Automakers will adopt 42-volt
electrical systems faster than previously thought because the switch from 14-volt
to 42-volt systems will produce substantial savings in fuel cost and a reduction
in emissions, according to a groundbreaking study released today by Standard &
Poor’s.

The 100-page study conducted
worldwide among vehicle manufacturers and suppliers says the more powerful 42-volt
systems would pay for themselves by enabling fuel consumption savings of 10%
or more with no capital investment

The study also said the
market for the systems, which would improve overall passenger comfort and safety,
will be substantial – 25% to 35% of the light vehicles produced in North
America, Europe and Japan will have 42-volt systems by 2010.

“With a stronger OPEC
pushing oil prices higher, and a global awareness of the need to reduce CO2
emissions, the fuel economy technologies enabled by 42-volt electrical systems
suggest that this is a technology that can benefit everyone,” said Tom
De Vleesschauwer, Senior Consultant of Standard & Poor’s DRI.

Those are just some of the
key findings from the 100-page study, 42 Volts: Implications, Challenges, Opportunities,
which assesses the technical and business implications associated with a move
from 14 to 42 volts and offers the first detailed global production and demand
forecast for 42-volt vehicles. (14 volts is the current standard, i.e., the
amount of voltage from the alternator needed to keep a 12-volt battery charged,
while 42 volts would charge a 36-volt battery)

Automotive electrical system
voltages higher than the present-day standard have been actively studied by
the industry since the 1980s. Researchers recognized that the total on-board
power demand would eventually exceed the capabilities of 14-volt electrical
generators. It became internationally accepted that 42 volts would be the most
appropriate for conventional passenger cars and light trucks.

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To be cost effective, however,
higher-voltage systems and components would have to be adopted in high volumes
quickly, because it was believed that the market would not pay the price for
the higher-voltage components used in only a few applications. Until recently,
many believed that high volumes of higher-voltage systems would be unlikely
since the loads that justified them were expected only in luxury cars.

But Standard & Poor’s
expects that 42 volts will become a self-supporting phenomenon. The benefits
it provides will become prerequisites to satisfying market demand for improved
comfort and convenience and regulatory requirements for reduced emissions and
fuel consumption.

While Renault SA recently
announced it will rollout a model with a combination of 14- and 42-volt power,
in 2004, with a complete 42-volt system not expected until 2007, Standard &
Poor’s predicts that 42 volts will be first applied within the next two years
to vehicles and markets where the benefits it enables will be of greatest value
to the vehicle owner.

Raising the level of comfort
and convenience the automotive industry can offer its customers will force investment
in the new technologies required – particularly motors, heating devices, DC/DC
converters, and electronic devices – to satisfy the demand for a new level of
benefits, according to the report. The 42-volt systems could also permit new
entrants to the automotive industry due to the potential for this significant
change in technology.

Standard & Poor’s believes
that 42-volt systems are here to stay because they are driven by the widely
shared industry aim for improved fuel consumption and emissions reductions.

Following is a production forecast chart based on the Standard & Poor’s
study:

Global Production of
Vehicles with 42-volt Systems to Reach 13 Million

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