Analyzing the Top 10 Electric Vehicle Brands
Electric vehicle sales have breached the 2 million unit mark internationally in 2016, and most automakers have committed to an electric vehicle strategy, some more aggressive than others and in the minority of cases not having a strategy is also seen to be a strategy. The Top 10 Electric Vehicle Brands constitutes a good proxy to evaluate trends within the market and to determine the reason for a brand’s success or failure. Also, as we reach the halfway mark to the point where electric vehicles are expected to reach between 9% and 11% of the total vehicle fleet by 2025, a look into the Top 10 will provide guidance on the expected winners and losers as the disruptive nature of the technology takes effect.
Top 10 Electric Vehicle Brands as a percentage of the total market
Sales of the Top 10 Electric Vehicle Brands constitute 65% of all electric vehicle (EV’s) sales, and for the Top 10 BEV list, 85% of all pure electric or Battery Electric Vehicles (BEV’s) are from the Top 10 Brands in the segment. However, the trend on both lists is on the decline as more and more brands participate in the market. The Top 10 Brands in the pure electric space owns a bigger percentage of the market segment as BEV’s requires more specialization and greater risk. Due to the high cost of battery technology and range anxiety, most automakers excluded themselves from the pure electric segment, providing a golden opportunity for a few dedicated brands to seize the opportunity and leapfrog their competitors into the coming decade.
Top 10 Plug-In Electric Vehicle Brands
The following interesting point emerges when comparing the Top 10 Electric Vehicle Brands positions in 2012 with the overall standings and the latest standings in 2016:
- Chevrolet’s annual sales in 2016 are only marginally higher (1.7% CAGR) than it’s sales back in 2012, while the automaker nearly lost its position on the Top 10 list, regaining some stature in 2016 through a nearly doubling of its Chevrolet Volt sales.
- Nissan remained successful with its only passenger model, the Nissan Leaf while sales of the commercial van, the e-NV200 only amounts to around 8,500 units internationally. Having only one model over the period, however, cost the automaker its overall top spot to Tesla and BYD who had two models or more with multiple configurations.
- Tesla’s overall position is significant, especially if one take into consideration the price point of its models compared to its competitors on the Top 10 list.
- The rise of Tesla and BYD, being of the few companies which only focus on electric vehicles, goes to show the advantage dedicated and focussed EV manufacturers have over those that are tied to combustion vehicles. Both these companies are now busy with second and third generation products going into the third decade of the century, at a time when most competitors will only bring their first pure electric models to market.
- Toyota has been the disappointment on the list, giving up the first-mover advantage it had with the Toyota Prius. Toyota is one of the automakers who’s strategy veered away from electric vehicles to Fuel Cell Vehicles. The company discontinued its Prius model in 2015 and brought it back in 2017, with hardly any significant increase in battery performance.
- BMW’s strategy to early on bring Plug-in Hybrid versions off most of its models has helped the company climb in the rankings. Most of the sales of the German automaker can be attributed to the BMW i3 and BMW i3REx of which the company sold around 70,000 units internationally.
- Ford is the other disappointing manufacturer, with the company completely disappearing off the list, even with two PHEV models and one BEV in its stable. The biggest reason for Ford’s disappointing performance is its lack of international sales outside of the USA and Canada.
- Renault also lost in the rankings despite having various models due to limited international sales.
- The Chinese dominance is evident from the number of Chinese-based auto manufacturers entering the list in 2016, with top performer BYD claiming the top spot in 2015 and 2016, taking the company to an overall third position. BYD’s success also proves Warren Buffets mastery, as the world’s second richest man invested in BYD back in 2008.
- Note – The 2017 data is skewed with underperforming Chinese sales in January due to the Chinese New Year and the Chinese government clamping down on subsidy fraud. The 2017 data is further skewed with the inclusion of USA, Swedish, Norwegian and Dutch sales for February and only some countries January data being available at the time of going to press.
Top 10 Battery Electric Vehicle Brands
Looking at the Top 10 Electric Vehicle Brands list when one only include Battery Electric Vehicles an entirely different picture emerges in many respects:
- Most of the traditional “Big Auto” brands are missing from the list.
- Chinese manufacturers, BYD, BAIC, Zotye, Chery, Kandi, JMC, and JAC, comprise six out of the Top 10 overall positions and seven of the Top 10 in 2016.
- The Top 3 BEV manufacturers in 2016 correspond to the Top 3 overall for all EV’s sold in the previous table, confirming the importance of focussing on BEV’s.
- VW has committed to a strategy shift towards electric vehicles, but it is evident judging from the 2016 data that the company needs to make hay not to fall short.
Electric Vehicles are entering the growth market phase in some countries
With EV sales rapidly climbing in 2016 and countries such as Norway now reaching EV sales of over 30% of new vehicles, owning an EV is not just an environmental requirement anymore drawing early adopters. Owning an EV’s has become cool and entering the growth phase in markets such as Norway and The Netherlands, where a couple of “Big Auto” manufacturers have opted to target the mainstream market through bringing Plug-In Hybrid versions of existing models. Many of the “Big Auto” brands are play stalling tactics by calling for the easing of emission standards or blocking Tesla’s direct sales model. Meanwhile, they are falling further and further behind in a market that is becoming ever more popular. Most of these manufacturers might be of the opinion to follow a wait and see approach, hoping that the first mover’s trips and falls due to the high risk and cost, with the intention to swoop in later with their big budgets to poach talent and ideas. We will analyze the tussle between Battery Electric Vehicles and Plug-in Hybrid Electric Vehicles in a follow-up post.
Picture Ellon Musk: The New Yorker
The barriers to entry into auto manufacturing became ever higher over the last 100 years before the disruption caused by technological advances in electric vehicles and self-driving technology. Most of the auto brands that were around at the turn of the century have been around for 50 years or longer; the only newcomers was a spate of Chinese brands backed by the government. For an individual to reach the top 50 position on the Forbes list from vehicle manufacturing was only possible if your parents left you a trust fund with a bunch of 100-year-old stock in a big brand. In fact, the only Forbes Top 50 billionaire from the auto sector was the German’s, Herbert and Johanna Quandt who owned nearly 50% of BMW and Georg Schaeffler (Number 39 on Forbes 2016 list) who inherited the automotive parts company, Schaeffler Group. After their passing of Johanna Quandt, the children, Susanne Klatten (Number 38) and her brother Stefan Quandt (Number 48), became the beneficiaries. Mrs. Klatten invested her fortune in pharmaceuticals, helping her to gain over her brother.
Come to the turn of the century and along came Elon Musk, risking it all on a technology that has been shunned for 100 years by big auto. Being a start-up in a market controlled by a couple of dinosaurs was not easy at first, Mr. Musk had to back himself in the first couple of rounds of fundraising for the electric vehicle company, Tesla. The table below shows that Elon Musk pretty much up until late 2008 lead fundraising and loan rounds. The risk paid off as Elon Musk became by far the richest person in the US auto sector and at the time of going to press Elon Musk jumped to the 83rd position, up from 94 in the official 2016 Forbes list of the world’s richest people.
Other early billionaires in the technology include the savvy investor Warren Buffet and Vincent Bollore. Warren Buffet, the world’s 3rd richest individual through his Berkshire Hathaway, controlled company, Mid-American Energy Holdings in 2008 bought 10% in BYD, a Chinese battery company, now the world’s largest electric vehicle manufacturer. The Investment at the time was $230m. Berkshire Hathaway is also a significant minority shareholder in GM.
Vincent Bollore, France’s 10th-richest person with an estimated personal fortune of $6 billion dollars, started manufacturing batteries in his company Bollore Blue Solutions. The firm, situated in Brittany province, who’s batteries are cheaper than lithium-ion cells used in other electric cars, allows it to hold down the cost of his small vehicles.
Suddenly investing in electric vehicles became sexy. Chinese billionaires, mostly from the technology sector, were the first to climb into the auto sector, some more successful than others. The Chinese electric vehicle boom is fuelled by government incentives targeting that 8% of all new vehicles should be EV’s by 2018.
The tech billionaire and founder of BitAuto, an online vehicle sales platform, William Li started the Shanghai-based NextEV. The company raised $500M of an expected $1Bln already, sporting shareholders such as Tencent, who is also invested in Future Mobility, Hillhouse Capital, who also invested in UBER, Sequoia Capital and Joy Capital. The company invested C¥3Bln in Nanjing High-Performance Motor Plant to produce 280,000 electric vehicles per year. NextEv also signed a partnership with one of the largest Chinese auto companies, JAC Auto which will see them share technology, manufacturing, supply chain, marketing, and capital.
Tencent mentioned above is owned by the world’s 46th richest person, Ma Huateng of China, also know as Pony Ma. Tencent, which applications include the popular WeChat app, aims to leverage its tech experience in a world where connectivity and the Internet of Vehicles will drive the auto industry. The development of electric vehicle technology provides a perfect platform for tech and vehicles to meet. To this end, Tencent created a company Future Mobility and targeted an autonomous vehicle by 2020.
The Chinese billionaire, Jia Yueting, founder of LeEco which owns LeTV, the Netflix of China invested in two electric vehicle companies, LeEco, which developed the acclaimed LeSee concept vehicle and Faraday Future, developer of the disastrous FF91, unveiled at the 2017 CES. Both businesses are known for making bold statements and big ticket announcements just to be followed by press reports of cash flow and funding problems.
The Chinese internet giant, Alibaba, owned and founded by Jack Ma who is 33rd on the 2016 Forbes list, invested $160M in a fund where it partnered with SAIC, one of the largest Auto manufacturers in the China to develop internet connected cars. The first car to come from the partnership is the Roewe OS RX5, where OS stand for Operating System and using SAIC’s luxury brand Roewe as a platform. The software runs on Alibaba’s YunOS operating system. Jack Ma unveiled the car in July 2016. The Alibaba Connected Car will have its own Internet ID, not needing WiFi or GPS services, enabling it to connect and identify drivers through their smartphones and wearables. The RX5 has four cameras providing it 360° vision and is voice controlled. The vehicle’s starting price is around $15,000 or C¥100,000.
Alibaba beat other carmakers and tech companies to the finish line with the 2016 release of the RX5. In 2015 Toyota invested $1 billion in artificial intelligence research, while Apple invested $1 billion in Chinese ride-hailing app, Didi Chixing. BMW went into partnership with technology firms Mobileye and Intel, providing the automaker with operating systems and driving assistance software while Kia and Google partnered around the search engine’s Android Auto operating system.
Robin Li, number 90 on Forbes List and owner of Chinese search engine Baidu, partnered with chipmaker Nvidia in September 2016 to develop a computing platform for self-driving cars. Baidu recently received approval from the Californian Department of Motor Vehicles to test autonomous vehicles, in Google‘s back yard. Baidu also partnered with BMW on creating an autonomous car.
Now that the floodgates are open, billionaires from around the world are looking to enter the electric vehicle and self-driving sectors. The world’s fourth richest man, Carlos Slim of Mexico, announced this early this year that he would back the development of a Mexican-produced electric vehicle through his company, Giant Motors in a joint venture with Grupo Bimbo, the world’s largest bread maker. The strategy plays off in an environment where many US based automakers are contemplating bringing production back to the USA amidst President Trumps America First policy environment. Mr. Slim said the electric vehicle would be designed specifically for Mexican conditions.
Bloomberg reported that the JSW Group’s owner and Chairman and India’s 19th richest man, Sajjan Jindal, announced in Davos, Switzerland his intention to enter the Indian Electric Vehicle market by 2020. The metals tycoon expects the Indian government, like many other governments, will promote EVs once it’s more affordable.
It is clear that some of these businessmen are purely opportunistic, targeting to profit from regulation and subsidies for the promotion of electric vehicles.The majority, however, leverages their passions to bring better and more advanced options to the consumer at a much faster pace than what big auto ever moved in the last 50 years.
Although not mutually inclusive to electric vehicles, self-driving cars, deployable on combustion vehicles also, will drive the second phase of disruption in the auto sector over the next ten years. Self-driving car’s poster child is Google, owned by the 12th and 13th richest individuals in the world, Larry Page, and Sergey Brin. The company started testing it’s quirky autonomous vehicle as far back as 2009. Google recently spun the project into a standalone brand, named Waymo, meaning “a new way forward.” The company aims to partner with vehicle manufacturers instead of developing its own car. The first of such efforts was the conversion of 100 Chrysler Pacifica’s Plug-in Hybrid vehicles. Google, in many’s eyes, has lost the lead to Tesla, who’s progression was much faster and already has active Level 2 autonomy available in its production vehicles.
It will be interesting to compare the Forbes list of wealthy individuals ten years from now to one at the start of the century; we expect much more fresh faces who made their money from disrupting the auto sector. As a footnote, the lesson learned time and time again by dinosaurs in an industry are that they become too big, arrogant and slow, creating opportunities for new hungry entrants.
Picture: Source www.technewstoday.com