CATARC report - August 2014: New Energy Vehicle trends in China
Passenger EV production in July continues to be strong
Production volumes in China
This report is based on a report by Beijing CATARC Automotive Technology Development Company*;
MarkLines has edited and translated the company's report to prepare this report. Click here for a list of CATARC reports.
Fig. 1 Production volume of energy-efficient vehicles
and new energy vehicles by vehicle type (January to July 2014)
The production volume of energy-efficient vehicles and new energy vehicles (hybrid vehicle [HV], plug-in hybrid vehicle [PHV], and electric vehicle [EV]) in China exceeded 7,000 units in June 2014; however, it slightly decreased to 6,962 units in July. As for the breakdown, the production volume of PHVs and EVs was 6,147 units with a share of 88.3%, and the production volume of HVs was 815 units with a share of 11.7%. Looking at the production volume by vehicle type, the production volume of passenger cars was 5,871 units, which was an increase by 9.0% month-over-month (m/m) (of which the production volume of PHVs and EVs was 5,056 units, and the production volume of HVs was 815 units) and the production volumes of buses and specialty vehicles, in which only PHV and EV versions are available, were 909 units and 182 units, respectively. Passenger cars account for 84.3%, buses account for 13.1%, and specialty vehicles account for 2.6% of total sales. The production volume of EV passenger cars increased by 7.3-fold year-over-year (y/y) in the same month and by 6.8% m/m; however, the production volume of EV buses decreased by 75.1% m/m. Looking at the production volume for the January to July 2014 period, the share for PHV and EV passenger cars is on an upward trend.
The production volume of passenger EVs in July 2014 was 4,035 units with an increase of 6.8% m/m. In June, 12 automakers produced 23 models; however, in July, the number of models that were produced dropped to 15. As a result, it is evident that the automakers are focusing on expanding the production of high-demand models. Kandi's K10 had the highest production volume; its production volume for the January to July 2014 period exceeded 7,000 units.
BYD's Qin had the highest production volume of passenger PHVs; production of other models is falling. In the January to July 2014 period, three passenger PHV models were launched in China and the production volume was on an upward trend; however, it grew at a sluggish pace from June (refer to Fig. 2). Since its launch at the end of 2012, the Qin has been the leader in the passenger PHV market and is in a state where there is no competing model.
The passenger HV market is in a state where its production remains flat compared to the previous month. By automaker, the production of Japanese automakers accounts for the majority and there is hardly any production from Chinese automakers. As background, HVs were not subject to the "EV promotion strategy" by the Chinese government as PHVs were; it is thought that this was the factor for the sluggish growth of production.
The production volume of the EV bus in July 2014 was 250 units. It significantly decreased by 75.1% m/m. The EV bus market is small. It is in a state where it is largely relying on the government for subsidy. The Chinese government is trying to expand the production of EV buses through subsidy; however, as of July 2014, only 21 models have been produced and it is in a state where the production scale is still small. Major Chinese bus makers, Yutong, Zhongtong, and Hengtong, are not producing EV buses. This is considered one of the factors for the small production scale.
The production volume of the PHV bus in July was 659 units, which was a slight increase over the previous month. The PHV buses featuring gasoline engines account for 61% of the total volume. Compared to the production cost of EV buses, that of batteries for PHV buses is low and investment in charging facilities is less; therefore, major bus makers, such as Yutong, Jintong, Hengtong, and Zhongtong, produces these buses. The types of batteries that are mostly used in PHV buses are iron phosphate lithium-ion batteries combined with a large-capacity capacitor, followed by manganese lithium-ion batteries and titanate lithium-ion batteries.
Import of HV
Ten automakers imported twenty hybrid models in July. The number of HVs that were imported in July was 2,399 units. Two automakers, Tesla Motors and BMW, import passenger EVs. Tesla Motors imported 1,849 units of its Model S in July, which is a record high.
Trends in China
Chinese style car-sharing
Medium-scale EV makers, such as Kandi and Zotye Auto, are exploring a new system called "Chinese style car-sharing," which is different from the car-sharing that is operated by car-sharing companies. Automakers will play a central role in the "Chinese style car-sharing" and will be responsible for the construction and operation of the charging facilities. If the government provides subsidies to automakers, it will also lead to the enhancement of the charging facilities. Therefore, it is a system that will also benefit the users. It is said that the target demographic of the "Chinese style car-sharing" is people who do not own a car but want to use one and that many of them puts emphasis on the usage fee. In the future, in addition to reducing the usage fee, the EV makers will seek for making use of the large amount of user information that are obtained from the system for marketing activities.
Number of registered electrified vehicles in Beijing: 600 units in the first half of the year
In Beijing, license plates for electrified vehicles were issued by using a lottery system from February 2014. Lotteries are held three times a year for new electric vehicles and a total of 9,382 license plates (of which 4,530 license plates are for businesses and 4,852 license plates are for individuals) are issued. However, since 600 units of electrified vehicles were registered as of end-June, only 6.4% of the license plates that were issued were taken.
In Beijing, an acquisition tax exemption policy for new energy vehicles is planned for implementation in September 2014. The expiration date for the license plates that were selected in February is August 26, which is six months later; therefore, if a vehicle is purchased before the expiration date, the purchaser will not be able to receive tax exemption from the preference policy that is to be implemented in September. To solve this issue, the Beijing Municipal Science and Technology Committee, together with the Beijing Transmission Commission, is considering to extend the expiration date for those whose numbers were selected in the February lottery.
New energy vehicle in Shanghai City: 2,017 free license plates were issued
To encourage individuals to purchase new energy vehicles, Shanghai City has approved the issuance of 20,000 free license plates at the end of 2012. The number of free license plates that were issued and new energy vehicles sold to individuals in the first half of 2014 was 1,436 units; it exceeded the 581 units in 2013. Shanghai City issued 2,017 free license plates by the end of July 2014.
Test operations of EV leasing in Wuhan
A few companies in Wuhan are leasing EVs on a trial basis. Those with an ID or driver's license can use the EV if a deposit is paid. The leasing period is available on an hourly or yearly basis. It is observed that the toll fee for roads, bridges, and tunnels, the limit of vehicles into the city, and the usage fee for the charging station will be applicable for exemption.
FAW Group has the own-brand EV "Oley" roll off the line
FAW Group had the Oley EV rolled off the line on July 15, 2014. The company launched the EV project in January 2013 and started small-scale production of the vehicle. It plans on launching the vehicle by the end of 2014. The base price is CNY 219,800. The vehicle is equipped with a motor and battery that were independently developed. The car's acceleration time from 0 to 50 km/h is 4.5 seconds and it has a maximum speed of 140 km/h. The battery capacity is 21 kWh. The cruising range is 150 km. The charging time for rapid charge is 48 minutes and for full charge is six hours. The life cycle is 5,000 cycles.
Road-charging rescue vehicles to be launched in Beijing in October 2014
To promote the development of charging infrastructures, the Chief Marketing Officer of Beijing New Energy Automotive Company, Wang Shui-Li, had an alliance formed between Beijing Automotive Industry Holding Co., Ltd. (BAIC) and China Petroleum & Chemical Corporation. They will be setting up charging stations, leaving a fixed distance between gasoline stations, to the north, south, east, and west (in four directions) of the Beijing suburbs (outside the 3rd Ring Road). Charging rescue vehicles that charge dead batteries of EVs will be launched in the city (within the 3rd Ring Road) in October 2014.
BAIC and "letv.com" jointly develops new energy vehicle
A discussion on new energy vehicles was held at the Silicon Valley in the U.S. between BAIC Group's chairman, Xu Hevi, and "letv.com's" (a major Chinese video distribution service company) CEO, Jia Yueting. In April 2014, Chairman Xu stated, "In the future, automakers will supply their cars to internet companies based on an OEM agreement." He also stated that there was a possibility of supplying them to "letv.com." Furthermore, he stated, "New energy vehicles should not be in accordance to the traditional automotive industry system. They should be compatible with the new system."
Tesla Motors focuses on the construction of charging facilities
Tesla Motors announced that by the end of 2015, it will increase the number of charging spots to 5,000 locations in Shanghai and set up "Supercharger" quick-charging stations in Guangzhou, Chengdu, and Chongqing. Tesla Motors is promoting the development of charging infrastructures. As of July 2014, it has set up superchargers in seven locations (two in Beijing, three in Shanghai, one in Hangzhou, and one in Shenzhen) and charging spots in 100 locations in 21 cities across the country.
Tesla Motors vehicles are exempt from license plate lottery in Hangzhou
After acquiring free license plates in Shanghai, the Tesla Motors vehicles also became subject to the preference policy that exempts them from the license plate lottery in Hangzhou.
BMW concentrates on the research and development of electrified vehicles and Internet of Vehicles (IoV) in China
BMW Group's director, Herbert Diess, is not only focusing on the China R&D business's research and development of new models but also on the development of electrified vehicles and IoV. Research and development activities in China have become a part of the global R&D organization of the BMW Group.
Energy-saving and new energy vehicle network www.chinaev.org
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