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    New Vehicle Technology Takes Decade to Reach Market Saturation

    Fuels Institute studies E25 and fleet turnover rates.

    ALEXANDRIA, Va. — Advancements in the vehicle industry will take time to take hold in the market, according to a recent report.

    The Fuels Institute's "New Technology Adoption Curves: A Case Study on Delivering E25-Capable Vehicles to Market" shows that it would be highly unlikely for a new vehicle powertrain optimized to operate on a gasoline blend containing 25-percent ethanol (E25) to achieve 20-percent market share by 2025, due directly to fleet turnover rates.

    "To signal the fuels market to make a new fuel product broadly available, there must be a realistic expectation that demand will be sufficient to support the retail and distribution investments," said Fuels Institute Executive Director John Eichberger. 

    "For this project, we selected a 20-percent share of vehicles on the ground to represent that signal. The study found that it would likely take many years, combined with very strong sales of these new vehicles in their first years on the market, to achieve this level of market penetration."

    The study, prepared by Navigant Research, calculated how many of these new vehicles must be sold each year to reach 20-percent fleet share by 2025 if the vehicles were first offered for sale in 2018, 2020 or 2022. 

    According to the report, in each scenario, vehicle sales in the first and subsequent years must be significant to achieve the model's established targets. First-year sales of E25-capable vehicles would have to total 629,000 if introduced in 2018, 1.3 million in 2020 and 3.8 million in 2022. 

    The ramp up in sales in subsequent years required to achieve 20-percent market share is equally significant.

    "Because the existing light-duty fleet in the United States is so large, it will take a considerable amount of time for any new technology to reach market saturation," Eichberger said. 

    He added the report does not consider any elements — such as automaker production schedules, regulatory approval requirements or other market introduction steps — other than sales and fleet turnover.

    "While we analyze E25-capable vehicles in this case study, the findings are applicable beyond E25," Eichberger said. "It does not matter what technology or powertrain is being contemplated, as every change to the fleet will take time to affect the market."

    To download "New Technology Adoption Curves: A Case Study on Delivering E25-Capable Vehicles to Market" click here.

    The Fuels Institute is dedicated to evaluating issues affecting the vehicles and fuels markets. It was founded by NACS, the Association for Convenience & Fuel Retailing in 2013.

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