E-mobility Index 3rd Quarter 2014

Transcription

1 STUDY E-mobility Index 3rd Quarter 2014 Roland Berger Strategy Consultants Automotive Competence Center & Forschungsgesellschaft Kraftfahrwesen mbh Aachen September, 2014

2 1 Key takeaways of the E-mobility Index for Q > In terms of technology, Germany has taken the lead owing to new vehicle models. In the market index, the US and Japan are catching up with France, while, Japan and the US continue to consolidate their lead over other automotive nations in terms of industry > The range of electric vehicle models offered by automotive manufacturers continues to grow in all markets except Italy. PHEVs are playing an increasingly important part in automakers' electrification strategies, partly due to CO 2 legislation. Concurrently national governments are successively decreasing R&D funding, with a number of program due to expire at year's end > Korea's position as one of the world's premier cell manufacturing hubs is predicated largely on a strategy of rapid industrialization, which though it was activated by public R&D funding (directed especially at cell chemistry research), was made possible largely as a result of the aggressive long-term investment strategies pursued by Korea's leading industrial conglomerates. 2 Summary comparison of the competitive positions of the world's seven leading automotive nations In terms of technology, Germany moves into pole position in the E-mobility Index for Q This is mainly due to the introduction of PHEVs in the premium vehicle segment, which is shifting the fleet mix further toward technologically more sophisticated vehicles. With the launch of the Kia Soul EV Korea now has fully-fledged mass production electric vehicles on the market for the first time. However, in terms of technical performance, the vehicles remain slightly below the levels it had originally announced, pushing Korea down slightly in the ratings. While Japan stays in third place in view of the good value-for-money it offers, France continues to catch up with the three leaders. This is primarily due to an increasing shift away from its previous model policy, which was focused strongly on micro cars (Renault Twizy). China, by contrast, is down slightly in the ratings (Figure 3). In terms of government subsidies for e-mobility, the volume of funds available remains constant in most countries. However, the trend toward governments not renewing direct subsidy programs, as witnessed in Japan recently, is becoming noticeable in other countries as well. In almost all the countries examined, state-funded R&D programs are drawing to a close and new programs have yet to emerge (Figure 4). In industry, the US continue to close the gap to Japan, partly as an indirect result of the localization of Japanese xevs (especially the Nissan Leaf) in the US. At the same time, Japan is profiting from continuing strong sales of American xevs with Japanese-made cells (especially the Tesla Model S). As a result, Japan and the US remain the most important production locations worldwide in the area of e-mobility. With regard to national production of xevs, Germany and France in particular are losing production volume compared to the leaders. The concentration of sales of PHEVs and EVs in the US and Japan, and the relatively lower demand for volume models, is pushing down production forecasts for such vehicles from European manufacturers, even where these are highly significant in their domestic markets. Cell production continues to be strongly concentrated in Asia. Compared to the Q edition of the E-mobility Index, China has significantly increased its share of global cell production. The 2

3 strong growth in sales (see Market index) has a double impact here, due to the use of lithium iron phosphate (which has a relatively low energy density) and the large share of pure electric vehicles in the xev mix. It remains unlikely that Europe will play a major part in global cell production. At the same time, looking beyond the current period, the US will probably move up in the Industry index in the medium term as local factories increasingly meet domestic demand for batteries (Figure 5). In terms of market, sales of EVs and PHEVs are growing in all markets except France. But despite this slight decline in sales, electric vehicles still make up a larger proportion of total vehicle sales in France than in any other country in the E-mobility Index. The US and Japan both saw an increase of almost 20% in sales of electric vehicles, putting them hot on the heels of France. In Germany, sales of EVs and PHEVs are up almost 40%, closing the gap between Germany and the leaders. However, the biggest growth in sales occurs in China, where figures almost doubled since the last period. In Korea, the overall market has developed very strongly even while sales of electric vehicles continue to grow. As a result, the share of xevs in the total market has only increased marginally. Korea thus falls from sixth to seventh place in the ranking (Figure 6). Figure 1: The competitive positions of the seven leading automotive nations develop unevenly - only Japan near top on all indicators E-mobility Index for Q ) Circle size shows EV/PHEV share of total vehicle market 3

4 Figure 2: Japan and France consolidate their leads in industry and market respectively as Germany rises to the top in technology E-mobility index Ranking by indicator Industry Technology Market Overall ranking Detailed analysis 3.1 Overview of index development In technology, the increasing technological maturity of vehicles on the market has led to a new focus on price when it comes to value-for-money considerations. The first generation of xevs were mainly pure BEVs positioned in the A segment. But in many markets, their importance in the model mix has gradually declined in favor of bigger, more full-fledged and hence more expensive vehicles. The resulting decline in value for money has led to a drop in the Technology index only in China and Korea. In other markets, especially Japan, it has provoked price cuts, some of them dramatic. In certain markets China in particular governments have reacted with further purchase incentives, reducing the price pressure on OEMs to some extent at least. The R&D funding provided by national governments has meanwhile followed an overall declining trend with diverse programs set to expire at the end of In terms of industry, Japan has dominated the entire field of the seven leading automotive nations in terms of both national share in global cell production and domestic xev production since the E-mobility index was first published. The US's second place by contrast is based almost entirely on strong domestic sales of domestically manufactured xevs (though the US also profits indirectly from the localization of Japanese xevs and cells on US soil). Besides Japan only China strikes similarly even balance between domestic manufacturing of xevs and domestic cell production. All other markets tend to rely one-sidedly on either a strong domestic cell manufacturing footprint (such as Korea) or a significant domestic share in global xev production (such as Germany or France). However, with the growing concentration of the global xev market on Japan and the US, especially France and Germany have lost significant share in this area. 4

5 In terms of market, all the markets examined have developed positively since the publication of the first E-mobility Index. But developments have been highly uneven. E-mobility has only established itself long term in certain countries. France holds pole position, having shown the strongest growth over the period. Japan and the US began from a relatively high level in Q For a long time, Germany trailed far behind: The country shows a clear upward trend for the first time in the Q index. The same goes for China, while Korea and Italy have yet to see much movement. This situation is also reflected in the vehicle mix: In China, Korea and France, almost 100% pure BEVs are sold, compared to 70% in Germany and the US, and 50% PHEVs in Japan. (Figure 9) Spotlight Korea: Interview with Prof. Young-Sup Joo of Seoul National University Prof. Young-Sup Joo currently holds a professorship at Seoul National University where he does research at the College of Engineering. Before returning to academia in 2013, Prof. Joo has had a distinguished career in the private sector with Hyundai Motor, Daewoo and GE among others, before being appointed Managing Director of the Office of Strategic R&D Planning in the Korean Ministry of Knowledge Economy in Wolfgang Bernhart: Prof. Joo, Korea far surpasses Europe and America in terms of cell production volume, trailing only Japan. In your opinion, what are the key contributing factors that have led to this remarkable development and the rise of such industry heavyweights as Samsung SDI, LG Chem or SK Innovation? Young-Sup Joo: I think what sets Korea apart is the country's specific industrial structure: The three companies you mention are each conglomerate companies that span multiple, often highly diverse, industries. In addition to being able to supply entire technologies end-toend they also tend to be dominated by a single family. As a result they are fast in terms of decision making (despite their size) and aggressive in terms of their long-term investment strategies. This has allowed them to quickly transfer know-how from other industries (most notably consumer electronics and IT) toward automotive applications. WB: The development of which technological competencies has been key in the making of this success story? Advance materials research, manufacturing and industrialization techniques or application engineering? YSJ: Cell chemistry is the single most important determinant of cell performance. Korea has invested heavily in basic material research, including cathode, anode and membrane materials as well as electrolytes. WB: In how far do you view these developments as the outcome of government-funded initiatives and/or private investments and initiatives? YSJ: I think it's a good mixture of both. We're seeing a lot of very solid basic research in any number of countries (also in Germany). But in the case of Korea, investment in basic research was met with the willingness on the part of key industrial players to invest long-term in commercializing the technology on a large scale at a time when its financial potential was still uncertain. WB: The Korean market leaders you mentioned before command highly integrated value chains that encompass both the synthesis of the precursor materials and the manufacturing of the cells themselves; do you believe that will remain the case in the near future also? YSJ: Yes. It is not by chance that all Korean players have strong chemicals credentials. However, the cross-fertilization between sister companies of the same group has also been 5

6 key. WB: How is Korean R&D funding channeled? Is it mainly through university, publicallyfunded research institutes or going toward private enterprises? YSJ: In Korea R&D funding is directed by three main government agencies: The Ministry of Science, ICT [Information and communications technology] and Future Planning (MSIP) and the Ministry of Education (MOE) each fund basic research mostly at public research institutes and universities; the Ministry of Trade, Industry and Energy (MOTIE) focuses on funding applied research through mostly private enterprises but also some public research institutes. In this Korea is really not all that different from other countries. WB: Recent public funding in the area of e-mobility by the majority focused on battery technology. Which future focus do you expect for Korean funding policy? YSJ: Actually in terms of R&D funding the Korean government has struck a good balance between battery technology research and electrical vehicle development. But I think you made the point yourself [in the Q edition of the E-Mobility Index]: now that the technology has been fully developed, policy makers' attention is shifting toward other factors, foremost putting in place of a comprehensive charging infrastructure. Korea marks no exception in this regard, and I think Jeju Island, which plans to achieve zero carbon footprint by 2030, is a good case in point in this respect. The key question policy makers are trying to address increasingly becomes how to make business of charging EVs attractive to private investors. WB: But unlike their Japanese and European competitors, Korean OEMs have yet to launch their own xevs both domestically and globally. Why have Korean OEMs been relatively slow in adopting xevs despite the industrial advantage provided by Korea's strong cell manufacturing capabilities? YSJ: To be fair, Korean OEMs have had EVs in small production numbers in the market for some time now, but I guess it's fair to say that Korean OEMs much like the German OEMs too have taken a more conservative approach and have hedged their bets by spreading their R&D efforts across a mix of technologies, which includes not only EVs and PHEVs, but also fuel cell electric vehicles. On public buses and taxis LPG and CNG are also very prevalent. Together they still constitute important alternatives to gasoline or diesel in the short to medium term. WB: What modes of cooperation are we likely to see between Korean cell manufacturers and OEMs, both foreign and domestic? How do you see partnerships between cell manufacturers and OEMs evolve in the near and long term? YSJ: Unlike Japanese companies of a similar pedigree [i.e. conglomerates], for Korean cell makers it was clear from the get-go that they would need to seek strategic partnerships with OEMs (both foreign and domestic), or form joint ventures with incumbent tier 1 suppliers to get access to critical automotive expertise, especially in total vehicle integration. What we're seeing now, of course, is that growing price pressure is successively dissolving these partnerships as OEMs become more cost conscious. In the future OEMs will likely seek to commoditize batteries and cells as much as possible through standardization or by adding multiple suppliers to their supply base. WB: Despite Korea's global leadership in Lithium-Ion battery and cell technology the Korean domestic market for xevs has yet to properly take off. Why do you think that is the case and what activities are being undertaken on the part of both the Korean government and domestic OEMs to close this gap? YSJ: I think there are both cultural and financial factors to be considered. To start with, so- 6

7 called early adopters, who have played a pivotal role in increasing customer acceptance elsewhere, are virtually non-existent in Korea. Korean society still emphasizes social cohesiveness to a large extent which all but diminishes this early adopter effect. The second (compounding) factor to be considered is the relative high cost and limited availability of EVs in Korea. For the near term I expect that government and public fleet operators (such as buses or taxi fleets) will become the main protagonists of e-mobility in Korea. Korea's first C-segment EV, which was developed as part of a public private partnership has also recently been launched. At the government's request public and municipal agencies as well as large businesses are now adding more EVs to their fleet. And we're already seeing the effect: To date xev sales have nearly doubled as compared to last year. WB: Do you expect the government to maintain the current high level of EV purchase incentives? What about non-monetary incentives (such as e.g. US policies where EV drivers enjoy the usage of commuter lanes/preferential parking) do you expect to come into effect in addition? YSJ: Yes, I think purchasing incentives will be needed in the short-term to achieve full market activation. Korean municipalities will provide non-monetary incentives as long as they are also supported by the public at large. WB: Non-Korean OEM show very little market share for conventional (ICE) vehicles. Will Korea be a target market for international EV manufacturers? Or will the EV market be dominated by Korean OEMs (Hyundai, Kia). What are potential market entry barriers for international EV manufacturers? YSJ: Korea is not a big market and the investments necessary to sell and service even a small fleet of cars here are relatively high. In consequence buyers of imported vehicles have for years had to contend with poor after sales services and high spare parts prices. I think this more than questions of image or preference for indigenous brands on the part of Korean consumer is the key explanation for the low share of foreign OEMs in Korea. In fact foreign OEMs have recently started to address these issues and have increased their market share quite dramatically as a result. By the same token I would also expect competition between xevs from foreign and domestic OEMs to increase in the future. No, I think the practical challenge foreign EV-makers are currently facing as they deliberate entering Korea is to be found elsewhere; namely, the fact that most domestic charging stations follow a version of the CHAdeMO standard still favored by Japanese OEMs. I don't see that Western OEMs will retrofit their vehicles with CHAdeMO plugs for Korea alone. This will be addressed in the long run as Korea adopts the worldwide Combo standard, which will level the playing field in the mid-term for all market participants, both foreign and domestic. 3.2 Commercial vehicles Despite the wide range of applications for electric vehicles (e.g. private use, car-sharing fleets), their requirements in terms of range and performance are by large comparable. When it comes to commercial vehicles, however, these requirements sometimes differ widely. At the same time, commercial vehicles face strict new legislation in the coming years, such as zero emission zones in downtown areas. Key dimensioning parameters for EVs include the widely varying vehicle weight with corresponding payloads, range and load profiles, and the use of auxiliaries (e.g. auxiliary drives in construction and refuse collection vehicles). Accordingly, the full-electric commercial vehicles that we have seen so far mainly prototypes and pre-series models vary widely with regard to drive dimensioning (Figure 9). 7

8 In light commercial vehicles with a permissible maximum weight of 3.5 tons, Sprinter-class (N1 category) transporters dominate the market. Other vehicles competing in this segment besides the Mercedes-Benz Sprinter EV, include the Iveco Daily Electric, PSA's Berlingo/Partner and the Renault Kangoo Z.E. These vehicles are to a large extent compatible with passenger vehicles (M1 category) in terms of their drive dimensioning. The electric vehicles currently available in this segment have electric outputs of up to 80 kw and battery capacities of up to 50 kwh, enabling ranges of approximately km. It would thus be possible to electrify light commercial vehicles using the technology established for passenger vehicles, adapting components where necessary and then integrating them into the vehicle. This approach has many advantages in terms of technical safeguarding and creating an economically attractive vehicle. The general similarity of the production structures to those of passenger vehicles production also supports the design of the manufacturing processes. N2 commercial vehicles with a permissible maximum weight of 12 tons have higher electric power and energy requirements than passenger or light commercial vehicles, so their dimensioning is substantially different. To ensure sufficient range, the prototypes and pre-series models that we have seen to date feature three-figure battery capacities (in kwh) and threefigure electric outputs (in kw). The operating conditions for these vehicles often call for very high power densities, so a direct transfer of N1 components, scaled up for the purpose, is not always possible. Suitable electric auxiliary drives and other auxiliaries (e.g. electric steering) do not exist in the relevant performance classes, so doing without hydraulic or mechanical topologies is not yet possible, especially while sales are so low that developing such components is unattractive. Powertrain design is also much more complicated than for passenger and N1 vehicles: The powertrain must be adapted for each type of use, making a simple, standardized application difficult. Moreover, commercial vehicles are often manufactured by body builders, and the body also places certain requirements on the powertrain and/or auxiliary drives. Manufacturers of commercial vehicles currently find themselves in a difficult situation, with demand for electric commercial vehicles potentially growing due to the new legislation, yet building such vehicles especially anything above a light commercial vehicle (N1) technically and economically unattractive. In addition, commercial customers are highly sensitive to additional costs and focus strongly on TCO. Smaller vehicle manufacturers, some of them only recently established, currently operate in this niche market, as was the case when battery-electric passenger vehicles were first launched. They offer vehicles for specific applications, sometimes taking a "good enough" approach. In the medium term, however, we expect to see increasing activity by established producers of commercial vehicles here too, squeezing the niche players out of the market. This development is especially likely if plug-in vehicles (on condition that they meet the legislative requirements regarding zero emission zones and CO 2 fleet emissions) become more attractive, and fleet operators alter their model mix in favor of smaller vehicles, in some cases with smaller load capacities, so that such vehicles can be integrated into the fleet more cost-efficiently. Having a modular, scalable technology kit that is closely coordinated with the passenger vehicle portfolio, and subjecting the sourcing strategy to careful review, will therefore constitute major success factors for established vehicle manufacturers. 4 Methodology The relative competitive position of individual automotive nations is compared to that of the others on the basis of three key indexes: 8

9 > Technology: The current status of technological development in vehicles made by indigenous OEMs and the support for vehicle development provided by national subsidy programs > Industry: The regional value added in the automotive industry by national vehicle, system and component production > Market: The size of the national market for electric vehicles based on current customer demand Roland Berger Strategy Consultants and fka weigh the individual indexes and combine them to form the E-mobility Index (Figure 10). The E-mobility Index makes it possible to compare the competitive positions of the world's seven leading automotive nations (Germany, France, Italy, the US, Japan, China and South Korea), juxtaposing their individual automotive markets on the basis of uniform global standards. The E-mobility Index thus reveals the extent to which individual nations are able to participate in the market that e-mobility is creating. The criteria applied are assessed as discussed below. Technology > Technological performance and value for money of electric vehicles that are currently available on the market or are soon to be launched > National e-mobility R&D programs through Only research grants and subsidies are taken into account (but not credit programs for manufacturing, budgets for purchase incentives, etc.) Industry > Cumulative national vehicle production (passenger cars, light commercial vehicles) for the period , taking account of BEVs and PHEVs > Cumulative national battery cell production (kwh) for the period Market > Electric vehicles' current share of the overall vehicle market (over a twelve-month period) The Q E-mobility Index included 2016 for the first time. The additional volume is reflected in higher scores for industry in all markets. However, this does not affect the shifts between markets, and the E-mobility Index's comparability with previous indexes is thus not compromised. 9

10 Figure 3: German manufacturers' selling prices remain high compared to other countries as they do not offer the same kind of price reductions as Japanese OEMs Value for money of market-ready BEVs and PHEVs Avg. sale price [EUR] EV value for money Low China Good France Japan Moderate Korea Poor USA Germany High Avg. technology level [points] Note: Italian OEMs have no mass-produced EV/PHEV models Country > Aggressive price policy continues > Stable model policy with tried-and-tested vehicle models > Introduction of current EV model generation hand-in-hand with price reductions > Diversified model range > No price reductions for EVs yet > PHEVs being introduced via high-priced vehicles in premium segment > Great volatility in model range and planned production volume > Technical level remains low > Falling sales for Twizy, Renault the only relevant OEM > Bolloré established as niche player > With the launch of the Soul EV, Korea now has mass production EVs on the market too Figure 4: R&D funding remains stagnant many programs earmarked to expire at the end of 2014 State R&D funding for e-mobility [EUR m], [% of GDP] Country [EUR m] [% of GDP] 1) 7, , , ) Subsidies expressed as a share of current GDP (2013) 10

11 Figure 5: Germany and France's importance in EV/PHEV production continues to diminish US and Japan now leading neck-and-neck Projected production of EVs and PHEVs through 2016 Country Domestic production of EVs/PHEVs ['000 units] Top 3 models in each country Nissan Leaf EV, Toyota Prius PHEV, Mitsubishi Outlander PHEV Chevrolet Volt PHEV, Tesla Model S, Nissan Leaf BMW i3, VW e-up!, VW Golf PHEV Renault ZOE Z.E., Renault Kangoo EV, smart fortwo ED Chery QQEV, BYD Qin, Kandi KD 26 Chevrolet Spark EV, Kia Soul EV, Kia Ray EV Note: No significant EV/PHEV production is expected in Italy Figure 6: With Japan still in the lead, China climbs to third position Korea loses in consequence of poor sales performance of European OEMs Cell manufacturers and production, by country, through 2016 Projected global market share, ) Total: USD 4.4 bn Domestic cell production, [MWh] 2) 36% 18,600 > Leading cell producer > Panasonic is the leader in consumer cells 23% 5,100 > Primarily LG Chem and Samsung > SK Innovation counted as part of Korean footprint 10% 9% 6% 6% 3% 3,600 3, > Primarily BYD and other "local for local" players > A123 also included after sale of US footprint > Primarily A123 and Japanese manufacturers with local production (AESC) > Primarily LiTec > No significant cell production > No significant cell production 1) 2016 market value in USD calculated as follows: USD 520/kWh for PHEVs and USD 370/kWh for EVs 2) Including Primearth's market share 11

12 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q E-MOBILITY INDEX Q Figure 7: France, Japan and USA are neck-and-neck at the top, with Germany far behind but growing Sales figures and market share of EVs/PHEVs, Q to Q Country Sales of EVs/PHEVs [items] EV/PHEV share of total sales [%] 111, , , , , ,100 1, Figure 8: Development of the competitive positions of the seven leading automotive nations by indicator Technology Industry Market 12

13 Figure 9: Light commercial vehicles (< 3.5 t) have the same technical design as passenger vehicles heavier commercial vehicles (M2/M3 segment) require specific components Electric power and range of electric commercial vehicles Electric power [kw] Performance requirements for N2/N3 commercial vehicles can currently only be partially met Battery capacity [kwh] Range [km] Large battery capacities needed for N2/N3 commercial vehicles to achieve reasonable ranges Requirements of N2/N3 vehicles % Vehicle category: M1 N1 N2 N3 Current BEV models 0 0 N1 50 N Figure 10: The E-mobility Index compares automotive nations on the basis of three parameters E-mobility Index Three parameters: Technology, industry, market Technology index 60% x 40% Electric vehicle performance National R&D funding Technological performance of electric vehicles (battery electric vehicles and plug-in hybrid electric vehicles, including range extended EVs) National R&D funding for electric vehicles and electric powertrains/storage systems for EVs Industry index 60% x 40% Electric vehicle production Supplier production footprint National value added: vehicle assembly National value added: cell production Market index 100% Electric vehicle sales ratio Size of the national market (EV/PHEVs' share of the overall vehicle market) 13

14 Authors We welcome your questions, comments and suggestions. Dr. Wolfgang Bernhart Partner Dr. Thomas Schlick Partner Dipl.-Kfm. Ingo Olschewski Senior Manager Dipl-Ing. Markus Thoennes Senior Engineer Jens Garrelfs Senior Consultant

15 Publisher Roland Berger Strategy Consultants GmbH Automotive Competence Center Mies-van-der-Rohe-Str Munich Germany Forschungsgesellschaft Kraftfahrwesen mbh Aachen Strategie und Beratung Steinbachstraße Aachen Germany Photo credits All images licensed from Roland Berger Strategy Consultants GmbH if not otherwise indicated. Disclaimer This study has been prepared for general guidance only. The reader should not act on any information provided in this study without receiving specific professional advice. Roland Berger Strategy Consultants GmbH shall not be liable for any damages resulting from the use of information contained in the study. itunes Store Google Play Roland Berger Strategy Consultants GmbH. All rights reserved. 15