China is currently subsidizing the development of e-mobility, making just under €7.7 billion (US$8.4 billion) available in the period to 2016, and is the global frontrunner in e-mobility subsidies by far, according to the Q1 2015 E-Mobility Index published by consultancy Roland Berger. The report also found that while Japan increased its subsidies slightly to €171 million (US$187 million) through 2016, most of the major automotive nations have seen the public subsidization of e-mobility decline dramatically. The US and Italy offer the least subsidization.
The index, prepared by Roland Berger and fka experts, compares the relative competitive standings of the top seven automotive nations (Germany, France, Italy, the USA, Japan, China and South Korea) in the electromobility segment. The outcome is based on analysis of three indicators: technology, industry and market.
China. Although China still lags behind other leading automotive nations in terms of the share of xEVs in total vehicle sales, in 2014 it became the second-biggest global market for xEVs in absolute terms. Sales of xEVs doubled in China in Q1 2015 from Q1 2014. China has also widened its network of charging stations and established a cooperation network for public sector companies engaged with e-mobility solutions.
The country has established an active industry and regulatory policy; local xEVs produced by partially foreign-owned companies (which account for almost 80% of the total Chinese market) are only permitted if one of the three key components—electric motor, battery or power electronics—is made not just in China but by a Chinese patent holder.
China has gradually introduced measures directly targeting sales, expanding these measures incrementally; e.g., local sales subsidies introduced in various pilot cities in 2009 were extended to 47 cities in 2014.
China’s primary policy objective is to achieve zero emissions locally; the renewal of sales subsidies in 2013 thus only included plug-in hybrids and battery vehicles. In the fleet mix, this is reflected in the fact that most xEVs sold are electric vehicles (BEVs) in the A or B segment, the index reported.
Overall rankings. In terms of technology, Japan has taken over the lead again, with France in second place. Germany is catching up quickly in terms of market, but the relative positions of the different nations remain unchanged overall for both market and industry.
Technology. Germany fell from first to fourth position due to the ending of government subsidies and further shifts in the fleet mix. Korea is in third place behind Japan and France. The continuation of funding programs and a further shift in the French fleet mix in favor of technically high-value vehicles favor this development.
China shows a slight improvement in technology due to continuing high levels of state subsidies.
Industry. Japan, the US and China are the top 3 nations, with these activities accounting for a high share of the GDP—both automotive manufacturing and battery production. The strong domestic demand in Japan and the US is also having a negative impact on European OEMs’ production forecasts. The US continues to close the gap to Japan, as does China.
In terms of battery cell production, the global distribution of national value added remains largely the same as in the previously examined period. Korea is up slightly, with domestic manufacturers increasing supplier volumes for European OEMs in particular.
Market. The US remains the lead market for e-mobility, selling some 120,000 electric and plug-in cars in the past 12 months. But the Chinese market has seen the biggest growth, more than doubling its sales year on year, with almost 53,000 cars sold. One of the main reasons for this is the strong demand from cities and local authorities.
Double-digit growth rates have also been recorded in Germany (27%) and France (13%). Looking at the number of e-vehicles as a proportion of a country’s entire automotive market, France leads the pack with 0.90% market share, followed by the US (0.73%) and Japan (0.71%). Germany’s standing remains somewhere in the middle, at 0.43%.
Stricter CO2 limits and lightweight design principles could stimulate e-mobility. From 2020 onward, 95% of newly registered cars in Europe will have to meet carbon limits, which are going to be even tighter from 2021. Then, new car emissions will be limited to just 95 grams of CO2 per kilometer driven—down from the current 130 grams.
The tightening of European directives is placing OEMs under increasing pressure: In the coming years they will need to offer at least one hybrid or fully electric model in all ranges in order to meet the CO2 limits.
The stricter European directives favor premium OEMs most of all. That’s because their high-price models make them more able to tap into a wealthy clientele than automakers who sell high-volume vehicles.—Roland Berger Partner Thomas Schlick
This, however, is all set to change in the future, as the conditions are now in place to enable OEMs to manufacture electric cars featuring more mature technology more cheaply. The application of lightweight design principles could deliver major impetus for the evolution of electromobility. Automakers are compelled to reduce the weight of electric cars dramatically to offset the extra weight of the battery. But to date, the design, the modular construction systems and the materials used in the vehicles were still aligned toward the conventional model series.
Modular construction systems enable car manufacturers to produce higher unit numbers at lower costs. However, electric cars can be between 10 and 30 percent heavier than conventional vehicles. This makes them less efficient. OEMs should therefore focus more on alternative materials like carbon fiber reinforced plastics and aluminum. Cost considerations do mean, though, that OEMs will not be able to migrate completely over to lightweight design concepts in the near future.—Markus Thoennes, Senior Engineer at fka