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Mercedes Benz and Chery Automotive reached an agreement in the trademark dispute lodged (EV News Week 12) by Chery in March 2017. According to a joint press release, the companies agreed to the following settlement with regards to using the EQ designation for electric vehicles in China:
Chery will focus on using the designations eQ and eQ1, as well as further numerical continuations thereof, while Daimler will focus on use in their electric Mercedes-Benz products with the designations EQC and any other alphabetical supplements. Daimler will use the EQ Power designation for Plug-In Hybrids and meanwhile Chery will also use eQ TEC to nominate their car electrification system.
Chery has already been using the eQ and eQ1 brand names in China since year 2014 and Daimler has now also granted them the possibility to use this name family in countries outside of China. Daimler established the EQ brand family for electrically driven Mercedes-Benz vehicles almost simultaneously in countries outside of China and Chery has granted the company the possibility to also use this in China now.
We reported in March that BMW was considering Mini as an EV only brand, with the Mini being its answer to Tesla and Chevrolet‘s mass market cars, the Model 3 and Bolt EV. At the time BMW CEO, Harald Krüger was quoted that the company is considering manufacturing facilities for the Mini in Germany, the Netherlands, and the UK. Reuters this week reported that unconfirmed sources indicated that the UK would be the winner in the race for producing a fully electric Mini. The BMW plant in Oxford is responsible for 60% of the Groups compact cars, but in the aftermath of BREXIT, the German automaker established the Netherlands as an alternative manufacturing base. The report indicates that the final desition will be announced at the Frankfurt Auto Show in September.
As the June EV sales data are being released, we have been able to create half year reports for the key markets. Most of the of the key markets are showing exceptional growth in the first half of 2017. The increased sales are helped with the release of a slew of new models. As many as 20 new models have entered the Chinese EV market since June 2016 while most European markets saw ten or more new models. Some of the highlights are:
Germany – Year on Year growth of 104% or 11,000 units
France – Year on Year growth of 1.4% or 260 units
Netherlands – Year on Year growth of -14.2% or shrinking with 656 units
Nissan announced that the new Nissan Leaf would be released on the 6th of September. New EV model releases have become as anticipated and high profile as smart phone releases some years back. With the date nearing Nissan has been releasing teasers about the long awaited new Nissan Leaf. The latest teaser revealed that the Leaf would have an e-Pedal, or for the novice, just one pedal to accelerate and break. Breaking is done by taking your foot off the pedal, activating regenerative breaking. The technology was first used in the Tesla Model S and then in the BMW i3 in 2014. Previous teasers indicated that the Leaf would have some autopilot functionality.
The Swedish carmaker, Volvo, and the Chinese company, Geely is fostering deeper relationships in the worlds largest market for electric vehicles. In a press release by Volvo this week it was revealed that the companies would establish a new joint venture technology company to share existing and future technologies. We have seen this cooperative trend in China for the last couple of months, which is a departure from previous JVs between international and Chinese companies. In the past international automakers were forced by law to enter into JVs with Chinee companies to be able to sell their vehicles, which lead to mostly older generation models being dished up to the Chinese consumer as the international partners tried to protect their IP.
The JV company will be owned 50/50 by Geely and Volvo with its HQ in China and a subsidiary in Gothenburg, Sweden. The Memorandum of Understanding agreed to on the 20th of July between Volvo, Geely and newly formed LYNK & CO determined that the companies will share vehicle architecture and engine technologies via cross licensing arrangements of technologies managed by the new joint venture. The IP for the technology will remain with the company that developed it, but the technology itself will be available for use by Volvo, Geely Auto, and LYNK & CO, via license agreements. Volvo Cars and Geely already share technology, most notably the Compact Modular Architecture (CMA) which is being used by Volvo Cars for its soon-to-be-announced smaller range of 40 series cars and by LYNK & CO.
Separately, it is also announced that Volvo will acquire a minority shareholding in LYNK & CO.
We look at the Top brands and models, the gainers and losers and how the battle between battery electric (BEV) and plug-in hybrid (PHEV) technologies play out in the summary of China EV Sales H1 2017.
The highlights for Chinese electric car sales in H1 2017 was:
The Top 3 EV brands in China for the first half of 2017 were BYD, BAIC, and Zhidou. Although BYD hung on to its first place, it sees its lead evaporate. BYD hardly registered any sales in the January 2017, and lost sales in its top performing Qin and Tang model ranges to competing new models from BAIC, Chery, and SAIC Roewe. BYD, one of the largest EV brands in the world, is seeing its position as China’s best performing EV brand challenged as it lost over 20% of its sales compared to 2016, while its competitor BAIC more doubled its sales. BAIC benefited from exciting new models entering the market in the last 12 months, with its small hatch, the BAIC EC180 being a top performer for three of the six months ending up the second best selling EV for the semester. Smaller EVs, or City cars, have also performed very well with the popular Zhidou Geely D2 selling nearly 20,000 units. Another brand with small EV models, Zotye, was placed fourth due to the popularity of its Cloud 100, E200 and E30 models. Other Top 10 Chinese EV brands selling city cars included Chery and JMC, both placed in the Top 10. Although JAC brought the exciting JAC iEV6S small SUV to market it was not enough to withstand the onslaught of its peers, crashing out of the Top 3 to the eight position. Tesla also entered the Top 10 list with the Model X performing very well (please note the June 2017 Tesla data did not make it in time for our analysis, which would have aided the brand’s performance). Western brands such as Volvo, BMW through its local partner BMW Brilliance, Daimler and GM mostly gave up market share to Chinese-produced vehicles.
Twenty new EV models entered the Chinese EV market in the first half of 2017 but only three, the BAIC EC180, SAIC Roewe eRX5 and BYD Song DM, made it to the Top 10 list of electric vehicles in China. None of last years Top 5 could hang on to their positions with two of the new models, the BAIC EC180 and SAIC Roewe eRX5, entering the market with Top 5 positions within three months from being launched. Last year’s Top 3 EVs, the BYD Tang, BAIC E200, and BYD Qin all crashed out, with the BYD Tang the only model able to hold on to a Top 10 position. Plug-in Hybrid vehicles could only muster three positions in the Top 20 as small city EVs made up more than half of the units sold in 2017 to date. The popular SUV class accounted for 26% of the units sold in the Top 20 list of EVs in China while plug-in hybrids only accounted for 16% of all the EVs sold. New electric vehicle models made up 31% of all the EVs sold during the period under review.
BYD’s ailing fortunes are clear in the list of losers for the first half of 2017 but another popular EV brand from 2016, Kandi, saw diminishing sales as its Kandi K17 Cyclone could not compete with the host of new small city cars entering the Chinese EV market. Clear again is the composition of plug-in hybrids and foreign brands in the list of the worst performing electric cars.
Plug-in hybrid models are losing the battle in China, strange though that 35% of the new models launched in the last 12 months are PHEVs. In the comparable period in 2016 plug-in electric vehicles made up 33% of all the units sold while the vehicle type only contributed to 16% of all sales in 2017.
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Recently the Chinese Government embarked on a program to clean up the electric vehicle sector which has been negatively impacted a confluence of companies rushing to produce electric vehicles lead to subsidy fraud and sub-standard products. At some point in 2016 over 200 companies had business plans to profit from the Chinese Government’s aggressive program to establish a dominant electric vehicle sector. A large number of the business operating in the sector had no previous experience in producing cars, among them were IT and Social Media companies such as Tencent (Future Mobility and Tesla), Baidu / BitAuto (NextEV) and LeEco (Faraday Future). The Chinese authorities became concerned that the unregulated development of the sector could lead to an oversupply of vehicles as the total planned capacity from the 200 companies reached over 50 million units annually, ultimately negatively impacting the sustainability of its program. At the end of 2016, the government closed or fined various manufacturers who were caught taking advantage of the subsidies to promote the adoption of electric vehicles. Further measures to regulate the industry included:
Other adjustments were made to entry applications in the auto sector by requiring joint ventures with foreign automakers, such as Denza, to be approved by the investment department of the State Council, local manufacturers need approval from the relative provincial government. The State Council indicated that in principal new capacity to combustion plants should be capped effectively halting development of new combustion plants.
At the time of publication, only fourteen companies have so far received production certificates for new energy vehicles, the last being Guangdong GreenWheel Electric Vehicle Co. Ltd which received approval to develop a 50,000 unit plant in Mingcheng Industrial Park. Greenwheel indicated that the plant would be developed at a cost of $267 million ( RMB 1.783b ). To successfully apply for a production certificate, the applicant needs to convince the authorities that it can research and develop key technologies such as powertrains. The other companies with development certificates are BAIC BJEV, Changjiang EV, Qiantu Motor, Chery New Energy, Jiangsu Minan, Wanxiang Group (Karma Automotive), JMC EV, Chongqing Jinkang, NEVS, Yudo Auto, Know Beans, SD EV, and Hozon Auto.
Up to now Chinese auto manufacturers provided very sketchy specifications on the electric range of their models, mostly indicating how far the vehicle can travel at a constant speed of 60km/h. To protect and assist the consumer the Chinese Automotive Technology and Research Center for the first time introduced an EV Test through the issue of the Chinese First Electric Vehicle Management and Evaluation Rules. The first classification process should be completed in the second half of 2017. The classification would be done by a five-star rating focusing on the following key performance areas:
The Chinese Government aggressive EV strategy targets the sale of 800,000 electric vehicles in 2017, increasing sales to two million units per annum by 2020. The top ten automakers, including FAW, Dongfeng Fengshen, Chana, SAIC, GAC Trumpchi, and Great Wall finalized production plans to produce over 4 million units by 2020 at a planned investment of $12 billion (RMB 80 billion ).
Interested in learning more about Chinese electric vehicles? Download our fun and easy app below, flick the China switch and swipe left the models you don’t like, right the ones you do, enter the chat rooms and share your thoughts with the community.
Increased support by ride-hailing companies such as Uber and Ola are becoming a big impetus for EV sales globally. This week Uber launched a program to incentivize many of its drivers to switch to electric vehicles. The program, driven by Uber owned leasing company, Xchange Leasing targets leasing up to 10% of all vehicles in Oregon as electric vehicles by 2019. The program follows on similar efforts in other countries by the company. In London, Uber is building a charging network to support a fleet of 150 electric vehicles, in Cape Town and Johannesburg the company deployed a fleet of BMW i3s on its uberGreen platform. UberGreen projects are also piloted in Lisbon, Madrid, and Paris. Uber is estimated to employ over a million drivers globally via its platform, a target of 10% will add a 100,000 electric vehicles, or just under 5% of the current EV fleet.
Other ride-hailing companies, such as the Softbank backed Ola in India, started to include electric vehicles in their business models. Ola CEO, Bhavish Aggarwal last week announced a pilot project for a large-scale rollout of electric vehicles. Ola’s pilot project includes thousands of EVs and a charging network. An indication of the magnitude of the project can be gleaned from a statement by Softbank Chairman, Masayoshi Son, made in December 2016, saying that Ola will roll out a million EVs over a five year period.
Various states in the USA had recently levied taxes or fees on electric vehicle owners, and more are expected to follow. The trend, which some claim to be a bid to recover investments in electric vehicle adoption and infrastructure, or due to pressure from lobby groups opposing electric vehicles. The most recent, and most surprising have been California, which will start levying a fee on electric car owners from 2020. Almost 50% of all electric vehicles in the USA is sold in California, and the state has been a big promoter for the adoption of the technology. The fee will consist of a $100 registration charge and an annual tax based on the value of the vehicle.
The fee, which the California legislature says is to fill the gap it would lose from lost gasoline taxes, in our opinion will not have a negative impact on EV sales when it is introduced in 2020. By the turn of the decade, EV prices will be very affordable, and the total cost of ownership is expected to remain below that of combustion vehicles.
The New York Auto Show, from 14 April to 23 April, showcases all 30 electric vehicle models available in the state. Electric vehicles at the new York Auto Show 2017 includes the Plug-in Honda Clarity, Mercedes-Benz AMG GT Concept, and the Lucid Air, a luxury sedan which achieved an eye-watering 217mph on a recent test run.
New York recently announced a $2,000 rebate, totaling $55 million, as part of a $70 million incentive by Mayor Cuomo tp promote the adoption of electric vehicles. The state targets a goal of 40% emission reduction by 2030.
The BMW i3 was awarded the title as the World’s Best Urban Car, beating the Citroen C# and Suzuki Ignis.
The Shanghai Auto Show starts this week on the 21st and will run until the 28th of April. Electric vehicles at the show will include the Bentley EXP 12 Speed 6e, the Skoda Vision E-SUV Coupe, Buick Velite 5 PHEV which is based on the Bolt, the NIO EVE autonomous vision by NextEV, SAIC Roewe i6 compact, VW Concept SUV, and the Hybrid Kinetic H600. Also at the Shanghai Auto Show would be Isreali and Chery JV company Qoros, which will unveil the Qoros Model K-EV, built on the same hybrid electric powertrain as the Koenigsegg Regera supercar. Do you also find that the naming of the model is eerily similar to that of Tesla?
Volvo is also expected to unveil the Volvo XC40 at the Shanghai Auto Show, its latest PHEV SUV, which aims to compete with the Audi A3, Mercedes-Benz GLA and BMW X1.Volvo this week announced that it will produce its first electric vehicle in China, ready for the international market by 2019. Volvo is owned by Chinese automaker Geely since its acquisition from Ford in 2010. Geely last year launched a new brand, Lynk & Co, and accompanying model the Lynk & Co 01 SUV PHEV. Volvo will manufacture its new electric vehicle at the same plant as the Lynk & Co 01 SUV in southeast China. Volvo 90 and 60 series are also manufactured in China.
Apple joined the growing number of companies authorized to test autonomous vehicles on California’s public roads. Tech companies have recently encroached on automakers territory, with 11 of the 21 companies on the list of permit holders authorized by the California DMV now being from the sector. Uber, a tech company, lost its permit in February 2017.
According to the permit Apple, based in Paulo Alto, is allowed to test three 2015 Lexus RX450h vehicles on public roads. According to the rules of the autonomous testing program, each vehicle should have two drivers, usually engineers, at all times in the vehicle.
It is not yet clear what Apple’s self-driving strategy is, news over the last two years have been conflicting, ranging from the company either following the Google route of not building car’s but only systems to the Tesla route, building an Apple iCar. The world’s most valuable tech company tagged its self-driving efforts as Project Titan.
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.
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.
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:
Looking at the Top 10 Electric Vehicle Brands list when one only include Battery Electric Vehicles an entirely different picture emerges in many respects:
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