The Client
A major automobile manufacturer
The Challenge
The emergence of a domestic biofuels industry raised significant questions for our client, a major player in the U.S. light vehicle market. How will biofuels production in the U.S. affect U.S. car and truck sales in coming years? How will it impact product mix and drive new technology? Will consumer preferences shift sharply towards Flex-Fuel-Vehicles that can run on a blend of 85 percent ethanol, or are biofuels just a short-lived, government supported phenomenon that will never expand beyond a niche market?
The Solution
HighQuest Partners performed an analysis of past and current investment in biofuels (both ethanol and biodiesel) production, as well as plans for future biofuels production and funding sources. Anticipated production capacity, consisting of currently operating facilities as well as future planned and under-construction facilities, was compared to current and projected feedstock availability to provide a gauge of realism.
In addition to how the future supply of biofuels might affect light vehicle demand, HighQuest also looked at various scenarios based on the economic impact of biofuels production focusing on job and income generation in the Midwest, the region in which the overwhelming majority of feedstock and biofuels production takes place and which leads the U.S. in high-margin light truck sales.
The Results
The client has a regularly updated “biofuels index” that includes plant-level capacity estimates and regional capacity projections serving as a roadmap of the development of the biofuels sector in North America, enabling benchmarking and decision making informed by fact-based analysis.
