TRAVERSE CITY, Mich. -- The industry is infatuated with vehicle electrification, but significant improvements are still in the offing for internal combustion engines, a market analyst said at the seminars.
“We’ve been talking about electrification for more than a decade now and still the numbers are quite small,” said Eric Fedewa, senior manager of global market intelligence for Eaton Vehicle Group. “But if you get a breakthrough on the internal combustion engine, as an industry, all the capital is in place there. Between the cost to incrementally change that technology versus the cost of changing to something new ... usually the investment that always wins is capacity in place.”
Fedewa said Tuesday that automakers can still make breakthroughs on gasoline-powered engines even as the industry increases investments on electric and hybrid technology.
“I think you’re going to see headlines of new programs coming to market where they’ve achieved combustion efficiency,” he said.
Automakers have made advances in turbocharging technology that have decreased the size and increased the power of engines. Ford Motor Co., for example, has popularized the technology with its EcoBoost brand. Other companies have developed larger nine- or 10-speed transmissions that have led to mileage gains.
“Everybody is fixated on connected, autonomous and electric, but I think you’re still going to see a lot of progress on conventional combustion engines,” Fedewa said on the sidelines of the CAR Management Briefing Seminars. “There’s a reason we have a billion of these vehicles on the road. They’re durable, the infrastructure’s in place to service and support them and consumers know how to use them. Engineering resources are not being diverted away from internal combustion engines just to focus on autonomy.”
Fedewa said demand will continue to grow for electric and fuel cell vehicles, especially because of government regulations, but so far, that has barely moved the needle on sales.
Although industry sales are plateauing, a number of economic indicators, such as housing starts and consumer confidence, are still strong. That means automakers can still make relatively healthy profits that will fund r&d into new ventures, including mobility.
But he cautioned that car companies should not place all their bets on autonomous cars and other future endeavors.
“The shiny object is what everybody pays attention to,” he said. “But the business really happens on a day-to-day basis making the technology we have today.”