Automotive Market TrendsAny impacts & opportunities for Vamac® & Viton® ?

DuPont Performance Polymers ConferenceDuPont Performance Polymers Conference

May 20May 20th,th, 20102010

AlbergoAlbergo CoccaCocca HotelHotel

SarnicoSarnico ((BgBg)) Laurent LefebvreLaurent Lefebvre

European Automotive Industry : The "Engine of Europe”

Introduction

3

Global Challenges for OEMs

Source Daimler

4

♦Automotive trends

� Fuel price & consumption

� Gas Emission reduction

♦Possible ways to reduce gas emission

� Engine downsizing + Turbo

� New technologies

� Emergence of biofuels

� New lubricants

Agenda

5

Fuel - Crude Oil Price

World Crude Oil Price on April 30th 2010 = 84 $ / Barrel

6

Fuel Consumption

• Transportation is the largest consuming sector of petroleum & the oneshowing the greatest expansion.

• In 2008, 13.7 million barrels per day of petroleum products were consumed for transportation purposes, accounting for 70 % of all petroleum used.

U.S Petroleum consumption by Sector

7

Worldwide CO2 Gas Emission

8

Global Emission Regulations for light vehicles

9

Source ACEA 2007

European automotive emission standards

NOx and PM emission standard for Diesel Engines

Euro 3

Euro 4

Euro 5Euro 6

Euro 2

0

20

40

60

80

100

120

0 100 200 300 400 500 600 700 800

NOx (mg/km)

PM

(m

g/k

m)

10

European automotive CO2 emission trends

11

Gas Emissions

evaporative

exhaust

Yearly average value

57%

43%

source: Ton Cackette, CARB, 4. April 2006

It’s not only Exhaust Gas !!!

According to U.S. Environmental Protection Agency:Evaporative loss is the No 1 Contributor to Total Hydrocarbon Emissions from Cars on Hot Days

12

Evaporative emission regulations in USA

Air Intake Manifold Gasket

Material mainly used

13

�Engine downsizing + Turbo

�New technologies

�The emergence of biofuels

� New lubricants

Possible ways to reduce emissions

14

Engine Downsizing – European market

Automakers are removing cylinders and lowering the displacement of their engines to meet tougher CO2 emissions rules that take effect in Europe in 2012.

Fiat to Offer 500 Minicar Fitted With 2-Cylinder 0.9 L 85 Horse Power Turbo Gasoline

15

Why turbocharger ?

TURBOCHARGED engines used compressed air allowing more air at higher temperature

in the combustion chamber.

Consequences are:

• boosted performances: getting the best available output from more power from smaller

better performing engines

• lower levels of particles in diesel engine emissions

• better control of NOx emissions

In addition, it can increase fuel economy as heat loss & friction increase drastically with

increases in engine size

TURBOCHARGING coupled with high pressure fuel injection makes combustion more

thorough, more efficient and therefore cleaner

Sourcesjust-auto.com

Honeywell Technologies

16

Auto Turbo Market Trends / Europe

EU Light Vehicle Engine Production Forecast

(CSM auto database - Jan 2010)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Year

Nu

mb

er

of

en

gin

es

Total Turbo Engines

Total All Engines

European Light Vehicle Turbo Engine Production Forecast

(CSM auto database -Jan 2010)

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

YearN

um

be

r o

f tu

rbo

en

gin

es

Total Turbo Gasoline

Total Turbo DieselGrowing Market

-4%

-19%+11%

+15%

+18%

+10%+10%

+5%

•Turbo Diesel is a mature market in Europe

• Turbo Gasoline is a strong growing market

exhaust gasesTurboCharger (TC)

17

Global Auto Turbo Market Trends

• EU is leading the global auto turbo market

• Is turbo engine short term forecast outside EU too pessimistic?

• Turbo technology is a dynamic & attracting market !!!

Regional Light Vehicle Turbo Engine Production Forecast

(CSM Automotive Database- Jan 2010)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015Year

Nu

mb

er

of

turb

o e

ng

ine

s b

y r

eg

ion

Total All turbo engines in South America

Total All turbo engines in North America

Total All turbo engines in Japan

Total All turbo engines in APEJ

Total All turbo engines in Europe

Turbo Manufacturers : Garrett, Borg Warner, Holset, Ishikawa, Mitsubishi, ToyotaNew comers : JV Bosch/Mahle, Daimler

18

Evolution of Technical Requirementsfor Turbo Hoses in diesel vehicles

Sourc

e: V

alé

o, G

arr

ett a

nd B

org

Warn

er

Charge air

cooling power (kW)

Turbocharging

pressure (bars)

���� The trend to higher compressed air pressure is confirmed with current

level at 2.5 bars, inducing a temperature of 205 °°°°C���� Twin-Turbo still limited to a very small number of top-class vehicles

35

30

25

20

15

10

5

40

Indir. injection dir. injection EURO 4 EURO 5 EURO 6 1990 2000 2005 2009 2014

3.5

3.0

2.5

2.0

1.5

1.0

0.5

bars

�

�

�

�

�

�

�

�

10 kW

15 kW

22 kW

30 kW

1.5 bar

1.9 bar

2.5 bar

3.5 bar

NO TURBO

4.0

130 °°°°C

165 °°°°C

205 °°°°C

250 °°°°CDouble

TURBO

Power (kW)

low

tem

peratu

re

mediu

m

tem

peratu

re

high

tem

peratu

re

Hot side

19

Elastomers choice for Turbo Hose

220

200

180

160

140

120

100

240

Lowte

mpera

ture

s

High te

mpera

ture

s

ECO

135 °°°°C(150 °°°°C)

AEM

140-165 °°°°C(180 °°°°C)

Mediu

m te

mpera

ture

s

HT ACM

170-180 °°°°C

(190-200°°°°C)

FKM/VMQ

200-220°°°°C(230°°°°C)

Low temperature

turbocharger hose

with CM, CR,

NBR

Cost of the part

Temperature (°°°°C)

FVMQ/VMQ

180-200 °°°°C(210°°°°C)

HT AEM

170-180 °°°°C

(190-200°°°°C)

Cold side turbo hose Hot side turbo hose

20

�Engine downsizing + Turbo

�New technologies

�The emergence of biofuels

�New lubricants

Possible ways to reduce emissions

21

So

urc

e:

gre

en

carc

on

gre

ss.c

om

/em

issio

ns for particle reduction :

High pressure

diesel fuel injection

Injection Combustion

Optimization ofthe combustion

chamber

Diesel particle filter

New technologies to limit emissions

22

Sensor Hoses for Diesel Particle Filter

Hose made of Vamac®

�Sensor hose between pressure sensor and DPF

�Temperature and exhaust gas

�Materials used : FKM, FKM/VMQ, VMQ, AEM

23

So

urc

e:

gre

en

carc

on

gre

ss.c

om

/em

issio

ns

for NOx destruction :

Exhaust gas treatment (with urea addition)NOx catalyst

New technologies to limit emissions (con’t)

AdBlue® system is generating new applications for elastomers & thermoplastics

24

Why AdBlue® System ?

25

Selective Catalytic Reduction (SCR)

26

New technologies to limit emissions (con’t)

There are emission control technologies currently available to enable

compliance of diesel motor vehicles to the next level of requirements

So

urc

e:

gre

en

carc

on

gre

ss.c

om

/em

issio

ns

for NOx reduction :

Increased recirculated gas in EGR (Exhaust gas recirculation)

High pressure direct gasoline injection

27

Exhaust Gas Recycling Loops

High Pressure Loop (HPL) Low Pressure Loop (LPL)

Engine Engine

HPL

LPL

20% max. of EGR 50% max. of EGR

70% max. of Exhaust Gas Recirculating

Turbo Turbo

High PressureHigh Temperature (> 200°C)Mainly metal pipes

Low PressureLow Temperature (< 150°C)Mainly flexible rubber / plastic tubes+ rubber seals

EGR loops should bring new applications for elastomers & thermoplastics in a near future

28

Blow-By Gas is a leakage flow between the piston and the cyclinder wall

originated through the pressure difference between combustion chamberand the crankcase. Blow-By Gas accumulates with oil & fuel particles.

In the past, Blow-By Gas was released into the

environment. Nowadays, only closed crankcaseventilation systems are allowed.

Blow By Gas composition varies and depends on :

*engine types, fuel or diesel engine (fuel more critical)*engine performance and management*driving style (speed, r.p.m, number of cold starts)*design of ventilation (dead areas, air volume flow)

Closed Crankcase Ventilation System

Blow-By Gas Origin

29

Air management: more acids in the future ???

Exhaust Fresh air

Inletmanifold

Turbocharger

Exhaust manifold

Air filter

Intercooler

‚Cold‘ hose between IC and AIM

Vacuum tube (molded) or shortconnector between air filter and

turbo charger

Crankcase ventilation hose forclosed PCV system

„Hot“ hose between turbo and intercooler

AIM seals

EGR & Blow-by contact with Euro 6

EGR contactwith Euro 6

EGR contactwith Euro 6

Blow-by gascontact with Euro 4

EGR contactwith Euro 4

30

Summary – New Technologies

It is widely believed that these solutions

should prove largely sufficient for the majority of OEMs to reach Euro VI phased-in compliance from 2012.

31

Hybrids & Electrical vehiclesAuto battery cables insulated with Vamac®

Vamac® ethylene acrylic elastomer (AEM) has been chosen by Huber + Suhner AG, Switzerland, a leading supplier of automotive cable systems, as insulation for battery cables supplied to Fiat, Ford, Jaguar, GM/Holden and Renault, and also to insulate screened cables for hybrid prototypes and the fully electric Tesla Roadster.

Vamac® AEM was specified mainly because of its high temperature and fluids resistance in tough automotive operating environments from -40°C to +150°C, involving hot motor and gearbox oils, battery acid, salt water and cleaning solvents, and for its flexibility and abrasion resistance in confined spaces. In addition, the compatibility of Vamac® with fillers or flame retardants, and ease of cross-linking with electrons, were other important selection criteria.

The move to hybrid vehicles

RADOX battery cables with Vamac® have become standard equipment at Fiat, Ford, Jaguar, Renault, and the Holden Division of General Motors. Now, in the transition to hybrid motor technology, Huber + Suhner are working closely with GM in the USA and selected European OEMs to supply screened battery cables for hybrid prototypes, several of which are expected to go into serial production soon.

The company has also won an assembly project for Tesla Motors Inc. to provide screened and non-screened battery cables with insulation of Vamac® for its groundbreaking Tesla Roadster — claimed the first production battery electric vehicle to travel more than 200 miles per charge, and with zero tailpipe emissions. Huber + Suhner will shortly supply cables for the Tesla Model S all electric family sedan as well.

32

�Engine downsizing + Turbo

�New technologies

�The emergence of biofuels

�New lubricants

Possible ways to reduce emissions

33

New Environmental legislationNew Environmental legislation

Driving down both vehicle exhaust & evaporative emissions

Driving the use of oxygen-containing fuels & Biodiesel

���� Ethanol

� E6 & E85 in favor in California, E10 & E85 in rest of USA

� E10 in Europe, India and China

���� Oxygenates

� MTBE has been legislated out in the USA, but still used in Europe

� ETBE and Methanol as well

���� Biodiesel (B5 to B20)

� Improves diesel fuel emissions

� Reduces diesel engine wear (inherent lubricity of FAME’s)

Environmental regulations are becoming global in scope

34

Europe & EurasiaBiodiesel: 4 to 76 Billion litres (2020)

Focus on Biodiesel RME + import from Asia� pure biodiesel: EN 14214� for blends: EN 590 ���� B7 to B10

Source: Dept of Energy and DuPont/BP estimates

Asia PacificBiofuels: 7 to 114 Billion litres(2020)

90% Ethanol ex corn & sweet potatoes (E10)10% Biodiesel ex jatropha & palm oilIn China: B5 & B10 (not yet normalized)

North AmericaBiofuels: 16 to 114 Billion litres(2020)

90% Ethanol ex sugar cane10% Biodiesel ex soya (SME) & sunflower� pure biodiesel: ASTM D975� for blends: ASTM D6751

���� B5 common���� B10 & B20 available

South AmericaBiofuels: 15 to 27 Billion litres (2020)

Ethanol ex sugar cane: E10 to E97� pure biodiesel: DOU25062007� for blends: DOU05112007

� B2 to B5

BioBio--Fuels Trends by RegionFuels Trends by Region

35

Example : Biodiesel feed stocksExample : Biodiesel feed stocks

Jatropha

Rapeseed

Palm & Coconut Canola Sunflower

AlgaeKelpSoybean

36

Environmental Benefits of Biofuels

�Reduce the CO2 emission (less greenhouse effect) compared with pure gasoline/diesel�Biodiesel is bio-degradable and non-toxic product�Biodiesel is a renewable energy source �Reduce our dependence on fossil fuels

Greenhouse Gas Emissions : Biofuels compared to conventional fuels

Source: “Bilan énergétiques et gaz à effet de serre des filières de production des biocarburants”

Price Waterhouse Coopers / Institut Français du Pétrole

0

20

40

60

80

Gra

m o

f C

O2

/ M

J

- 70%- 60%

Gasoline

Ethanol e

xwheat

ETBE ex

wheat

VOME e

xra

peseed

Ethanol e

xsugar beet

ETBE ex

sugar beet

Diesel f

uel

VOME e

xsunflo

wer

37

List of FKM applications in Fuel System

• Fuel Filter Seal

• Fuel Injector O-ring• Fuel Rail Seal

• Quick Connect O-ring

• Filler Neck Hose• Fuel Vapour Line• Fuel Return Line

• Fuel Tank Valve Seal• Fuel Sender Seal

• Fuel Cap Seal

38

�Engine downsizing + Turbo

�New technologies

�The emergence of biofuels

�New lubricants

Possible ways to reduce emissions

39

Automotive lubricant composition:

- base oils (75% to 85 %) : mineral or semi-synthetic or FULLY SYNTHETIC

- package of additives (15% to 25%) : viscosifiers, anti wear, antioxidants, detergents, corrosion inhibitors, dispersing agents, anti-foaming agents, alkalinity, anti freeze agents, extreme pressure agents

Automotive Engine Oils

40

New lubricants

�Lubricants classified 0W20, 0W30 & 5W30 (fuel economy) & low SAPS* oils to meet EURO V standards (including diesel particle filter technology)

�Higher market share for automatic transmissions in Europe, Transmission systems with more gears (e.q. VW 7-speed transmission) using new synthetic ATFs (Dexron VI)

*SAPS = last generation lubricants based on Low Sulphated-Ash, Phosphorus and Sulphurtechnology fully compatible with diesel particle filter

New engine oil with Euro V

41

Cylinder(Engine Block)

Cylinder Head

Oil Pan

Cylinder Head Cover(Rocker Cover, Cam Cover)

Engine Composition – Static Seals & Gaskets

Oil Filter

4. Rubber Gasket

3. Rubber Gasket

4 main engine static rubber seals & gaskets:

2. Rubber Gasket

1. Rubber Gasket

Additional engine static seals & gaskets : • Front cover gasket• Oil filler cap seal• Oil drain plug• Grommets

NBRAEMACMLSR

NBRHNBRAEMACMFKM

NBRAEMACM

NBRHNBRFKM

42

Trends: More aggressive fluids in the engine and in the engine oil:

- New synthetic oils for fuel efficiency & higher temperature exposure- Higher level of Blow-by and EGR acid condensates- Presence of fuel/biofuel in engine oil

New opportunities in engine seals for High Performance Elastomers (=FKM, AEM, HT-ACM): Cam Cover, Front Cover, Oil Pan, …

Trends in Engine Static Seals & Gaskets

•Heat resistance > 135°C•Low temperature ( -30°C to -40°C)

•Oil resistance (low viscosity)

•Sealing performance(Compressive Stress Relaxation)

43

Conclusion: Auto Market Dynamics & Trends

Trend: Replacement of low to medium performance elastomers by High

Performance Elastomers (FKM, AEM, HT-ACM)

Oil Resistance% Swell in IRM 903 Oil

No Req 170 120 100 80 60 40 20 10

Butyl

HeatRes.70 hrs

70

100

125

200

225

250

Styrene ButadieneNatural Rubber

Neoprene

Vamac®

Viton®

Silicone

EPDM

Fluorosilicone

Polyacrylate (ACM)

HNBR

Epichlorohydrin

NBR

NBR/PVC

CPE

V Solutions SpaceSealing & Hose Applications

HiTemp-ACM

150

175

165

Applications with

min. temperature

requirements of

165 degrees

Applications

with reduced

swell

- V Solutions products are well represented in the ‘150°C and plus’ – area - Vamac® & Viton® offers excellent performance for new requirements

44

The information set forth herein is furnished free of charge and is based on technical data that DuPont believes to be reliable and falls within the normal range of properties. It is intended for use by persons having technical skill, at their own discretion and risk. This data should not be used to establish specification limits nor used alone as the basis of design. Handling precaution information is given with the understanding that those using it will satisfy themselves that their particular conditions of use present no health or safety hazards. Since conditions of product use and disposal are outside our control, we make no warranties, express or implied, and assume no liability in connection with any use of this information. As with any product, evaluation under end-use conditions prior to specification is essential. Nothing herein is to be taken as a license to operate or a recommendation to infringe on patents.

Caution: Do not use in medical applications involving permanent implantation in the human body. For other medical applications, discuss with your DuPont customer service representative and read Medical Caution Statement H-50103-3.

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