Light Duty Vehicle Analysis Team Report CSC November 17, 2011 Final 1 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Objectives Scope and methods update Review results of model outputs Discuss next steps 2 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Light Duty Model Analysis Team Norm Brinkman, General Motors Jaycie Chitwood, Toyota Clay Phillips, General Motors Deanne Short, Caterpillar Ian Sutherland, General Motors Bill Taylor, Tau Advisors Pallassana Venkataraman, ExxonMobil Puneet Verma, Chevron Graham Williams, GP Williams Consulting / Westport 3 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

SCOPE AND METHODS UPDATE 4 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Basic Principles and Assumptions (1/2) The primary purpose of the analysis is to use an integrating model to provide insights about various trade-offs across technologies, fuels, and costs over time –Inputs founded on individual pathway chapters The model is not being used as a forecasting nor a predictive tool –It illustrates a range of possible future states that could occur, within a defined set of assumptions; other future states are possible –Averages and standard deviations are the main output metrics Technologies and fuels compete on an economic basis with a primary metric of minimal total cost of driving Significant effort made to ensure consistency of inputs and analysis across pathways Technology pinchpoints cleared, but no step-function innovations for any pathway, technology or fuel are comprehended 5 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Basic Principles and Assumptions (2/2) All technologies and pathways assume sustained investment and development –Magnitude of investment needed to achieve the advancements may differ across pathways, and have not been quantified Each vehicle / fuel pathway allowed flexibility to adopt appropriate technologies independent of conventional vehicles No vehicle has mile per gallon lower than conventional vehicle in AEO reference case Transition phase barriers for new technologies and infrastructure are assumed to have been overcome Fuel costs are fully burdened and comprehend all capital requirements and fuel taxes Impact of significant changes in fuel demand on fuel markets not comprehended 6 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Scope of Analysis Changed Two “time horizons” used for total cost of driving: minimizing vehicle + fuel cost for 47,500 miles (“3 year”) and 140,000 miles (“17 year”) –These serve as proxies for initial purchase and useful life of a vehicle Not changed Light Duty vehicle only Electricity grid mix based on AEO10 and all hydrogen from natural gas Concentrated analysis on 2035 and 2050 results 7 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

3 Year vs. 17 Year Analysis Basis for analysis is 3 year minimized cost of vehicle + fuel costs –Discounted mileage associated with 3 years is 47,500 “test” miles - drawn from VCM DoE request to also consider longer term view Took total vehicle lifetime 17 years drawn from DoE Transportation Data Book –Discounted mileage associated with 17 years is 140,000 “test” miles Economic analysis uses these two time horizons for evaluating vehicle and fuel costs DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 8

Specific Input Assumptions AdvantageDisadvantage Liquid ICE Vehicles Lower bound reference source did not include diesel (cost) Plug-in Electric Vehicles Batteries last full life of vehicle -17 years Range degradation is not accounted for in the model AEO10 grid mix (cost) AEO national transportation electricity price (cost) Rapid adoption rate allowed AEO10 grid mix (GHG) No sequestration (GHG) Natural Gas Low and narrow range fuel price All CNG from fossil gas (cost) Rapid adoption rate allowed All CNG from fossil gas (GHG) Advanced Biofuels All ICE engines assumed to be fully flex-fuel capable Light duty fleet takes advanced biofuel first Rapid adoption rate allowed Retail price never lower than gasoline/diesel price (cost) Hydrogen Fuel Cell EV All hydrogen from natural gas (cost) Rapid adoption rate allowed All hydrogen from natural gas (GHG) DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 9

Analysis Approach 10 Ten different output “portfolios” were created to identify and evaluate combinations of variables –All In : All vehicle technologies and fuels available –Liquid ICE : Only conventional gasoline, hybrid, and diesel –Liquid ICE Plus-one (or “First-in” analysis): Incremental add Liquid ICE + CNGV Liquid ICE + PEV (PHEV and BEV) Liquid ICE + PHEV Liquid ICE + BEV Liquid ICE + FCEV Quantifies marginal benefit of adding a vehicle-fuel combination to Liquid ICE –Zero-out Pathways (or “Last-in” analysis): Sequential withdraw All In - CNGV All In - PEV All In - FCEV Quantifies marginal benefit of adding a vehicle-fuel combination to an existing portfolio of all other vehicles-fuels Within each portfolio, technology prices, fuel prices, biofuel supply curve, and availability of advanced biofuels toggled separately Two time horizons: 3yr and 17yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

4 Tech Prices high / low 3 System Tech Prices upper / lower Run, Portfolio and Case Structure 11 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Conventional CNGV HEV PHEV10 PHEV40 BEV100 FCEV Diesel Liq ICECNGVPHEVBEVFCEV PEV All In Liq ICE Liq ICE + CNGV Liq ICE + PEV Liq ICE + PHEV Liq ICE + BEV Liq ICE + FCEV All In - CNGV All In - PEV All In - FCEV 10 Portfolios X Hydrogen Prices high / low Oil Prices high / ref / low Electric Charging home / ubiquitous Biofuel Supply high / low / no adv 8 Toggles Run = 2,988 total cases X Efficiency Tech Prices upper / lower 3 yr / 17 yr Time Horizons

12 Primary Performance Metrics Used In This Report Cost of Driving $/mile: Sum of fuel and vehicle cost of driving for entire vehicle stock –For reference: $0.01 / mile x 5 trillion miles / year = $50b / year in 2050 GHG Total million of metric tonnes of CO2 equivalent –grams CO2 equivalent / mile x VMT (trillions) Energy Diversity Diversity index: Measure of energy source concentration in LDV fleet Total petroleum use (quads, 2035 / 2050) Other Fleet fuel economy: miles per gasoline equivalent gallon (GEGHHV)* –Total VMT divided by total LDV energy use Share of vehicles / fuel type pathways 2035 / 2050 *gasoline equivalent gallon higher heating value (geghhv) = 125,000 BTU DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Shared Systems Across Vehicle Technology Subgroups 2008 Conventional Vehicle (AEO2010) Gasoline CNGV HEV PHEV10 PHEV40 BEV100 FCEV Glider Modification Options Internal Combustion Engine (SI ICE) ICE Gen Set Electric Traction System (ETS) - full ETS - partial Power Battery Energy Battery Power Battery H2 Storage CNG Storage Fuel Cell Sys Gasoline CNG Electricity Hydrogen Elec Infra B Elec Infra A Elec Infra C Vehicle Design Point for initial round of modeling: minimize Vehicle Price + Fuel Cost subject to Vehicle Choice Model parameters Vehicle and Key Subsystems Fuel + Infrastructure VCM Diesel Gasoline CNGV HEV PHEV10 PHEV40 BEV100 FCEV Diesel CI Biofuel SI Biofuel CI ICE 13 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Analysis Tool: Case Display Dashboard 14 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Example #1 – 3yr, all technology prices high, hydrogen price high, no advanced biofuels, Ref Case petroleum prices Note: This is just one example out of 2,988 light duty vehicle cases

Analysis Tool: Case Display Dashboard 15 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Example #2 – 17yr, biofuel volume high, High Case petroleum prices Note: This is just one example out of 2,988 light duty vehicle cases

Analysis Tool: Case Display Dashboard 16 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Example #3– CNGVs withdrawn from market, battery and fuel cell technology prices low Note: This is just one example out of 2,988 light duty vehicle cases

Analysis Tool: Cluster Display Dashboard 17 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Example #1 – 3yr, 2050, All In, High Oil Price, Advanced Biofuels, all technology costs

Analysis Tool: Cluster Display Dashboard 18 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Example #2 – 17yr, 2050, LiqICE+BEV, High Oil Price, No Advanced Biofuels, Low BEV System Cost,

Analysis Tool: Cluster Display Dashboard DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 19 Example #3 – 3 yr, 2050, Low Oil Price, All In, Advanced Biofuels

MODEL RESULTS OVERVIEW PATHWAY SHARES COST OF DRIVING GREEN HOUSE GAS ENERGY DIVERSITY AND OIL USE OVERALL OBSERVATIONS 20 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Overview DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 21

Cases provide a wide range of CO2, $/mile and oil use DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 22 Low Oil Price Reference Oil Price High Oil Price All In – 2050 – 3 year time horizon

Pathway Shares DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 23

24 1. All vehicle / fuel pathways are potentially economically viable, and some new vehicle / fuel pathways can realize significant share ConventionalDieselHEVPHEV10 PHEV40BEV100CNGVFCEV Histogram of 2050 Fleet Share, 3 Year Horizon, All Oil Prices Each pathway has potential to achieve >20% share in some cases DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

25 High Oil Low Oil Electric Vehicle* Fleet Share FCEV Fleet Share CNGV Fleet Share Biofuel Fraction** *PHEV10 + PHEV40 + BEV100 **fractional biofuel (by energy) in LDV gasoline + diesel 2. Oil price has large impact on penetration of alternatives DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

26 3. CNGV has the largest share of the alternatives for all oil prices High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

27 4. Purchase decisions based on 17 years increase share of alternatives High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Results Summary: Pathway Shares DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 28 1.All vehicle / fuel pathways are potentially economically viable, and some advanced vehicle / fuel pathways can realize significant share –Each pathway has potential to achieve >20% shares in some cases 2.Oil price has large impact on penetration of alternatives 3.CNGV has the largest share of the liquid ICE alternatives for all oil prices 4.Purchase decisions based on 17 years increase share of alternatives

Cost Of Driving DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 29

30 1. Oil prices have more impact on total cost of driving than vehicle / fuel technology yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Reflects relative ranges of oil and vehicle / alternative fuel cost inputs *Imported crude oil price in 2008 $/B from AEO2010, extrapolated to 2050 using CAGR from High Oil (200 $/B*) Reference Oil (121 $/B) Low Oil (42 $/B) High Oil (217 $/B*) Reference Oil (157 $/B)Low Oil (42 $/B)

31 2. With reference and high oil prices, alternative propulsion systems and fuels reduce total cost of driving compared to liquid ICE only High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

32 2. With reference and high oil prices, alternative propulsion systems and fuels reduce total cost of driving compared to liquid ICE only High OilReference OilLow Oil yr yr As oil prices rise greater uptake of alternatives can decrease cost of driving relative to liquid ICE portfolio DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

33 3. Portfolios with CNG fueled vehicles contribute significantly to lower total cost of driving when oil prices are high due to low relative fuel cost and high share High OilReference OilLow Oil yr yr 2050 ($/btu gasoline ) / ($/btu CNG ) = 2.1 ($/btu gasoline ) / ($/btu CNG ) = 1.7 ($/btu gasoline ) / ($/btu CNG ) = 0.9 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

34 4. Purchase decisions based on 17 year view results in lower lifetime cost of driving High OilReference OilLow Oil yr yr Buying more vehicle efficiency technology and/or lower fuel cost / mile alternatives (e.g. electricity, H2, CNG) DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

35 5. Achieving lower bound price for vehicle efficiency technologies reduces cost of driving for all portfolios at all oil prices High OilReference OilLow Oil yr yr Vehicle Efficiency Technology Price DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

Results Summary: Cost of Driving 1.Oil prices have more impact on total cost of driving than vehicle / fuel technology –Reflects relative ranges of oil and vehicle / alternative fuel cost inputs 2.With reference and high oil prices, alternative propulsion systems and fuels reduce total cost of driving compared to liquid ICE only 3.Portfolios with CNG fueled vehicles contribute significantly to lower total cost of driving when oil prices are high due to low relative fuel cost and high share 4.Purchase decisions based on 17 year view results in lower lifetime cost of driving –Buying more vehicle efficiency technology or lower fuel cost / mile alternatives (e.g. electricity, H2, CNG) 5.Achieving lower bound price for vehicle efficiency technologies significantly reduces cost of driving for all portfolios at all oil prices –Liquid ICE vehicles are most affected with high oil prices –Of the vehicle efficiency technologies, the uncertainty between upper bound and lower-bound price can be primarily attributed to uncertainties in cost of light-weighting DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 36

Greenhouse Gas DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 37

38 1. Advanced bio-fuels have the most impact on GHG emissions, but volumes are sensitive to oil price High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 50% target Advanced biofuels are not price competitive at low oil prices

39 2. Purchase decisions based on 17 year view (vs. 3 year view) tend to yield lower GHG portfolios High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 50% target

40 3. At high oil price, alternative vehicles/fuels lead to low liquid fuel usage, which limit use of advanced bio-fuel and leads to higher GHG than reference oil High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 50% target

41 4. Some portfolios approach % GHG reduction vs High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 50% target

42 4. Some portfolios approach % GHG reduction vs High OilReference OilLow Oil yr yr The lowest portfolio is a combination of liquid ICE / advanced bio-fuel, and hydrogen fuel cells DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 50% target

43 4. Some portfolios approach % GHG reduction vs High OilReference OilLow Oil yr yr The lowest portfolio is a combination of liquid ICE / advanced bio-fuel, and hydrogen fuel cells DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 50% target LiqICE + PEV, with advanced biofuels, would have met the target if the grid carbon content was 25% below AEO2010

44 4. Some portfolios approach % GHG reduction vs High OilReference OilLow Oil yr yr No portfolios achieve 50% in the 3 year analysis DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 50% target

45 5. CNG benefit GHG when it displaces oil, but not when it displaces advanced bio-fuels High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 50% target

Results Summary: Greenhouse Gas Emissions 1.Significant volumes of advanced bio-fuels have the most impact on GHG emissions, but volumes are sensitive to oil price 2.Purchase decisions based on 17 year view (vs. 3 year view) tend to yield lower GHG portfolios 3.At high oil price, alternative vehicles / fuels lead to low liquid fuel usage which limit use of advanced bio fuel and leads to higher GHG than reference oil 4.Some portfolios approach % GHG reduction vs –The lowest portfolio include combinations of liquid ICE / advanced bio-fuel, and hydrogen fuel cells –No portfolios achieve 50% in the 3 year analysis 5.CNG benefits GHG when it displaces oil, but not when it displaces advanced bio-fuels DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 46

Energy Diversity and Oil Use DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 47

48 Diversity Index (3 year, ) High OilReference Oil Low Oil yr yr 1.High oil price favors penetration of alternatives which increases energy diversity 2.Significant energy diversity improvement can be realized with combinations of three pathways; the impact of All-In is marginal 3.CNG plays a significant role in improving diversification, driving a significant amount of liquid fuels out of the mix DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

49 4. The 17 year view offers marginal improvement in diversity across portfolios, but electric vehicles play a larger role High OilReference Oil Low Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

50 5. High share of alternatives leads to low oil use with many portfolios, particularly in 2050 at high oil price High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Reminder: This study does not analyze the impact of oil consumption on oil price AEO2010

51 6. Purchase decisions based on a 17 year view (vs a 3 year view) reduce oil consumption at all oil prices High OilReference OilLow Oil yr yr DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Reminder: This study does not analyze the impact of oil consumption on oil price

Results Summary: Energy Diversity and Petroleum Use 1.High oil price favors penetration of alternatives which increases energy diversity 2.Significant energy diversity improvement can be realized with combinations of three pathways –The impact of All-In is marginal 3.CNG plays a significant role in improving diversification, driving a significant amount of liquid fuels out of the mix 4.The 17 year view offers marginal improvement in diversity across portfolios, but electric vehicles play a larger role 5.High share of alternatives leads to low oil use with many portfolios, particularly in 2050 at high oil price 6.Purchase decisions based on a 17 year view (vs a 3 year view) reduce oil consumption at all oil prices DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 52

Overall Observations 1.Oil price has significant impact on penetration of alternatives 2.Only portfolios with advanced biofuels approach the 50% greenhouse gas reduction target 3.All vehicle / fuel pathways benefit from low cost of vehicle technology 4.Internal combustion engines remain the primary powertrain technology in most portfolios, with increased diversity of fuel supply (CNG and advanced biofuels) 5.Adding alternative vehicle / fuel pathways reduces cost of driving and increases energy diversity, but does not necessarily reduce GHG –CNG particularly lowers cost of driving and increasing diversity 6.Electric Vehicle portfolios (BEV, PHEV, FCEV) improve diversity in high oil and 17 year views, but do not necessarily improve cost of driving –GHG impact affected by grid mix assumptions DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 53

Analysis Team Next Steps Integrate LD and HD analysis Preparation of process and results documentation DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 54

Backup DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 55

Acronyms / Definitions DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 56 AEO2010 Annual Energy Outlook 2010 Advanced Biofuel Spark ignition biofuel from cellulosic sources BEV100 Battery electric vehicle with 100 miles of real-world range from energy stored on-board via charging Case A single selection of toggles and timeframe within a portfolio C FuelCost Vehicle choice function multiplier for fuel cost per mile C VehPrice Vehicle choice function multiplier for vehicle price CI Biofuel Biofuel for compression ignition (diesel) engines. Includes range of options from biodiesel to “drop-in” fuels Cluster A set of cases chosen for purpose of analysis CNG Compressed natural gas CNGV Compressed natural gas vehicle with 300 miles of real world range Cost of Driving $/mile computed for a given year over an entire fleet of vehicles. Includes vehicle cost and fuel cost elements ETS Electric traction system (power electronics, motor, gearbox) FCEV Fuel cell electric vehicle (fueled with compressed hydrogen gas) with 300 miles of real-world range H2 Hydrogen fuel (compressed gas) HEV Hybrid electric vehicle ICE Internal combustion engine mpg Miles per gallon (gasoline) mpgge Miles per gallon gasoline equivalent PEV Plug-in Electric Vehicle. Term used to refer to PHEV and BEV together PHEV10 Plug-in (parallel) hybrid electric vehicle with 10 miles of real-world range from energy stored on board via charging PHEV40 Plug-in (series) hybrid electric vehicle with 40 miles of real-world range from energy stored on board via charging Portfolio The set of cases generated using a defined set of vehicle-fuel technologies PT Powertrain (engine, transmission, fuel system, exhaust system) RPE Retail price equivalent (end price to consumer) in 2008 $s Run A model run in which results are computed for the full set of possible cases

Acronyms / Definitions DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 57 SI Biofuel Biofuel for spark ignition engines. Includes range of options from alcohols to “drop-in” fuels Test Fuel Economy Fuel economy on test cycle – not adjusted to reflect on-road, real-world driving Test Miles Miles that are paired with Test Fuel Economy in order to correctly calculate fuel consumption Toggle A switch that moves a parameter from one time series to another (ex, lower / base / higher oil prices) VCM Vehicle Choice Model – simulates consumer choice and market share based on utility functions VISION A model developed by ANL that computes fleet characteristics based on vehicle-fuel characteristics and market shares as

Vehicle Choice Model Attributes 58 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

3 Year and 17 Year Parameters DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 59 The Vehicle Choice Model bases vehicle utility on Vehicle Retail Price and Fuel Expenditure A one dollar increase in Vehicle Retail Price has equal impact on utility to a one dollar increase in total Fuel Expenditure across a certain number of miles –47,500 “test” miles (3 Year) or –140,000 “test” miles (17 Year) The basis of these mileage parameters is shown in the box below Regardless of whether the 3 Year or 17 Year parameter is used in the model, the cost of driving metric is always evaluated over the full vehicle lifetime

60 Vehicle Retail Price Equivalent (RPE) Inputs Small car RPE, reference oil price Vehicle Technology Costs High Vehicle Technology Costs Low DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

61 Fuel Cost of Driving in 2035 Components of 2035 Reference Case Fuel Cost (average)Range of 2035 Dispensed Fuel Cost (Average) Low High n/a Wholesale price is transportation sector price minus fuel taxes for gasoline and diesel, transportation sector price for electricity, and industrial NG price for CNG, LNG and H2 (Source: AEO2010) Wholesale price for gasoline and diesel is inclusive of production, distribution and dispensing costs; Wholesale price for electricity is inclusive of generation, distribution and transmission costs Fuel production cost for hydrogen is cost for centralized reforming of natural gas Distribution cost is levelized fixed and variable cost to transport fuel from production facility to dispensing facility Dispensing cost is levelized fixed and variable cost for dispensing fuel Taxes are federal and state taxes. Taxes for CNG, Electricity and H2 are equivalent to gasoline in cents/mile. Taxes for LNG is equivalent to diesel in cents/mile. GEG = Gasoline Equivalent Gallon HHV = BTU/gal Average test fuel economies in mpgeg for vehicles are Conventional (38), Diesel (38), CNG (43), LNG (36), PHEV10 (123 elec; 50 gaso), PHEV40 (128 elec; 45 gaso), BEV100 (148), FCEV (84), HEV (52) Utility factors (fraction of miles on electricity) with ubiquitous supply: PHEV10 = 50%; and PHEV40 = 80% PHEV40 (c/mile) = 0.8*(Cost of electricity c/GEG)/(mpgeg on electricity) + 0.2*(Cost of gasoline c/GEG)/(mpgeg on gasoline) DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

62 Biofuel Supply and Price DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

63 Biofuel Consumption by Oil Price Scenario DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

64 Biofuel Volume Projections at Reference Oil Price DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

65 When high oil price is assumed, gasoline price exceeds biofuel price in 2050, but analysis elevates biofuel price to be equal to the competing gasoline price In the cluster shown below, biofuel consumption is much higher than oil consumption –CNG achieves the highest market share because it has a vehicle + fuel price of $24,000, compared to $26,000 for conventional –If VCM had used biofuel price instead of gasoline price, conventional market share would have been higher DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only High Oil – 3 yr – All In Shares of liquid fuel vehicles impacted in some cases by assumption that SI biofuel pump price equal to gasoline pump price

66 Simpson’s Diversity Index (Energy source diversification) Simpson’s Diversity Index is a simple statistical metric to measure diversity Ranges between 0 and 1; lower value corresponds to higher diversity Simpson Diversity Index (D): where: p i is the fractional share of type “ i ” Applied here as a measure of energy diversification in LDV sector Fractional share of total fuel consumed D= Increasing diversification Illustrative example: More fuel types & increased homogeneity of fuel shares results in lower values of Simpson’s diversity index DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

67 On-road Fleet Fuel Economy (mpgeg) High OilReference Oil Low Oil LDV fleet fuel economy ranges from mpgeg in 2035, and mpgeg in 2050 Slightly lower average fleet fuel economy for LiqICE/CNG, as CNGV displaces HEVs, along with gasoline ICE DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

68 On-road Fleet Fuel Economy (mpgeg) High OilReference Oil Low Oil 17y case shows improvements in average fleet fuel economy at all oil prices, with greater uncertainty “3y” “17y” DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

69 Oil Price Scenarios (AEO2010*) *Extrapolated to 2050 using cumulative aggregate growth rate from DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

70 Tornado for Diversity Index High OilReference OilLow Oil yr yr Baseline: AllTech / Vehicle Technology Cost = High / System Costs = High / H2 Fuel Cost = High / PEV Fuel Cost = Ubiquitous System Cost “NA” shows impact of removing propulsion system from All-in portfolio BioVolume NA shows impact of removing advanced biofuels from All-in portfolio DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only