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Flexible-fuel vehicles capable of using E85 could grow to more than 9% ar

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LEXANDRIA, VA – The growth of vehicles running on alternative fuels will accelerate over the next decade, but diesel fuel- and gasoline-powered vehicles will continue to dominate market share, according to “Tomorrow’s Vehicles: What Will We Drive in 2023?” a new report released today by the Fuels Institute.

 

 

For light-duty vehicles (passenger vehicles and light trucks), gasoline-powered vehicles will continue to dominate the market, although overall market share could decline from 93% in 2012 to as low as 82% of vehicle inventories in 2023. Diesel-powered vehicles will potentially comprise nearly 7% of the market while flexible-fuel vehicles capable of using E85 could grow to more than 9% of the market.

 

 

Meanwhile, for medium- and heavy-duty vehicles (commercial vehicles like trucks and buses), diesel-powered vehicles will prevail, representing at least 94% of the vehicle fleet in 2023.

 

 

“On the surface, it may not seem that significant change is occurring, because gasoline and diesel fuel-powered vehicles will continue to dominate the vehicle fleet in 2023, but alternatives are gaining traction,” said John Eichberger, executive director of the Fuels Institute. “Consumers appear to be more open to alternatives than ever before and vehicle manufacturers are offering a wider variety.”

 

 

Given that there are more than 250 million vehicles on the road today, it will take years of strong sales of alternative fuel vehicles to reshape the country’s vehicle fleet. In addition, a variety of developments — including cost reductions for alternative-fuel vehicles, conveniently available refueling options, expanded vehicle range and overall consumer familiarity and confidence with new fueling options — will need to occur before alternative-fueled vehicles can capture significant market share.

 

 

“We need to ask — and answer — some tough questions so that the vehicles and fueling markets can develop together and convert consumers to new type of vehicles, said Eichberger.”

 

 

The Fuels Institute, founded by the National Association of Convenience Stores (NACS), is a non-profit, research-oriented think-tank dedicated to evaluating the market issues related to consumer vehicles and the fuels that power them. It commissioned Navigant Research to provide a forecast of the vehicles market through 2023 that captures approximately two generations of vehicle development, providing a reliable look into the future but not reaching so far into the future as to be rendered unreliable.

 

 

Gasoline Will Dominate the LDV Market

 

 

The report forecast the makeup of the vehicle fleet in 2023 based on two scenarios: a “base case” that incorporates current forecasts and an “aggressive case” that assumes more robust world economic conditions that further spurs demand and prices for petroleum products.

 

 

In both projections, gasoline-powered vehicles will continue to dominate the LDV market but lose significant market share, dropping from 93.2% of LDVs on the road in 2012 to between 82.6% to 86.0% in 2023. This decline in market share is driven by a shift in the sale of new vehicles, with gasoline-powered vehicles’ share of sales falling from 83.4% in 2012 to between 67.6% to 78.9% in 2023, a potentially dramatic change in consumer purchasing behavior.

 

 

Diesel Fuel Will Gain LDV Share and Maintain Medium and Heavy-Duty Share

 

 

Diesel-powered vehicles are expected to see strong growth in the LDV market, growing from 2.0% of all LDVs in 2012 to between 3.7% to 6.7% of the LDV fleet in 2023. This surge in market share will be led by the sales of new vehicles hitting the market. Diesel-powered LDV sales are expected to comprise between 7.2% to 17.8% of new LDV sales in 2023.

 

 

With respect to medium- and heavy-duty vehicles (M/HDV), diesel fuel will see a slight decline, with its market share dipping from a near-ubiquitous 99.4% in 2012 to between 94.6% to 97.5% in 2023. The primary competition to diesel fuel in the M/HDV market will be natural gas.

 

 

Even With Dramatic Sales Increases, Others Will Lag Behind

 

 

Despite increased attention from policymakers and public-opinion leaders, there are many hurdles to overcome before a robust market emerges for other types of vehicles. But some growth in the next ten years is projected:

 

 

Flexible-fuel vehicles: Flexible-fuel vehicles (FFV), which can use both gasoline or E85, show the most promise for growth. In 2012, only 4.7% of LDVs were flexible-fuel vehicles; however, automaker production is forecast to double FFV’s share of the market to 9.3% of the fleet by 2023. However, the potential for this alternative fuel is tempered by lackluster existing demand and limited availability of E85.

Natural gas vehicles: The number of light-duty natural gas-powered vehicles (NGV) is expected to see at least a ten-fold increase over the next decade, but will still only represent 0.43% in the aggressive case. However, in the M/HDV market, compressed natural gas is projected to capture up to 3.8% of the market in the aggressive case. The high cost of installing natural gas facilities at retail and the cost of vehicle conversion or production will be factors limiting additional growth by 2023.

Propane-vehicles: Propane-powered LDVs are expected to double market share, but will grow from only 0.04% to 0.07% of all LDVs by 2023. For M/HDVs, propane is currently the second-most-popular option after diesel fuel, capturing 0.38% of the market in 2012. However, its growth is considered limited to mainly medium-duty vehicles and will account for no more than 0.76% of the M/HDV fleet in 2023.

Battery-electric vehicles: Unless there are significant breakthroughs in battery-charging technology, battery-electric vehicles (BEVs) will not break out of the niche category of LDVs over the next decade. Even with a projected 22- to 26-fold increase in annual sales over the next decade, BEVs are forecast to be no more than 0.72% of the LDV market in 2023.

Fuel cells: Fuel-cell vehicles (FCVs), electric vehicles that use an external fuel source like hydrogen, are also expected to remain a niche category. Sales are expected to increase significantly over the coming decade, but the reality is that there were only 500 FCVs on the road in 2012. Even in the most aggressive forecast, registrations are only expected to reach 70,000 vehicles — 0.02% of the LDV market — in 2023.

“Without coordination between the vehicle and fueling industries, successful market introduction of these systems will be characterized by starts and stops, booms and busts and a protracted — and potentially painful — market development phase that may or may not result in consumer acceptance,” said Eichberger. “Consumers have more vehicle options than ever and where they choose to invest their money will determine the future.”

 

 

The Fuels Institute’s governing structure incorporates a diverse set of stakeholders including, but not limited to, fuels retailers, fuels producers and refiners, alternative and renewable fuels producers, automobile manufacturers, environmental advocates and consumer organizations. It will continue to commission and publish comprehensive, fact-based research projects that address the issues identified by the affected stakeholders. These projects will help to inform both business owners considering long-term investment decisions and policymakers considering legislation and regulations affecting the market.

 

 

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Founded in 1961 as the National Association of Convenience Stores, NACS is the international association for convenience and fuel retailing. The U.S. convenience store industry, with more than 149,000 stores across the country, posted $700 billion in total sales in 2012 and sells more than 80% of the motor fuels purchased in the United States. NACS has 2,100 retail and 1,600 supplier member companies, which do business in nearly 50 countries.

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The number of vehicle makes and models is increasing, with many Audi vehicles now flex fuel, all Bentley vehicles flex fuel, as well as Jaguar, Land Rover, Toyota, and Nissan now in the mix. But the concept that continues to baffle me is this - if every FFV currently on the road in the country ran on E85, the RFS would be satisfied... there would be little need to blend ethanol into regular gasoline.

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But the concept that continues to baffle me is this - if every FFV currently on the road in the country ran on E85, the RFS would be satisfied... there would be little need to blend ethanol into regular gasoline.

 

 

There you go ..thats' the line of thought that we need.. Look how the H can we have  a Ethanol Mandate ..but Not have a Mandate for the Vehicles to be able to run on it?

 

 

 

 

If every vehicle coming off the line  the past 10 years had been FFV .. the Ethanol Industry wouldn't be in this position of being stuck at E10..

 

 

Stopping E15 in it's tracks is the best thing that can happen for E85..it means if the Industry is serious about expanding Market share they will do what is necessary to get FFV's and E85 installed..

 

 

We will never have a E15/E20 base until every car on the Line is coming off the assembly line as a FFV base ..pretty obvious where their lobbying $$$$ and effert needs to go.

 

 

They want high volume additive ethanol (E15/E20) and we want ethanol as an alternative fuel E85 .. Got to have every vehicle not just capable but certified to be able to run on E15-E85

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Part of the problem is people. The guy that just applied my anhydrous ammonia is a big farmer and a big proponent of ethanol. He was telling me that he could never get his 85 year old dad to even use E10. And now his wife drives by a blender pump going to work everyday and he's asked her to put E85 in her flex fuel Explorer but she won't do it. He's pretty disappointed. He says he can't get the cost per mile to soak in.

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Part of the problem is people. The guy that just applied my anhydrous ammonia is a big farmer and a big proponent of ethanol. He was telling me that he could never get his 85 year old dad to even use E10. And now his wife drives by a blender pump going to work everyday and he's asked her to put E85 in her flex fuel Explorer but she won't do it. He's pretty disappointed. He says he can't get the cost per mile to soak in.

 

 

And that's a real shame .. it's frustrating in that he says he supports ethanol.. as long as they are buying his corn.. but not enough to actually use it...E85

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I sometimes think it's a power struggle between husband and wife. I had another instance a few years ago--- I was talking up ethanol and a lady said her farmer husband told her to put ethanol in her Tahoe. She said to me " I'm not putting that crap in my car". I said do it for your son then, to help the corn price since he farms too. I eventually saw her putting E10 in.

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