Optimal engine technology mix in a low carbon economy

Environmental regulations force automotive companies to modify the powertrain technology portfolio offered to the customer to comply with greenhouse gas (GHG) emission targets. Automotive companies, in turn, are faced with the decision of finding the right powertrain technology portfolio because the selection of a particular technology portfolio affects different company targets at the same time. What makes this decision even more interesting is the fact that future market shares of the different technologies are uncertain. With its numerous objectives, this challenge requires multi-criteria decision-making techniques to identify the optimal powertrain technology portfolio. The objective of this research is to present a new decision support approach for assembling optimal powertrain technology portfolios while making decision-makers aware of the trade-offs between the achievable market share, the market share risk, and the GHG emissions generated by the selected vehicle fleet. The proposed approach combines `a posteriori' decision-making, multi-objective optimization, and the Markowitz portfolio theory. In an application case, the outlooks of selected market studies are fed into the proposed decision support system. The result is a visualization and analysis of the current real-world decision-making problem faced by many automotive companies. Interesting findings of this research include that for the assumed GHG restrictions in place in 2030, there exists no optimal powertrain technology portfolio that is not composed of at least 20% of electric vehicles.