CATARC report - January 2017: NEV trends in China

New energy vehicle production exceeds 500,000 units in 2016

2017/02/10

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.

 2016 was the first year in which the 13th five-year plan and the 3rd policy for the prevalence of new energy vehicles” were in effect. Production volume of new energy vehicles increased by 1.1-fold year-over-year (y/y) to 516,000 units. Sales volume was also 516,000 units. China sustained its position in having produced and sold the most number of new energy vehicles in the world. Looking at production volume of new energy vehicles in 2016 on a monthly basis, average monthly production in the first quarter was sluggish at 15,000 units; however, the average from April to October increased to 40,000 units. Because average monthly production in November and December expanded to 98,000 units, production volume for the full-year in 2016 was raised to 516,000 units.

 Production volume of new energy vehicles in December 2016 increased by 17.1% y/y and by 33.8% month-over-month (m/m) to 112,100 units, marking a record high for monthly production. Looking at production volume of new energy vehicles by vehicle type, production volume of electric vehicles (EVs) exceeded 100,000 units, which accounted for 92.2% of the new energy vehicle production share. Production volume of plug-in hybrid vehicles (PHVs) was approximately 86,000 units. Three types of fuel-cell vehicles (FCVs) -passenger cars, buses, and special-purpose vehicles- were produced, but production volume was less than 100 units.

Fig. 1 Monthly production volume of new energy vehicles (2016)



Production volumes in China

Table 1 Production volume of new energy vehicles by type in 2016

 
PHV
EV
FCV
Total
Passenger car
74,229
247,345
64
321,638
Bus
19,576
115,664
33
135,273
Special-purpose vehicle
1
58,773
532
59,306
Total
93,806
421,782
629
516,217


Fig. 2 New energy vehicle production shares by type in 2016

Passenger PHV

 The number of automakers that produced passenger PHVs in 2016 increased from the previous year by four to 11. For this reason, the number of models produced also slightly increased. BYD sustained first place for the production of passenger PHVs due to strong production of the Qin and Tang. SAIC Motor Corporation Limited (SAIC) produced over 20,000 Roewe 550PHEVs. Production volume of all other models did not reach 4,000 units. 60% of the passenger PHVs produced in 2016 had an EV cruising range of 100 km or more.

Plug-in hybrid bus

 Production volume of plug-in hybrid buses was 4,886 units in December 2016 and 19,600 units in the full-year of 2016. Even by the year, most of the buses produced were large buses with a length of 10 m or greater and they accounted for 86% of the plug-in hybrid bus production share. Of the top ten plug-in hybrid bus makers, Yutong Bus was the only maker that annually produced over 5,000 units. 2016 production share of plug-in hybrid buses equipped with a natural gas engine declined by 6 percentage points y/y to 59%.

Passenger EV

 Production volume of passenger EVs was 34,100 units in in December 2016 and 247,300 units in the full-year of 2016. Production volume of passenger EVs in 2016 was concentrated by the top ten automakers, accounting for 90.1% of the overall production share. By automaker, Beijing Automotive Industry Holding (BAIC) ranked first for production with 47,000 units and BYD ranked second with approximately 40,000 units. Eight joint-venture automakers entered the passenger EV market in 2016. These joint-ventures were FAW Haima Motor, Zhengzhou Nissan Automobile, Beijing Hyundai Motor, GAC Toyota Motor, SAIC-GM-Wuling Automobile (SGMW), Dongfeng-Yueda-Kia Motors, Changan PSA Automobiles, etc. The passenger EV market in 2016 was dominated by A-segment cars. In 2015, AO-segment cars and below accounted for 82% of the market share and A00-segment cars accounted for 63%. However, in 2016, the share of A00-segment cars shrunk to 22% while A-segment cars and above (length exceeding 4.0 m) expanded to 53%. By drive battery, production share of vehicles equipped with a ternary battery expanded from 56% in the previous year to 71%. On the contrary, production share of vehicles equipped with a lithium-iron phosphate battery shrunk. Average energy consumption in 2016 was 6.86 km/kWh.

Electric bus

 Production volume of electric buses was 34,900 units in December 2016 and 115,700 units in the full-year of 2016. The number of bus makers that produced electric buses in 2016 increased by 30 y/y to 93. Total production volume of electric buses in 2016 by the top ten bus makers accounted for approximately 70% of the production share. Yutong Bus, BYD, and Zhongtong Bus produced over 10,000 units. Production share of electric buses with a length of 6 to 8 m shrunk from 60% in the previous year to 18% in 2016. On the contrary, production share of mid-size and large buses was 72%, accounting for the majority of the electric bus share. By drive battery, production volume of electric buses equipped with a lithium-iron phosphate battery, lithium-titanate battery, and lithium-ion manganese-oxide battery accounted for 95%, 3%, and 2% of the production share, respectively. Production volume of electric buses equipped with a ternary battery was 393 units of which buses with a length of 6 to 8 m accounted for 80% of the share.

Electric special-purpose vehicle

 Production volume of electric special-purpose vehicles in 2016 was 58,800 units. Of the 58,800 units, 34,500 units were produced in December, which accounted for 58.5% of the 2016 production share. 121 vehicle makers produced electric special-purpose vehicles in 2016; however, only three of them─Dongfeng Motor, Dayun Automobile, and BAIC─produced over 5,000 units. 94% of the electric special-purpose vehicles produced in 2016 was for cargo-transport use. Governments in Beijing City and Chengdu City released a policy which gave preferential treatment to EVs used to transport cargo. Due to the implementation of this policy, it encouraged vehicle makers to produce many of these vehicles.

FCV

 Production volume of FCVs in 2016 was 629 units. Of the 629 units, fuel-cell special-purpose vehicles accounted for 85% of the production share. Five vehicle makers produced FCVs in 2016. In August 2016, the United Nations Development Programme (UNDP) initiated a project to promote the prevalence of FCVs. Many cities participated in the project. They proclaimed to be a FCV model district and promoted the development and production of FCVs.

Table 2 FCV makers and production volume in 2016

Passenger FCV SAIC Motor Corporation Limited
64
Fuel-cell bus Beiqi Foton Motor Co., Ltd.
6
Foshan Feichi Automobile Manufacture Co., Ltd.
25
Zhengzhou Yutong Bus Co., Ltd.
2
Sub-total
33
Fuel-cell special-purpose vehicle Jinhua YoungMan Automobile Co., Ltd.
532
Total
629


Trends in China

Four ministries release “notice on adjustment to subsidy policy for prevalence of new energy vehicles”

 On December 30, 2016, the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology (MIIT), and the National Development and Reform Commissions (NDRC) released a “notice on the adjustment to the subsidy policy for the prevalence of new energy vehicles.” This policy was implemented from January 1, 2017.

 This policy does not only reduce the subsidies to that from the 2015 policy but also sets stricter standards on them. In addition, this policy incorporates the safety of new energy vehicles as a requirement for subsidies. Furthermore, it sets a ceiling on subsidies provided by the central and local governments, a post adjustment system, and a penalty system. Adjustments made were as follows.

Stricter requirements for vehicles to be qualified as recommended model Additional requirements on energy consumption Energy consumption per range of 100 km based on vehicle weight added as requirement for passenger EVs.
Ekg per vehicle type, and energy consumption per range of 100 km for vehicle weight of 1 ton added as requirements for electric special-purpose vehicles.
Stricter Ekg standard values set for electric buses.
Stricter requirements on cruising range Stricter cruising range requirements for electric buses and FCVs: measurement method switched from constant-speed-drive mode to test-drive mode at 40 km/h, etc.
Stricter cruising range requirements for passenger EVs set in phases.
Stricter requirements on driving batteries Stricter standards on safety, cycle life, and charge-discharge performance set with use of new international standard, and energy density standard added as requirement for drive batteries.
Stricter technical requirements set for FCVs.
Stricter conditions on safety Stricter requirements set on safety. If an accident is caused due to a fault in quality of a model, subsidies will be reduced for that particular model depending on the content of the accident.
Construction of sampling inspection Mechanism to conduct sampling inspection will be constructed to strengthen the control by the inspection department. Vehicle makers and models that do not pass the sampling inspection will be removed from the “list of recommended models for new energy vehicles” (hereinafter referred to as the “list”).
Construction of system to manage models in “list” System to manage models in the “list” will be constructed. After a new energy vehicle is added to the “list,” the seller applies for a subsidy. If a model is not sold for one year, it will be removed from the “list”
Promotion for prevalence of new energy vehicles Prevalence of new energy vehicles will be promoted. For a non-individual user to apply for a new-energy vehicle subsidy, the cumulative driving range of his/her vehicle must reach 30,000 km (excluding vehicles used for work). In addition, subsidy standards and technical requirements will be based on the year in which the vehicle-driving permit was obtained.
Adjustment to subsidy standards for new energy vehicles Subsidy requirements will be set by energy consumption, cruising range, specific gravity of battery and vehicle weight, and battery performance which will be based on the production cost and technical level of drive batteries for new energy buses. Subsidy standard will be determined based on battery capacity and energy density
Adjustments to subsidy standards will be made for new energy trucks and special-purpose vehicles. Vehicles will be separated into grades according to the amount of energy used for propulsion; subsidies will determined based on the grade.
Maximum subsidy amount provided by the central and local governments will be set. Subsidies provided by the local government (total local subsidies for each class) will not exceed 50% of the subsidies provided by the central government. In 2019 to 2020, subsidy standards and maximum subsidy amount provided by the central and local governments for each vehicle type (excluding FCVs) will be reduced by 20% from the current standard/amount.
Related departments will constantly make adjustments to the system based on technical progress, industrial development, and prevalence status of new energy vehicles.

 Ekg = E÷M. E is the energy consumption rate (Wh/km). M is the additional mass (equal to the maximum loading amount when the maximum loading amount is 180 kg or less, 180 kg when the maximum loading amount is greater than 180 kg to less than 360 kg, or half the maximum loading amount when maximum loading amount is 360 kg or greater).

 The new system revises the method for paying subsidies and establishes a severe penalty system for subsidy fraud. The “subsidy proposal for new energy vehicles and product technical requirements,” stipulates subsidy standards and technical requirements for passenger cars as follows.

1. Standard values for passenger PHVs, including new-energy passenger cars and range-extender vehicles

Unit: ten thousands CNY/vehicle

Vehicle type
EV cruising range R (test-drive mode, km)
Maximum subsidy provided by the local government (in ten  thousands CNY)
100≦R<150
150≦R<250
250≦R
50≦R
Passenger EV
2
3.6
4.4
/
50% of subsidy provided by the central government
Passenger PHV
/
/
/
2.4

2. Technical requirements for new energy passenger cars

・Passenger EVs will be capable of traveling at 100 Km/h minimum for 30 minutes
・Energy density of drive batteries will exceed 90 Wh/kg for passenger EVs. When energy density is 120 Wh/kg or greater, subsidies will increase by 1.1-fold.
・In accordance with vehicle weight, requirements for energy consumption (Y) per 100 km in test-drive mode for passenger EVs will be determined as follows.

 Vehicle weight ≦ 1,000kg: Y ≦0.014 X vehicle weight + 0.5
 1,000kg < vehicle weight ≦ 1600kg: Y ≦ 0.012 X vehicle weight + 2.5
 1,600kg < vehicle weight: Y ≦ 0.005 X vehicle weight + 13.7
・For passenger PHVs with an EV cruising range less than 80 km, fuel consumption, excluding that by power generation, must be 70% or less than to that of China’s fuel consumption standards. Passenger PHVs with an EV cruising range of 80 km or more will be subject to the same requirements as passenger EVs.

State Council releases “13 th five-year plan for development of national strategic emerging industries”

 The State Council released the “13th five-year plan for the development of national strategic emerging industries.” By increasing the prevalence rate of new energy and energy-efficient vehicles, its low-carbon industry will be developed into a key industry. By 2020, the scale of the industry will become CNY 1.0 billion or greater.

 The scale of prevalence of new energy vehicles will be expanded. By 2020, annual production/sales volume will become at least 2.0 million units and cumulative total will become over 5.0 million units. Technical level of new energy vehicle makers and suppliers nationally will be raised to that of the international level, making the vehicle makers and suppliers competitive outside China. Details of the plan are as follows.

・Quality and performance of electrified vehicles will be improved. By 2020, the industry will become competitive.
・A drive battery industry that is also competitive outside China will be developed. By 2020, the technical level of the drive battery industry will be raised to that of the international level, developing the industry into becoming a global leader in the industry.
・Research and development and industrialization of FCVs will be promoted. By 2020, FCVs will be mass produced and used on a constant scale.
・Development of infrastructure will be accelerated. By 2020, charging infrastructure that meets the demand of the EV market will be developed.

Number of new energy vehicles in Shanghai City increases to over 100,000 units

 On January 3, the Shanghai Municipal Commission of Economy and Informatization announced that the number of new energy vehicles in Shanghai City increased to 100,000 units with production exceeding CNY 10 billion, making it the city with the largest number of new energy vehicles in the world. This was the first time that the number of new energy vehicles increased to over 100,000 units in China. This increase in the number of vehicles in Shanghai City was equivalent to the number of vehicles in Norway.

Chery plans to launch new models─Tiggo 7 PHEV and Arrizo 5 EV

 Chery Automobile plans to launch a new compact SUV (development code M31T) into the market in the latter half of 2017. This model will share the same platform with the Tiggo 7. Furthermore, Chery will also launch a seven-seater SUV based on the T1X platform (development code T18), along with the Tiggo 7 PHEV and the Arrizo 5 EV in 2018.

LeEco starts construction of green car plant in Huzhou City, Zhejiang Province

 On December 28, 2016, LeEco started construction of its green car plant, LeSEE Eco-Automobile Industrial Park, in Moganshan High-tech Industrial Development Zone, Huzhou City, Zhejiang Province. The site area is approximately 2.86 million square meters. Construction will be split into two phases. For phase-one construction, investment is approximately CNY 11 billion and site area is approximately 1.33 million square meters. After phase-two construction is completed, the plant is expected to have an annual production capacity of 400,000 vehicles.

Gonow starts construction of new energy truck plant in Taizhou City

 On January 3, 2017, Zhejiang Gonow Auto Co., Ltd. started construction of its new energy vehicle and parts plant in Taizhou City. Total investment in this project is CNY 4.2 billion, and total construction area is 251,452 square meters. The plant will have main process lines, such as stamping, welding, painting, and assembly, a battery pack production line, an inspection line, and other additional facilities. Construction of the new plant is scheduled for completion within two years. The plant will annually produce 90,000 new energy vehicles and in addition to parts for 90,000 new energy vehicles. Sales of approximately CNY 16.8 billion per year and profit before tax of CNY 1.38 billion are expected.

Jiangxi Jiangling Group becomes seventh company qualified to produce passenger EVs

 On December 27, 2016, Jiangxi Jiangling Group New Energy Vehicle Co., Ltd. received official approval to construct a passenger EV plant to produce 50,000 vehicles annually, making it the seventh company qualified to produce passenger EVs. The company has also become the third automaker to operate a new energy business, following Beijing Electric Vehicle Co., Ltd (BJEV) and Chery New Energy Automotive Technology Co., Ltd.

Chongqing Jin Kang becomes eighth company qualified to produce passenger EVs

 On January 10, 2017, the NDRC granted permission to Chongqing Jin Kang New Energy Automobile Co., Ltd. to build a passenger EV plant. The automaker has been allowed to build a passenger EV plant with an annual production capability of 50,000 units. New facilities for stamping, welding, painting, assembly, and battery pack production, along with an office building and test course will be built. Other related facilities will be expanded. The plant will be located in Yufu Industrial Park, Liangjiang New Area, Chongqing City, and total investment will be CNY 2.51 billion.

Reference:
Energy-saving and new energy vehicle network www.chinaev.org
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