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Hyundai unveiled the 2018 Hyundai Sonata PHEV at the Chicago Auto Show this week. The Hyundai Sonata PHEV is available in the USA in the ZEV states of California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont from Q2 2018. The 2018 Hyundai Sonata has undergone an extensive facelift and technology upgrade but remains with the same drivetrain as the 2016 version.
Mercedes Benz announced that the Geneva Auto Show would be the venue of the world premiere for the new C-Class Saloon and Estate PHEV model. The premiere of the C-Class will be on the 6th of March, at 12.30 p.m. in Hall 6. The new Mercedes Benz C-Class consists of a stylish makeover and technology upgrade equivalent to the S-Class. Mercedes further announced that it would expand on the look ahead for the EQ portfolio and showcase the EQC production vehicle. Also unveiled at the Geneva Auto Show will be the Smart Nightsky Edition which will be available with a 22kW onboard charger from March 2018, reducing charge time significantly to compensate for the short range of the Smart EV.
Opel is charting its own course on the electrification of its models after being acquired from GM by the French PSA Group. Opel CEO Michael Lohscheller announced this week that the company would produce an electric Opel/Vauxhall Corsa sub-compact car in 2020. The Corsa EV will be assembled exclusively at the company’s Spanish plant in Zaragoza.
The poster child of how not to run an EV company, Faraday Future, this week held a Global Suppliers Summit at its HQ in Los Angeles where it showed sketches of its second EV, a compact SUV. Faraday Future apparently secured $1.5 billion in funding from a backer in Hong Kong which will be made available on it reaching certain unknown milestones. The FF SUV is expected to cost in the region of $100,000 to $150,000 which is more “affordable” than its first production EV, the FF91. Faraday Future is yet to start construction on its assembly plant in Hanford, Nevada to bring its first EV to production.
We are used to tech companies invading the space of automakers brought on by the EV rush, but you don’t often hear of home appliance companies with EV ambitions. It might, however, be that appliance companies stand a better chance to mass produce electric cars with their understanding of manufacturing processes. Dyson, the British home appliance company last year announced that it is betting £2 billion on the development of an electric vehicle propelled by solid-state battery technology the company has been pursuing since 2014. The entrepreneur Sir James Dyson ramped up his company’s solid-state program in 2015 by acquiring Michigan based Sakti3 for $90 million.
The Financial Times this week took a closer look at Dyson’s EV program which targets three EVs from 2020 onwards and concluded that the first EV might be equipped with a lithium-ion battery rather than a solid-state battery as initially planned. Solid-state batteries which is much safer and more efficient is only expected to become mainstream in 2025 judging from pronouncements made by companies such as Toyota and Mercedes although EV start-up Fisker recently brought its solid-state battery roll-out forward to 2020.
Some industry insiders doubts if Dyson’s EV gamble will pay off with Aston Martin CEO Andy Palmer tweeting a spoof of a Dyson EV in 2017 (See image below). Dyson is yet to decide on a location for the production of its EVs which supports the detractors of Dyson’s plans as tooling for an assembly plant takes minimum 18 months no matter if you are a 100-year-old automaker or a start-up. The company is looking at locations in the UK, China, Malaysia and Singapore with the far east being favored since it is expected that China would be the largest market for the Dyson EV. Supporting Dyson’s plan is its ability to develop many components in-house making it less reliant on external suppliers. The Dyson EV is rumored to be made from plastic, which is closer to Dyson’s core and allows for the inventive design promised by Sir James Dyson in September 2017 when he announced that EV would look “quite different” to any currently on the market.
Other than Tesla Dyson does not want to over promise and under deliver and keeps its progress close to its chest. Also different than Tesla who had access to a lot of government funds the privately owned Dyson so far has only received £16 million from the UK Government. Developing electric cars is an expensive venture, this week in an interview with CNBC Renault-Nissan-Mitsubishi alliance chairman, Carlos Ghosn said that they are probably the only carmaker making money off selling EVs. To date, it seems Dyson is not considering an IPO but going it alone by supporting the £2 billion project from own funds.
Recent reports claimed that the Chinese Government was set to scrap the local component of EV incentives which is aimed at supporting a robust EV sector and spur demand. Policymakers fears that by scrapping the local subsidies to curb state expenditure it will kill the infant EV sector. Local EV incentives is an extra subsidy set at a city level and are capped at 50% of that of the Federal incentives. Earlier the month Shanghai extended its local subsidy to 31 December 2020. In Shanghai, an EV buyer receives the full local portion of the purchase of a pure electric car and 60% on a plug-in hybrid. Bloomberg reported that unconfirmed sources indicated that the latest amendment to the national policy would retain the local incentives. The amended national policy has been changed to favor improved technology and longer range EVs by increasing the subsidy for EVs with a range of over 400km from RMB 44,000 to RMB 50,000 while upping the qualifying threshold from 100km to 150km and favoring more efficient batteries. Some sources indicated that FCEVs stand to gain the most by qualifying for 100% local subsidies. Shares of companies selling EVs rose on the report with BYD performing the best rising 5.2% on Monday followed by GAC with 4.3% and BAIC with 1.7%.
In related news, the Chinese Government gave its approval for the acquisition of a 4.79% shareholding by Daimler AG in Jinggangshan New Energy Investment Management Co, the top selling pure electric vehicle producer of 2017. Jinggangshan New Energy Investment Management Co, BJEV for short, is owned by Daimler’s local partner BAIC which holds 37.27% alongside the Beijing municipal investment fund and Xinshixinye Investment Management Co.
Further afield BYD is set to construct an electric bus assembly plant in India at the cost of Rs2 billion. The 100-acre plant which is situated in Bidar, Karnataka will have an initial capacity of 1,000 units per annum and also build batteries for the local market. BYD and its local partner Goldstone Infratech will bid on tenders by 10 Indian cities to supply 390 electric buses in the coming months.
According to a survey by the German publication “Automobilwoche” the success of electric cars in Germany seems to be the technologies biggest risk as prospective buyers now face delivery times that can have them waiting as long as a year for their new EV. The problem is not isolated to buyers of imported vehicles only but also local brands such as Volkswagen where buyers have to wait until October 2018 for delivery of e new e-Golf purchased today. Smart CEO Annette Winkler said that the increase in demand is much stronger and faster than could have expected and planned for with the companies suppliers, resulting in buyers only receiving their new Smart by the end of 2018 or early 2019.
To compensate for the increased demand Volkswagen has introduced a second shift at its Dresden plant as e-up! buyers wait for five to six months. According to the survey, the waiting period for a Hyundai Ioniq EV is up to 12 months, the 2018 Nissan Leaf is around ten months, and six to seven months for the Peugeot ION and Kia Soul EV. Renault Zoe buyers only have to wait four months while the waiting list for a BMW i3 is the shortest at two to three months. The problem is not isolated to private buyers but fleet buyers are also affected. The software giant SAP wants to be carbon neutral in 2025 and is currently expanding its e-fleet. SAP manager Marcus Wagner told “Automobilwoche”: “If you want to buy a full electric in February 2018, you will get almost none.” It seems to me the problem is not isolated to buyers which place pre-orders for new EVs like the Tesla Model 3.
I hosted the friendly team of EV-Volumes last week in Cape Town and from the comments based on our combines research of the EV sector over a glass of beautiful Cape wine we concluded that the EV market has reached its tipping point.
Following on our story above many news reports the past week referred to the supply of commodities for EV batteries such as lithium, nickel, manganese, graphite, and cobalt which seems to confirm the notion that EV sales are set to take off. Prices for the commodities have skyrocketed the last couple of years despite the fact that the amounts required of these commodities per cell are so small that price impact on the total cost of the battery is limited. Current cobalt prices have more than doubled in on a year to year basis from February 2017, trading above $80,000 per ton on the LME.
Renault-Nissan-Mitsubishi Alliance Chairman Carlos Ghosn in an interview this week on the announcement of the company’s record profits said that the rising cost of commodities for batteries does not worry him. Ghosn said:
“The increase in the cost of the raw material would be compensated by much better knowhow into how to make batteries more efficiently and how to substitute some of the raw materials going into the batteries,”
The German publication Frankfurter Allgemeine Zeitung reported that BMW is close to securing a 10-year supply of lithium and cobalt according to statements made by BMW’s head of procurement, Markus Duesmann. Duesmann said: “The aim is to secure the supply all the way down to the level of the mine, for 10 years. The contracts are ready to be signed.”
According to Reuters, BASF the German chemicals giant has entered talks over a supply partnership for high-grade Nickel used in long-range batteries with Russian miner Norilsk Nickel and BASF competitor, Belgium’s Umicore raised 892 million euros to expand its business. Umicore CEO CEO Marc Grynberg said that recycling would be crucial as mining won’t be enough to meet the world’s needs should EV demand continue at the current pace beyond 2025.
Bloomberg Quint reported that Samsung SDI is to purchase equity in an unnamed company which posses a recycling technology to extract cobalt from used cell phone batteries. Samsung can recycle 157 tons of cobalt and other minerals from the doomed Galaxy Note 7 smartphone while the commodity analysts CRU Group projects that 25,000 metric tons of minerals will be extracted from used batteries by 2025.
Companies are also pivoting towards developing batteries which require less cobalt such as nickel-cobalt-manganese batteries which consist of 88% nickel to be less reliant on cobalt of which more than 50% comes from the unstable Democratic Republic of Congo (DRC). The DRC recently passed a new mining code through the country’s National Assembly to grab more profits from the mining of cobalt and copper. The new code puts royalties of 5% on “strategic metals” which include cobalt, allow a larger shareholding by the State in mining companies and repatriates of at least 40% of the revenue of minerals that are sold for export.
Technology advances will also change the landscape in the coming years as manufacturers aim to bring down costs of EVs to compete with low cast manufacturers such as China. A research article in ScienceMag explained how desalination using metal organic framework (MOF) membranes separates lithium from salt water as a by-product.
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National auto data for December released this week by China showed that EV sales in the country rose a staggering 11 consecutive periods of which the last six months were records, each eclipsing the month prior. Total figures for 2017 shows that the country produced 794,000 new energy vehicles (up 53.8%) and sold 777,000 units (up 53.3%). New energy vehicles now constitute 2.7% of the national fleet for the year, an increase of 50% on the 1.8% in 2016. Passenger EVs grew from 1.4% of the national fleet in 2016 to 2.38% in 2017. Of the total amount of EVs produced 478,000 (up 81.7%) were pure electric and 114,000 (40.3%) were plug-in hybrid vehicles. Sales for pure electric cars amounted to 458,000 (up 82.1%) and for that of PHEV 111,000 (up39.4%).
According to Reuters a forecast from the China Association of Automobile Manufacturers on Thursday predicted that EV sales would grow 40% on that of 2017, bringing forecasted total sales for 2018 to 1 million vehicles. Manufacturers such as FAW, BAIC, and BYD came out this week with their plans for 2018. BYD targets to sell 200,000 EVs in 2018 while BAIC will build on its success of 2017 by bringing five pure electric models to market. Read our full report on BAIC unseating Renault in the Top 3 EV companies and its 2018 plans here. FAW the state-owned automaker announced that it would develop 15 EV models through its Hongqi luxury brand by 2025 starting with its first model in 2018 in a bid to revive the ailing brand. The company hopes that by focusing on EVs that it could increase Honqi’s sales from the current ca 5,000 units to 100,000 in 2020 and 300,000 in 2025. EV models from 2020 onwards will be developed on a new drivetrain with a range of 373 miles (600km) and assembled in Changchun.
According to the Times of India Nissan is engaging with the Indian Government to support the company in bringing a mass-produced and affordable EV to market which could also be exported to other countries in the region. Nissan’s Global Director for EVs, Nicholas Thomas, told the Times that the car should be in the region of Rs 7 lakh ($10,000), making it cheaper than the Indian produced Mahindra e20, previously also sold in the UK. Mr. Thomas gave no timeline on such a project and commented that it would depend on the development of the Indian EV market and the affordability of batteries in the country. Although the Indian Government aspires to be 100% in electric by 2030, it is yet to present a clear plan on how this will be achieved. Nissan’s EV strategy is to develop 12 EV models by 2022 for the international market.
In related news, Nissan announced that orders for the new Nissan eNV200 MPV or 7-seater eNV200 Evalia are now open. The limited edition 40kWh Nissan eNV200 with an expected range of 280km (175 miles) will be available in Italy, Belgium, Germany, Austria, and Switzerland from the second quarter of 2018.
In December 2017 Hyundai Senior VP Lee King was quoted by Reuters that the Group sees the end of the sharp drop in prices of lithium batteries by 2020 after which it expects prices to flatten off. According to Reuters Mr. King said at the time: “Not a single ingredient is going in a positive direction in terms of pricing, so far battery prices have been declining at a rapid pace, but the pace will moderate significantly or maintain the status quo by 2020.”
This week at the CES 2018 Mr. King was quoted by Reuters making the same remarks at the launch of its new Nexo FCEV. Although Hyundai and its sister company KIA acknowledges the need to go green, they see a much smaller role for electric vehicles pushing hydrogen-based vehicles along with Japanese carmaker Toyota and FIAT Chrysler. Hyundai KIA is launching EVs on its new platform this year and plans to roll out EVs powered by solid-state batteries from 2020.
Last week I featured some of the teasers ahead of the CES 2018. You can now view the unveiled images and specifications on each of the dedicated pages on wattEV2 buy for the XPENG G3, Fisker eMotion, Byton Concept, KIA Niro BEV Concept, and Hyundai Nexo FCEV SUV by following the associated links.
Panasonic showcased mockups of a platform for EV bikes and micro-cars it developed at its booth at the CES 2018. The platform which offers an energy-efficient, a safe powertrain that features integrated compactness, high efficiency and flexible scalability includes a power unit (with an onboard charger, junction box, inverter and DC-to-DC converter) and a motor unit.
Nissan and Nasa are extending their five-year research co-operation partnership to develop a working demonstration of SAM (Nissan Seamless Autonomous Mobility) by 2019. First introduced at the CES 2017 Nissan developed SAM from NASA technology used to managing interplanetary rovers as they move around unpredictable landscapes. SAM is used to managing autonomous transportation services. According to Nissan “SAM represents a major milestone in Nissan Intelligent Integration, providing the infrastructure to safely and seamlessly integrate autonomous mobility services into existing urban environments.”
The world’s largest supplier of semiconductors to the auto industry, NXP, launched its Automated Drive Kit at the CES 2018. The NXP Automated Drive Kit allows for the open, fast and flexible development of Level 3 self-driving systems and will expand to higher levels of autonomy in time. The Drive Kit is a software-enabled platform that enables carmakers and suppliers to develop, test and deploy autonomous algorithms and applications quickly on an open and flexible platform with an expanding ecosystem of partners. According to a press release by the NXP:
“The first release of the Automated Drive Kit will include a front vision system based on NXP’s S32V234 processor, allowing customers to deploy their algorithms of choice. The Kit also includes front camera application software APIs and Object Detection Algorithms provided by Neusoft; a leading IT solutions and services provider in China and a strategic ADAS and AD partner to NXP. Additionally, the Kit includes sophisticated radar options and GPS positioning technology. Customers choose from various LiDAR options and can add LiDAR Object Processing (LOP) modular software from AutonomouStuff, which provides ground segmentation and object tracking.”
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Daimler and Chinese BAIC Motors this week agreed to increase the investment in the Sino-German Joint Venture, Beijing Benz Automotive Co (BBAC), to manufacture electric vehicles. The partners agreed to a further investment of 5 billion yuan (655 million euros / $735 million) at a signing of the heads of agreement in Berlin in the presence of German Chancellor Dr. Angela Merkel and Chinese President Xi Jinping. The investment by the German automaker is a further commitment to electric vehicles as it implements the aggressive electric vehicle strategy. BBAC is the localization of the Mercedes-Benz brand and will see its first electric vehicle rolling off the production line in 2020.
In June 2017 both partners agreed to strengthen their strategic collaboration through investments for New Energy Vehicles (NEVs) in China. As part of the investment agreement, Daimler announced its intention to acquire a minority share in Beijing Electric Vehicle Co., Ltd. (BJEV), a subsidiary of the BAIC Group, with the purpose of strengthening strategic collaboration with BAIC in the NEV sector.
The investment will be used to extend the BBAC plant in Beijing, established in 2005 and already Daimler’s largest Mercedes-Benz passenger car production hub, to become a BEV production hub in China. The establishment of a BEV production hub will commence with the building of an eBattery factory, which would be Daimler’s first foreign location of its global battery production network. Daimler plans to invest one of the ten billion euro earmarked for its electric vehicle strategy in the global battery production network for Mercedes-Benz vehicles. The network already includes the site in Kamenz, Saxony, built in 2010, where a second state of the art battery factory is being built with an investment of around 500 million euros. Mercedes-Benz will source the cell for its battery plant in Beijing from Chinese suppliers.
Tesla‘s Elon Musk announced last Sunday that production of the Tesla Model 3 would commence on Friday the 7th of July, two weeks ahead of schedule. Late Saturday evening Elon posted a tweet showing two pictures of the historic vehicle with serial number one that came off the production line. According to Elon Musk, the rule at Tesla is that the first person to pay the full price will get the first Tesla Model 3 SN1. He responded to a tweet that he has the first Roadster and Model X but not the first Model S. The average sales price for a Tesla Model 3 is estimated to be around $50,000 before incentives.
Electric car sales in the USA and Norway showed healthy gains over the same period in 2016. US EV sales increased 16% over that of June 2016 while in Norway sales jumped 62% for the same period. Electric vehicle sales in Norway now stands at a record 42% of new vehicle sales. Total US EV sales for the year so far stands at around 90,000 units, 39% more than in the first half of 2016. Read our detailed breakdown of EV sales for H1 2017 in Norway and the USA by clicking on the following links.
The state-owned Chinese automaker Dongfeng, a top four vehicle producer in China, which primary strategy has historically been the production of localized cars of various international auto companies such as the PSA Group, Hyundai, Honda, Nissan, and Kia. The company’s in-house developed vehicles are sold under the Dongfeng Fengshen brand which up to now had little EV models. On the 3rd of July, the GM of Dongfeng Fengshen announced during the unveiling of its AX4 SUV that the company will focus on SUVs and EVs from now going forward. The GM, Mr. Lui Hong, did not specify if the vehicles will be based on the new AX4 SUV, AX7 or the E70.
VW and robotics firm Kuka this week signed a new co-operation agreement to develop robot-based innovations for all-electric and autonomous automobiles. The new agreement will expand the existing e-smart Connect project which includes a practical and user-friendly solution for charging high-voltage batteries of electric vehicles pictured here charging the VW GenE research vehicle. The Kuka developed charger is a charging solution developed for parking garages.
The Volkswagen Group is planning a strategic e-mobility offensive in the course of realigning its drive strategy. By the end of 2018, more than ten new electrified models will be launched on the market. A further 30 models will follow by 2025. These will be all-electric battery-powered vehicles. In parallel, Porsche will manage the ongoing expansion of infrastructure for quick-charging stations. The Volkswagen Group is providing a vision for autonomous driving of the future with the “Sedric” concept car. Audi recently established Autonomous Intelligent Driving GmbH for self-drive systems. This company is carrying out work for the entire Volkswagen Group.
KUKA AG is one of the biggest providers of intelligent automation solutions and is the world’s leading manufacturer of production plants in the automobile industry. The Group’s own Research Department headquartered in Augsburg lays the technological fundamentals for innovations in industrial production and service robotics.
The pace of German electric vehicle sales just keeps on accelerating as the country’s April EV sales jumped 119% compared to the previous April, bringing the year-to-date increase to 82%, up from 77% in March. Battery Electric Vehicles (BEV) maintained a slight lead over Plug-in Hybrid Electric Vehicles (PHEV) with 6,843 units sold vs. 6,728. Plug-in Hybrids were, however, the leading technology for the month of April with 1,953 units sold vs. 1,587.
The Top EV brand in Germany is BMW, taking the crown from VW. The BMW i3, which kept on to its second position overall and the BMW 225xe Active Tourer accounted for nearly 80% of the German automaker’s total sales. Significant of the BMW i3 sales is that the consumer is shifting away from the i3 REx range extended PHEV, last years preferred variant, to the pure electric version. The ratio in 2016 was 474 i3 REx to 216 i3 BEV vs. 897 BEV to 551 REx now. The shift towards the pure electric version is an indication that consumers are getting more comfortable with the technology and that range anxiety is becoming less of a deterrent. Surprising is that Nissan lost a lot of ground in Germany, this was due to the fall in Nissan Leaf sales. The popular, yet dated Leaf, has been able to hold its commanding position in most other markets, so we have to ask the question if Germany is a sign of what’s to come. Nissan teased some pictures of the new Leaf, expected in 2018 this week. The VW brand was one of the other losers for the year-to-date, mostly due to falling Volkswagen Golf GTE and e-Golf sales. The new Renault Zoe Z.E. 40 was the most popular car in February and March but lost ground in April to the BMW i3, Audi A3, and Mitsubishi Outlander.
Smaller and cheaper models remained the top performers in Germany, but new models such as the Opel Ampera-e (rebadged Chevrolet Bolt), Hyundai Ionic and Mini Countryman SE ALL4 has yet to perform. In the luxury segment, Mercedes-Benz outsold Volvo, BMW, and Audi. Tesla remained the best performer in the luxury segment, maintaining its position, owning 10% of the total electric vehicle market in the country. The Toyota Prius, a top performer over the last couple of months in the USA and Japanese markets, is not yet available in the German market and it is unclear if it will be available here.
At this rate, Germany is expected to surpass its 2016 record with about four months to spare, a great achievement for the electric vehicle sector, boding well for global EV sales in 2017.
Please feel free to use the comment section below to share your thoughts on the German EV market and available models.
#1 – USA April EV Sales continue upward trend
USA EV sales for April were released this week showed an increase of nearly 25% on a year-on-year basis, bringing the 2017 figure to 54,000 units for the year-to-date, which is 41% ahead of the 38,000 for the same period in 2016.
PHEV vehicles are gaining on the lead of BEV vehicles as Toyota Prius sales continued its upward momentum while deliveries for the Nissan Leaf and Tesla’s Models S and X slipped (hard). Sales for new models introduced through the month were a mixed bag, with the Cadillac CT6 PHV only racking up 6 units while the Chrysler Pacifica PHEV mustered 205 units after a delayed start to the year. The Chevrolet Bolt recovered nicely and Fiat had a record month with the 500e after introducing special deals. A big loser was the Mercedes C350e, dropping to only three units from a high of 210 in January.
#2 – Citroën’s EV strategy unwrapped
Citroën this week shed some light on its electric vehicle strategy. The PSA Group company plans EVs across the range starting 2020. The strategy mimics Hyundai’s strategy with the Ioniq, having an ICE, PHEV and BEV version. The approach is seen as quite expensive, but hopefully, the company gained some inside knowledge from the Citroen C-Zero, one of the first EVs of the decade.
Citroen CEO Linda Jackson was quoted by Automotive News Europe as follows – “Our strategy for electric vehicles is not to have a vehicle dedicated to electric, but to have electric across the range so that customers can choose a gasoline model or an electric model.”
#3 – Tesla’s shares retreats after hitting our target
Tesla shares early in the week hit the target of $320 we predicted on the 3rd of April after which it came back to test the breakout when the company announced a loss of $322m for the quarter despite more than doubling revenues. Interestingly enough if you list GM, Tesla and Ford’s market cap and total units sold it seems that investors are valuing the three top brands in the USA on their EV unit sales only.
We picked up in the fine print of the release that Tesla will add a 100 retail, delivery and service locations during 2017 globally, representing a 30% increase. The company will also add 100 Tesla Ranger mobile repair trucks during the second quarter. The production of 5,000 Model 3s per week is still on track to commence in July.
#4 – California taxes ZEV owners
The California legislature this week passed a bill to increase revenues from the transport sector in a bid to cover the increased cost of maintaining road infrastructure. The Bill included an annual levy of $100 on ZEV vehicles to compensate for the fact that EV taxes can’t be recovered at the pump. Diesel and gasoline prices increased by $0.36 and $0.30 per gallon. California is home to nearly half of all EVs in the USA.
In other regulatory news this week impacting on EV growth the EU approved a joint venture between BMW, Ford, Daimler, and VW to develop a fast charging network in across the union. The companies will hold equal shares in the JV.
#5 – EVs now 3% of BMWs sales
BMW this week released its sales data for the first quarter 2017, showing that EVs now constitute 3% of its total sales as EV sales jumped 50%. The Chairman of the Board, Mr. Harald Kruger was quoted saying “We are therefore well on course to delivering more than 100,000 electrified vehicles for the first time in 2017”. The company also announced that it would start producing it iNext autonomous brand at its Dingolfing plant form 2021. Other models expected from the German automaker is the i8 Roadster PHEV (2018), a BEV Mini (2019), and a BEV X3 (2020). The news from BMW is in stark contrast from news only six months earlier when the Board grappled with if it should pursue EVs at all (Top 5 EV News Week 49 2016).
China, the world’s largest market for electric vehicles showed a rise in sales for the first quarter of 2017, improving on 2016 figures by 12,500 units. While March was a particularly good month, selling over 30,000 units, we wonder if the total sales of nearly 56,000 units in the first quarter will be enough for 2017 to beat the record of 350,000 set in 2016?
EV sales for 2017 kicked off rather poorly in January with a disappointingly low 7,000 units. The Chinese holiday season and the regulatory clampdown on the abuse of EV subsidies were blamed for the lackluster sales. Fortunately, sales improved as the following months saw a doubling each month on the previous, setting a very promising trend. Battery Electric Vehicles outsold Plug-In Hybrids by nearly five to one as over 44,000 BEV units were sold compared to only 9,000 PHEV models during the period.
New models were the top sellers, taking three of the top five positions in a country starved for cool looking EVs. Chinese consumers are used to being dished up a mix of inferior cars due to major international brands being forced to partner with local manufacturers. To protect their IP, the global brands produced older variants of their vehicles for the Chinese market. The situation has improved for the Chinese consumer as local producers such as BAIC, SAIC and BYD have started producing improved second generation EV models. The BAIC E180 and BAIC E260, taking the first and third positions for the quarter is a case in point of how the second generation electric vehicles are drawing more buyers to the sector.
2016’s darling, BYD is slipping in the rankings, the company, part-owned by Warren Buffet, which has been the best-selling electric vehicle brand in the world for 2015 and 2016 could only muster two-thirds of BAICs sales. More worrying for BYD is that it had five models in the market compared to BAICs three BEVs. Tesla had a respectable performance with the Model X selling 1,500 units, which is 13% of all Tesla Model X units sold internationally during Q1, accounting for 6% of the company’s total sales for the period.
In total Q1 2017 sales improved 30% on that of the same period in 2016, indicating that 2017 could even be a better year for electric vehicles, despite stricter regulation, proving that electric vehicles are entering the mainstream.
There were 2,250 more electric vehicles sold in Norway than during the same period in 2016, resulting in a 20.03% increase year-on-year. Norway is the darling of the EV sector and is targeting 100% EV ownership by 2025. The country is number three on the list of Top 10 EV markets, and number one the list of EV as a percentage of new vehicle registrations. The country is now officially a growth market, reaching the take-off point for the technology. EV sales in Norway as a percentage of the total fleet for the year 2016 was at a record 29.1%. The prospects for 2017 looks even better, as in January the percentage of EV’s registered achieved a record-breaking 37.5% and kept the momentum for the following two months.
Small family cars constituted four of the top 5 positions, and Battery Electric Vehicles (BEV) marginally outsold Plug-In Hybrid Vehicles (PHEVs). The BMW i3, who’s BEV variant made up the overwhelming majority of the models’ sales was the best seller for the quarter and nearly double that of the same period in 2016. The Nissan Leaf showed strong growth and was the best-selling car in March 2017. The Tesla Model X performed better than the Model S, with the Model X being the second best seller of all electric cars in March 2017. The best PHEVs were the VW Passat GTE, the Mitsubishi Outlander, and Mercedes GLC350e. Although still on the top 5 list the Mitsubishi Outlander is showing a significant decline in sales, selling only two-thirds of what it did last year. The Toyota Prius has not performed as well as in some other markets. Mirroring most other markets, the BMW x5 xDrive40e sales in Norway showed a decline, selling a third less when compared to March 2016.
At this rate, we can expect Norwegian EV sales to reach between 55,000 and 60,000 units for the year, edging closer to 50% EV penetration.
The highlights for USA electric car sales in Q1 2017 was:
There are no surprises in the Top 3 Electric Vehicle Brands as Tesla remained on top, due to increase sales of the Tesla Model X, and GM and Toyota brought new models to book. Quarter 1 2017 was the first full quarter for the Chevrolet Bolt, the world’s first mass-market car. The Chevrolet Bolt‘s performance was rather disappointing, with sales dropping from a January high. The reason can be one of two, either GM‘s slow roll-out is to blame, or most buyers are waiting for the Tesla Model 3. Toyota’s only Plug-In Hybrid (PHEV) vehicle, the Toyota Prius Premium, performed remarkably well, taking in consideration that the battery capacity and range does not offer a real advantage to its competitors.
The bad boy on the block was Ford, barely hanging on to the Top 5 list of electric cars. Were it not for Porsche’s bad performance in the VW Group; the German automaker would have unseated Ford in the Top 5. BMW dropped out of the Top 5 list as Toyota entered the list in the third position. Daimler showed commendable improvement while Hyundai and Volvo joined Ford on the losing side. Nissan still shows consistent growth with its only electric vehicle, the Nissan Leaf.
Of the new electric vehicle models that came to market in this quarter, the Toyota Prius Premium, a PHEV outperformed GM‘s Chevrolet Bolt, a BEV by nearly 30%, a disappointing performance for the first mass-market electric vehicle. Both Mercedes-Benz and BMW had two more models in this quarter compared to 2016, with the Mercedes-Benz C350e and Mercedes-Benz GLE 550e outselling the BMW 330e and BMW 740e.
The Mercedes Benz S550 PHEV, BMW i3 2017 and Tesla Model X were the best performing existing models, although for the BMW i3, its the 50% improvement in battery capacity that attributed to its increase in sales.
The Tesla Model S sales remained flat on a year-to-year basis, despite continued improvements in its software and hardware.
Sales of the Cadillac ELR fizzled out completely in anticipation of the release of the Cadillac CT6 PHEV this month. Both the Porsche Cayenne and Panamera showed big losses in sales from a year ago, impacting on total growth for the VW Group. Judging from the Ford models sales slump, it is clear the century-old automaker needs to reassess it electric vehicle strategy. The big drop in the Volvo XC90 T8 can be attributed to the challenge faced by all automakers coming late to the electric vehicle party. To enter the electric vehicle market, lagging brands alter existing models to include batteries but in the process lose performance as drivers complain about smaller fuel tanks.
Battery Electric Vehicle’s (BEV), of which nearly half is constituted by the two Tesla models, outperformed plug-in hybrid electric vehicles. Over 20,000 BEV units were sold in the first quarter of 2017 compared to just under 15,000 a year ago. Q1 2017’s 19.2% increase in sales showed a slight improvement for the technology on Q1 2016 when BEV outsold PHEV with 17%. The USA is one of the few countries where BEV vehicles outsold PHEV’s since 2016, read our blog on the Top 10 EV Markets.
In total there is 13 BEV models and 20 PHEV models available in the USA market in 2017 so far. Consumers had a choice of seven new PHEV models in Q1 2017 and one BEV compared to the same period in 2016.
New model’s coming to market in the next quarter include three plug-in hybrids, the Cadillac CT6 PHEV, BMW 530e, and the Porsche Panamera 4 E-H, while only one BEV, the Hyundai IONIQ Electric will be released, should there be no surprises from Tesla on the Model 3.
Please leave us a comment on your thoughts regarding the electric vehicle models available to the US consumer.
We all held our breath after the disappointing January EV’s sales from the world’s largest market in the sector. January sales were hit by a double whammy of the annual Chinese holiday season and a clamp down on subsidy fraud that plagued the Chinese EV sector, resulting in much stricter regulations by the Chinese Government.
February sales nearly tripled, with the new-comers the BAIC EC180 EV and SAIC Roewe eRX5 PHEV causing much of the stir. The SAIC Roewe SUV PHEV, introduced in the second half of 2016 is known as the Alibaba Connected Car, running Alibaba’s YunOS software, making the RX5 the world’s first internet car.
Small cars took the Top 4 positions for the month with the small hatchback BAIC EC180 outselling the rest by a long shot. The BAIC EC180, with a range of 180km at a top speed of 100km/h on a 41hp electric motor. BAIC remained the best performing brand for the year with total sales of over 5,000 units followed by SAIC Roewe.
BYD, China’s best-selling brand in 2016 with over 100,000 units from its five models, were the under performer with less than 2,500 units sold for the year-to-date. BYD is 10% owned by Warren Buffet’s Berkshire Hathaway.
BEV’s outsold PHEV by 3-to-1. Total sales in 2016 were 351,861 units, setting a huge target for the world’s largest EV market. Judging from the first two months sales, it seems difficult to breach.
The respected Economist Magazine this week commented on forecast adjustments by various investment houses for the penetration of electric vehicles. Up till last year, the consensus was that only 4% of new vehicles would be electric by 2025. BNP Paribas now forecast 11% penetration by 2025, while Morgan Stanley see’s a 7% penetration. In 2016 international EV sales increased with nearly 750,000 units (42%) in spite of a low fuel price environment. One factor driving the change of heart are aggressive regulations to support environmental targets. In Norway electric vehicles now makes up 37% of new vehicle fleet amid government support while in China the Government aims to have EV’s make up 8% of new vehicles by 2018. Technology has also moved much faster than anticipated and battery cost, a long time stumbling block is coming down faster than anticipated, with some mega factories coming online within the next two years. Our hearts go out to the automakers that failed to notice the trend, RIP Fiat, Toyota, Honda, Hyundai, and the list goes on, not to mention Big Oil.
This week Tesla CEO Elon Musk commented on the disruption of self-driving cars to the sector during the World Government Summit in Dubai. Mr. Musk was in Dubai for the launch of Tesla in the Emirates. His comments indicated that Tesla would have its first Level 4 Autonomous system available by the end of 2017. The disruption is significant to the auto sector since once a self-driving car is available, it will devalue new cars without the technology. According to Mr. Musk, the disruption will be slow initially but that in ten years from now all new cars will have the capability to be autonomous. It’s significant that Mr. Musk made the comments at a Government Summit as regulations, not technology seems to be the biggest hurdle at the moment. Will technology force the pace of Governments? We sincerely hope so.
The Wall Street Journal reported on the Chinese Electric Vehicle market hitting a road block, with new electric vehicles sales down over 60% for January. China up till now has been the mainstay of the sector with sales increases in 2015 of 300% and 50% on top of that in 2016. The recent clampdown on corruption in the sector which led to a range of new regulations being forced on the Chinese market since December 30, 2016, is seen to be the reason for the sharp slowdown. The Wall Street Journal reported on fines of $150 million imposed on some companies in September 2016. The fines were as a result of subsidy fraud. The Chinese Government also indicated earlier the year that they want to increase barriers to entry and limit the market to around ten manufacturers, down from over 200 currently, in a bid to improve quality and safety of the end product.
The 3rd event in the current series of the Formula-E electric vehicle street racing calendar held Buenos Aires Argentina ended yet again with a victorious Renault.eDams team. The e.Dams driver, Swiss-born Sebastian Buemi clinched his 3rd win of the series. The Brasilian Lucas Di Grassi’s 2nd position kept Audi’s ABT Schaeffler standings in the overall second position. The Chinese teams of Next EV and Techeeta were the only teams climbing the rankings, now lying 4th and 5th respectively. Newcomer Panasonic Jaguar has yet to score a single point in the 3rd season, with its drivers Evans and Carrol ending 18th and 19th.