CATARC report - March 2016: New Energy Vehicle trends in China
New energy vehicle production in February falls below 10,000 units
Production volumes in China (Summary)
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.
Production volume of new energy vehicles (electric vehicles [EVs], plug-in hybrid vehicles [PHVs], and fuel cell vehicle [FCVs]; excluding vehicles equipped with lead-acid batteries) in February 2016 in China declined by 50% month-over-month (m/m) and increased by 64.3% year-over-year (y/y) to 8,262units. Cumulative total for January through February 2016 was 24,600 units. Year-over-year production of passenger EVs was at its highest and that of passenger PHVs declined by more than 50%. By vehicle type, production volume of passenger cars, buses, and special-purpose vehicles in February 2016 accounted for 79.8%, 17.7%, and 2.5% of the production share, respectively.
Fig. 1 Production volume of new energy vehicles (Sep. 2015 to Feb. 2016)
Production volumes in China
Table 1 Production volume of new energy vehicles by type in Feb. 2016
Fig. 2 New energy vehicle production shares by type (Feb. 2016)
Plug-in hybrid vehicle (PHV)
Production volume of PHVs in February 2016 was 1,207 units, which was 21% of the production volume in the previous month. Of the 1,207 units, 722 units were passenger PHVs. Six automakers produced passenger PHVs in February. These automakers were BYD, Zhejiang Haoqing Automobile, Guangzhou Automobile Group Co., Ltd. (GAC), Shanghai Automotive Industry Corporation (SAIC), Beijing Benz Automotive, and Brilliance BMW. The BYD Tang consecutively ranked first for production volume of passenger PHVs. Although production volume of the Tang in February was the highest, which accounted for 48.1% of the production share, production volume was significantly low when compared to the monthly production of 6,000 units in the fourth quarter of 2015. The Beijing Benz BJ7204FLHEV PHV (C350eL) ranked in the top five for the first time.
Production volume of plug-in hybrid buses in February 2016 was 485 units. Production share of plug-in hybrid buses that use natural gas was high. Production volume of these buses accounted for 96.3% of the plug-in hybrid bus production share in February. All plug-in hybrid buses that were produced in February were either mid-size or large buses with a length of 10 m or greater. Eight bus makers produced plug-in hybrid buses in February. The bus makers that ranked in the top five were Zhongtong Bus, Xiamen King Long, Anhui Ankai, Chongqing Hengtong Bus, and Beiqi Foton. Zhengzhou Yutong did not make it in the top five for the first time.
Electric vehicle (EV)
Production volume of EVs in February 2016 was 7,055 units. Of the 7,055 units, 5,871 units were passenger EVs. By automaker, Beijing Automotive Industry Holding Co., Ltd (BAIC) ranked first for two consecutive months, and BYD surpassed China Anhui Jianghuai Automobile (JAC) to second place. The new BYD e6 and Chery EQ ranked in the top five models. 16 automakers produced passenger EVs in February. The automakers that ranked in the top five were BAIC, BYD, JAC, Hunan Jiangnan Automobile, and Chery Automobile.
Production volume of electric buses in February 2016 was 975 units. Production volume was slightly greater on a year-over-year basis, but significantly less on a month-over-month basis (by more than 50%). 23 vehicle makers produced electric buses in February. The vehicle makers that ranked in the top five were Zhongtong Bus, Anhui Ankai Automobile, Jiangsu Joy Long, Dongfeng, and Hangzhou Yuexi Bus. Of the electric buses produced in February, production share for mid-size buses with a length of 6 to 8 m declined from 78% (January) to 23.6%, and that of buses with a length of 8 to 10 m was at its highest.
Production volume of special-purpose EVs in February 2016 was 209 units. Production volume was significantly less on a month-over-month basis (by 50%), but slightly greater on a year-over-year basis. 15 vehicle makers produced special-purpose EVs in February. The number of vehicle makers has been significantly decreasing from the end of 2015. The vehicles that ranked in the top five were SAIC Motor Commercial Vehicle, Shandong KAMA Automobile, Shaolin Bus, Zoomlion Heavy Industry, and Fujian Longma Special Vehicle. Production volume of the top five accounted for 91.9% of the special-purpose EV production share. Electric special-purpose vehicles were mainly used to transport cargos (90%) and collect garbage.
Trends in China
Development and Reform Commission releases “promotion policy on green consumption” and further focuses on prevalence of new energy vehicles
On March 1, 2016, 10 government departments—the Development and Reform Commission, etc.—jointly formulated the “promotion policy on green consumption.” According to the policy, the central government will encourage the purchase of green products, further promote the prevalence of new energy vehicles, and accelerate the development of charging infrastructures.
In addition, the following will be required. In existing parking spaces of main public institutions, charging poles will be installed and at least 10% of the parking space will be designated for new energy vehicles. In 2016, at least 30% of the government-use vehicles that are purchased (additions or replacements) by public institutions will be comprised of new energy vehicles. By 2020, the number of new energy vehicles will significantly increase. To encourage loans for the consumption of green products, such as energy-efficient vehicles and new energy vehicles, the central government will encourage financial institutions to establish insurance programs for new energy vehicles.
Government to establish and invest CNY 500 million in drive battery R&D project
On February 25, 2016, Ministry of Industry and Information Technology (MIIT) Minister Miao Wei revealed that details on a research and development (R&D) project on drive batteries were being finalized. At the present, new energy vehicle makers, other than BYD, do not conduct R&D on batteries nor produce them. The vehicle makers purchase the drive batteries from suppliers. Since the development of the drive battery technology has an influence on vehicle performance and safety, the central government will establish a drive battery project and research team. The government will invest CNY 500 million in the nine companies that will be involved in the drive battery project.
Although production of new energy vehicles in China is approaching a cumulative total of 500,000 units, production of drive batteries are far behind from that of developed countries. State Council Premier Li Keqiang stated that acceleration of drive battery development was required to strengthen the support system of the new energy vehicle industry.
Xinjiang Uygur Autonomous Region: government releases policy to accelerate prevalence of new energy vehicles
On February 17, 2016, the Xinjiang Uygur Autonomous regional government released a policy to accelerate the prevalence of new energy vehicles. According to the policy, at least 10% of the vehicles purchased by public institutions and entities (additions and replacements) will be comprised of new energy vehicles, starting from 2016, to increase the number of new energy vehicles in each of the three to five model cities and provinces in Xinjiang Uygur Autonomous Region. To increase the penetration of new energy vehicles in model areas up to a certain scale by 2020, at least 50% of the vehicles purchased (additions and replacements) will consist of new energy vehicles. For public institutions and entities, it will be at least 30%. Charging facility networks for new energy vehicles will be built in model areas, covering main public service institutions, vehicle congestion areas, commercial and residential areas, and highway service areas. Service spots for battery replacement and vehicle charge (fast and normal) will be set up.
Harbin City: government launches prevalence and industrial development policy for new energy vehicles
The Harbin municipal government launched a prevalence and industrial development policy for new energy vehicles. According to the policy, the new energy vehicle ratio of vehicles owned by each government institution and government enterprise (government-use vehicles, public transportation buses, and garbage trucks) will be raised every year, starting from 2016. By 2017, the ratio will be 30% or greater. Entities and individuals who purchase new energy vehicles will receive subsidies from both the central and municipal governments. The municipal government will pay the same amount of subsidies paid by the central government for the purchase of EVs and 80% of the amount paid by the central government for PHVs. However, the total amount of subsidy that the buyers can receive is up to 60% of the vehicle price.
Charging facilities or chargers will be installed in all parking spaces of newly constructed apartments and large public buildings, and in public parking spaces. In addition, charging facilities and chargers will take up at least 10% of the parking space.
The administrative department responsible for new energy vehicles will establish a new energy vehicle lane “green path” at offices for vehicle registration and issuance of license plates and at auto maintenance shops. In addition, new energy vehicles will be exempt from traffic regulations that restrict vehicles from entering roads in cities based on their license plate number.
BAIC to launch EV with cruising range of 400 km in 2017
On March 7, 2016, BAIC Chairman Xu Heyi announced that BAIC will provide car-sharing services as part of the reform policy for government-use vehicles that was launched by the central government. The service will cover 91 central government institutions and 180 Beijing government institutions. In 2015, BAIC provided more than 1,300 EVs to the government and installed 70 charging facilities and 1,000 charging poles. In 2016, the automaker will provide an additional 5,000 to 6,000 EVs for this car-sharing service. BAIC is reviewing its product strategy to find solutions to the challenges that it is facing with its new energy vehicle—single model, short cruising range, etc. The automaker plans to launch a model with a cruising range of 300 km and another model with a cruising range of 400 km or greater in 2016 and 2017, respectively.
Gree Electric to acquire Yinlong New Energy and enter into new energy vehicle business
On March 6, 2016, Gree Electric Appliances, Inc. of Zhuhai announced that it will acquire Zhuhai Yinlong New Energy Co., Ltd. From this acquisition, Gree Electric aims to enter into the new energy vehicle business.
Geely and Corun launches R&D project for new energy vehicles
On March 6, 2016, Zhejiang Geely Group and Hunan Corun New Energy Co., Ltd. announced that they will launch a R&D project on hybrid technology for new energy vehicles with Chinese automakers that produce own-brand vehicles. Changan and other automakers will join the project by March 2016.
Geely and Corun launched a joint venture and are proceeding with a project to annually produce 1 million hybrid powertrains. Phase 1 construction of a plant in Changsha City, Hunan Province began on February 28. CNY 3.69 billion will be invested in the Phase 1 construction. The plant will start operations in 2017, fully operating in 2018. After Phase 1 construction, an annual production capacity of 300,000 units is expected.
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