight and horsepower fell.For the next twenty years,average new vehicle weight and horsepower steadily increased,while fuel economy steadily decreased.Model year 2004 was another inflection point,after which fuel economy,horsepower,and weight have all generally increased together,to historic highs in model year 2023.Since model year 2004,average new vehicle fuel economy has increased 40%,horsepower increased 26%,and weight increased 6%.Footprint has increased 6%since EPA began tracking it in model year 2008.Fuel economy,weight,and horsepower are all projected to increase again in model year 2024,as shown in Figure 3.18.The changes within each of these metrics is due to the combination of design and technology changes within each vehicle type,as well as the market shifts between vehicle types.For example,overall new vehicle footprint has increased within each vehicle type since model year 2008,but the average new vehicle footprint has increased more than the increase in any individual vehicle type over that time span,due to market shifts towards larger vehicle types.Fuel economy has also increased in all vehicle types since model year 2008,however the market shift towards less efficient vehicle types has offset some of the fleetwide fuel economy and CO2 emission benefits that otherwise would have been achieved through improving technology.Vehicle fuel economy and CO2 emissions are clearly related to vehicle attributes investigated in this section,namely weight,horsepower,and footprint.Future trends in fuel economy and CO2 emissions will be dependent,at least in part,by design choices related to these attributes.40 Figure 3.18.Relative Change in Fuel Economy,Weight,Horsepower,and Footprint Change Since 1975 100uP%0%Real-World Fuel Economy Weight Horsepower 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 15%0%Change Since 2008Footprint 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Model Year 41 Table 3.1.Vehicle Attributes by Model Year Model Year 1975 1980 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024(prelim)Real-World Real-World Car Truck CO2 FE Weight Horsepower 0 to 60 Footprint Production Production(g/mi)(mpg)(lbs)(HP)(s)(ft2)Share Share 681 13.1 4,060 137-80.7.3F6 19.2 3,228 104 15.6-83.5.5A7 21.3 3,271 114 14.1-75.2$.8B0 21.2 3,426 135 11.5-70.4).6C4 20.5 3,613 158 10.1-63.56.5E0 19.8 3,821 181 9.8-58.8A.2D7 19.9 4,059 209 9.0-55.6D.494 22.6 4,001 214 8.8 48.5 62.87.299 22.3 4,126 230 8.5 49.5 57.8B.277 23.6 3,979 222 8.5 48.8 64.45.668 24.2 4,003 226 8.4 49.1 64.15.969 24.1 4,060 230 8.3 49.7 59.3.760 24.6 4,035 229 8.3 49.4 57.4B.659 24.7 4,035 230 8.3 49.5 55.3D.757 24.9 4,093 234 8.2 49.8 52.6G.453 25.1 4,137 241 8.0 50.4 48.0R.056 24.9 4,156 245 7.9 50.8 44.4U.649 25.4 4,166 246 7.8 50.9 43.9V.147 25.4 4,289 253 7.7 51.5 37.1b.937 26.0 4,303 259 7.6 51.6 36.9c.119 27.1 4,371 266 7.3 51.8 37.5b.505 28.0 4,419 267 7.4 51.6 36.7c.3%To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 42 Table 3.2.Estimated Real-World Fuel Economy and CO2 by Vehicle Type Model Year Sedan/Wagon Car SUV Truck SUV Minivan/Van Pickup Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)1975 80.6f0 13.5 0.1y9 11.1 1.76 11.0 4.50 11.1 13.1t6 11.9 1980 83.5D6 20.0 0.0a0 14.6 1.6g6 13.2 2.1b9 14.1 12.7T1 16.5 1985 74.687 23.0 0.6D3 20.1 4.5S8 16.5 5.9S7 16.5 14.4H9 18.2 1990 69.881 23.3 0.5G2 18.8 5.1T1 16.4 10.0I8 17.8 14.5Q1 17.4 1995 62.079 23.4 1.5I9 17.8 10.5U5 16.0 11.0I2 18.1 15.0R6 16.9 2000 55.188 22.9 3.7I7 17.9 15.2U5 16.0 10.2G8 18.6 15.8S4 16.7 2005 50.579 23.5 5.1D0 20.2 20.6S1 16.7 9.3F0 19.3 14.5V1 15.8 2010 54.540 26.2 8.286 23.0 20.7E2 19.7 5.0D2 20.1 11.5R7 16.9 2011 47.844 25.8 10.078 23.5 25.5D9 19.8 4.3B4 20.9 12.3Q6 17.2 2012 55.022 27.6 9.481 23.3 20.6D5 20.0 4.9A8 21.3 10.1Q6 17.2 2013 54.113 28.4 10.065 24.3 21.8B7 20.8 3.8B2 21.1 10.4P9 17.5 2014 49.213 28.4 10.164 24.4 23.9A2 21.6 4.3A8 21.3 12.4I3 18.0 2015 47.206 29.0 10.253 25.1 28.16 21.9 3.98 21.8 10.7G4 18.8 2016 43.803 29.2 11.538 26.2 29.10 22.2 3.9A0 21.7 11.7G1 18.9 2017 41.0)3 30.2 11.639 26.1 31.798 22.3 3.699 22.2 12.1G0 18.9 2018 36.7(6 30.8 11.324 27.4 35.084 23.1 3.189 22.8 13.9F6 19.1 2019 32.7(5 30.9 11.723 27.5 36.578 23.5 3.496 22.4 15.6F7 19.0 2020 30.97 31.7 13.010 28.4 38.774 23.8 2.979 23.4 14.4F5 19.2 2021 25.70 32.2 11.48 31.0 44.768 24.1 2.222 27.3 16.1F3 19.3 2022 26.5&0 33.2 10.4%0 33.4 43.864 24.2 2.939 26.0 16.4D4 20.0 2023 25.0$9 34.1 12.50 40.5 45.356 24.7 2.539 25.9 14.7C2 20.5 2024(prelim)21.3$8 34.3 15.40 40.3 46.633 26.0 1.832 26.3 14.9A8 21.0 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 43 Table 3.3.Model Year 2023 Vehicle Attributes by Manufacturer Manufacturer BMW Ford GM Honda Hyundai Kia Mazda Mercedes Nissan Stellantis Subaru Tesla Toyota VW Other All Manufacturers Real-World Real-World CO2 FE Weight Horsepower 0-to-60 Footprint(g/mi)(mpg)(lbs)(HP)(s)(ft2)305 27.6 4600 321 6.0 50.2 374 23.2 4845 316 6.6 58.2 396 22.4 4766 288 7.3 55.7 314 28.3 3936 212 7.7 49.4 292 29.8 3824 206 8.1 48.7 289 30.4 3721 191 8.3 47.9 322 27.6 3864 196 8.9 46.7 304 27.5 4843 306 6.4 52.3 305 28.9 4075 222 8.3 48.4 402 21.8 4836 316 7.0 56.0 311 28.4 3939 198 9.0 46.0 0 120.6 4384 407 4.6 50.7 322 27.5 4227 231 7.7 50.4 317 27.0 4361 263 7.0 48.8 276 29.1 4940 352 6.6 50.8 319 27.1 4371 266 7.3 51.8 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 44 Table 3.4.Model Year 2023 Estimated Real-World Fuel Economy and CO2 by Manufacturer and Vehicle Type Manufacturer Sedan/Wagon Car SUV Truck SUV Minivan/Van Pickup Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)Real-Real-World World Prod CO2 FE Share(g/mi)(mpg)BMW 46.6&8 31.0 4.742 26.0 48.738 25.2-Ford 1.38 21.8 8.45 47.5 44.71 22.1 1.651 25.3 44.092 22.2 GM 14.5%2 32.5 11.601 29.4 48.6B2 21.1-25.3G4 19.0 Honda 42.5&7 33.3 7.3&9 33.0 35.344 25.9 8.077 23.6 6.9B4 21.0 Hyundai 33.9$6 35.4 27.1&2 32.1 39.152 25.2-Kia 45.3$2 35.7 9.900 29.6 41.930 26.7 2.986 23.0-Mazda 11.3(5 31.1-88.727 27.2-Mercedes 34.6)7 28.6 16.29 48.0 40.057 24.0 9.2A1 21.6-Nissan 38.5%7 33.6 16.3&8 33.2 36.539 26.2-8.7D7 19.9 Stellantis 15.2B5 20.9 0.029 27.0 50.882 22.7 10.234 25.6 23.8E8 19.5 Subaru 13.521 27.6-86.510 28.5-Tesla 36.1%0 126.8 55.1%0 117.1 8.8%0 118.5-Toyota 29.4%8 34.4 8.6(4 31.0 39.729 26.8 3.1$9 35.7 19.1C5 20.4 VW 25.310 28.0 13.8 3 38.6 60.945 25.0-Other 11.32 40.7 8.7 54.4 76.123 26.0 0.531 26.9 3.5%0 69.4 All Manufacturers 25.0$9 34.1 12.50 40.5 45.356 24.7 2.539 25.9 14.7C2 20.5 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 45 Table 3.5.Footprint by Manufacturer for Model Year 20222024(ft2)Manufacturer Final MY 2022 Final MY 2023 Preliminary MY 2024 Car Truck All Car Truck All Car Truck All BMW 48.3 52.8 50.5 48.6 52.0 50.2 48.8 52.1 50.5 Ford 48.1 56.9 55.9 49.2 59.2 58.2 48.0 57.8 56.4 GM 46.1 59.3 56.0 46.4 59.0 55.7 46.3 59.6 55.0 Honda 46.3 50.4 48.3 46.9 51.9 49.4 46.6 50.9 48.4 Hyundai 46.9 50.3 48.3 47.6 50.3 48.7 47.8 50.8 49.2 Kia 46.6 51.2 48.8 46.2 50.0 47.9 47.0 51.3 49.4 Mazda 44.2 46.7 46.3 44.0 47.0 46.7 44.4 47.1 46.9 Mercedes 50.6 53.4 52.2 50.7 53.9 52.3 51.3 53.0 52.1 Nissan 46.6 52.9 49.1 46.6 50.6 48.4 46.6 51.6 48.9 Stellantis 51.5 57.5 56.7 52.8 56.6 56.0 42.0 56.0 55.7 Subaru 45.2 46.5 46.3 45.0 46.2 46.0 45.4 46.1 46.0 Tesla 50.7 51.7 50.8 50.7 51.5 50.7 50.8 51.1 50.8 Toyota 46.5 52.0 49.7 46.9 52.6 50.4 46.5 53.6 51.3 VW 46.2 50.1 48.6 46.5 50.3 48.8 46.7 50.3 49.2 Other 45.7 51.1 49.2 47.4 51.6 50.8 47.5 53.4 52.1 All Manufacturers 47.2 54.2 51.6 47.7 54.2 51.8 47.5 54.0 51.6 To explore this data in more depth,please see the report website at https:/www.epa.gov/automotive-trends 46 4.Vehicle TechnologySince model year 1975,the technology used in vehicles has continually evolved.Todays vehicles utilize an increasingly wide array of technological solutions developed by the automotive industry to improve vehicle attributes discussed previously in this report,including CO2 emissions,fuel economy,vehicle power,and acceleration.Automotive engineers and designers are constantly creating and evaluating new technology and deciding how,or if,it should be applied to their vehicles.This section of the report looks at vehicle technology from two perspectives;first,how the industry has adopted specific technologies over time,and second,how those technologies have impacted CO2 emissions and fuel economy.Vehicle Architecture All vehicles use some type of engine or motor to convert energy stored on the vehicle,usually in a fuel or battery,into rotational energy to propel the vehicle forward.The generalized vehicle architecture for a vehicle with a gasoline internal combustion engine(ICE)is shown in Figure 4.1.Internal combustion engines typically combust gasoline or diesel fuel to rotate an output shaft.The engine is paired with a transmission to convert the rotational energy from the relatively narrow range of speeds available at the engine to the appropriate speed required for driving conditions.The transmission is connected to a driveline that transfers the rotational energy from the transmission to the two or four wheels being used to move the vehicle.Each of these components has energy losses,or inefficiencies,which ultimately increase vehicle CO2 emissions and decrease fuel economy.Figure 4.1.Vehicle Energy Flow for an Internal Combustion Engine Vehicle 47 The general vehicle design shown in Figure 4.1 was nearly universal in the automotive industry for decades,but more recent technology developments have created vehicle architectures that look quite different.Vehicles that have stop/start systems generally use a larger alternator and enhanced battery,which enables the vehicle to turn off the engine at idle to save fuel.Hybrid vehicles use a larger battery to recapture braking energy and provide traction power when necessary,allowing for a smaller,more efficiently operated engine.Hybrids can be separated into smaller“mild”hybrid systems(MHEVs)that provide launch assist but cannot propel the vehicle on their own,and“strong”hybrid systems(HEVs)that can temporarily power the vehicle without engaging the engine.Plug-in hybrid vehicles(PHEV)have both a battery that can be charged from an external electricity source and a gasoline engine and operate on electricity until the battery is depleted or cannot meet driving needs.Strong hybrids and PHEVs often have much more complicated architectures that allow for complex energy optimization strategies that ultimately improve some combination of vehicle CO2 emission,fuel economy,and vehicle performance.These vehicles use a combination of an engine and one or more motors to power the wheels,and recapture braking energy.Full battery electric vehicles(BEVs)employ a battery pack that is externally charged and an electric motor exclusively for propulsion,and do not have an onboard gasoline engine.BEVs can have very simple layouts,as vehicles with one electric motor can be directly connected to the driveline without a traditional transmission.9 However,some manufacturers are producing electric vehicles with 2-speed transmissions,and others have developed vehicles with 2 or more motors that propel the vehicle in combination.Vehicles with diesel engines are also present in the light-duty automotive market,and briefly reached 6%of all production in model year 1981.Vehicles relying on the combustion of a fuel other than gasoline or diesel,such as compressed natural gas(CNG),have occasionally been produced for sale in the U.S.Fuel cell electric vehicles(FCEVs)which use a fuel cell stack to create electricity from an onboard fuel source(usually hydrogen)to power a motor,have also been produced in recent years.These vehicles are included in the data for this report,but generally have not been produced in large volumes.10 9 For more information on electric vehicles,see EPAs Green Vehicle Guide(https:/www.epa.gov/greenvehicles)or the U.S.Department of Energys Alternative Fuels Data Center(https:/afdc.energy.gov/vehicles/how-do-all-electric-cars-work),or www.fueleconomy.gov(https:/fueleconomy.gov/feg/evtech.shtml)10 Vehicles converted to an alternative fuel in the aftermarket are not included in this data.48 Overall Industry Trends Innovation in the automobile industry has led to a wide array of technology available to manufacturers to achieve CO2 emissions,fuel economy,and performance goals.Figure 4.2 illustrates manufacturer-specific technology usage for model year 2023 for technologies that represent increasing levels of vehicle electrification,as well as the recent adoption trends of those technologies across the industry.The technologies in Figure 4.2 are being used by manufacturers,in part,to reduce CO2 emissions and increase fuel economy.Manufacturers strategies to develop and adopt these technologies are unique and vary significantly.Each manufacturer is choosing technologies that best meet the design requirements of their vehicles.In model year 2023,gasoline vehicles with stop/start,MHEVs,HEVs,PHEVs,and BEVs all gained market share and captured their largest market shares on record.In addition to electrification technologies,other technologies continue to improve the performance of internal combustion engines(ICE),including the engines found in hybrids and PHEVS.These technologies include a combination of turbocharged engines(Turbo),gasoline direct injection(GDI),fuel injection systems that can alternate between GDI or port fuel injection(GDPI),and cylinder deactivation(CD).Higher speed transmissions and continuous variable transmissions(CVT)also enable the engine to operate in the most efficient way possible.Table 4.1 shows the implementation of several of these technologies,as used in conjunction with the electrification technologies identified in Figure 4.2.49 50 Figure 4.2.Manufacturer Use of Electrification Technologies for Model Year 2023 0%Pu0%TeslaKiaHyundaiMercedesNissanBMWSubaruHondaVWToyotaMazdaFordGMStellantisALLProduction Share2010201520202025Model YearDiesel ICEGasoline ICE Stop/StartGasoline ICEMHEVHEVPHEVBEVOther Table 4.1.Production Share by Drive Technology for Model Year 2023 Technology Production Share Stop/Start GDI GDPI Turbo 7 Gears CVT Average Fuel Economy(mpge)Average GHG Emissions(g/mi)Average#Cylinders Gasoline Gasoline Mild Strong Plug-In Battery Fuel ICE without ICE with Hybrid Hybrid Hybrid Electric Cell Diesel Stop/Start Stop/Start(MHEV)(HEV)(PHEV)(BEV)(FCEV)All 0.8&.3I.2%4.9%7.2%1.7%9.8%0.00.0.0%-100.00.00.00.0%-63.8%-36.2g.7h.0C.1h.7%-50.5%-34.3 .6%3.2F.8.5%-22.90.0!.4R.6X.5#.9f.0%-38.00.0D.1u.90.0.6V.6%-56.4%-31.7!.4%-69.6(.8%-24.4$.1 24.9 24.0 23.0 36.4 36.8 106.7 70.1 27.1 422 357 370 387 244 174 0 0 319 6 4.9 4.9 5.7 4.2 4.4-4.9Figure 4.3.shows the current adoption rates of electrification and engine improvement technologies for the fourteen largest manufacturers.The technologies in Figure 4.3.have emerged as significant technology developments within the last 10-15 years(some,like turbocharged engines,were available before this timeframe,but in small numbers).Manufacturers are continuing to implement both electrification and engine technology improvements across their vehicles to improve CO2 emissions,fuel economy,and performance.The following sections provide a deeper look into many of the technology trends identified here,beginning with engine/propulsion technologies,then transmissions,and drivelines.While the evolution of vehicles in more recent years challenges the breakdown of technology into these traditional categories,it is still a useful context for evaluating different aspects of vehicle technology and the many changes taking place across the automotive industry.51 Figure 4.3.Manufacturer Use of Emerging Technologies for Model Year 2023 Tesla Kia Hyundai Nissan Subaru Honda BMW Mazda Toyota Mercedes VW Ford GM Stellantis All Manufacturers 90pc0uI1%&!uA#%x%6V3v%4%3IXr7R%53CQt&Y%5#4t%23x8YP#C(%08%8$%8%1%1%2%0%9%0%2%1%7%4%7%3%0%3%20%1%0%0s8I$V%5%7%2%0%Turbo GDI or Cylinder CVT 7 Non-Hybrid MHEV HEV PHEV BEV FCEV GDPI Deactivation Gears StopStart 52 A.Vehicle PropulsionAs discussed above,all vehicles use at least one engine or motor to convert stored energy into rotational energy to propel the vehicle forward.Over the 50 years that EPA has been collecting data,the technology used in engines,and now motors,has continually evolved.The industry continues to develop new and innovative technologies to improve vehicle efficiency,reduce emissions,and increase vehicle performance and features.The following analysis will look at technology trends within gasoline engine vehicles,hybrids,PHEVs and EVs,and diesels.Each of these categories of engine technologies has unique properties,metrics,and trends over time.Gasoline Engines Since EPA began tracking vehicle data in 1975,nearly 700 million vehicles have been produced for sale in the United States.While electric vehicles have been capturing a growing share of the market in recent years,as shown in Figure 4.2,vehicles with gasoline engines still make up most of the market today and in past years have often been nearly the only option available.The following analysis focuses on engine technology and metrics for gasoline engines.Hybrid and plug-in hybrid vehicles are included in this data unless they are explicitly excluded.For the purposes of this report“flex fuel”vehicles that are capable of operating on gasoline or a blend of 85%ethanol and 15%gasoline(E85)are included with gasoline engines and are not evaluated seperately.Engine Size and Displacement Measuring and tracking new vehicle engine size is one of the most basic,and important ways to track engine trends,because larger engines strongly correlate with higher fuel use.Engine size is a generally described in one of two ways,either the number of cylinders or the total displacement of the engine(the total volume of the cylinders).Figure 4.4 shows the production share of gasoline engines by number of cylinders over time.In the mid and late 1970s,the 8-cylinder gasoline engine was dominant,accounting for well over half of all new vehicle production.Between model year 1979 and 1980,there was a significant change in the market,as 8-cylinder engine production share dropped,as larger engines were replaced with smaller 4-cylinder and some 6-cylinder engines.From model year 1987 through 2004,production moved back towards larger 6-cylinder and 8-cylinder 53 engines.This trend reversed again in 2005 as production began trending back towards 4-cylinder engines.Four-cylinder gasoline engines are the most popular engine option,capturing about 51%of the market in model year 2023.Figure 4.4.Gasoline Engine Production Share by Number of Cylinders Production Share 100uP%075 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Model Year Cylinders Less than 4 4 Cylinder 5 Cylinder 6 Cylinder 8 Cylinder More than 8 Overall engine size,as measured by the total volume of all the engines cylinders,is directly related to the number of cylinders.As vehicles have moved towards engines with a lower number of cylinders,the total engine size,or displacement,is also at an all-time low.The average new vehicle in model year 1975 had a displacement of nearly 300 cubic inches(or just under 5 liters),compared to an average of 170 cubic inches(about 2.8 liters)in model year 2023.Gasoline engine displacement per cylinder has been relatively stable over the time of this report(around 35 cubic inches,or 0.6 liters,per cylinder since 1980),so the reduction in overall new vehicle engine displacement is almost entirely due to the shift towards engines with fewer cylinders.Even as gasoline engine displacement has fallen over time,horsepower has generally increased.One way to examine the relationship between gasoline engine horsepower and 54 displacement is to look at the trend in specific power(HP/Displacement),which is a metric to compare the power output of an engine relative to its size.Specific power has doubled between model year 1975 and model year 2023.The rate at which specific power has increased has been remarkably steady,as shown in Figure 4.5.The specific power of new vehicle gasoline engines(excluding hybrids and PHEVS)has increased by about 0.02 horsepower per cubic inch every year for 50 years.Considering the numerous and significant changes to engines over this time span,changes in consumer preferences,and the external pressures on vehicle purchases,the long-standing linearity of this trend is noteworthy.The roughly linear increase in specific power does not appear to be slowing.Turbocharged engines,direct injection,higher compression ratios,and many other engine technologies are likely to continue increasing engine specific power.Figure 4.5 also shows two other important engine metrics,the amount of fuel consumed compared to the overall size of the engine(Fuel Consumption/Displacement),and the amount of fuel consumed relative to the amount of power produced by an engine(Fuel Consumption/HP).For Figure 4.5,gasoline engines in hybrids and PHEVs have been excluded.The amount of fuel consumed by a gasoline engine in model year 2023,relative to the total displacement,is about 11%lower than in model year 1975.Fuel consumption relative to engine horsepower has fallen more than 70%since model year 1975.Taken as a whole,the trend lines in Figure 4.5 clearly show that gasoline engine improvements over time have been steady and continual and have resulted in impressive improvements to internal combustion engines.55 Figure 4.5.Percent Change for Specific Gasoline Non-Hybrid Engine Metrics Change Since 1975 20000P%0P%Fuel Consumption/HP Fuel Consumption/Displacement HP/Displacement 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Model Year Fuel Delivery Systems and Valvetrains All gasoline engines require a fuel delivery system that controls the flow of fuel delivered into the engine.The process for controlling fuel flow has changed significantly over time,allowing for much more control over the combustion process and thus more efficient engines.Figure 4.6 shows many different engine designs as they have entered,and in many cases exited,the automotive market.Some fleetwide changes occurred gradually,but in some cases(for example trucks in the late 1980s),engine technology experienced widespread change in only a few years.Evolving technology offers opportunities to improve fuel economy,CO2 emissions,power,and other vehicle parameters.In the 1970s and early 1980s,nearly all gasoline engines used carburetors to meter fuel delivered to the engine.Carburetors were replaced over time with fuel injection systems;first throttle body injection(TBI)systems,then port fuel injection(PFI)systems,and more recently gasoline direct injection(GDI)and combined gasoline direct and port injection 56 engines(GDPI),as shown in Figure 4.6.TBI and PFI systems use fuel injectors to electronically deliver fuel and mix it with air outside of the engine cylinder;the resulting air and fuel mixture is then delivered to the engine cylinders for combustion.Engines that utilize GDI spray fuel directly into the air in the engine cylinder for better control of the combustion process.Engines using GDI were first introduced into the market with very limited production in model year 2007.The use of GDI has increased in subsequent years to the point where 74%of the model year 2023 fleet had either GDI or GDPI.In model year 2023,GDI engines were installed in 51%of model year 2023 vehicles,while GDPI engines were installed in 23%of new vehicles.Another key aspect of engine design is the valvetrain.Each engine cylinder must have a set of valves that allow for air(or an air/fuel mixture)to flow into the engine cylinder prior to combustion and for exhaust gases to exit the cylinder after combustion.The number of valves per cylinder and the method of controlling the valves(i.e.,the valvetrain)directly impacts the overall efficiency of the engine.Generally,engines with four valves per cylinder instead of two,and valvetrains that can alter valve timing during the combustion cycle can provide more precise control of the combustion process and therefore increase engine power and efficiency.This report began tracking multi-valve engines(i.e.,engines with more than two valves per cylinder)for cars in model year 1986 and for trucks in model year 1994.Since that time,about 90%of the fleet has converted to multi-valve design.While some three-and five-valve engines have been produced,the majority of multi-valve engines are based on four valves per cylinder.Engines with four valves generally use two valves for air intake and two valves for exhaust.In addition,this report began tracking variable valve timing(VVT)technology for cars in model year 1990 and for trucks in model year 2000,and since then nearly the entire fleet has adopted this technology.Figure 4.6 shows the evolution of engine technology,including fuel delivery method and the introduction of VVT and multi-valve engines.As shown in Figure 4.6,fuel delivery and valvetrain technologies have often been developed simultaneously.Nearly all carbureted engines relied on fixed valve timing and had two valves per cylinder,as did early port-injected engines.Port-injected engines largely developed into engines with both multi-valve and VVT technology.Engines with GDI are almost exclusively using multi-valve and VVT technology.These four engine groupings,or packages,represent a large share of the engines produced over the timespan covered by this report.57 Figure 4.6.Production Share by Engine Technology 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 0%Pu0%Truck 0%Pu0r Production Share 1 3 5 6 7 8 10 12 11 14 14 15 13 9 6 5 7 3 1 4 8 14 2 15 10 11 12 13 14 Model Year Fuel Delivery Valve Timing Number of Valves Key Carbureted Fixed Two-Valve 1 Multi-Valve 2 Throttle Body Injection Fixed Two-Valve 3 Multi-Valve 4 Port Fuel Injection Fixed Two-Valve 5 Multi-Valve 6 Variable Two-Valve 7 Multi-Valve 8 Gasoline Direct Injection(GDPI)Fixed Multi-Valve 9 Variable Multi-Valve 10 Gasoline Direct Injection(GDI)Fixed Multi-Valve 11 Variable Multi-Valve 12 Two-Valve 13 Diesel 14 BEV/FCEV 15 58 Figure 4.7 shows the changes in specific power and fuel consumption per horsepower for each of these engine packages over time.There is a very clear increase in specific power of each engine package as engines moved from carbureted engines to engines with two valves,fixed timing,and port fuel injection,then to engines with multi-valve VVT and port fuel injection,and finally to GDI engines.Some of the increase for GDI engines may also be due to the pairing of GDI engines with turbochargers to further increase power.Vehicles with fixed valve timing and two valves per cylinder have been limited in recent years and are no longer included in Figure 4.7 after model year 2015 due to very limited production.59 Figure 4.7.Engine Metrics for Different Gasoline Technology Packages 1.6 1.2 0.8 0.4 Specific Power(HP/Displacement)Carbureted Engines Fixed Timing,Two-Valve Engines Variable Timing,Multi-Valve Engines GDI Engines Fuel Consumption/HP(gal/100 mi)/HP)0.06 0.05 0.04 0.03 0.02 Carbureted Engines Fixed Two-Valve ETiming,ngines VaMultriable Timing,i-Valve Engines GDI Engines 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Model Year 60 Turbocharging Turbochargers increase the power that an engine can produce by forcing more air,and thus fuel,into the engine.An engine with a turbocharger can produce more power than an identically sized engine that is naturally aspirated or does not have a turbocharger.Turbochargers are powered using the pressure of the engine exhaust as it leaves the engine.Superchargers operate the same way as turbochargers but are directly connected to the engine for power,instead of using the engine exhaust.Alternate turbocharging and supercharging methods,such as electric superchargers,are also beginning to emerge.A limited number of new vehicles utilize both a turbocharger and supercharger in one engine package.Most current gasoline turbocharged engines also use GDI and VVT.This allows for more efficient engine operation,helps increase the resistance to premature combustion(engine knock),and reduces turbo lag(the amount of time it takes for a turbocharger to engage).Gasoline turbocharged engines have grown steadily in the marketplace,accounting for more than 35%of all production in model year 2023,as shown in Figure 4.8.Many of these engines are applying turbochargers to create“turbo downsized”engine packages that can combine the improved fuel economy of smaller engines during normal operation but can provide the power of a larger engine by engaging the turbocharger when necessary.As evidence of this turbo downsizing,most gasoline turbocharged engines in model year 2023 are either 4-cylinder or 3-cylinder engines.Model year 2024 is projected to be a similar distribution,as shown in Figure 4-9.61 Figure 4.8.Gasoline Turbo Engine Production Share by Vehicle Type 0 0%Production Share Vehicle Type Sedan/Wagon Car SUV Pickup Minivan/Van Truck SUV 2003 2008 2013 2018 2023 Figure 4-9.Gasoline Turbo Engine Production Share by Number of Cylinders 4 Cylinder 3 Cylinder 6 Cylinder 8 Cylinder Other 2003 2008 2013 2018 2023 Production Share 30 %0b Cylinder Deactivation Cylinder deactivation is an engine management approach that turns off the flow of fuel to one or more engine cylinders,and the corresponding spark plugs,when driving conditions do not require full engine power.This effectively allows a large engine to act as a smaller engine when the additional cylinders are not needed,increasing engine efficiency and fuel economy.The use of cylinder deactivation in gasoline vehicles steadily climbed through model year 2021,but fell slightly,less than one percentage point,in model year 2023 to 15%of all new vehicles.Projected model year 2023 data suggests another small drop in the use of cylinder deactivation across all new vehicles.Non-hybrid Stop/Start Engine stop/start technology allows the engine to be automatically turned off at idle and very quickly restarted when the driver releases the brake pedal.By turning the engine off,a vehicle can eliminate the fuel use and CO2 emissions that would have occurred if the engine was left running.This report began tracking stop/start technology in model year 2012 at less than one percent.Since then,the use of stop/start has increased to more than 50%of all new gasoline non-hybrid vehicles in model year 2023.While non-hybrid stop/start systems have been used in a wide range of applications,they are found more often in larger vehicles and engines,as shown in Figure 4.10 and Figure 4.11.63 Figure 4.10.Gasoline Non-
2024-12-05
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