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Overview of Ecos Consulting’s Presentation
• Provide market context
• Identify the scale and type of market opportunity
presented by the state fleet
• Discuss test procedure recommendations
• Report findings from rolling resistance data collected
so far
• Identify remaining data needs
• Gather input from manufacturers and other
stakeholders
Process
Ecos Consulting was hired by CEC to conduct outreach to
manufacturers, obtain rolling resistance data, & make
technical and program design recommendations.
Ecos specializes in the process of transforming markets
for energy efficient products:
1. Research to identify the technological & market opportunities
2. Establishing manufacturer and retailer relationships and links
to “public purpose” objectives
3. Understanding marketing leverage points for an efficiency
message.
4. Creating a standardized test procedure and efficiency
benchmark to facilitate fair, open competition.
5. Implementing a program (incentives, education, training, etc.)
with trade allies to accelerate sales of the efficient products.
SB 1170 Overview
Passed by Legislature in September 2001 and signed
by Governor shortly thereafter
Key provisions:
• Fuel-efficiency specifications by 1/31/03 governing
motor vehicles and tires
• Reduce petroleum consumption “to the maximum
extent practicable and cost-effective.”
• Goal is to reduce energy consumption of the state
vehicle fleet by at least 10% by 1/1/05 (state buys
about 1,500 vehicles and 5,000 replacement tires per
year).
CEC to make recommendations by
1/31/03 on the following:
– Test procedure for measuring rolling resistance
– Database of tire models and their efficiency
– Consumer tire fuel efficiency rating system
– Other consumer education approaches
– A study regarding safety implications of more
widespread LRR tire use
– Mandatory standards for tire efficiency in California
– Incentive programs to encourage the purchase of
more fuel efficient tires
Key Market Stats
• Total North American tire
sales: $24 billion per year
• 60+ million OEM and 200+
million replacement tires sold
per year (CA market alone
20+ million units per year)
• At least 28 brands and 700
models of replacement tires
for sale
• Many complex partnerships
among manufacturers and
brands
Top Four Manufacturing Partnerships (Michelin/BFGoodrich/Uniroyal,
Goodyear/Dunlop, Bridgestone/Firestone, Cooper)
Hold ~ 56% Share of Replacement Tire Market
Passenger tires Percent Light truck tires Percent
Goodyear 17 Goodyear 13
Michelin 10 Michelin 11
BFGoodrich 7 BFGoodrich 8
Firestone 6 Firestone 7
Bridgestone 5 Cooper 6
Cooper 5 Bridgestone 5
Uniroyal 5
General 5
General 4
Kelly-Springfield 4
Dayton 3
Mastercraft 3
Dunlop 3
Toyo 3
Kelly-Springfield 3
Continental 2 Uniroyal 2
Hankook/Aurora 2 Dayton 2
Kumho/Marshal 2 Dunlop 2
Mastercraft 2 Yokohama 2
Toyo 2 Continental 1
Yokohama 2 Hankook 1
Lee 1 Kumho 1
Pirelli 1 Lee 1
Others 20 Others 23
Total 100 Total 100
Source: tirebusiness.com
Rolling Resistance Is a Factor in the
Competitive Marketplace
• Michelin/BFGoodrich/Uniroyal played a leading role in the
development of a new rolling resistance test procedure, has won 81%
of JD Power’s tire customer satisfaction awards, and invests the
greatest percentage of its revenues in tire R&D.
• Goodyear has developed GT3 bioTRED models with very low rolling
resistance and corn starch-based polymers.
• Branded LRR tires for electric and hybrid vehicles, such as
Bridgestone/Firestone’s ECOPIA.
Replacement Tire Characteristics
• Market dominated by all-
season radials (90+%)
• About 80% of tires now
carry speed ratings
• Federal government
mandates ratings for
traction, treadwear,
temperature resistance,
size, max pressure, max
load, and other attributes
OE / Replacement Tire Differences
• Original Equipment Tires
– Low rolling resistance sought for CAFE
– Short lifetimes (~2 years) typical – (new cars
driven heavily; tire warranty separate from car’s)
– About 42% of buyers will replace OE tires at end
of life with the same brand
• Replacement Tires
– Low cost and longevity more important in
marketing than low rolling resistance
– Lifetimes longer than 2 years
– About 35% of buyers will replace their second set
of tires at end of life with the same brand
The Market Opportunity: Bringing Low Rolling
Resistance to the Replacement Market
• Ongoing improvements continue from changes in tire
chemistry and design. The most efficient tires cut RR
by 30% or more, saving 2-6% of fuel use.
• Market opportunity to increase sales volumes of OE
tires in the replacement market, rather than limiting
low RR tires to the OE market only
• May be able to increase brand loyalty & repeat
purchases if customers can readily buy the same
replacement tires that were on their new car
• Customers already pay more for better performance,
durability, and brand. With the right marketing,
customers would invest in fuel efficiency as well.
The Retail Side
• About 50% of all replacement tires are sold through
local dealers and another 25% through regional and
national dealers. Bridgestone/Firestone is largest
national retailer.
• General merchandise sellers like Wal-Mart, Sam’s
Club, Costco are only about 11-18% market share,
but are expanding.
• Internet sites like tirerack.com also growing in
importance – allow extensive comparative research
across brands and models before purchasing.
• Minimal marketing of rolling resistance at present.
From an Energy Consumption Standpoint, Tire Use Dwarfs
Manufacturing, Shipping and Recycling
Tire Life Cycle Energy Consumption
Raw Mat erials
Compound Recycling
Collect ion at End-of -Lif e 12.097%
0.194%
0.056%
Tire Product ion
5.950%
Use Dist ribut ion
(Tire Debris and Fuel) 0.076%
82%
Source: Pirelli
The California Fleet Market Opportunity
California Fleet - Distribution of Tire Sizes
(2001 & 2002)
195/60R15
225/60R16
215/60R16
175/65R14
LT245/75R16
235/70R16 195/70R14
U.S. Market Share Estimates for Replacement Tires by Size
Passenger tire sizes Light truck tire sizes
Rank Size Share Rank Size Share
1. P235/75R15 8.9% 1. LT235/85R16 16.8%
2. P205/70R15 4.3% 2. LT245/75R16 11.6 %
3. P195/75R14 4.2% 3. LT235/75R15 10.0%
4. P205/65R15 4.0% 4. 31X10.50R15 9.5%
5. P185/75R14 3.6% 5. LT265/75R16 8.9%
6. P205/75R14 3.5% 6. LT225/75R16 7.7%
7. P215/70R15 3.4% 7. LT215/85R16 5.8%
8. P205/75R15 3.0% 8. 30X9.50R15 3.9%
8. P215/75R15 3.0% 9. LT285/75R16 2.1%
10. P195/70R14 2.8% 10. 33X12.50R15 1.8%
Total 40.7% Total 78.1%
Other Sizes 59.3% Other Sizes 21.9%
Source: tirebusiness.com
California DGS tire purchases between mid-1998 and mid-2002
Tire Size Units Share National Market Popularity
P195-70R14 2,571 15.5% 7th most popular OE tire, 10th most popular replacement tire
P185-70R14 1,478 8.9% NA
P195-65R15 1,001 6.0% 4th most popular OE tire
P205-65R15 730 4.4% 2nd most popular OE tire, 4th most popular replacement tire
P225-60R16 687 4.1% 5th most popular OE tire
P225-75R15 558 3.4% NA
P235-75R15 529 3.2% most popular OE tire, most popular replacement tire
P175-70R14 514 3.1% NA
LT245-75R16 440 2.7% most popular OE truck tire, most popular replacement truck tire
P185-65R14 405 2.4% 7th most popular OE tire
P215-70R14 401 2.4% NA
P225-70R15 365 2.2% NA
LT225-75R16 352 2.1% 3rd most popular OE truck tire, 6th most popular replacement truck tire
P205-70R15 335 2.0% 2nd most popular replacement tire
P215-75R15 334 2.0% 8th most popular replacement tire
P205-75R15 265 1.6% 8th most popular replacement tire
P215-60R15 259 1.6% 9th most popular OE tire
P215-70R15 209 1.3% 7th most popular replacement tire
TOTAL 11,433 68.9% (top 18 sizes represent about 70% of purchasing)
GRAND TOTAL 16,584 100.0% (total includes another 5,000 tires of various sizes)
Rolling Resistance Test Procedure Options
• SAE J1269
– Originally developed in 1979
– Only tests at one speed (80 kph)
• SAE J2452
– Developed in 1999
– Tests at 6 speeds between 115 kph and 15 kph
– Used by GM, Ford, and Daimler/Chrysler for OEM tires
– Used by NREL in ADVISOR modeling to estimate fuel
economy impacts
• Other Approaches
– Coast down measurements by EPA on a test track (SAE
J2263)
– Track testing of fuel consumption in pairs of identical vehicles
with different tires
After extensive research, Ecos
recommended the use of J2452 to the CEC
• Results more predictive of real-world performance
than J1269
• Actions by the state would be consistent with testing
processes already in use between automakers and
OE tire manufacturers
• Coast-down and test-track measurements can be
substantially more expensive and difficult, not yet
widely in use in industry
• Linkage to NREL’s ADVISOR permits straightforward
fuel economy impact assessments
Variations Identified in the J2452 Testing
Process: May Need Adjustments
Options to True-Up Tire Test Results from Different
Manufacturers:
• Centralized Testing
• Trust but Verify
• Trust and Adjust
• Take the Tire Challenge
Centralized Testing
Main elements:
• Competitively selected independent testing
lab
• Manufacturers submit tires for testing
• Reports sent to CEC
• Testing costs to be paid by manufacturers
who wish to sell in California
Trust But Verify
Main elements:
• Manufacturers provide CEC with self-
tested tire data
• CEC selects random models for testing
• Independent results replace
manufacturer results if they are less
favorable
Trust and Adjust
Main elements:
• CEC assumes car mfr function of adjusting
data submitted by tiremakers
• Sends tire samples to each tire mfr to test
• Analyzes submitted results
• Creates adjustment factors
• Standardize rolling resistance data before
publication
Tire Challenge
Main elements
• Manufacturers submit data to CEC
• Any result can be formally challenged by
another manufacturer
• Sample tested at CEC-selected independent
test lab
• If results come equal or better, test paid for by
challenger
• If results come out worse, test paid for the
manufacturer that was challenged
Selected Passenger and Light Truck Tire Rolling Resistance (J1269)
M o del 1 5
M o del 1 4
M o del 1 3
M o del 1 2
M o del 1 1
M o del 1 0
M o del 9
M o del 8
M o del 7
M o del 6
M o del 5
M o del 4
M o del 3
M o del 2
M o del 1
0 2 4 6 8 10 12
SMERF (N)
Manufacturer Reported Passenger and Light Truck Tire
Rolling Resistance (J2452)
M o del 9
M o del 8
M o del 7
M o del 6
M o del 5
M o del 4
M o del 3
M o del 2
M o del 1
0 10 20 SMERF (N) 30 40 50
Treadwear and Rolling Resistance (J1269)
14
12
10
DVN RR (N)
8
6
4
2
0
0 100 200 300 400 500 600
Treadwear
Treadwear vs. Rolling Resistance (J2452)
60
50
40
SMERF (N)
30
20
10
0
100 200 300 400 500
Treadwear
Temperature Resistance and Traction Rating vs Tire Rolling Resistance
(J1269)
14
12
10
DVN RR (N)
8
6
4
2
0
A B C A B C
Temperature Resistance Traction
Speed Ratings vs. Tire Rolling Resistance (J1269)
12
10
8
DVN RR (N)
6
4
2
0
H N P Q R S T U V W Y Z
Speed Rating
Relational Tire Database
Auto Manufacturer Table:
Manufacturers and models of
vehicles that link to specific tires
Option: Vehicle
options that change
tire configuration
J2452 Table: Rolling
Resistance Test Results
for the J2452 Test
Method and Who Tested
Tires: Catalog of tire
Contact Table: Contact models for which rolling
Information for All Groups resistance data are
J1269 Table: Rolling
available
Resistance Test Results
for the J1269 Test
Method and Who Tested
Speed Rating: Load Index: Traction and
SpeedRating 71-110 Temperature
Tire Contacts: Links
H, N, P, Q, R, S, Rating: A, B, C
tire mfr contact info to
tire models T, U, V, W, Y, Z
How Will the Database be Used?
• Allows investigation of correlations between rolling
resistance and other tire performance metrics
(traction, tread wear, temperature resistance, etc.)
• Helps fleet buyers determine which efficient tires are
available for which vehicle types
• Possible front-end for consumer education website
(vehicle/tire matching)
• Assists with cost effectiveness calculations –
comparing incremental cost of efficient tires to
lifetime fuel savings
• Allows comparison of test lab results, possible
adjustments as needed
Remaining Data Needs
• Only have 9 data points for J2452 and 15 data points
for J1269 – Need far more tire data
• OE and replacement tires needed
• Industry research on synergies and interactions
between RR and other tire attributes
• Information about industry marketing of low RR
replacement tires so far
• Incremental costs
• Opportunities for listing in Green Seal Choose Green
report
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