Eaton’s Fedewa: Don’t Count Out the ICE

“It is much more cost effective to incrementally improve internal combustion engines than to create a whole new propulsion system.”

“I was an engine builder before I became a forecaster,” says Eric Fedewa. Earlier in his career he was involved in advanced studies of internal combustion engine theory, design and machining technologies.

Now he is with Eaton’s Vehicle Group (, where he is the senior manager within its Global Market Intelligence organization.

Yes, he tracks things like sales and production and assesses future technologies that will have a ramification on Eaton, which provides an array of technologies to vehicle manufacturers, from superchargers to emissions controls, from clutches to fluid connection products.

Overall, Eaton, which describes itself as a “power management company,” had 2016 sales of $19.7-billion and sells its products (which also includes tech for aerospace, electrical, heath care, and other industries) in some 175 countries.

But Fedewa focuses on the auto industry.

For 2017 he said that they had thought earlier in the year that there would be U.S. sales of 17.4-million vehicles, and he believes that this is how the year will end up. He said that consumer confidence is high, there is full employment, and there is a demand for housing.

Fedewa says that he doesn’t think there will be “significant growth. But there won’t be significant declines.” Which is certainly a good thing, especially at such a comparatively high level.

He noted that the average loan is 69.8 months, and because of that length, “People are buying as much vehicle as they can afford”—as in being able to stretch those payments over such a period of time, consequently making the average transaction prices high but not a huge hit to the consumers’ bank accounts.

But then we get back to that issue related to engines.

And he states, “There is still a lot of head room in combustion efficiency that hasn’t been realized.”

Or said more plainly: The internal combustion engine (ICE) isn’t dead. Not by a long shot. And for one than one reason.

It should be pointed out right away that Fedewa thinks there will be increasingly electrification of powertrains, particularly as the OEMs have to meet global fuel economy/emissions regulations. “We see the evolution of higher-voltage architectures, from 48-volt to full hybrid.”

But he also notes that there has been “a tremendous amount of R&D” in ICEs over the past two decades, and that thanks to the development of sensors, processors and materials, advanced ICEs can be developed that were not possible 20 years ago.

“I really think we could see a breakthrough in combustion efficiency in the same time frame that people are talking electrification,” he stated.

Yes, that’s right: internal combustion engines that will meet legislative and consumer requirements.

But he also stressed that this is not an either-or sort of proposition: that it isn’t all about making better engines alone, because electrification—to the point of full electric vehicles—should be part of a company’s portfolio.

Still, it is intriguing that Fedewa is so bullish on the internal combustion engine. And he has a couple of reasons why the ICE is going to have a future that’s perhaps a lot longer than some people in Silicon Valley might imagine.

One reason is cultural. Another is economic.

As for the cultural aspect, he noted that every organization, be it a supplier or OEM, has a unique organizational capability, one that’s aligned around its current product portfolio. Traditional vehicle manufacturers have capability and competency around ICEs. When it comes to “making a step-change to something completely new”—as in going full-bore into electric vehicles, say—“organizations don’t have the expertise for it unless they make an acquisition—and even if they make an acquisition, they still have the learning curve.”

Change can be slow and painful and can be unsuccessful.

Then there is the whole issue of physical assets. Just consider the number of engine plants that currently exist. It isn’t economically feasible for all of these—or even a high percentage of them—to be transformed into motor manufacturers (or to be closed).

“The industry,” Fedewa says, “is capacitized to produce internal combustion engines and propulsion systems. It is much more cost effective to incrementally improve internal combustion engines than to create a whole new propulsion system.”

Again, however, he is not arguing for the status quo. Rather, he is suggesting that there needs to be advances—and he thinks those advances are on the horizon.

“The way the R&D community works,” he said, “is that they follow one another. There are four guys who watch four other guys who watch four other guys. They all sort of know generally what people are working on at other companies, and what the general progress is.”

These people go to the same conferences. They read the same publications. And they have the same—generally speaking—capabilities.

“I think a couple of concepts will come to market that will change the discussion around combustion engines,” Fedewa said. He gave a range of within from 5 to 10 years. The ballpark of when we’re supposed to see more advances in battery technology.

Given what Fedewa did earlier in his career, he probably knows four guys who know a little more than the average four guys.