Top 5 Electric Vehicle News Stories of Week 21 2017

Top 5 Electric Vehicle News Stories of Week 21 2017

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TOP EV NEWS #1 – BMW reportedly changed EV strategy

Reports this week hinted that cost issues are driving BMW to depart from its dedicated EV brand strategy. BMW CEO, Harald Krueger last year set the German automaker’s strategy as follows:

“Our Strategy Number One Next is centred on consequent lightweight construction, alternative drivetrain technology, connectivity, autonomous driving functions and the interior of the future. The iNext will set the standard from 2021″

Only three weeks ago wattEV2Buy reported that the BMW AGM determined that it would start producing it iNext autonomous brand at its Dingolfing plant form 2021.

Unconfirmed online reports this week claimed that BMW would not pursue the development of the BMW i5 as its mass market answer to the Tesla Model 3, but rather follow other carmakers such as Hyundai and Citroën, by offering electric options across existing ranges so that customers can choose a gasoline model or an electric model.

The reason for the change of heart is that the cost associated with the specialized chassis systems of the i8 and i3 makes it unsuitable for high volume production. In March BMW’s reported its lowest profitability since 2010 on the back of spending on technologies to compete with its rivals in the electrification and autonomous sectors.

It seems BMW is struggling to communicate or find a definitive answer to present as its mass market EV solution. In March of 2017, the BMW CEO hinted that the Mini could be automakers mass market EV.

The following statement by Harald Kreuger this week, “The all-electric MINI and the all-electric BMW X3 will mark the beginning of the second wave of electrification for the BMW Group, benefiting from the ongoing technological progress we are making in this area.” is seen to support the reports that the company is having a rethink on its EV Next strategy.

BMW’s change of direction will set it on a different course than its competitor in the luxury car market, Daimler, which has set an aggressive strategy to develop a separate brand to establish a market lead in the e-mobility sector.

The BMW strategy now seems to focus on finding the least cost route of adding batteries to existing models to produce vehicles for consumer’s increasing appetite for electric cars. Adding batteries to combustion vehicles is seen as a cop-out as consumers will be better served by buying electric vehicles built from the ground up around the technology.

TOP EV NEWS #2 – Mahindra gearing for EV race

Indian based Mahindra and Mahindra this week shed some more clarity on how it aims to compete in the electric vehicle sector. The company announced that it would construct a battery plant in Chakan, Pune City in Maharashtra State which will increase the company’s battery output ten fold. Currently, the company produces only around 500 battery packs a month for its e2O, and eVerito models from imported cells at its Bengaluru plant, the Chakan plant has a target of 5,000 units a month. The Indian company is also developing a high powered electric vehicle platform available by 2019 that is capable of speeds up to 200km/h / 125mph and a range of 350 – 400km (250 miles). The Indian government has set a lofty goal of 100% electrification of the countries vehicle fleet by 2030, but to date, the technology has failed to get any traction that can compare with its peer, China.

TOP EV NEWS #3 – Charging infrastructure market to $45 billion by 2025

US-based research firm Research and Markets this week released a report indicating that they see the EV charging infrastructure market should be valued at around $45 billion by 2025. A rush by governments to encourage the adoption of electric vehicles is seen as the main driver for the uptake of the technology. The research firm also reported on the adoption trends within the charging technology sector, stating that the CHAdeMO connectors would be replaced by Combined Charging System (CCS) as the preferred connector type. The fast charger segment is said to lead over slow or home-based chargers, showing an estimated CAGR of 47.9% from 2017 to 2025.

TOP EV NEWS #4 – New report sees EVs cheaper than combustion cars by 2025

Research firm Bloomberg New Energy Finance (BNEF) this week reported that it expects EVs to reach price parity with internal combustion vehicles (ICE) in the USA and Europe by 2025. Falling battery prices driving down cost is seen as the main reason behind the conclusion. Currently, battery prices constitute around 50% of an EVs cost, by 2020 BNEF forecast batteries to only constitute between 23% and 16% of an electric car’s total cost by 2030. The report did not compare the total cost of ownership, which is expected to favor EVs this decade already. It is unclear if the study did take into consideration regional factors such as the EU adding as much as $340 per engine on diesel engines from 2020, which should increase the cost of combustion engines.

TOP EV NEWS #5 – Detroit Electric ownership restructured

In March the UK based Detroit Electric signed a joint venture agreement with Shanghai-listed Far East Smarter Energy Group (Smarter Energy). The JV called for the Chinese partner to invest $370 million over a four-year period. Already the JV is experiencing stress as Smarter Energy this week announced that it would transfer 40% in Detroit Electric to Far East Holding Group (Holding) to secure financing. The transaction was done at no value. Smarter Energy revealed that the financing round is taking longer than anticipated and that it is struggling to secure the required production certificates from the Chinese Government to be allowed to produce electric vehicles. Up till May 2017, only fourteen such permits have been granted by the Chinese authorities. The remaining shareholding structure of the joint venture now has Detroit Electric owning 50% while Yixing Environmental Protection Science and Technology Industrial Park 10%. It is unclear how the restructuring will impact on the company’s timeline to bring the SP:01 to production by 2018.

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Top 5 Electric Vehicle News Stories of Week 17 2017

Top 5 Electric Vehicle News Stories of Week 17 2017

#1 – Peak in oil due to EVs confirmed by Big Oil

Record breaking sales in the first quarter of 2017 reaffirm the trend set by the healthy sales growth experienced in the sector during 2016. All expectations are that 2017 would even be better and that the deluge of new models reaching dealership floors by the end of the decade will sustain the growth into the next decade, causing many stakeholders to adjust their forecasts upwards. We have covered most of these forecast adjustments, but the one sector that is forever dissing the sector, Big Oil, has as recent as Week 9 2017 maintained that the disruption caused by EV’s is overstated.

Finally, this week during the Bloomberg New Energy Finance Conference voices from the sector came out signaling that EV penetration will hurt oil demand. Total SA’s Chief Energy Economist, Joel Couse, projected that the impact of electric vehicles would cause the demand for oil to flatten or even decline by 2030. The CEO of Royal Dutch Shell shared the same sentiments recently as the company trimmed their forecasts, indicating that oil demand my peak by the late 2020’s. The reasoning behind the shift in outlook is sparked by electric vehicles being able to compete with combustion vehicles in both performance and price as battery prices decline.

Michael Liebreich, the founder of Bloomberg New Energy Finance, pointed out that there would be 120 models across the spectrum by 2020. He was quoted further saying what we already know – ”These are great cars. They will make the internal combustion equivalent look old fashioned.”

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Picture Source: Bloomberg New Energy Finance

#2 – VW continue to see electric vehicles only as a niche going into the next decade

The recent surge in Tesla‘s share price, which is close to the first target of $320 called by wattEV2Buy on the 3rd of April, has put a spotlight on traditional vehicle manufacturer electric vehicle strategies. VWs CEO, Mr. Matthias Müller, this week reprimanded the media for getting too carried away with the “New Beats Old” storyline. Mr. Müller was quoted by The Financial Times at the Vienna Auto Show on Friday, responding to Tesla‘s surge – “This has little to do wth the reality on our streets. The VW Group produced 10.3m vehicles last year – Tesla around 80,000, and the fact is, electric mobility continues to be niche. VW only see’s that one out of four of its vehicles would be electric by 2025.

The world’s largest automaker will spend around €20bn by 2022 on cleaner engines, of which only 45%, or €9bn, would be on alternative drive tech, which at least is a trebling over the amount of only €3bn spent over the last five years. The €9bn budget is less than the €11bn earmarked by fellow German automaker, Mercedes, over the same period. Analysts have been concerned over certain automakers conservative electric vehicle strategies in the face of Tesla and Chinas dominance in the sector.

#3 – Bollore exits the electric vehicle sector

The French industrialist, Vincent Bollore, one of the pioneers of the current electric vehicle revolution announced that he would retreat from the sector. Bollore introduced some of the first car-sharing schemes at the start of the decade, using its own vehicle the Bollore Blue Car, It created a second car, the Bollore Blue Summer, but contracted it out to Citroen, which sells it’s as the Citroen Mehari. Mr. Bollore cited that he can’t compete with only one car in the market as more and more players crowd it. Bollore will focus on its strengths, being battery technology, and will apply it in its grid storage and mass transit vehicles. Those who follows the data for France in our Global EV Sales section would have noticed that hardly any Blue Cars were sold in the country this year. Bollore uses a Lithium Metal Polymer Battery, which is not suited for cars, as the chemistry consume electricity even when off.

#4 – India to go all electric by 2030

India is set to introduce policies and support the country’s electric vehicle industry for three years as it targets to have a 100% electric fleet by 2030, in a bid to save on fuel import cost. The announcement was made by the country’s Energy Minister, Mr. Piyush Goyal at the CII Annual Session in New Delhi.

#5 – Tesla shareholder to unveil its own electric vehicle

Tencent-backed Future Mobility is set to unveil its concept vehicle this year with the intent on starting production in 2019. Tencent recently acquired a significant stake in Tesla by purchasing 5% of the US companies stock in the open market, making one wonder how it will impact on the investment with which it aims to compete. The concept vehicle is said to be a midsized SUV priced around $45,000. Chinese internet companies such as Tencent and Baidu are increasingly becoming active in the vehicle market as the bounds between cars and vehicle are falling away. Baidu introduced it’s Appollo self-driving platform last week, opening it up to developers to join in its development.