The Premier Global Eco-Innovation Technology Firm

Clean Diesels, an Economy or Performance Option?

DEER Conference - August 13, 2007

Dean Harlow

President - Ricardo, Inc.

© Ricardo plc 2007

The Premier Global Eco-Innovation Technology Firm

$3.4 Million in DOE R&D Awards

Thank You DOE

“Ricardo is Fuel Economy”

Engine Downsizing - Cooled EGR � Goal: 15% Fuel Economy Improvement

� Partner: GM

Advanced Flex-Fuel Technologies � Goal: Gas-like Fuel Economy with E85

� Partners: Bosch & University of Michigan

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FuelCell

2030

The Premier Global Eco-Innovation Technology Firm

R&D - Technologies for fuel economy, emissions & vehicle electrification

TechnologyPortfolio

Hybrids & FuelCells

Advanced Gasoline Engines

Clean Diesels

Efficient Transmissions

Controls and Electronics

Alternative Fuels

Pass Car T2B2 Diesel Adv Tech Demo Vehicle

Early Concept for Integrated Aftertreatment

Example Ricardo Solutions

2-Stroke/ 4-Stroke Torque Vectoring - Active Steer Engine with Safety Critical Software

H2

H2 O2

H

Fuel Cell

2030

2

H2 O2H2 O2

Hydrogen-Powered Down Sizing & Boosting "Efficient-C" Diesel Vehicle Concept “DI Boost” Hybrid -- world's most

efficient powertrain

Vehicle-to-Vehicle orHybrid Transmission WAVE-RT for FullAdvanced

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Design Infrastructure Electronic Model Based Control Communication Controllers in ECU

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Key Messages / Agenda

� A systems approach is required to meet the Fuel Economyand CO2 challenge

� Ricardo is applying a systems approach to optimizingpowertrain efficiency and Total Vehicle Fuel Economy

� Diesels have a bright future in the US and Ricardo ishelping to deliver the technology that is leading the way – World’s Most Efficient Powertrain – Ricardo “Efficient-C” Diesel Hybrid – Tier2Bin2 Breakthrough – DIESELMAX – land speed record

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Energy Security, Fuel Availability and Low Carbon Fuel Efficient Vehicle Technologies are driving industry investments

Evidence links increased use of fossil fuels with global warming

Oil Pricing up sharply, increasing global demand will increase prices further

Pric

e pe

r Bar

rel

$80

$70

$60

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$10

$0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06

World-wide adoption of low carbon targets

NEDC-Equivalent CO2 comparison

g/km

NED

C E

quiv

alen

t CO

2

50

100

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250

1990 2000 2010 2020

Source: Ricardo Analysis

EU-15

EU Current Rate

CA Car

China Car

Canada Car

Australia

Japan 1300kg

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In the near term, powertrain improvements will remain the most cost effective solution to the FE & CO2 challenge

� Vehicle Down-sizingCost/Benefit Ratio for CO2 Reduction

Cost

CO

2 R

educ

tion

Weight Reduction

Power

train

Other Improvements

Source: Ricardo Internal data

� Restricting Vehicle Use

� Improved vehicle Weight,Aerodynamics and Friction

� Alternative Fuels and Energy

� Improved Powertrain Efficiency

� Each solution has its own merits, and all have a role to play

� However, improved powertrainefficiency will be a main-stay ofshort / medium term fuelconsumption & CO2 reduction

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HYBRIDS

Advanced Gasoline technologies will close the gap with Diesel with Hybrid solutions remaining expensive

Incremental Cost vs. Current Gasoline Unit

CO

2 R

educ

tion

Cost vs. CO2 Reduction for Powertrain Technologies

Source: Ricardo Internal data

0%

10%

20%

30%

40%

50%

60%

0% 50% 100%150%200%250%300%350%400%450%

Diesel Gasoline E4 LDD/Gas Intersection Line

Diesel Hybrids

E4 Diesel

Advanced gasoline

Gasoline LBDI

Gasoline Hybrids

US T2B5 Diesels

E5/6Diesel

Application: 1590kg D Segment Passenger CarDrive Cycle: MVEG-B

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Ricardo “Efficient–C” Diesel Hybrid Demonstrator features the world’s most efficient powertrain, achieving >60 mpg

E -M A C H I N E

FD

Driveshaft

Main

1.6 HDi 90hp Diesel Engine

Driveshaft

Starter-Alternator

5-Speed AMT

Flywheel Clutch

� Powertrain efficiency optimization program � 35% improvement in cycle fuel consumption compared

with 2.0l base vehicle � 0-60 mph less than 13 seconds � 5 km to 10 km electric only range

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Further gains will be achieved by combining powertrain efficiency improvement with vehicle systems optimization

Efficient ~ Low Carbon

Vehicle Conventional

Vehicle

Reduce Power required by

vehicle

ImproveEfficiency ofPowertrain

Reduce Carbon in Fuel

Improved Vehicle Energy Efficiency

Higher mechanical efficiency

Optimised control

Fuel cells/battery electric

Higher combustion efficiency

10-15%

2-3%

5-10% (inc trans)

Marginal v Hybrid

Lower vehicle weight/size

Reduced aerodynamic drag

Energy recovery (hybrid)

<5%

3-5% (high speed)

20-30% (city)

Potential benefit

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Propulsion System Ancillaries Drivetrain Rolling Resistance Aero Drag

Ricardo is uniquely contributing to the systems approach

– Offering OEMs… • “No Compromises” Total

Vehicle Fuel Economyimprovement process

• Independent, unbiasedassessment of most cost effective strategies to meetincreased fuel economystandards across their productportfolios

– Assisting EPA with objectiveapproach to reasonable andachievable future CAFE standards

– Providing Governments strategicinsights on balancing CO2 reduction strategies withregulations and industry/ societalimpact

Energy Flow Analysis

Fuel Usage (ea Gear)

Vehicle Speed (MPH)

Fuel Economy (MPG)

Scientific Simulation Methodologies

Propulsion System Ancillaries Drivetrain Rolling Resistance Aero Drag

Vehicle Systems Approach

Total Vehicle Fuel Economy Process

Ric

ardo

is F

uel E

cono

my

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T2B2 emission requirements dictate a comprehensive and integrated systems approach to Diesel engine optimization

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Control Transient

Response & Robustness

Model based gas path control

Electric actuators w/ feedback

Closed loop MAF/EGR balance

Full closed loop CPEMS

System Objective

Combustion

Low Comp. Ratio (<16:1) Cold start aids

Reduce Combustion

Temperatures Modulated super cooled EGR

Improved FuelMixing

High pressure FIE 2000+ bar

Small bore 8-10 hole Nozzles

Adv. Conventional Combustion (PPCC & FPCC)

Full HCCI (Early Injection)

Boost System Performance & High EGRCapability

Wide flow range VGT Sequential Staged

Mixed HP/LP route EGR

High power/weight ratio Next Generation VGC & S/C

Medium route EGR

Aftertreatment Low Cost IntegratedSolution

SiC CDPF

Urea SCR

Low Cost / Low Inertia DPF

LNT 4-Way Catalyst

Pre-Turbo Cat

Available In Progress High Risk

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Ricardo’s “Tier 2 Bin 2” Diesel Technology Breakthrough

� Research Program with Production Intent

� Goals - Demonstrate on D-class Pass Car:

– Tier 2 Bin 5 without NOx aftertreatment • Bin 5 “Engine-Out” emissions • August 2007 Demo

– SULEV with simplified LNT NOxaftertreatment• Bin 2 “Tailpipe” emissions • December 2007 Demo

� Results:

– Achieved Bin 5 “Engine-Out” emissions – Targets demonstrated with acceptable

smoke and fuel economy

Details at 2:20 pm Today Mark Kuhn - Ricardo

– Further refinement continues

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Diesels are an important part of the solution – penetration will nearly triple to 9% by 2013

Projected US Diesel Passenger Vehicle Sales and Market Penetration

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Truck

Penetration

2005 2006 2007 2008 2009 2010 2011 2012 2013

Other forecasters are even more optimistic: � Bosch forecasts 6% Diesel penetration in the U.S.A by 2010 and 15% by 2015 (over 2.5 mm) � J.D.Power forecast a rise to 10-15+% penetration in North America by 2015 (up to 2.5 mm) � Martec Group forecast 10-12% in North America by 2013 depending on Diesel price vs. Gasoline

www.ricardo.com

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DIESELMAX - 350.092 mph FIA Land Speed Record – high performance while fuel efficient!

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JCB444-LSR Engine

JCB444 Baseline Engine

DIESELMAX • 4.5 mpg @ 350 mph

Bugatti Veyron• 2.8 mpg @ 250 mph

Mini Cooper S• 5 mpg @ 120 mph

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