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Why ICEs will be relevant well into the 21st century

In an exclusive to Just Auto, HORSE CEO Patrice Haettel sets out the rationale for continuing investment in ICE technologies

David Leggett July 22 2024

Headquartered in Madrid, HORSE Powertrain Solutions is a joint venture between Renault and Geely focused on developing low emission internal combustion engines (ICEs). It has already unveiled range extender powertrains as a central part of its offering. In an exclusive to Just Auto, HORSE CEO Patrice Haettel sets out the rationale for continuing investment in ICE technologies.

Throughout the early 2020s, there’s been recurring talk of a full-on global phaseout of internal combustion engines (ICEs). Generally, however, I don’t believe such a phaseout is practically on the cards – in fact, I believe at least 50% of vehicles sold by 2040 will still contain ICEs.

There are three major reasons why we should expect the ICE to enjoy a long and healthy future: differing regional economic needs, the pipeline of investments in alternative fuels, and the need to support the existing vehicle parc.

Urban vs rural mobility

According to the International Energy Agency, 85% of all global EV sales still take place in markets that contain the world’s densest collections of built-up urban areas: China (60%) and Europe (25%). This is because dense, urbanised areas are the most affordable markets to install the charging infrastructure required to power non-ICE vehicle parcs. However, the world is vast and consists of more than just urban hubs.

This is why hybrid vehicles (HEVs) and plug-in hybrid vehicles (PHEVs) are emerging as a preferred choice for rural markets, where electrified areas can be separated by stretches of hundreds of kilometres. For the rural world, universal access to charging infrastructure for non-ICE mobility isn’t practical.

As a result of this economic and environmental geography, ICEs are set to have a role to play in rural regions for many years to come. And even in heavily electrified and developed markets, maintaining key urban-rural economic links means that ICEs will have a role to play in the vehicle parc. This is reflected in many consumers flocking to the flexibility offered by hybrids in markets like Europe – the European Automobile Manufacturers’ Association reports that HEV sales grew by over a third year-on-year, making them the continent’s fastest-growing vehicle category.

Alternative fuels and ICEs

Rural economies know how their geography is best suited to ICE vehicles. That’s why many of them have built their sustainability strategies around alternative fuel solutions for ICEs, such as flex fuels or biofuels.

Brazil serves as a compelling case-in-point: currently, 80% of its new vehicle sales are powered by low-emission bioethanol ICEs. This makes total sense for Brazil: along with being large and ruralised, it also is one of the world’s largest sugarcane and ethanol producers. For this reason, Brazil has invested decades into biofuel innovation and technology leadership – resulting in a low-emissions, ICE-powered vehicle parc.

On a global scale, biofuels and bioethanol are exploding in demand. In 2028, global biofuel demand is set to rise by 23% from 2023, to 200 billion litres. This trend is already manifesting in various regions, such as India, which is slated to implement a new 20% bioethanol fuel standard next year.

Concurrently, the world is witnessing a concerted trend towards exploring alternative energy sources, exemplified by substantial investments in green hydrogen and e-fuels. Along with private investors, states are also banking on new fuels for the future of mobility: last year, the EU invested €352 million in alternative fuels infrastructure for the continent’s transport network. Such investments in alternative fuel innovation and infrastructure are predicated on continued global use of ICEs for decades to come.

The different needs of urban and rural areas mean that a one-size-fits-all approach implicit in an ICE phaseout simply does not work.

Fleets and ICEs

The transportation industry encompasses more than just passenger cars, with over 300 million trucks and buses worldwide relying on ICEs. These vehicles serve vital roles in transporting goods and people. Heavier vehicles and machinery also represent significant capital investment by their owners, many of which have decades of operational life left.

Scrapping these heavier ICE-powered vehicles in favour of electrified models isn’t viable for fleet operators. A more practical solution is retrofitting these vehicles to accommodate alternative fuels. This approach ensures that global fleets can evolve sustainably and enjoy a full lifespan without consigning tens of billions of dollars to the scrap heap.

Looking ahead

Internal combustion engines aren't fading away anytime soon.

The different needs of urban and rural areas mean that a one-size-fits-all approach implicit in an ICE phaseout simply does not work. Tied to this is the challenge of replacing entire HGV and LCV fleets, which are used extensively across the rural world and the global south – there is a practical need to retrofit ICEs, rather than scrap them. 

Finally, the significant investment currently being made in alternative fuels shows a global commitment to sustainability that iterates on current ICE infrastructure, rather than supplanting it.

Ultimately, the world’s mobility needs are so varied that there can be no sole solution for decarbonisation. Instead, each market needs to find its own path that fits its unique circumstances. And for many of those markets, ICE-powered vehicles are going to remain critical technologies for many decades to come.

By Patrice Haettel, CEO, HORSE Powertrain Solutions

Patrice Haettel

After earning his engineering degree from École Nationale Supérieure des Arts et Métiers, Patrice Haettel worked for Elf Atochem and Total Petrochemicals then moved to Renault Group in 2005, joining powertrain plant in Cléon .

2005 Successively served as Production Manager at Cléon, Plant Manager at Valladolid Motores (Spain) and Plant Manager at the Novo Mesto vehicle plant (Slovenia).

2016 VP Manufacturing & Supply Chain for North-East France Cluster.

2018 VP Manufacturing & Supply Chain for France, overseeing 12 plants.

2020 VP Industry for the Renault brand and VP Manufacturing and Supply Chain for Europe.

2021 VP Industrial Strategy & Engineering (in addition to VP Industry for the Renault brand and VP Manufacturing and Supply Chain for Europe).

15 March 2023 Appointed CEO of HORSE, effective 1 July 2023.

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