NIST GCR 04-863
Composites Manufacturing Technologies: Applications in Automotive, Petroleum, and Civil Infrastructure Industries
Economic Study of a Cluster of ATP-Funded Projects

3. Vapor-Grown Carbon Fiber Case Study

The U.S. automotive industry operates in a highly competitive global market. To retain its competitiveness, the industry is committed to cost-reduction initiatives, continuous quality improvement, and greater fuel economy, while addressing increasingly challenging emissions standards.

Composites reinforced with vapor-grown carbon fiber (VGCF) have improved electrical conductivity and strength and can provide a broad range of benefits to the automotive industry and to consumers in the form of improved quality, better fuel economy, reduced cost, and lower environmental emissions. These benefits can potentially be achieved through several VGCF automotive applications:

• Electrostatic painting of exterior automotive panels reinforced with VGCF can avoid the use of conductive primers and “off-line” finishing processes, leading to cost, quality, and environmental benefits.
• Enclosures for shielding automotive electronic systems from electromagnetic interference (EMI) can be fabricated from VGCF reinforced composites, leading to cost reduction benefits.
• Automotive tires with VGCF additives will have improved electrical conductivity and stiffness and will contribute to improved fuel economy.

This section describes the results of a case study of the ATP-funded VGCF technology. It presents project history and key technical accomplishments, describes commercial and market applications in the automotive and tire industries, and presents the results of a quantitative economic benefit-to-cost analysis together with a brief discussion of qualitative benefits.

PROJECT HISTORY

Polymer composites reinforced with carbon fiber provide improved electrical conductivity, high strength and stiffness, and other desirable properties. In the past, the widespread industrial utilization of carbon-reinforced composites has been limited by the high relative cost of carbon fiber and the absence of well-defined design rules and proven manufacturing methods to support industrial-scale production (Strong 1989).

In 1994, Applied Sciences, Inc. (ASI), an independent U.S. company, with the support of General Motors Corporation and Goodyear Tire & Rubber Co., submitted a proposal to ATP for the high-risk vapor-grown carbon fiber (VGCF) technology development project. According to ASI’s proposal for ATP funding, VGCF was intended as an electrically conductive, high-strength structure for mass production polymer molding processes (automotive panels and parts) and for mass production elastomer molding processes (automotive tires).

In 1995, the ATP cost shared the project with ASI, General Motors Corporation, and Goodyear Tire & Rubber Company. The ATP investment was used to support ASI’s technology development efforts. General Motors and Goodyear provided sufficient investment to fund their own activities in technology development, testing, and prototyping. However, General Motors and Goodyear did not receive any ATP funding. The major technical challenges of the ATP-funded project included the following:

• Creating an adequate interface between the carbon fiber and the polymer matrix to assure uniform infiltration and adhesion and to allow load transfer from the matrix to the carbon fiber reinforcement.
• Developing a deliverable form of the VGCF fiber that would be practical for plastic compounders, who normally work with powder additives.
• Developing manufacturing processes for large quantities of fiber, thus reaching economies of scale and reducing fiber costs to competitive levels.

The project was successfully completed in 2000 and resulted in the development of the following practical design and production methods:

• Controlling VGCF diameter, surface chemistry, morphology, and achieving appropriate interface adhesion.
• Debulking nanoscale fibers to optimize strength and electrical properties and facilitate handling.
• Positioning VGCF manufacturing operations for substantial future cost reductions and industrial-scale production.

ATP funding also contributed to credibility and project momentum, leading to subsequent funding from the state of Ohio and private investors to support the construction of a $3 million pilot production plant and further technical developments, including coal gasification to replace expensive methane feedstock.

Without ATP funding these accomplishments would not have been realized. In particular, the surface state of VGCF fibers and the impact of surface state on composite performance would not have been characterized and “this would have substantially inhibited or effectively stopped the development of industrial-scale application of VGCF composites, outside of specialized niche markets” (Lake 2002 et al.).

HOW DOES IT WORK?

Unlike the complex PAN based processes, the ATP-funded manufacturing process uses a simpler, faster, and cheaper “vapor-grown” production technology (see Figure 3). As indicated in Figure 3, vapor-grown carbon fiber (branded Pyrograf-III) is produced in the vapor phase by decomposing either methane, ethane, or coal gas in the presence of a metal catalyst, hydrogen sulfide, and ammonia. The catalyzed gas decomposes into carbon and hydrogen and is conveyed to a reactor furnace. Carbon remains in the reactor for only a few milliseconds, growing into a fiber of 60 to 200 nanometers in diameter and about 100 microns in length. The fiber is entrained in a gas flow, which carries it from the reactor, on a continuous basis, into a fiber catch basin. The fiber is debulked for sale or for additional processing (such as heat treatment).

Source: Applied Sciences, Inc. 2002.

The above VGCF process overcomes many of the costly production steps and processing limitations of the PAN-derived process and provides an innovative approach for fabricating high performance fibers at lower cost. Hydrogen, which is about 40 percent by weight of the gas stream, is a potentially useful byproduct that can be used to further improve process economics (Lake 2002a).

TECHNICAL ACCOMPLISHMENTS

The technical accomplishments of the ATP-funded vapor-grown carbon fiber manufacturing technology included four key elements: surface modifications to assure fiber-matrix adhesion; developing user-compatible fiber forms; evaluating the performance of thermoplastic, thermoset, and elastomer composites with VGCF reinforcement; and prototyping automotive components using VGCF-reinforced thermoplastic, thermoset, and elastomer matrices.

Surface Modifications to Assure Fiber-Matrix Adhesion

Prior to the ATP-funded project there was incomplete understanding of the surface state of the vapor-grown carbon fiber. Information about fiber surface area, surface energy, fiber morphology, and the type and amount of nonhydrocarbon functional groups resident on the fiber surface was of interest as all of these features can impact the interfacial bonding between the fiber and matrix materials.

The ATP-funded program developed measurement and estimation techniques for fiber surface area, surface energy, morphology, and functional groups and made it possible to characterize the relationships of these surface parameters to composite performance properties. This body of knowledge was of considerable value in guiding optimization efforts during the evaluation of VGCF properties, which in turn were used to guide further development and refinement of VGCF production processes.

The surface area determination produced values for total surface area (including internal areas of surface micropores) as well as external surface area (without micropores). Processes were developed to decrease the fiber diameter, which resulted in larger relative surface areas. This proved beneficial since increased surface area was found to contribute to improved fiber matrix bonding.

The surface energy of the fiber impacts the ability of matrix materials to wet and spread on the fiber and thus increase fiber matrix adhesion. Surface energy levels were determined using inverse gas chromatographic techniques. It was found that surface energy and adhesion could be increased by the removal of surface layers of polyaromatic hydrocarbons (PAH) produced in the vapor-grown carbon fiber process. Surface energy could be further increased by heat treatment. In addition to promoting better fiber–to-matrix adhesion, higher surface energy levels promoted improved fiber dispersion in the polymer matrix resin.

Prior to the ATP-funded project, there was insufficient knowledge as to the nature and extent of resident functional groups on the fiber surface. The ATP-funded project identified the presence of low levels of oxygenated, nitrogen, and sulfur groups. “Fibers, with such functional groups on the fiber surface, were found to have improved mechanical performance and appropriate levels of electrical conductivity for a variety of composite applications” (Hughes 2003).

The ATP-funded project also contributed to improved fiber structure or morphology. Initially, VGCF consisted of a hollow core with a graphitic sheath and a carbon “overcoat” on top of the graphitic sheath. During the project, the fiber production process was changed to produce fibers with altered morphology (without a carbon coating), resulting in lower cost and higher levels of surface energy.

Developing User-Compatible Fiber Forms

Prior to the ATP-funded project, “as grown” fibers existed in the reactor as a flaky material with very low density (inhomogeneous with respect to density) that could not be efficiently handled by composite manufacturers. The ATP-funded project developed an efficient VGCF debulking process resulting in improved handling characteristics as well as improved fiber-matrix adhesion. As an alternative form of VGCF, ASI determined that the fiber could be produced in paper form, using production processes similar to the paper industry.

Evaluating Composites with VGCF Reinforcement

Prior to the ATP-funded project, there was limited information on the effect of carbon fiber reinforcement on the properties of polymer composites.

Separately, the GM Technology Center tests identified that VGCF-reinforced thermoplastic composites possessed attractive electrical properties, demonstrating substantially improved electrical conductivity in both PP and nylon 6,6 composites. Electrical properties were within required levels for electrostatic painting, EMI shielding, and static electricity dissipation in the automotive industry. The thermal conductivity of VGCF-based composites was determined to be better than the base resin, and VGCF reinforcement could be expected to inhibit thermal warping and result in improved dimensional stability of automotive panels.

The GM Technology Center also completed limited work on VGCF-reinforced thermoset composites with vinyl ester resins. These tests indicated greatly improved electrical conductivity but only slight impact on strength and stiffness. It was found that a mixed fiber structure, using glass fiber in combination with VGCF, provided high electrical conductivity as well as substantially improved stiffness compared with thermosets reinforced with only VGCF.

Preliminary evaluation of VGCF-reinforced elastomer composites was undertaken at the Goodyear Tire & Rubber Co. Initial results indicated “desirable increases” in tensile strength and stiffness, without a buildup of undesirable static electricity.

General Motors used VGCF reinforced composites for prototyping instrument panel parts. GM also identified additional components for prototyping, including fuel hose fittings, oil pans, gas tanks, door panels, seat backs and supports, truck beds, door hinges, engine mounts, and suspension bushings.

Goodyear built and tested prototype tires and indicated that tire properties were very promising and that VGCF costs were the remaining barrier to adoption. Based on the above ATP-funded accomplishments, VGCF provides a “multifunctional reinforcing structure” with the following performance characteristics:

• Ten times the electrical conductivity of conventional “chopped” carbon fiber.
• Four times the thermal conductivity of fiberglass at ten percent by weight loading.
• Half the coefficient of thermal expansion as conventional carbon fiber at ten percent by weight loading, reducing thermal distortion and increasing dimensional stability.
• “Environment friendly” flame retardancy properties.

The ATP-funded technical accomplishments and resulting performance characteristics enabled ASI to learn how to control VGCF diameter, surface chemistry, and morphology, how to debulk and package nanoscale fibers to optimize strength and electrical properties, and how to accomplish these tasks in an industrial-scale production environment. The ATP-funded project also identified a “65 percent reduction in material costs by learning how to properly handle hydrogen sulfide in a production reactor” (ASI 2002 et al.).

composites, outside of specialized niche markets, such as defense applications” (Lake 2000a ).

ATP funding also provided credibility and project momentum, which facilitated subsequent funding from the state of Ohio and from private investors to support the construction of a $3 million VGCF production pilot plant, as well as additional technological developments, including coal gasification to replace expensive methane feedstock.

During the summer of 2000, ASI completed construction of a VGCF pilot plant. It has one production line and was built at an approximate cost of $3 million, including engineering and infrastructure costs. This line now supports annual production levels of 100,000 lbs of VGCF. Capacity expansion is expected to be an easily replicable process and the facility could be expanded (by adding additional production lines) up to annual production levels of 5 million lbs. In contrast to the first line, the capital cost of the second line is expected to be about $900,000.

Given the relatively low complexity of the VGCF manufacturing process and correspondingly low capital investments for additional production capacity, capacity expansion is not expected to restrict expanded VGCF utilization, as long as VGCF continues to make progress in meeting automotive industry performance and price expectations.

ASI is currently pursuing additional cost reduction opportunities, including the possible utilization of cheaper VGCF feedstock from coal gasification. Nevertheless, ASI asserts that the $3 to $5 per pound pricing target for VGCF could be met solely on the basis of expanded production and associated economies of scale. In this price range, VGCF is expected to be competitive in the mass production automotive market.

ASI’s marketing efforts for VGCF are focused on automotive applications for electrostatic painting of composite body panels, electromagnetic interference shielding of automotive electronics, and reduced tire rolling resistance. These applications are tied to VGCF providing intrinsic electrical conductivity to composite parts and components.

In 2001, North American sales of new light vehicles exceeded 17 million units, evenly split between passenger cars and light trucks (minivans, SUVs, and pickup trucks). Fourteen million units were produced domestically, including a growing share (2.4 million units) by Japanese affiliates and a rapidly growing share by German affiliates (Office of Automotive Affairs 2002). North American markets are expected to grow at only one percent, and there is substantial excess motor vehicle production capacity in the United States and worldwide.

Composite use can lead to weight reduction and improved fuel economy. The use of composites also facilitates making “comparatively cost effective modifications to vehicles … due to lower tooling costs” (Vasilach 2001).

The average North American vehicle weighs about 3,300 pounds and contains approximately 250 pounds of composites (Brown and Gregus 2001). Composites are used for interior trim (instrument panel skin, door trim panels, airbag covers, and so forth), exterior body panels (such as fenders, hoods, and deck lids), and exterior trim and facia. In addition, 42 percent of vehicle bumpers are molded from composites (BRG Townsend 1998) and composites are used in engine compartments for a variety of applications, including protective enclosures to provide electromagnetic shielding for electrical and electronic systems.

In 2000, 29 percent of average automotive SAPV (surface area per vehicle) in the North American market was manufactured from composite materials. The use of composites for exterior body panels and trim is projected to grow at 4.5 percent per year and to exceed 36 percent of SAPV by 2005 (Gregus 2001).

Composite use in North American auto vehicles is expected to grow from 4.2 billion pounds in 2001 to 5.6 billion pounds in 2011. Of this amount, 1.7 billion pounds will be for exterior body panels and exterior trim parts (Broge 2001).

The first target market for VGCF is automotive coating and painting. Use of VGCF facilitates efficient electrostatic painting of external parts and panels made from composites.

Automotive coating and painting (finishing processes) occur between body pressing, welding, and final assembly. The assembled body shell goes through up to 13 distinct steps, including electrocoating, priming, painting, clearcoating, and curing, to become a painted body ready for the assembly line. The finishing process can take about 10 hours, and there is a tendency for this process to bottleneck automotive assembly (Sawyer, n.d.). Finishing operations involve large capital costs, including investments in robotics. “An automotive painting facility can be a $400 million investment” (Banholzer and Adams 2002).

Automotive painting facilities are generally set up to paint steel parts (Vasilach 2001). The standard procedure is a continuous “in-line” process of painting and finishing the

entire assembled body and the method of choice is electrostatic painting, where exterior panels are given a negative charge and the paint is given a positive charge and atomized through a special nozzle. Charged exterior panels magnetically attract paint droplets with sufficient force to “pull” paint around corners, ensuring a smooth and even coat. This reduces overspray and fogging relative to conventional spray guns and it also provides productivity benefits by reducing color mismatch, rework, scrap loss, and downtime (Couch 2003).

Painting composite surfaces can be more costly and time consuming than steel surfaces. Composite parts and panels typically cannot hold an electrical charge and require the application of conductive primers for electrostatic painting. In addition, they are often painted separately from metal body panels in an off-line process. Off-line painting is an expensive and time-consuming process that can lead to color mismatch and other quality problems and thus extensive rework. As a related problem, composite parts often cannot survive the high temperatures of paint curing ovens.

VGCF’s ability to add intrinsic electrical conductivity and to improve thermal conductivity makes it possible to avoid conductive primers, off-line painting, and curing-oven quality problems. This will simplify the finishing process for external automotive body panels made from composites, reduce processing time and costs, and improve color matching.

By eliminating the conductive primer, VGCF utilization will also reduce harmful environmental emissions. Automotive assembly facilities generate 4.5 pounds of volatile organic compound (VOC) emissions per vehicle (General Motors 2002), and 90 percent of these emissions result from the painting and finishing processes. Eliminating the conductive primer coat removes one in five layers with significant VOC content and is projected to result in an 18 percent reduction in VOC emissions. At current levels of composite use in vehicles, VGCF utilization will eliminate 0.23 pounds of VOC emissions per vehicle. With projected increases in the use of composites, the elimination of VOC emissions will be correspondingly higher.

The second target market for VGCF is automotive electronics systems, where VGCFreinforced composites can be used to provide shielding from electromagnetic interference (EMI).

Spark plug wires are a significant source of EMI and lead to operating problems when engine management computers receive signals from sensors that have been altered by spark plug interference. Many other electronic devices also emit EMI that can interfere with onboard computers, systems, and sensors (RTP 2000).

With the proliferation of electronic devices in cars and trucks, EMI shielding is becoming increasingly important. Computer chips regulate and monitor ABS brakes, fuel injection, oxygen sensors, navigation equipment, engine controls, and communication systems. In addition, the “next level of systems and embedded sensors will replace mechanical and hydraulic systems with electronic micro-systems and include drive by wire, brake by wire, collision avoidance, and other ‘smart car’ features” (Krueger 2001).

To provide EMI shielding, electronic systems are enclosed in metal or composite enclosures. While composites provide design flexibility and lower weight, composite enclosures must be coated with a conductive layer to provide effective EMI shielding. The cost of conductively coated enclosures or die-cast metal enclosures is in the range of $1.00 to $1.50 per part.

Compared to metal or conductively coated enclosures, intrinsic EMI shielding with stainless steel fibers dispersed in a polymer matrix can reduce part costs by 50 percent (RTP 2000). Given very low (by weight) VGCF loading requirements and cost advantages over stainless steel fiber, EMI shielding with VGCF-loaded polymer can be used to further reduce part costs. It is conservatively estimated that VGCF-loaded composites will result in cost reductions of 65 percent per part compared with metal or conductively coated enclosures.

Carbon black is an inexpensive additive to automotive tire compounds and provides electrical conductivity to prevent the buildup of static charges during tire operations. To improve tire stiffness, reduce rolling resistance, and improve fuel efficiency, silica is sometimes substituted for carbon black. However, silica has much lower conductivity and can result in the buildup of undesirable electrical charges.

As a tire additive, VGCF can provide directional stiffness, reduced rolling resistance, and improved fuel efficiency while improving electrical conductivity and avoiding static charge buildup. ASI estimates that a partial (20 percent) replacement of carbon black with VGCF additives will lead to a “1.2 percent improvement in fuel economy for passenger vehicles and up to 4 percent improvement for heavy trucks” (ASI 2002a).

According to a major U.S. tire manufacturer, “the technical challenges of VGCF have been largely addressed and the remaining challenges are tied to the economics of scaling up VGCF production, in the most cost effective manner, to effectively support automotive tire mass production.” (ASI 2002a).

The carbon nanofiber market for industrial-scale applications is characterized by high prices, low availability, and customer reluctance to enter into development programs due to perceived supply risks. Currently prices range from $90 to $170 per pound and there are four major suppliers, including ASI.

ASI is the low-cost producer in this market and expects to reach further, substantial economies of scale. VGCF prices are projected to reach $30 per pound by 2006, $15 per pound by 2008, and to be under $5 per pound by 2010 (Hughes 2002). With VGCF electrical and thermal properties (ten times the electrical conductivity and half the coefficient of thermal expansion relative to competing carbon fibers), the VGCF cost advantage can be further leveraged by lower fiber loadings in the polymer matrix.

Based on these competitive market conditions, it is expected that VGCF will be economically viable for

• Electrostatic painting and EMI shielding applications at $30 per pound by 2006.
• Automotive tire applications at under $2 per pound by 2011.

AUTOMOTIVE INDUSTRY INITIATIVES

The automotive industry is aware of VGCF’s technical and commercial potential relative to electrostatic painting and EMI shielding applications. According to the Materials and Processes Laboratory of the General Motors R&D Center, the “electrical properties of VGCF in polypropylene and VGCF in nylon composites are very attractive compared with those provided by other conventional conducting additives. Because of the low VGCF diameter, the onset of (acceptable) conductivity can be below 3 percent by volume” (Finegan and Tibbetts 2001).

• ASI is currently working with a major compounder of polymer resins and a second-tier supplier to automotive OEMs to evaluate VGCF as a possible additive to provide conductivity to composite automotive panels for electrostatic painting. Based on discussions with automotive executives, the probability of VGCF-filled composites being used in a North American assembly plant by 2006 is estimated at 70 percent.
• Discussions with a major automotive electrical supplier indicate that, while there is not yet an active development program for incorporating VGCF into plastic enclosures for EMI shielding, this company and its competitors are “actively aware” of VGCF and consider it to be a promising material for “potentially cheaper, better EMI shielding.” Once prices begin to drop, as projected by ASI, plastic enclosures with conductive coating or metal enclosures can be replaced with VGCF-filled composite enclosures through “running changes” within a timeframe of less than 12 months. It is expected that design and production changes will not be platform dependent. The probability of VGCF-filled composites used for EMI shielding in a North American assembly plant by 2006 is estimated at 50 percent.
• Discussion with a major U.S. tire manufacturer indicates awareness and interest in VGCF. An active product development and testing program will become likely once a price level of $15 per pound is reached (expected in 2008). Design, development, testing, and tooling would require up to three additional years. The probability of VGCF use in North American automotive tires by 2011 is estimated at 40 percent.

BENEFIT-TO-COST ANALYSIS

Figure 4 summarizes the use of VGCF for automotive composites leading to economic and environmental benefits along three pathways, corresponding to the three target markets.

Figure 4: Flow of Benefits from the ATP-Funded VGCF Project

Pathway 1: Electrostatic Painting

Exterior automotive panels are frequently made from composites. These panels are painted “off-line,” which adds cost, slows down production, and results in color mismatch, requiring extensive rework. VGCF’s ability to add intrinsic electrical conductivity avoids these costs, reduces production cycle times, improves paint quality, and reduces harmful VOC emissions.

Discussions with OEMs, first- and second-tier automotive suppliers, and automotive industry associations indicated that the timing of VGCF deployment will be significantly influenced by VGCF pricing. It is expected that VGCF will be economically viable for electrostatic painting at $30 per pound, expected to be achieved by 2006 (Couch 2003).

VGCF deployment in industrial-scale production will also be linked to automotive model years, with typical production estimated to range from 60,000 to 150,000 units per model year. For purposes of analysis, the average number of vehicles per model year deploying VGCF is conservatively estimated at 90,000.

First-year (2006) VGCF application for the electrostatic painting application will be limited to a single model year. Subsequent utilization will double for three years and then level off at one million units per year (see Table 1). Thereafter, utilization is projected to continue growing at 10 percent per year, reaching 2.8 million automotive vehicles by 2021, or 16.5 percent of U.S. production. A probability factor of 70 percent is applied to reflect the likelihood that these market projections would be reached (based on discussions with a manufacturer of automotive polymer resins).

Table 1: Market Projections for VGCF Utilization in North American Automotive Production (Numbers of Vehicles in Thousands)

Base case assumptions for estimating Pathway 1 benefits are as follows:

• Average exterior painting cost for an all-steel U.S. automotive vehicle, painted inline, is $504 per vehicle (Sawyer n.d.).
• Average exterior surface area of U.S. automotive vehicles, including panels and trim, is 137.2 square feet (Couch 2003).
• By 2005, the polymer content in the exterior surface of an average U.S. automotive vehicle will reach 40.5 square feet or 29.5 percent of exterior surface area (Brown 2000).
• Exterior painting of a car body with 29.5 percent polymer surface area is currently estimated at $606, compared to $504 for an all-steel vehicle. The cost penalty includes the cost of conductive primer, increased production time, reduced productivity, color mismatch, and related rework (BRG 1998). VGCF utilization will avoid the $102 of additional cost.
• Avoiding the application of a conductive primer for off-line painting of polymer panels and trim will reduce VOC emissions during painting and finishing operations. North American automotive assembly operations generate 4.5 pounds of VOC emissions per vehicle and 90 percent of these emissions result from painting and finishing processes (General Motors 2002). The conductive primer coating for off-line painting is one in five layers with significant VOC content. Eliminating the primer coat is projected to result in 0.23 pounds of avoided VOC emissions per vehicle.

For a step-out scenario, exterior surface polymer content is assumed to increase 10 percent over the base case to 44.6 square feet per vehicle, or 32.6 percent of exterior surface area. The cost penalty of off-line painting for the increased surface area is $113 over an all-steel exterior vehicle, compared with $102 for the base case. VGCF utilization will avoid the $113 additional cost.

Pathway 2: Electromagnetic Interference (EMI) Shielding

EMI is important for safe and reliable automotive vehicle operations and is now provided by conductive enclosures made from metal or metal-coated parts. VGCF’s intrinsic conductivity eliminates the need for metal parts or metallic coating and leads to cost savings.

Discussions with OEMs, first- and second-tier automotive suppliers, and automotive industry associations indicated that the timing of VGCF deployment for EMI and required VGCF price reduction are the same as for electrostatic painting (Couch 2003).

As for electrostatic painting, VGCF use for EMI shielding will be linked to automotive model years, with typical production ranging from 60,000 to 150,000 units per model year. For purposes of analysis, the average number of vehicles per model year deploying VGCF is conservatively estimated at 90,000.

First year (2006) VGCF utilization will be limited to a single model year. Subsequent utilization will double for four years and then level off at 2.0 million units per year (see Table 1). Thereafter, utilization is projected to continue growing at 10 percent per year, reaching 5.2 million automotive vehicles by 2021, or 30.5 percent of U.S. production. A probability factor of 50 percent is applied (based on discussion with an automotive electrical parts supplier).

Base case assumptions are as follows:

• By 2006, the typical U.S. vehicle will have 26 electronic systems, including automotive steering and control, safety, and communications (based on discussions with a first-tier electronics supplier).
• Each electronic system needs to be effectively shielded within metal enclosures or metal-coated plastic enclosures. The cost of these enclosures is approximately $1 per enclosure (based on discussions with a first-tier supplier).
• Replacing metal enclosures or metal-coated plastic enclosures with VGCF reinforced composite enclosures results in a 65 percent savings, or $16.9 per vehicle.

For a step-out scenario, replacing metal enclosures or metal-coated plastic enclosures with VGCF composites is expected to lead to 69 percent savings, or $17.9 per vehicle.

Pathway 3: VGCF-Reinforced Tires

In automotive tires, carbon black is used as a tire additive to provide conductivity and eliminate the buildup of static electricity. To improve tire stiffness and to reduce rolling resistance, silica additives are sometimes used to partially replace carbon black additives. Since silica has lower conductivity, its use can lead to the buildup of static electricity.

Using VGCF as an alternative to silica can provide both stiffness and conductivity, leading to reduced rolling resistance and improved fuel economy without a buildup of static electricity.

Discussions with automotive OEMs, first-tier automotive suppliers, and automotive industry associations indicate that VGCF as a automotive tire additive will be economically viable at $2 per pound, expected to be achieved by 2011.

First-year (2011) VGCF utilization will be limited to daily lot sizes of 5,000 tires or 1.25 million tires per year, corresponding to 312,500 vehicles (see Table 1). If this application is successfully developed, lot sizes will double for two subsequent years and then increase by 625,000 units per year for the next two years. Thereafter, VGCF use in automotive tires will increase at 10 percent per year, corresponding to 4.4 million vehicles by 2021. Since there is currently no active development program, the probability of successful deployment is estimated at 40 percent.

Given a probability of deployment under 50 percent, VGCF use for automotive tire applications was not included in the base case analysis. For a step-out scenario, it is assumed that VGCF additives will replace 20 percent of carbon black additives for the above number of vehicles. This will result in reduced tire rolling resistance and improved fuel economy by 1.2 percent (ASI 2002a). For passenger cars with 20.7 miles per gallon CAFE standards, average annual mileage of 12,000 miles, and motor gasoline prices at $1.5 per gallon, the 1.2 percent improvement will result in annual per vehicle savings of 6.9 gallons and $10.4.

Timeframe of Analysis

Timeframes for base case and step-out scenario analyses are 15 years for electrostatic painting and EMI shielding applications and 10 years for the automotive tire applications. These timeframes are reasonable in light of anticipated aggressive VGCF price reductions from $30 dollars per pound in 2006 to $2 in 2011.

ATP and Industry Partner Investments

During the 1995 to 2000 period, ATP invested $2.2 million and its industry partners (ASI, General Motors Corporation, and Goodyear Tire & Rubber) invested $3.2 million in the VGCF technology. The ATP investment was used to support ASI (an independent small U.S. company that was the technology innovator) and its engineering and technical subcontractors. General Motors Corporation and Goodyear Tire & Rubber Company provided sufficient funding to fully support their own project-related activities including technical development, testing, and the prototyping of automotive parts with VGCF additives. General Motors and Goodyear did not receive ATP funds.

For purposes of cash flow analysis, the ATP investment was normalized to 2003 dollars and assumed to occur in 1998, the midpoint of the five-year investment period. Given the study’s focus on measuring benefits to industry users and the nation broadly (that is, public benefits), industry’s investment costs relative to the ATP (public) investment were not included in the analysis.

Base Case Economic Analysis

The expected values of cash flow benefits (adjusted for probabilities of VGCF deployment in industrial-scale production) for electrostatic painting and EMI shielding applications are indicated in Table 2. The net present value (NPV) from ATP’s investment is $552 million for the two pathways combined. Over 80 percent of NPV derives from VGCF utilization for electrostatic painting. The public benefit is $221 for every dollar invested and the internal rate of return (IRR) is estimated at 57 percent.

Table 2: Cash Flows and Performance Metrics from VGCF Use in the Automotive Industry ($ Millions, in 2003 Dollars): Base Case

Note 1: A 1998 base year and an OMB-mandated 7 percent discount rate were used for analysis. Performance metrics were computed from time series assuming ATP investment in 1998 (project midpoint) and prospective cash flow benefits from 2006 to 2021.

Note 2: The NPV calculation for each benefit component assumes investment costs divide equally across benefit components.

Step-Out Scenario Economic Analysis

Table 3 indicates step-out scenario returns on ATP’s investment in VGCF technology. The net present value of ATP’s investment is estimated at $634 million.

Over 80 percent of the NPV derives from VGCF utilization for electrostatic painting, 15 percent derives from EMI shielding, and four percent from automotive tire applications. The public benefit is $254 for every dollar invested and the internal rate of return is estimated to be 58 percent.

Table 3: Performance Metrics from VGCF Use in the Automotive Industry ($ Millions, in 2003 Dollars): Step-Out Scenario

Note 1: A 1998 base year and an OMB-mandated 7 percent discount rate were used for analysis. Performance metrics were computed from time series assuming ATP investment in 1998 (project midpoint) and prospective cash flow benefits from 2006 to 2021.

Note 2: The NPV calculation for each benefit component assumes investment costs divide equally across benefit components.

Private Benefits to ATP Industry Partners

Continued motivation to refine and commercially market the ATP-funded technology is a precondition for industrial-scale use. Only with industrial-scale use will the general public come to enjoy the economic, quality, and environmental benefits of VGCF technology.

ASI’s annual sales revenues from VGCF products, expressed in 2003 dollars, are expected to reach $35 million by 2007 and $80 million by 2010. These revenues will provide the motivation for ASI, its manufacturing partners, and licensees to continue lowering VGCF costs and actively market VGCF products.

Joint venture members will also realize substantial economic benefits from reduced manufacturing and component parts costs. These benefits will be available to the entire automotive industry, not only to JV participants.

QUALITATIVE BENEFITS

Incorporating VGCF into external automotive body panels will provide sufficient electrical conductivity for painting the entire vehicle (both metal and composite panels) in one combined electrostatic process, avoiding the additional layer of conductive primer for composite materials. Other benefits include the following:

• The elimination of one of five primer layers will reduce harmful VOC emissions and associated environmental compliance costs. Eliminating the separate off-line painting of composite panels will also reduce paint mismatch and other paint quality problems.
• Incorporating VGCF into automotive body panels will improve the thermal conductivity of VGCF-reinforced composites, increase resistance to thermal warping, and improve dimensional stability. VGCF-reinforced composites also improved flame retardancy, increasing safety in case of road accidents or electrical and mechanical malfunctioning.
• Incorporating VGCF into protective enclosures to shield automotive electronic systems from EMI (electromagnetic interference) will facilitate the replacement of metal enclosures with composite enclosures, thereby providing significant design flexibility in the engine compartment and other highly constrained internal spaces.
• Incorporating VGCF into automotive tires will provide sufficient electrical conductivity to discharge the buildup of static electricity and reduce the likelihood of electrical shock during vehicle operations and fueling.

*******

At the time of the ATP funding in 1995, ASI was a new company with 10 employees, including 4 engineers and scientists, and without the financial resources to undertake a high-risk VGCF research and development program. By 2003, ASI had grown to 26 full time employees, including 10 engineers and scientists. According to ASI management, the VGCF project would not have been undertaken without the ATP cost share and the associated qualitative and qualitative benefits would not have been possible.

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Date created: July 14, 2004
Last updated: August 3, 2005

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