Honda’ Experience And Perspective On CNG Powered Vehicles

Honda’ experience and perspectiveon CNG powered VehiclesIchiro SakaiAmerican Honda MotorDecember 13, 2012MSTRS meeting

Contents Overview Civic GX Technical Achievement Fleet Sale and Marketing Retail Consumer Market CNG Infrastructure and Fuel Quality Summary

OverviewWhy Natural Gas is a great transportation fuel

Circumstances9Nationwide87976 654CNG d Price in per 1000 cubic feetMar. 7, 030020010001992Number of StationsNumber of CNG Stations vs. CNG PriceAs as ofCNG price has dropped sharply and stations have increased gradually

U.S. CNG Station InfrastructureMap LegendPublic and privateCNG Station

4/17/ /0010 1/0/1 01/ /0014/ /0117/ /0110 1/0/1 11/ /0114/ /0217/ /0210 1/0/1 21/ /0214/ /0317/ /0310 1/0/1 31/ /0314/ /0417/ /0410 1/0/1 41/ /0414/ /0517/ /0510 1/0/1 51/ /0514/ /0617/ /0610 1/0/1 61/ /0614/ /0717/ /0710 1/0/1 71/ /0714/ /0817/ /0810 1/0/1 81/ /0814/ /0917/ /0910 1/0/1 91/ /0914/ /1017/ /1010 1/1/1 01/ /1014/ /1117/ /1110 1/1/1 11/ /1114/ /1217/ /121/12Cost per GGERetail Fuel Price Advantage 5.00 0.50 0.00U.S. Average Retail Fuel Prices 4.50 4.00 3.50 3.00 2.50PropaneE85 2.00B99/B100B20 1.50GasolineDiesel 1.00CNGNeed to y.gov/afdc/data/

Technology Pathway Comparisons – CO2100%Technology Pathway Comparisons - CO2Typicalmid-size CarTypical Mid-size Car90%Well to TankTank to WheelsCO2 EVCNGBar for BEV reflects 600 grams CO2e/kWh, which is EPA’s “image” for 2016.Using the GREET model and today’s averages, BEVs exceed HEVs.(1)

Technology Pathway Comparisons – Petroleum ConsumptionTechnology Pathway Comparisons - Energy Security100%90%Relative Comparison80%70%60%50%40%30%20%10% 00%ICEHEVPHEVBEV 0CNG

Natural Gas is a Great Choice Low carbon fuel North American fuel supply Fuel distribution networkestablished (pipelines) Wide range of infrastructurepossibilities High well-to-wheel efficiency Fuel cost gasoline Wide applicability (autos, trucks,buses, forklifts, etc.) SULEV / ILEV / AT PZEV capable Proven performance, known costs Renewable fuel Pathway to hydrogen

Civic GX Technical Achievements

2006 -2012 Civic GX Technology: Fuel Supply SystemPressure RegulatorSingle stage,integral type withlow pressure oil trap filterFuel Tank Composite with aluminum liner Pressure relief device In-tank solenoid valve@3000 psi: 7.2 GGE@3600 psi: 8.0 GGE(GGE gasoline gallons equivalent)InjectorsManual shut-off valveDedicated gaseousfuel injectorsEngine Valve/SeatChanged materials, designed toreduce wear and be compatiblewith CNG, a non-lubricating fuel.Other Key Components Tank pressure sensor Tank temp sensor Rail pressure sensor Fuel temp sensor Fuel shut-off solenoid valve Fuel filters ReceptacleReference:HONDA CIVIC 2006-2010 Service Manual, GX SupplementDedicated components for a practical, safe, and durable system

2006 -2012 Civic GX Technology: Engine and Exhausti-VTEC CNGEngine 1.8LInlet Valve Delay ClosureHigh-output camDelayed closure cam Reduced pumping loss Reduced mechanical loss Improved thermal efficiency Improved HWY FE 15%CR 12.5:1Variable-Length Air Intake ManifoldClosed-Coupled CatalystQuick light-off Complies with AT-PZEVIncrease power by 7%. Combined with 8%increased displacement 15%LAFsensorO2sensorExhaust manifoldintegrated cylinderheadClose-coupled two bed catalystSpecific design improved fuel economy, increased power, and achieved AT-PZEV

Emission Standards Comparison0.40.35NMOGCO (x.1)Grams per mile0.3NOX0.250.20.15-90%0.10.050Light Duty LEV(LEV I)Light Duty LEV(LEV II)Med Duty SULEV Med Duty SULEV Light Duty ULEV(LEV I)(LEV II)(Lev I)Light Duty ULEV LEV II SULEV (All 1/10 ULEV (GX)(Lev II)New Std)

Natural Gas Vehicles – GHG ReductionsWell-To-Wheel GHG Emissions450Tank-To-Wheel (Tailpipe Emissions)-27%Well-To-Tank (Upstream Emissions)-44%400350GHG Emissions WTW3002503012002441502251871480100137509044670CAFE Vehicle28.5mpg391288CNG Vehicle28.5mpggeCivic 38.4mpg2923344Civic GX 37.5mpggeCivic Hybrid58.8mpg220FCX Clarity87.8mpgge192137Using CA Greet Model:Civic GX is a 44% GHG Reduction from the Average US Gasoline Car

Honda Civic Natural Gas - RangeTank Capacity is 8 GGENominal Range is 8 x 38 304 miles (this would runthe car out of fuel.)Real World Range is 7.8 x 30 234 milesOvernight, home refueling (Phill)Fast refueling at public stations (3 to 5 minutes)Comparisons:3X “100 mile BEV”1X Honda Fuel Cell “Clarity”75% of Gasoline Car

Fleet Sales & Marketing

Advertising - Fleet

Honda Civic GX Fleet ApplicationsWorld’s Cleanest Taxi Cab!Parking EnforcementCommunity PatrolPrivate BusinessFederal, State, CountyGovernments

Retail Consumer Market

Examples Incentives Financial Incentives State Incentives – Vary Local municipal and/or air district Buy downs Up to 3,000 rebate Incentives beyond money Environmental stewardshipReduce dependence on oilFree/Preferred ParkingHOV lane access for single occupant

Customer Benefit: Carpool Access Top benefit for CNG customers is carpool lane access. Currently no limit for CNG vehicles in CA.Top Likes of Civic Natural Gas40%Ability to UseCarpool Lane31%50%8%EnvironmentallyFriendly7%9%8%Low Emissions16%8%Clean Engine13%3%5%Handling3%6%Fuel e-occupant use of HOV lanes by alternative fuelvehicles that qualify as Inherently Low Emission Vehicles(ILEVs) and Super Ultra Low Emission Vehicles (SULEVs).EV and CNG vehicles qualify.3%19%Other HOV access for CNG vehicles until January 1, 2015.

Expected to be record highCivic Natural Gas Sales Trend

Civic Natural Gas 3,000 Free Fuel Card Sales PromotionPromotion through:1. Press Releases2. Direct Mail3. Auto Shows (Ride and Drive)4. Social media5. Outdoor billboards6. Customer lead generation for dealers 3000 Free Fuel Card Promotion utilizing multiple marketing channels( 1K Dealers, 1K Clean Energy, 1K AHM) 3,000 Free Fuel Card Promotion Calendar

CustomerofBenefitCost Evaluation with assumption15K mile/year usageInitial running Cost ( )50000Civic GX Payback Periodfor CA Customers4000030000 Condition - Mileage : 15000mile/year- Usage : 240days/year- Gasoline price : 3.50/gal- CNG price : 2.52/gge- Home refueling CNG price : 1.20/gge- Home refueling device price : 2,700(Est.)200000Less than3 years51015Years after purchasePrice increase of CNG vehicle could be recouped by less than 3 years.(not include home refueling equipment)

CNG Price Gap (Public Station vs. Residential)CNG Price Gap between Station and NRIOHTNKSPALACNG Price ( /gge)3.50CNG price gap between station and residential varies among states

CNG Infrastructure / Fuel Quality

Partnership Experience with Home Refueling equipment company NGV buyers . are more receptive if they understand fueling options want convenient and cost-effective refueling synchronized vehicle & refueling unit delivery Fuel Quality (delivered to home) is critical It is necessary to develop fuel quality standard (moisture).

Natural Gas Fuel Production Vs. Processing CapacityNatural Gas Processing Plant Concentration (2004)Concern Point for Highlighted Area: Large amount of Natural Gasproduction and low amount ofprocessing capability.Fuel can be distributed to LDC (localdistribution companies) asunprocessed (Wet) fuel.Increased Shale Gas production(Wet Fuel)

Sampled were taken in above points of public injection stations. (to check formoisture content)

Phill’s maximum dryer capability : 855 ppmVConcern with gas in Ohio & NY is high moisture content. (Gas in Ohio contains moisturethat exceed the Phil Dry Layer capability) Some areas has Shale gas with low moisture content.

Moisture problemDew point line (each moisture level)CNG operation zoneMethane hydrate Generation0.5lb/MMscf25Pressure [M Pa]1.0lb/MMscf302015Methane waterPoint1Methane hydratePoint210300lb/MMscfMethane Ice5With fuel containing10lb/MMscf moisture,methane and water coexist at point 2 andmethane hydrate isgenerated at point 1.0-30-20-10010203040Tem perature [ ]Solenoid get stuck due to methane hydrate generation.Water in a fuel tank suggests that fuel with excess amount of moisture, above CNG fuel standardor dryer capacity of home refueling equipment, is delivered300 450lb (Estimated) 40.0lb 7.0lb/MMscf（Delivered gas）（Home refueling （CNG fuel standard）Equipment dryercapacity）

2012 Civic CNG Owner’s Manual Fuel Quality and Honda Refueling In order to insure that your Civic Natural Gas vehicle receives CNG fuel withquality equal to or above the NFPA-52 and SAE J1616 fuel standards, Hondaonly recommends that your vehicle be refueled at public commercial-grade CNGrefueling station. Public stations offer an approximately five minutes refuelingtime, and the assurance of natural gas quality meeting NFPA and SAEstandards.Public refueling stations use commercial quality filtering and drying equipmentthat helps to assure your vehicle will only be refueled with automotive gradeCNG, meeting the NFPA and SAE standards. Due to the nature of home naturalgas supplies from gas companies, even with filtering and drying equipment, it ispossible to introduce moisture into your vehicle’s CNG tank and fueling system,possibly resulting in damage to the system Moisture damage can requireinconvenient and costly repairs.Due to the wide variation of natural gas quality for home use, Honda does notrecommend the use of home refueling at this time. If you choose to sue a homerefueling device, you should consult with the equipment manufacturer and thelocal natural gas quality of the natural gas at the location the refueling equipmentwith be installed. They may recommend additional filtering and drying equipment,and a schedule for maintaining this equipment to insure delivery of natural gasthat meets the NFPA and SAE standards of fuel quality. It is important tounderstand the quality of fuel not just when it is evaluated, but the range ofquality, particularly moisture content, from the natural gas provider.

Conclusion Natural Gas is very good transportation fuel from energy security(energy diversity). Due to limited refueling infrastructure, Civic Natural Gas Sedan’ssales are limited. But sales have increased in the past a couple ofyears because of low fuel cost, incentives (both monetary and nonmonetary) HOV lane access is regarded as the most attractive. This incentiveshould be maintained unless it hurts the value of HOV lane. Infrastructure availability is critical for further expansion of this kind ofalternative fuel vehicle. Government leadership to develop its networkis desired. Honda’s effort to address the limited fueling infrastructure; homerefueling equipment, is hindered by the fuel quality. Maintaining fuelquality at delivered site (equivalent to or above NFPA-52 or SAEJ1616) is desired. It would be possible that moisture in delivered natural gas is higher thanbefore due to fracking activity.

ContactIchiro Sakaiichiro sakai@ahm.honda.com202-661-4400 (Tel)

2012 Civic CNG Owner’s Manual Fuel Quality and Honda Refueling In order to insure that your Civic Natural Gas vehicle receives CNG fuel with quality equal to or above the NFPA-52 and SAE J1616 fuel standards, Honda only recommends that your vehicle be refueled at public commercial-grade CNG refueling station.