China Is Building a Market for Electric Vehicles

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The presentation includes latest findings on the Chinese market and throws light on the question, why China is poised to build a market to accommodate e-mobility developments. The presentation investigates government budgets, electric vehicle powertrain technologies such as batteries and motors, charging infrastructure development and electric vehicle deployment roadmaps leveraging the advantage of availability of raw materials to build a market place.

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China Is Building a Market for Electric Vehicles

  1. 1. China Building a Market for Electric Vehicles – What are the Hot Prospects? China to be One of the Hot Regions to Adopt Electric Vehicles Anjan Hemanth Kumar, Team Leader Automotive & Transportation 29th November 2012© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. Today’s Presenters Anjan Hemanth Kumar Jason Huang Team Leader Research Manager5 years of automotive research and consulting 5.5 years of strategy consulting experience, more thanexperience, with a focus on hybrid and electric 40 significant strategy design & implementationvehicles. Authored/co-authored more than 20 projects. Particular expertise in:industry reports and worked on over 15 opportunityassessment and strategy formulation engagements • Value creation strategy: Product Portfolio Review,with Global clients. Specific expertise in: Market Entry & Geographical Expansion, New Business Models, Strategic Planning• Electric Vehicles market forecasting and models • Operational strategy: New Product Development,• Batteries and electric motor technologies for New Product Launch, Business Modeling & hybrid and electric vehicles Planning• New market entry and diversification strategies• New business model analysis and evaluation 2
  3. 3. AgendaKey Findings and Market OverviewInfluence of Chinese Government on Electric VehiclesElectric Vehicle Market Trends and ForecastsOverview of Charging Station InfrastructureElectric Vehicle Powertrain Analysis 3
  4. 4. Key Findings of the StudyThe highest government subsidy (up to $9,500) along with other supporting policies, as well as 18-25% lowermanufacturing cost in China are expected to drive the market for Electric Vehicles. Chinese Electric Vehicle Market: Chinese Electric Vehicle market of 5,512 units in 2011 is 1 expected to grow to 1.06 million units by 2020 accounting for up to 3.4% of annual vehicle sales. EV Availability: More than 75 electric vehicle models can be expected by 35 vehicle 2 manufacturers by 2020. Low Manufacturing Cost: Manufacturing electric vehicles in China can be 18-25% cheaper than 3 EU, NA due to the low labor, manufacturing and material costs. Government role and support: China has the highest direct cash incentive of up to $9,500 for a 4 purchase of EV, more than North American incentive of $7,500 and European average of $6,180. Charging Station Infrastructure: China has more than 10,000 AC charging spots established in 5 the 25 pilot cities and about 10 battery swap stations. Technology:. More than 8 battery manufacturers and 10 electric motor/inverter suppliers are 6 expected to compete in Electric Vehicle Market post 2020. Source: Frost & Sullivan analysis. 4
  5. 5. Chinese Electric Vehicle Market Overview Chinese manufacturers are likely to dominate the EV market with 58% of market share by 2020 driven by low production, labor and raw material cost. Electric Vehicle Market: EV Unit Shipment Sales, Electric Vehicle Market Breakdown by Segment, China, 2011, 2016 and 2020 China, 2020 Unknown, 29 .1% 1,200,000 0.0% 1.0% 3.4% A Basic, 12.0% SUV/MPV, 3 .2% B 900,000 Subcompact, D/E - C 10.3% Midsize, 9.9 Compact, 35 % .5% 600,000 Electric Vehicle Market: Key Suppliers of battery packs 300,000 and electric motors, China, 2011 Powertrain Manufacturer 0 Wanxiang, Lishen, BYD, ANX, A123 2011 2016 2020 Battery Packs System, LG Chem, MGL, Skyenergy, etc CEV PHEV Others Jing-Jin, Dajun,Shanghai Electric Motors Edrive,Wanxiang, etcNote: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis. 5
  6. 6. Influence of Chinese Government on EVChinese government will invest about $16 billion (100 billion RMB) from 2012 to 2020 to sponsor R&D,develop battery and electric motor technology and gradually industrialize the new energy cars in China. Government Investment in Electric Electric Vehicle Market: Cities Offering Financial Subsidies Vehicle Industry, (China), 2011-2020 (China), 2012 Changchun R&D and $ 7.93 billion Shenyang Huhehaote Tangshan Industrialization Dalian Tianjin Beijing Jinan Vehicle Zhengzhou components $ 4.76 billion Hefei Nantong development Xiangfan Shanghai Chengdu Wuhan Suzhou Hangzhou Chongqing Nanchang Promoting and Changsha Xiamen Demonstration $ 3.17 billion Guangzhou Kunming Shenzhen First Series of 13 Cities (2009) -> Haikou Second Series of 7 Cities (2010) -> Third Series of 5 Cities (2011) -> Source: Ministry of Finance People’s Republic of China• 11 of the first series of 13 cities are provincial capitals, except Dalian and Shenzhen. 6
  7. 7. Electric Vehicle Market—Unit Shipment Scenario AnalysisThe Chinese market for electric vehicle sales is expected to grow to 1.06 million vehicles by 2020 accountingfor 3.4% of total vehicle sales. Electric Vehicle Market: Unit Shipment Sales Scenario Analysis, China, 2009-2020 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 Units 1,000,000 800,000 600,000 400,000 200,000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Optimistic Scenario Frost & Sullivan Scenario Conservative Scenario Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis. 7
  8. 8. Chinese Manufacturers to Account for 58 Percent of Electric Vehicle Market Share in China by 2020 BYD and Volkswagen are Projected to be the Biggest Players of the Market Share of Sales in Electric Vehicle Market, (China), 2020 Others Others Ford Honda Chinese GM Vehicle Zoyte Manufactures, Toyota Joint 58% Great Wall, Ventures, 36% Geely, Renault Nissan JAC International Chana Vehicle Daimler Manufacturers, FAW 6% Volkswagen Chery BYDNote: EV = Electric Vehicle; All figures are rounded. Source: Frost & Sullivan analysis. 8
  9. 9. Charging Facilities in ChinaThree type of Charging facilities are being built in China. A Charging station would have many rapidcharging points which will operate similar to a gas filling station. Electric Vehicle Charging Infrastructure Type of Charging Facilities, China, 2012 Charging Facilities Charge Spot Charging Station Battery Swap StationItem Specifications Type Area Charger spec. Power Item Specifications (m/sq) capacityCoupler IEC/GB (kVA) Area ~1500 m/sq.Access/Billing RFID/IC Card No. of chargers 180 Large (>4Power 220V charge 1,50- No. of swap devices 2 >500 spots) 2,000 DC (large)Output Single phase. 500V,400A No. of service for 30 220V, ~32A Medium (4 automobiles charge 500- DC (medium) Power supply ~3,000 kVAInstallation Vertical Wall 100-500 spots) 1,000 500V, 200A mount No. of battery packs 180Communication RS485/2G/3G DC (small) Small (2-3 No. of battery pack 2interface 350V, 100A charge 50-100 <100 racksElevation <2000m spots) Swapping time 10-15 minutes Source: Frost & Sullivan analysis 9
  10. 10. Charging Station Infrastructure Comparative AnalysisChina is expected to lead in terms of Charging infrastructure with government plans of setting up 4000 chargingfacilities by 2016. Electric Vehicle Charging Infrastructure : Comparative Analysis, China, Europe and North America, 2012 China Europe North America Defined as • Charge spot, Charging station • Mode 1,2,3 and DC • Level 1, Level 2 and DC and Battery switch station charging Charging AC Charging Standard GB/T 18487 : Part 2 IEC 62196 – 2 SAE J1772 DC Charging Standard GB/T : Part 3 Chademo (widely utilized not bot Chademo a standard) Government • The Beijing and Shanghai • Government incentives vary • Tax credit of >$1,000 to install Incentives government are planning to offer country wise a residential charging station up to 30% and 20% of the total cost respectively as subsidies to infrastructure builders Business Model • Pay-as-you-go (charging • Pay-as-you-go • Pay-as-you-go station and battery swap • Subscription • Subscription station) • Revenue sharing • Subscription based Key Participants • Better Place, China Southern • ABB, Chargemaster, EDF • Aerovironment, Coulomb Power Grid, State Grid Elektromotive, ENEL, RWE Technologies, Delphi, DBT Corporation etc. etc. Ecotality etc. Planned/Estimated • ~4,000 Charging Facilities** • ~300,000 Charging points • ~350,000 Charging points Charging Facility (2016) Planned Estimated Estimated **Charging facility can contain many charging points ranging from hundreds to a thousand Source: Frost & Sullivan analysis 10
  11. 11. Who Supplies Whom AnalysisBYD produces both battery system and electric motor system in-house, while other manufacturers cooperateswith multiple suppliers for battery and electric motor systems. Electric Vehicle Market: Who-Supplies-Whom Analysis, China, 2012 Battery System Electric Motor System Battery Cell BMS Battery Pack Electric Motor Motor Control Unit VMs BYD BYD BYD BYD BYD BYD Shanghai Edrive, Chery Wanxiang EV Wanxiang EV Wanxiang EV Shanghai Edrive Ananda AESC, NEC, AESC, NEC, AESC, NEC, Nissan, Xiangfan Nissan, Wanxiang Dongfeng Wanxiang EV. Wanxiang EV, Wanxiang Special Electrical EV Skyenergy Skyenergy EV,Skyenergy Machinery Wanxiang FAW Wanxiang EV Wanxiang EV Wanxiang EV, JJE Wanxiang EV EV,Chunlan Shanghai Jiexin, Shanghai Jiexin, Shanghai Jiexin, Bosch, Shanghai Bosch, Shanghai SAIC A123Systems A123Systems A123Systems Dajun Dajun Lynx Motors, A123 Systems, Shanghai Edrive, Lynx Motors, Geely A123 Systems A123 Systems Positive Shanghai Edrive JJE Image Source: Google Source: Frost & Sullivan 11
  12. 12. Key Conclusions and Future OutlookOpportunity for global suppliers to invest in Chinese EV powertrain manufacturing and VMs to establishvehicle production facilities. So What ? Government So What ? Worlds highest direct cash incentive of $9,500 with additional Early market entrant will get the first mover exemption from annual taxes advantage and utilize government subsidy. Infrastructure Utilities have been supporting Opportunity for businesses to invest in battery swap stations but VMs are battery swap station as China is the only not in favour at present country exclusively developing the switch stations. Joint Ventures Foreign VMs should leverage domestic JVs between foreign and Chinese VMs good supply VMs is expected to take up 36% chain, dealership, distribution network and market share understanding of the local market. Opportunity for global suppliers to invest in Raw Materials and Supply Chinese EV powertrain manufacturing and Chain for VMs to establish vehicle production EV Battery and motor raw materials facilities. Potential for huge margins. are abundant and cheaper by 30% Source: Frost & Sullivan analysis. 12
  13. 13. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by “Rating” this presentation. 13
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  15. 15. For Additional InformationKatja Feick Anjan Hemanth KumarCorporate Communications Team LeaderAutomotive & Transportation Europe Automotive & Transportation+49 (0) 69 7703343 +91 80 6702 8035Katja.feick@frost.com Anjan.kumar@frost.comJason Huang Sarwant SinghResearch Manager PartnerAutomotive & Transportation, China Automotive & TransportationOperations +44 207 915 7843+86 21 5407 5780 Sarwant.singh@frost.comJason.huang@frost.com 15

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