Strategic Assessment of Passenger
Electric Vehicle Market:
Can EVs revive the auto industry?
Benny Daniel, Consultant
Automotive & Transportation
January 29, 2009
© 2009 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost
& Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

FOCUS POINTS
300
Unit Shipments (Thousands)
250
2565
200
Market Overview and Forecasts
630
150
260
160
100
100 2004 2005 2006 2007 2008
50
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EV Infrastructure Analysis
INDENTIFICATION OF ALTERNATE AND UNIQUE BUSINESS MODELS TO SUPPORT EV INFRASTRUCTURE
*In du str ie s: Ide nti fied and se lected based on d efin iti on e xisti ng i n eq ui ty tra de
Utilities
mark ets
•P ower Generation Co.
**Sp end in g la rge a mou nts of mo ney i n o wn R&D, to find man y of the proje ct s i n
•P artnership with Re newable Energy Providers
dead -e nds, ho pin g for some to tur n ou t as su cce ssfu l bl ockb uster g ene rati ng
hi gh r etur ns. The mode l i s com mon ly u se d in in dustr ies wh ere deve lop men t
•Energy Storage
co st s, r isks an d po tent ial rew ard s a re h igh .
Financial Governmen t
• Banks, Insurance •Carbon Trading
• Venture Capital •Tax Incentive s
Technology
Cons umer
New Business Models
•Smart Card
• Green Collared EV
•Te lematics
Jobs
•Mobile Se rvice Providers
Industrial
Diversified
• Material Mining
•Gara ges a nd service stations
• Buildings, homes, hospita ls
•Cha rging Stations
• Wire and Cable Bas ic M aterials •Parking Stations
• Ele ctronics •Li-ion, Copper and other •Battery Swapping
battery packaging mtls. •Recycling
Voice of Customer Study- Customer Feedback on EV
Potential for businesses to enter
New business opportunities for
EV market with relatively low
Utilities and Innovative financial-
investment; strategise to partner
leasing firms- To be resilient
with OEMs
High before it makes profits
Utilities
Leasing
Potential to generate revenue
Battery Bus ine sses
Rejuvenation Financial
Opportunities
Fle et
Businesses
Medium Coach
Re cycli ng Servic e/ Bui lde rs
De alership
Tele ma tic s
Innovative model but due to
demographics it requires good
Ma rketi ng Ins urance
EV penetration and customer
Swap
Low Tele com utilization- to have high impact if Stations
successful
Medium High
Low
Frost & Sullivan Support Capabilities
2

Scenario Analysis – 700K Annual Sales Potential by 2015 in NA
Regulations, Incentives, Loan Programs and Li-Ion Technology Advancement
are Primary Drivers
Electric Vehicle Market: Scenario Analysis (North America), 2008-2015
800,000
700,000
600,000
Unit Shipment
500,000
Source: Frost & Sullivan
400,000
300,000
200,000
100,000
0
2008 2009 2010 2011 2012 2013 2014 2015
Optimistic Frost & Sullivan Cons ervative
Key Drivers Optimistic Scenario: Relatively high fuel prices (averaging well-over
$150/barrel), continuation of federal government incentives for EVs and
• CAFE regulations - 35 fleet mpg by 2020, could be higher if states are
expansion of state/city incentives, significant growth in charging and
allowed to set higher emission standards
battery swap infrastructure, significant Li-Ion battery cost reduction (at
• Government incentives and subsidies for EVs - $7,500 for Chevy Volt, free
least 50% reduction in 5 years - 2010-2015), no battery supply constraints,
parking for EVs by many cities, exemption from emission certification by
favorable field experience and no major safety issues.
some states, HOV lane driving exemption for EVs with a single occupant
Frost & Sullivan Scenario: Relatively moderate fuel prices (averaging well
• Industryaggressively pursuing HEV and EV strategy to secure $25B
below under $150/barrel), continuation of federal government incentives
federal auto retooling loans and $17B+ TARP loans
for EVs, slow growth in charging and battery swap infrastructure, moderate
• High
energy security concerns and energy independence goal of the reduction in Li-Ion battery cost (no more than 33% reduction in 5 years -
Obama administration 2010-2015), no battery supply constraints, no major safety issues.
• Technological innovation and economies of scale have driven significant
reduction in Li-Ion batteries
• Growth in charging infrastructure and new business opportunities
3

Scenario Analysis - Market Entry Strategies of Top OEMs and
Change in Congestion Charging Schemes Are the Top Influences
Electric Vehicle Market: Scenario Analysis (Europe), 2007-2015
700000
600000 Volumes doubling
Un S ipm ts
due to early market
500000
en
entrants
Source: Frost & Sullivan
Volumes by Small
400000 OEMs- Identical in
it h
all 3 scenarios
300000
200000
100000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015
Optimistic Conservative Frost & Sullivan
OPTIMISTIC SCENARIO - 2015 F&S SCENARIO - 2015
Start-Up OEs
Start-up OE's
16 %
BMW
BMW 21 %
6%
Honda
Honda
3% 8%
9% Toyota
2%
Toyota
9% 7%
Mitsubishi
9% Mitsubishi 11%
4% 8% Daimler
Daimler
10% 4%
VW
7%
VW
34%
PSA
PSA 31%
Renault Nissan
Renault Nissan
4

EV Technology and Product Roadmap- Charging Times to Drop From 6-8
Hours to <15 Minutes By 2015; But All Fast Recharging to Be Made Off-board
Lead acid Advanced Lead acid
Nickel Metal Hydride
Batteries
Sodium Nickel Chloride
Phosphate based
Manganese based
Lithium Ion
Titanate based
Silica based
Zinc Air
Permanent Magnet
Electric
Motors
Asynchronous
Switch Reluctance
In wheel motors
Driving Distance/charge-
Up to 200 kms 300 + kms
Performance
up to 60 kms
Charge Time – 6 to 8 hrs < 1 hour < 15 minutes
Battery Capacity – up
Up to 50 kWh 75 kWh +
to 16kWh
Source: Frost & Sullivan
Motor Power- Up to 70 kW 70 kW – 250 kW
Slow charging - onboard
Infrastr
ucture
Fast charging – mostly off board
Battery Swapping
2005 2010 2015
5

Number Of Potential Customers* To Increase 5 Fold Post 2015 Across Prime
W. European Markets As EV Range Extends to Reach Suburban and Adjacent
Cities
Electric Vehicle Market: Range and spread of Electric Vehicles (Europe), 2007-2015
Potential Customer = ~ 3.42Mn
+150 Miles
+ +
Key Markets = , Scandinavia, Switzerland
Drivers:
Cities + Sub-urban + Rural
• 150 + Miles to be standard with high technology batteries
5
offering stronger storage capacity
201 • Environmental concerns to yield high adoption rate among
potential customers
1-
100 Miles
201
Potential Customers = ~876K
+
Key Markets = , Scandinavian regions
Cities + Sub-urban
Drivers:
• Competition will see EV manufacturers increase
distance, speed and charging time configuration
50 Miles
0
01
• Consumers to increasingly use EVs to commute from
home (suburban) to work (urban)
-2
09
20
Potential Customers = ~ 686K
08
-20
Key Markets = Cities
04 Drivers :
20 • EV’s limiting range restrict application to cities
50 Miles 100 Miles +150 Miles
*Potential Customer Customers “Very likely” to purchase EV with present specifications .
•Likely purchase to actual adoption rate would depend on individual market developments Source: Frost & Sullivan
6

At least 13 Congestion Charging Cities to Be In Operation In Europe By 2013,
All Key Cities Have Good EV Potential
•Future Schemes at
proposal stage,
•Charging Stations = 50 (400 planed)
2008-2015
•Key Players = Govt
PLANNED BY 2010
•Schemes with future
•Highlights
potential, beyond
2013
1. Charging station network is a
government initiative 80
•Existing schemes Others 30 Others
200
Switzerland
• Charging Stations = 100 (40+in London)
150
• Key Players = Government, EDF, Elektromotiv Austria
• Highlights 193
1. Govt invested £ 90Mn to make Britain the France 425 Paris
50
“Capital of Electric Vehicles”
2. EDF has partnered with Elektromotive to
build 250 stations in London
Norway 400
120
Bordeaux
250
UK
•Denmark
•Charging Stations = 200 (100 + in 100
•Charging Stations= 20K plan
Paris & Suburbs) 47 Lyon
Italy 90
•Key Players = Better Place,
•Key Players = EDF, Govt, VM’s Germany
15 Strasbourg
Dong Energy
•Highlights
60 500
1. Govt allocated €400M to
develop charging network
2. EDF partnership with Renault
& PSA to build charging 200 •Charging Stations = 60
stations 200 •Key Players = VM’s,
•Synergies and initiatives from several
Utilities
industries will see the penetration rate of
•Highlights
•Charging Stations = 1300
1. VW & E-ON charging station increase dramatically
target for 2011
20 2. Daimler &
•Key Players = Govt, Nissan •The above forecast could prove
RWE
conservative
•Charging Stations = 20 (400
Source: Frost & Sullivan
planned)
•Key Players = Daimler, ENEL
• Strong correlation exists between regional markets adoption of congestion charging (and other green initiatives) and
uptake of charging stations, e.g. London and Norway
• Pioneering efforts from relevant industries could facilitate faster expansion of infrastructure
7

Shift From “Dumb Grid” to “Smart Grid” Will Support the Development of EV
Infrastructure
EV Support
Utility Power Generation Infrastructure Implications on Utilities ROI Opportunities
T op
Capability
ics
Tim
eF
Conventional Grid and Infrastructure
ram
e
• Centralised power
Power Station stations
• Limited to grid and
• Centralised power
Pre 2008
utility industry
generation resulting in
substantial power and
Office
transmission losses
Building
Houses
Factory
UTILITY
Transformation of` Conventional Grid
• Consumers – Utility Bills
Energy Internet
• Partnership with renewable
80 %
energy generators
developmen
• Decentralized
Hospital
• Charging Stations
t
• Generating facilities – • Parking Space
Smart Grid Control
wind, solar • Govt - Carbon Trading
Centre
• Offices, hospitals • Venture Capital
2008 - 2015
Solar Power
selling excess energy • Garage and Stores Support
back to grid
Wind
EXTERNAL
Power • EV as generators when • Battery Manufacturers
not in use • Telecom Providers
• Increased efficiencies
Energy Storage
• Smart Card
• Banks, insurance etc.
40 %
• Green Collared Jobs
developmen
t • Recycling
Smart House with
Low • Battery Servicing - Swapping
EV car generator
Own Generation High
8

Innovative Business Opportunities Arise from Partnership Formed Between
Diverse Industries in Order to Expand Infrastructure in Time for the EV Boom
Identification Of Alternate And Unique Business Models To Support EV Infrastructure
*Industries: Identified and selected based on definition existing in equity
Utilities
trade markets
• Power Generation Co.
**Spending large amounts of money in own R&D, to find many of the
projects in dead-ends, hoping for some to turn out as successful blockbuster • Partnership with Renewable Energy Providers
generating high returns. The model is commonly used in industries where
• Energy Storage
development costs, risks and potential rewards are high.
Financial Government
• Banks, Insurance • Carbon Trading
• Venture Capital • Tax Incentives
Technology
Consumer
• Smart Card
EV
• Green Collared
• Telematics
Jobs
• Mobile Service Providers
Industrial
Diversified
• Material Mining
• Garages and service stations
Source: Frost & Sullivan
• Buildings, homes, hospitals
• Charging Stations
• Wire and Cable Basic Materials
• Parking Stations
• Electronics • Li-ion, Copper and other
• Battery Swapping
battery packaging mtls.
• Recycling
BLOCK BUSTER BUSINESS MODEL**
New Business Models that will address additional Electric Vehicle (EV) energy requirements will be formed at the
intersection of several diverse and cross functional industries
9

Battery Leasing Best Returns: Future Leasing Models To Sell 75% Of
EVs; The Rest 25% Sold Traditionally
Business Model 1 Business Model 2 Business Model 3 Business Model 4
TYPE Energy Package Maintenance Package Part Subsidy Full Subsidy
COVER Battery lease + Energy Package+ Maintenance Maintenance Package+
Electricity Insurance+ Maintenance Package+ Discount 100% Discount
ENERGY Monthly Bill Flat: Max 2000km/month Flat: 25,000km/year Flat: 30,000km/year
CONTRACT NA NA 4 years 7 years
SUBSIDY NA NA 50% car price Free car
MONTHLY Up to $200 Up to $400 $700- $1,000 ~ $1,200- $2,000
LEASE
• Leasing EV batteries will be the likely option to continue beyond 2020. The leasing model might
possibly be the main driver of how vehicles will be sold in the future. The immense engineering behind
Future
the batteries will only increase the cost and the performance. A strong option to amortize this is
through the leasing models.
• Reduction of the product cost is to promote market penetration. In the same direction the future
belongs to several ways of separating the energy from the battery.
10

While Customer Awareness of EV Limitations are High, their Suggestions and
Opinion on Incremental Improvements in EV are of High Interest to OEMs
Electric Vehicle Market : Ideal Characteristics of an EV consumer (United Kingdom), 2008
OWNERSHIP & MAIN USAGE
• Driving the vehicle to work is his main priority
• ~40% of the market
• Av miles per trip – 16 (London), parking duration 7 hours
• 60% of these commuters do inner city commute
• Shopping during weekends.
• Differentiate between weekday and weekend usage –
• average only twice a month - 100 miles or more
MOTIVATING FACTORS
DEMOGRAPHICS
• Contribution to environment
• Male/female falling under the age group
of 26-45 yrs • Reduced fuel cost
• Has a university degree • Savings on tax and other Govt
subsidies
• Earning between $30K - $655K
Male/Female (26-45 yrs) • Free from congestion charging
• Resides in London / Greater London
• Compact and ease in parking
• Flat /semi-detached house residence
FEEDBACK ON LEASING
BATTERIES SUGGESTIONS ON EV IMPROVEMENT
• Prefer to lease battery than source • Reliability and after-sales service
it directly from manufacturer • Latest battery to aid in greater distance
• Efforts to dispose and effect on travelled
environment key reasons • Improved and increased access to charging
NEEDS stations
• Reliability, price and fuel economy were the most important • Improved interior designs for greater
issues considered while purchasing EV experience
• Improved charging capability, provision of fast charger kits • Navigation tools to improve access to POII*
and maintenance free motors were features that consumers
would consider to boost chances of EV purchase
Source: Frost & Sullivan
11

Electric Vehicle Market to Create Opportunities and Attractiveness for
Industries such as Telematics, Mobile Phones, Fleet Businesses
Electric Vehicle Market- Opportunity assessment for various businesses, 2012-2015
Potential for businesses to enter
New business opportunities for
EV market with relatively low
Utilities and Innovative financial-
investment; strategise to partner
leasing firms- To be resilient
with OEMs
High before it makes profits
Utilities
Leasing
Potential to generate revenue
Battery Businesses
Rejuvenation Financial
Fleet
Businesses
Medium Coach
Recycling Service/ Builders
Dealership
Telematics
Innovative model but due to
demographics it requires good
Marketing Insurance
EV penetration and customer
Swap
Low Telecom utilization- to have high impact if
Stations
successful
Medium High
Low
Effort required to develop EV business
Source: Frost & Sullivan
: Size of the bubble represents the impact on EV market
12

Our EV Global Research Program
Strategic Assessment of European Passenger Electric Vehicles Market - May 2008
Published Research
Strategic Analysis of European Market for Electric Corner Modules - Oct 08
Strategic Analysis of Global Market for Fuel Cell Electric Vehicles - Aug 2008
World Hybrid/Electric Vehicle Battery Markets -Jun 2008
Strategic Analysis of In Car Green Technologies - Jun 2008
Advances in Hybrid Electric Vehicles (Technical Insights)
Global Market Analysis of Plug in Hybrid Electric Vehicles Dec 2007
European Consumers’ Attitudes & Perceptions Towards Sustainability, Environment
Strategic Review of New EV Includes section on Electric Vehicles
and Alternate Power-trains - Business Models in the Automotive Industry – Q1, 2009
1.
Analysis of Electric Vehicles Infrastructure for Automotive Applications in Europe and Revenue Generation
2.
Opportunities for Utilities – Q1, 2009
In Process Research
Strategic Analysis of the Fleet Market Opportunity for Electric Vehicles in Europe – Q2, 2009
3.
Asia Pacific Market Analysis for Electric Vehicles for Fleets and Private Consumer – Q1, 2009
4.
North American Market for Electric Vehicles for Fleets and Private Consumer – Q2, 2009
5.
Analysis of Hybrid Vehicle Systems and Technologies in North America – Q2, 2009
6.
VOC Study on EVs – Customers Interest in Electric Vehicles and Acceptability to New Business Models
7.
The Generation Y Consumer : Future Vehicle and Features Choice and Brand Marketing Positioning Study –
8.
Consumer Study to have section on EVs – Q2, 2009
VOC Study on Sustainability and Alternate-Fuel Vehicles and Technologies in USA
9.
Strategic Profile and Business Model Assessment of (Project) Better Place – Q3, 09
10.
Note : new titles and schedule is subject to change and is not guaranteed. Titles for second half of 2009 are still to be
confirmed. Suggestions are welcome 13

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