By J.Eichberger of The Fuels Institute

2. What is it?

3. What threatens your business?
• Fuel demand is dropping off
• Alternative fuels are expanding market share
• Automakers are shifting focus to new
technologies
• Consumers are changing behavior…dramatically
• Alternatives to vehicle ownership are gaining
traction

4. Questions I Have…
• What will you sell in 15 years?
• What will I drive in 15 years?
• Will my daughter even have/want to drive in 15
years?

5. COP 21
CAFE
RFS
LCFS
ZEV

6. Gasoline demand dropping 20%
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
10,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2020 2025 2030 2035
ThousandBarrelsperDay
Gasoline Demand
Source: U.S. EIA

7. There will be more drivers…
11.8
12.0
12.2
12.4
12.6
12.8
13.0
13.2
13.4
200
210
220
230
240
250
260
270
2015 2020 2025 2030 2035
ThousandMilesperDriver
MillionLicensedDrivers
Licensed Drivers and Miles Traveled
Licensed Drivers Miles per Driver
2015-2035
VMT per Driver: +7.8%
Licensed Drivers: +17.4%
Source: U.S. EIA

8. but they will travel further on less.
0
10
20
30
40
50
60
2015 2020 2025 2030 2035
Cars - 57% more efficient
New Cars MPG Registered Cars MPG CAFE for Cars
0
10
20
30
40
50
2015 2020 2025 2030 2035
Trucks - 54% more efficient
New Trucks MPG Regisered Trucks MPG CAFE for Trucks
Registered vehicles will be 55% more efficient in 2035 vs 2015.
Source: U.S. EIA

9. 1950’s Vision of the Future
The Self-Driving Car
of the Future,
advertisement for
“America's Electric
Light & Power
Companies”,
Saturday Evening
Post, 1950s. The
picture shows self-
driving cars on an
electric super-
highway. Credit: The
Everett Collection.

10. Liquid still reigns supreme

11. 100+ Years of Progress…
98% of surface
transportation
energy provided
by petroleum
mixtures

13. Auto Sales in 2015
Diesel, 2.78%
Electric, 0.41%
Gasoline,
94.37%
Hybrid, 2.17%
Plug In, 0.25%
Source: WardsAuto

14. Gas vs Diesel
$1.000
$1.500
$2.000
$2.500
$3.000
$3.500
$4.000
$4.500
Gasoline Price Diesel Price
Source: OPIS
What can ruin $2 gasoline?
Can diesel remain on par?

15. Impact of VW Scandal
Response % Consumers
Much more positive towards diesel vehicles 5%
Somewhat more positive towards diesel vehicles 9%
About the same as before 73%
Somewhat more negative towards diesel vehicles 8%
Much more negative towards diesel vehicles 6%
Have your views on diesel vehicles changed over the past 3-6
months? My views are…
September 2015, n=1,200
Note: This survey was fielded right after VW scandal broke.

16. Diesel Sentiments – Feb 2016
• 45% of car buyers would consider diesel
– Compared with 42% and 41% in 2015 and 2014
• Why?
– 51% said better fuel economy
• Why not?
– 48% said fuel too expensive
– Only 8% said recent scandals

17. Biofuels
0
5
10
15
20
25
30
35
40
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
BillionGallonsperYear
RFS E10
If every gallon gasoline contains 10% ethanol,
21 billion gallons of additional renewable fuels
must be blended into fuels market by 2022.

18. Biofuels Consumption
0
2000
4000
6000
8000
10000
12000
14000
16000
2007 2008 2009 2010 2011 2012 2013 2014 2015
MillionGallonsperYear
Ethanol Biodiesel
Source: U.S. EIA

19. Higher Biofuel Blends

20. What about alternatives?

21. Auto Sales in 2015
Diesel, 2.78%
Electric, 0.41%
Gasoline,
94.37%
Hybrid, 2.17%
Plug In, 0.25%
Source: WardsAuto

22. Auto sales 2015 vs 2014
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
Diesel Electric Gasoline Hybrid Plug In
Change in Sales
Source: WardsAuto

23. Is this the future?

24. Electric is Sexy
And contributes to ZEV, CAFE & LCFS compliance.

25. EVs in U.S. Plug In Hybrids in U.S.
Electric is growing
Limitations: Range
Recharge Time
Price

26. 2016 Nissan Leaf
• 107 Miles per charge
• 80% recharge in 30 mins
• Starting at $29,000
2017 Chevrolet Bolt
• 200 miles per charge
• 80% recharge in 1 hour
• Starting at $35,000
Note: Sufficient range does not require $100,000 price tag.
Electric is getting better

27. What about emissions?
Power Plants in US in 2015
286 coal fired
780 petroleum
803 natural gas
32 nuclear
889 hydro
272 other renewable
Vehicles in US in 2015
235.6 million light duty
7.8 million med/heavy duty

28. Hydrogen Fuel Cell
• Grid-independent EV
• ZEV, CAFE, LCFS
• Range – 300+
• Fuel Time – 3-5 mins
• Status:
– ~15 stations
– ~$2 million per
– ~100-150 vehicles

29. Natural Gas
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Market Share
LDV HD CNG HD LNG
PIRA projects natural gas to capture up to
30% of HD market fuel demand by 2030.
Source: Fuels Institute

30. Propane
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Market Share
LDV Propane M/HD Propane
Source: Fuels Institute

31. What Does the Customer
Want?

32. Fewer people are driving
57.7%
63.8%
66.5%
63.1%
56.1%
50.5%
85.6%
89.6%
91.4%
89.1%
86.4%
81.5%
85.1%
93.7%
95.7%
93.3% 92.5%
88.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
1963 1972 1982 1992 2002 2012
16 - 19 20 - 29 30 - 39
Source: Fuels Institute

33. Major shift in generational interests

34. Is this the last
time she will
drive?
Turns 16 in 2030

35. Are we seeing a sharing takeover?

36. Metro areas are breeding ground
55%
88%
98%
87%
44%
12%
2%
11%
1% 0.5% 0% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Turo Zipcar Car2Go Enterprise CarShare
%ofFleetVehicles
Car Sharing Services Geographic Distribution
Principal City Suburbs Non‐Metro

37. Metro areas are getting bigger
56%
84%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1950 1960 1970 1980 1990 2000 2010
Metro%ofUSPopulation
Projected Population Increase 2015 – 2060
98 Million

38. They like to share electric cars
1973
4955
7546
9869
0 2000 4000 6000 8000 10000 12000
Enterprise
CarShare
Car2Go
Turo
Zipcar
Vehicles per Company
(Sept/Oct 2015)
0
466
129
510
400
16 16
160
0
100
200
300
400
500
600
Car2Go Zipcar Enterprise Turo
Vehicles
Count of Hybrids and EVs
Hybrid EV

39. Will she even need to drive?

40. Final Thoughts
• Liquid fuels dominate, but decline in volume
• Regulations favor electric, market developing
– Long ramp up, but then quick growth
• Gaseous fuels seem destined for HD market
• Technology advances could render obsolete:
– Car ownership
– Driver training programs
• Next generation expects autonomous, electric
car sharing to dominate the market

41. Questions?
John Eichberger
jeichberger@fuelsinstitute.org
703-518-7971