electric vehicles global markets by fung global retail ......these vehicles. it also analyzes the...

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DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

• Governmentincentiveprogramsinmajormarketsfueledarapidincreaseinelectricvehicle(EV)salesin2015.WorldwidesalesofEVsgrewby79%lastyearandthenumberofEVsinusesurpassed1million.

• China’splug-inelectricpassengercarsalesgrewbyafactorofthreein2015,makingthecountrytheworld’slargestEVmarket.

• InEurope,theEVmarketisstartingtoshowsignsoffull-scalecommercializationincountriessuchasNorwayandtheNetherlands.

• AmidtheEVboom,ane-mobilityvaluechainisemerging.Weareseeinginnovationandnewbusinessmodels,includingcombinedEVchargingservices/retailbusinesses.

D E B O R A H W E I N S W I G M a n a g i n g D i r e c t o r ,

F u n g G l o b a l R e t a i l & T e c h n o l o g y d e b o r a h w e i n s w i g @ f u n g 1 9 3 7 . c o m

U S : 6 4 6 . 8 3 9 . 7 0 1 7 H K : 8 5 2 . 6 1 1 9 . 1 7 7 9

C H N : 8 6 . 1 8 6 . 1 4 2 0 . 3 0 1 6

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TableofContentsExecutiveSummary 3

IntroductiontotheEV 4

GlobalMarketOverview 5

GeographicAnalysis 11

China 11

US 15

Europe 18

Japan 22

FutureDevelopment:InnovativeBusinessModelsandE-Mobility 24

Conclusion 25

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ExecutiveSummaryThis reportprovidesanoverviewof theglobalelectricvehicle (EV)marketandanalyzesthedriversandchallengesthatareimpactingtheadoptionofthese vehicles. It also analyzes the market trends and specific factorsaffectingtheEVmarketinChina,theUS,EuropeandJapan.

The global EV market saw huge growth in 2015, with worldwide salesincreasing by 79% during the year and the global stock surpassing the 1-million-vehiclemilestone.Chinawasthefastest-growingEVmarketin2015.Thenumberofplug-inelectricpassengercars sold in thecountrygrewbythreetimeslastyear,toover200,000units.Saleswere80%higherthanintheUS,makingChinatheworld’s largestelectricpassengercarmarket forthefirsttime.TheexceptionalgrowthofEVsalesinChinaoverthepasttwoyearshasbeendrivenbygovernment incentives,especiallyapurchasetaxexemptionscheme.

TheUSmarket,whichusedtobethelargest,suffereda4%declineinplug-invehiclesalesin2015,whichwasmainlyattributedtothedipinfuelcosts.

In both Europe and Japan, EV sales growth outperformed that of thebroaderautomarketsin2015.Europe’sEVmarketisonitswaytofull-scalecommercialization, but is still affected by beneficial government incentiveprograms, some of which are due to be phased out within the next fewyears.InJapan,EVsalesgrewbydoubledigitsin2015,whilethecountry’soverallautomarketsufferedadecline.

ThedevelopmentofglobalEVmarketsisleadingtotheemergenceofane-mobilityvaluechain,which isgivingrisetonewpartnershipsandbusinessmodels.Wedetailsomeoftheseinthelastsectionofthisreport.

TheglobalEVmarketsawhugegrowthin2015,withworldwidesalesincreasingby79%duringtheyearandtheglobalstocksurpassingthe1-million-vehiclemilestone.

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IntroductiontotheEVGlobal EVmarkets have undergone rapid development over the past fiveyears,althoughtheelectriccarisnotanentirelynewinvention.

ABriefHistoryoftheEV

The history of electric mobility can be traced back to the 19th century,when Scottish inventor Robert Anderson built the prototype electric-poweredcarriageinthe1830s.Bytheendofthe19thcentury,electriccarshadenteredthemarket,andwerebeingwellreceivedintheUS.Accordingto the International Energy Agency (IEA), electric-powered cars were thetop-selling road vehicles in the US in 1900, accounting for 28% of themarket,andtheglobalelectriccarstockreachedahistoricalpeakof30,000in1912.

However,thefirstelectriccarboomsooncametoanend,withtheadventof light and powerful internal combustion engine vehicles and theavailabilityofcheapfuel.Bythemid-1930s,electriccarswerealmostextinct.Theygainedrenewed interest in the late20thcentury,againstabackdropof rising oil prices and heightened concern over air pollution caused byvehicleemissions.Since then,publicandprivate sectorsaround theworldhave committed more to the development of electric cars, leading to asecondelectriccarboom.

MajorCategories

An EV is a vehicle that uses one or more electric motors for propulsion.MajortypesofEVsincludebatteryelectricvehicle(BEVs,orall-electriccars)andplug-inhybridelectricvehicles (PHEVs).SometypesofPHEVsarealsocalled extended-range electric vehicles (EREVs). Both BEVs and PHEVs arecategorized as plug-in vehicles, and are different from hybrid electricvehicles (HEVs), which use both an electric motor and an internalcombustionengineandcannotberechargedbybeingpluggedintoanoff-vehicle power source.HEVs use regenerative brakes to recharge batteriesinstead.

Source:sce.com

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WhileHEVscameintomassproductioninthe1990s,markedbythelaunchoftheToyotaPriusin1997,plug-invehiclesalesstartedtopickupin2010,following the releaseof theNissanLEAF (aBEV)and theChevroletVolt (aPHEV).

Theindustryfocusesonplug-invehicleswhendiscussingEVsandreportingrelated figures. In this report, “EV” refers to plug-in vehicles (PHEVs andBEVs, unless otherwise specified). These mainly comprise light-duty andpassenger cars, except inChina,where a largeproportionof plug-ins soldareforcommercialuse(forexample,electricbuses).

GlobalMarketOverview

2015WastheYearoftheEV

TheglobalEVstock(cumulativesalessince2005)hit1millionvehiclesinthesecond half of 2015 and reached 1.26 million by the end of the year,accordingtotheIEA.Morethan565,000plug-invehicles—oralmosthalfoftheworld’s stock—were sold in key EVmarkets, includingNorthAmerica,WesternEurope,JapanandChina, lastyear.Globalsalesgrewby79%lastyear,acceleratingfrom48%growthin2014.

Figure1.Plug-InEVSalesinSelectedCountries/Regions,2011–2015

WhencomparingEVsalesindifferentcountries/regions,wearecomparingelectricpassengercarsales.ArgonneNationalLaboratorysaidthat214,283plug-invehiclesweresoldinChinain2015,whichexceedsthefigurereportedbytheChinaAssociationofAutomobileManufacturers(207,382electricpassengercarssold).

Source:USDepartmentofEnergy/ArgonneNationalLaboratory

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Morethan565,000plug-invehicles—oralmosthalfoftheworld’sstock—weresoldinkeyEVmarkets,includingNorthAmerica,WesternEurope,JapanandChina,lastyear.

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ChinawasthebrightestspotintheglobalEVmarketin2015.FiguresfromtheArgonneNationalLaboratory,theChinaAssociationofAutomobileManufacturersandtheElectricDriveTransportationAssociationallindicatethatsalesofelectricpassengercarsinChinasurpassedthoseintheUSin2015,makingChinathelargestEVmarketforthefirsttime.

However,eventhoughEVsalesgrowthwasimpressivein2015,theproportionofEVsontheworld’sroadsisstillminiscule,ataround0.1%asof2015,comparedtotheproportionofpassengercars.

ThepicturelooksabitbetterwhenwelookatEVs’shareofnewcarsalesin2015versusthosealreadyontheroad.EVs’globalmarketshareroseto0.9%in2015from0.5%in2014and,accordingtotheIEA,thatsharewasabove1%insevencountries:Norway,theNetherlands,Sweden,Denmark,France,theUKandChina.

Figure2.EVs’MarketShareinSelectedCountries(EVSalesas%ofTotalAutoSales)

Source:IEA

NorwayhasthehighestEVmarketshare;itjumpedto23%in2015fromaround14%in2014.EVs’marketshareintheNetherlandsincreasedtonearly10%in2015fromabout4%in2014.TherelativelyfastadoptionofEVsinthesetwocountriesshowsthattheirEVmarketsaremovingtowardfullcommercialization.

EVSalesAreExpectedtoDoubleEveryYearUntil2020

AccordingtotheElectricVehiclesInitiativeandtheIEA,therewillbe20millionEVsontheroadworldwideby2020,whichmeansthatsalesofEVs

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EVs’globalmarketshareroseto0.9%in2015from0.5%in2014and,accordingtotheIEA,thatsharewasabove1%insevencountries.

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areexpectedtodoubleeveryyearforthenextfiveyearsandthattheglobalEVstockwillgrowataCAGRof76%duringtheperiod.Theprojectionissupportedbyproductionestimatesforelectrifiedpowertrains,whicharetheenginesthatgeneratepowerforEVs.KPMGexpectstheproductionofpowertrainstogrowfrom3.1millionin2015to5.1millionin2020,whichwouldcertainlymeetthegrowingneedsoftheEVindustry.

Figure3.EstimatedElectricPowertrainProduction,2011–2020F

Source:KPMG/LMCAutomotive/Statista

TeslaIsLeadinginRangeTechnology,butBYDIsLeadinginSales

AlookattheperformanceofthemajorEVcompaniesshowsthatChinesebrandBYDledglobalplug-invehiclesalesin2015,thankstoastrongEVmarketinChina.BYDsold61,722plug-invehiclesgloballyin2015,whileTeslasold50,580andBMWsaiditproducedmorethan30,000ofitsiSerieselectriccars.

Figure4.GlobalPlug-InEVSales,byManufacturer,Jan.–Oct.2015

Source:Statista/BusinessWire

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Intermsofvehicletravelrange,orhowfarthecarcantravelonasinglecharge,Teslawastheleaderintheindustryin2015,witharangeof263miles(421km)fortheModelS.BYD’se6electriccarhasbeencatchingup,however.TherangeofitsupdatedBYDe6modelincreasedfromaround188miles(300km)to250miles(400km)duetoanincreaseinbatterycapacity.NewEVmodelsthatareexpectedtolaunchin2017,suchasTesla’sModel3andChevrolet’s2017Bolt,arealsogoingtohaverangesof200milesormore.

Figure5.TravelRangeofSelectedEVs,asofJuly2015

Source:CleanTechnica/Statista/FungGlobalRetail&Technology

MarketDriversandChallenges

AnumberoffactorsaredrivingEVmarketgrowtharoundtheworld:

• Governmentincentives:GovernmentsinmajorEVmarketshavebeenprovidingfiscalincentives—suchastaxbreaksandsubsidiesforpurchasingEVs—thathaveproventobekeydriversofEVsales.Otherincentives,suchasfreeparkingandaccesstobuslanesforEVs,havealsoboostedEVadoption.

• Increasingawarenessofenvironmentalconcernsandtighteningregulations:RegulationsonCO2emissionsarebeingtightenedaroundtheworld,whichisforcingmanyautomakerstoincreasetheirshareofEVproduction.

• BrandsusingEVstodifferentiatethemselvestoconsumers:MoremanufacturersareaddingEVstotheirproductlinestoattractenvironmentallyconsciousconsumers.

• Emergenceofthee-mobilityvaluechain:AstheEVmarketgrows,ane-mobilityvaluechaininvolvingplayersotherthanautomakers—suchasutilitycompanies,charginginfrastructureoperators,mobilityproviders,andfinancialservicesandleasing

61687681828384848793

250263

0 50 100 150 200 250 300

i-MiEV(Mitsubishi)SmartED(Daimler)

FocusElectric(Ford)i3(BMW)

ChevroletSparkEV(GM)e-Golf(VW)

LEAF(Nissan)Mercedes-BenzB-ClassElectricDrive(Daimler)

500e(Fiat)KiaSoulEV(Hyundai-Kia)

e6(BYD)ModelS(Tesla)

GovernmentsinmajorEVmarketshavebeenprovidingfiscalincentives—suchastaxbreaksandsubsidiesforpurchasingEVs—thathaveproventobekeydriversofEVsales.

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companies—istakingshape,andgivingrisetonewbusinessmodelsandrevenueopportunities.

• Decliningbatterycosts:HighbatterycostshavechallengedEVadoption,buttheyhavebeendeclininginrecentyearsandareexpectedtodecreasefurther.AccordingtotheUSDepartmentofEnergy,EVbatterycostshavefallenconsiderably:in2008,thecostwasabout$1,000perkilowatt-hour,butby2014,ithadfallentoabout$289perkilowatt-hour.Teslaprojectedthat,by2020,thecostoflithium-ionbatteriescoulddeclineto$100perkilowatt-hour,whichislessthanhalfthecurrentprice.

Figure6.BatteryCost(LeftAxis)andUSCumulativePlug-InEVSales(RightAxis)

Source:USDepartmentofEnergy

TheglobalEVmarketsarealsofacingsignificantchallenges,however,including:

• Charginginfrastructure:ThekeyEVmarketsstillneedtobuildmorepublicchargingstationsandmakechargingmoreconvenient.Thegraphbelowshowsthat,globally,thenumberofpubliclyavailablechargersisstilllow,althoughthenumberofEVsupplyequipmentoutletsincreasedby72%yearoveryearin2015,to190,000.AccordingtotheIEA,45EVsaresharingonepubliclyavailablefast-chargingoutlet.

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Figure7.GlobalEVSupplyEquipmentOutlets(LeftAxis,Thou.)andYoY%Change(RightAxis)

Privatechargersareestimated,assumingthateachEViscoupledwithaprivatecharger.

Source:IEA

• Broadconsumeradoption:ManyconsumersstillhaveconcernsaboutthetravelrangeofEVbatteries,andtheyprefershorterchargingtimes.

• Long-termeffectofsomegovernmentincentivesbeingphasedout:AsEVmarketsmature,governmentsinsomecountrieswillstartphasingoutincentivestobuyEVs.Forexample,inChina,thegovernmentintendstograduallyreduceconsumersubsidiesforEVpurchases,andthepurchasetaxexemptionwillexpirebytheendof2017.InNorway,taxbreaksforEVswillbemaintainedthrough2017,butafterthat,somewillbegraduallyphasedout.AndintheUS,taxcreditswillstarttobephasedoutonceamanufacturerhassoldmorethan200,000plug-invehiclescumulativelysincetheendof2009(nomanufacturerhasreachedthatpointintheUSyet).WhileitisimpossibleforgovernmentstosubsidizetheEVmarketforever,itisimportantthatincentivesarephasedoutinacontrolledmanner,soasnottodisruptmarketgrowthtoomuch.

GasPrices:ADriverandaChallenge

OilandgaspricescaneitherdriveorinhibitEVsales.Historically,therehasbeenacorrelationbetweengaspricesandHEVsalesintheUS.Whengaspricesdeclined,HEVsalesalsodeclined,andviceversa.Eventhoughsalesofplug-invehiclesintheUSappeartobemoreresilientthanthoseofHEVs,theystillshowsomelevelofcorrelationwithgasprices.Asthemarketforplug-inEVsmatures,therelationshipcouldbecomemorepronounced,mimickingthatobservedintheHEVmarket.

IntheUS,taxcreditswillstarttobephasedoutonceamanufacturerhassoldmorethan200,000plug-invehiclescumulativelysincetheendof2009

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Figure8.MonthlySalesofHEVsandPlug-InEVs(LeftAxis)andGasPrice(RightAxis)

Source:USEnergyInformationAdministration/ElectricDriveTransportationAssociation/FungGlobalRetail&Technology

GeographicAnalysisInthissection,wetakeacloserlookatthedomesticEVmarketsinChina,theUS,EuropeandJapan,andanalyzethespecificfactorsaffectingeach.

ChinaGovernmentincentives,includingapurchasetaxexemptionandconsumersubsidies,havebeenkeysupportingfactorsfortheChinaEVmarket.Thegovernment,however,isplanningtograduallyphaseoutsomeoftheincentivesincomingyears,whichmaypresentachallengeforthemarketbeginningin2018.Atthesametime,thegovernmentisincreasingitssupportforbuildingcharginginfrastructure.

MarketSizeandTrends

InChina,EVsareknownas“newenergyvehicles”(NEVs),whichincludebothBEVsandPHEVs.AlargeportionoftheNEVssoldinChinain2015werecommercialvehicles(suchaselectricbuses),whichaccountedfor37.4%oftotalNEVsales;electricpassengercarsaccountedfortheremaining62.6%.

ThetotalnumberofNEVssoldinChinain2015was331,092,morethanthreetimesthenumbersoldin2014,accordingtotheChinaAssociationofAutomobileManufacturers.Comparedtothe3.3%salesgrowthofthebroaderautomarketinthecountrylastyear,thatgrowthisimpressive.

TheChinesegovernmenthassetatargetofhaving5millionNEVsontheroad(cumulativesales)by2020.IthastakenmeasurestosupportthecontinuedrapidgrowthofNEVsales,mainlythroughataxexemption

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ThetotalnumberofNEVssoldinChinain2015was331,092,morethanthreetimesthenumbersoldin2014,accordingtotheChinaAssociationofAutomobileManufacturers.

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programrolledoutinSeptember2014,whichisduetoexpirebytheendof2017.

Figure9.SalesofNEVsinChina,2015

Source:ChinaAssociationofAutomobileManufacturers

In2015,therewere207,382electricpassengercarssoldinChina,anincreaseofmorethan280%fromthepreviousyear.Thenumberwasabout80%higherthantheUSsalesfigure(intheUS,114,022plug-invehicles,includingBEVs,PHEVsandEREVs,weresoldlastyear).

NEVs’marketshareinChinawasabout1%higherthanthatofpassengercarsin2015,whiletheirshareofthecommercialvehiclemarketwasmuchhigher,at3.6%.

AlargepercentageoftheEVssoldinChinalastyearwereproduceddomestically.Chinaproducedatotalof340,471NEVsin2015,whichrepresented1%ofitstotalautoproduction.TheChineseMinistryofIndustryandInformationTechnologyhastargetedastockof1milliondomestic-brandNEVsontheroadsinChinain2020.

Figure10.ProductionofNEVsinChina,2015

Source:ChinaAssociationofAutomobileManufacturers

BEVs(Passenger)146,719;44%

BEVs(Commercial)100,763;30%

PHEVs(Passenger)60,663;18%

PHEVs(Commercial)22,947,7%

TotalNEVSales:331,092(+340%YoY)NEVs’ShareofTotalAutoSales:1%

BEVs254,633;75%

PHEVs85,838;25% TotalNEVProducpon:

340,471(+330%YoY)NEVs’ShareofTotalAutoProducpon:1%

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MajorMarketPlayers

China’sEVmarketisdominatedbydomesticplayers,andBYDisthemarketleader.BYDsold58,000NEVsinChinain2015,accountingforabout18%ofthedomesticmarket(includingelectricpassengercarsandNEVsforcommercialuse).ThecompanyexpectsitsdomesticNEVsalestoalmosttriplein2016,to150,000.

Source:www.autoblog.com

Figure11.ElectricPassengerCarMarketShare*inChina,byModel,2015

*Basedonannualelectricpassengercarsales**1Q–3Q2015Source:ChinaAutoWeb/FungGlobalRetail&Technology

Thegovernment’smassiveNEVdevelopmentplanbenefitsdomesticcompaniesmorethanitdoesforeignautomakers.Chinasetatargetofmaintaining70%marketsharefordomesticautomakersintheNEVmarket,accordingtothegovernment’s“MadeinChina2025”strategy.Thatmeansforeignautomakerswouldhavesome,albeitlimited,roomtogrowtheirextremelylowmarketshareinthecountry.

1.5%1.8%1.8%

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BYDQin

Chinasetatargetofmaintaining70%marketsharefordomesticautomakersintheNEVmarket,accordingtothegovernment’s“MadeinChina2025”strategy.

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Currently,TeslaisthemajorimportedEVbrandsoldinChina.OtherforeignautomakersmainlyparticipateinthemarketthoughSino-foreignjointventures.Tesla’ssalesinChinaweredisappointingin2015,withonly3,025vehiclessoldinthecountryduringthefirstthreequarters.Itsfull-year2015Chinarevenuedeclinedby33%yearoveryear,to$318.5million.

WhenTeslalauncheditsModelSinChinain2014,thecarwaspricedat¥734,000(~US$121,370atanexchangerateofUS$1=¥6.05).Thiswas50%higherthanthecar’spriceintheUSandmuchhigherthandomesticbrandsinChina,mainlyduetothehighimportdutyandVAT.ImportedcarscanbetwiceasexpensiveinChinaversusothermarkets,andTeslawasalreadybeingconservativeinsettingitsChinapriceoftheModelS,whichallowedforlittleprofit.

Figure12.BreakdownofTeslaModelSPriceinChina(USD)

ShippingandHandling $3,600CustomDutiesandTaxes $19,000VAT $17,700ChinaPrice $121,370(50%higherthanUSpriceof$81,070)

Source:Tesla

BecauseitissodifficulttotaptheChinesemarketasaforeignbrand,TeslaCEOElonMuskhasindicatedthatTeslaintendstosetupafactorytomanufactureEVsinChina.

GovernmentIncentives

TheChinesegovernmenthasprovidedincentivesforvariousEVindustryparticipants,includingautomakers,suppliers,researchersandconsumers.TherearetwokeyincentivesaffectingNEVsalesgrowthinChina:

• NEVpurchasetaxexemption:ThegovernmentlaunchedapurchasetaxexemptionschemespecificallyforNEVsfortheperiodofSeptember1,2014–December31,2017.AccordingtotheChinaAssociationofAutomobileManufacturers,about90%ofNEVssoldsinceSeptember2014havebeenmodelsonthepurchasetaxexemptionlist.

• Subsidyforconsumers:Thegovernmentprovidedasubsidyof¥35,000–¥60,000(US$5,469–US$9,375)forelectricpassengercarpurchasesin2013.Thesubsidyisbeingreducedto¥25,000–¥55,000(US$3,906–US$8,594)in2016,whichisstillmeaningful,giventhatsomeNEVscostlessthan¥200,000(US$31,250)inChina.

China’sMinistryofFinanceisplanningtograduallyreduceconsumersubsidiesincomingyearsinordertodevelopamoreself-reliantEVmarket.Itplanstocutthesubsidyby20%by2018,and40%by2020,fromthe2016

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base,andtheMinisterofFinancesaidearlierthisyearthatthegovernmentintendstoendtheconsumersubsidyschemealtogetherin2021.

Atthesametime,theChinesegovernmentwillprovidefiscalsupportforthedevelopmentofcharginginfrastructure.Between2016and2020,thecentralgovernmentwillgivefiscalincentivestolocalauthoritiestodevelop,operateandupgradecharginginfrastructure.Tobeeligiblefortheincentives,localauthoritiesneedtofulfillanumberofcriteria,includingpromotingNEVs,designingcomprehensiveNEVpoliciesandpromotingfairmarketpractices,i.e.,levyingnoprocurementrestrictionsonforeignbrands.CitiesandprovinceswithmoresevereairpollutionwillhavehigherNEVpromotiontargets.

Industryparticipantsshouldpayattentionasthepurchasetaxexemptionandconsumersubsidiesarephasedout,andassesswhetherlocalauthoritiescanadequatelymakeupfortheendingoftheseprogramsbypromotingNEVsmoreheavily.

Challenges

ApartfromtheconsumeradoptionissuesallEVmarketsface,suchashighbatterycostsandconcernsaboutbatterytravelrange,China’sEVmarketfacessomechallengesthatarespecifictothecountry:

• China’sdevelopmentofitscharginggridlagsthatofothermarkets.AccordingtotheNationalDevelopmentandReformCommission,therewereonly780EVchargingstationsand31,000chargingpillarsinChinaattheendof2014.TheChinesegovernmenthassetatargettobuildmorethan12,000chargingstationsand480,000chargingpillarsby2020.

• EVsarestillexpensiveforconsumersinChina.• Salesgrowthhasbeendrivenbytaxexemptionsubsidies.• ImportedEVsarenoteligiblefordomesticsubsidies,andtheyface

highimportdutyandVATrates(25%importdutyand17%VAT;exactratesvaryfordifferentimports).

UnitedStatesTheUShasbeenleadingtheglobalEVmarketintermsofplug-inEVstock.AccordingtotheIEA,plug-inEVstockintheUSwasthehighestintheworldin2015,at404,090,accountingforone-thirdoftheglobalstock.However,intermsofannualsalesofplug-invehicles,theUSlaggedChinain2015.

MarketSizeandTrends

OverallvehiclesalesintheUSgrewby5.8%yearoveryearin2015,to17.4million.Salesofplug-invehicles,however,declinedby4%yearoveryear,to114,022,againstabackdropoflowgasprices.Plug-invehicles’marketshareremainedflatin2015,at0.7%.AutomakerssuchasBMWandFordhaveintroducedturbochargedenginesthatprovidebetterfueleconomyandloweremissions,whichalsopressuredsaleslastyear.Nevertheless,NavigantResearchprojectedthatplug-invehiclessalesinNorthAmericawillexceed1.1millionannuallyby2024.

Plug-inEVstockintheUSwasthehighestintheworldin2015,at404,090,accountingforone-thirdoftheglobalstock.However,intermsofannualsalesofplug-invehicles,theUSlaggedChinain2015.

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Figure13.SalesandMarketShareofPlug-InVehiclesintheUS,2015

*PHEVsplusEREVsSource:ElectricDriveTransportationAssociationAnumberofupgradedEVmodelsaresettolaunchinthecomingyear,whichcouldsupporttheUSmarketandhelpitregainstablegrowth.Someoftheseareall-electriccarswithrelativelyhighrangesof200milesormore,andarepricedbelow$40,000.TheTeslaModel3,expectedin2017,willhavearangeof215miles,andthe2017ChevroletBoltEVwillhavearangeofmorethan200miles.OthernewPHEVmodelsincludethe2016and2017ChevroletVoltandtheVolvoXC90T8.

MajorMarketPlayers

Tesla,NissanandChevroletaretheleadersintheUSplug-inEVmarket.In2015,Tesla’sModelSbecamethebest-sellingplug-inEVintheUS,with26,200carssold.Thecompany’smarketsharejumpedfrom14%in2014to23%in2015.Teslaannouncedthatitdelivered50,580vehiclesin2015,whichmeansthatmorethanhalftheunitsitsoldlastyearweresoldintheUS.Tesla’ssalesgrowthcameattheexpenseofitscompetitors,however.

TheNissanLEAFwasthebest-sellingplug-inEVintheUSin2014,butitsmarketshareshrankfrom25%in2014to15%in2015.Salesofthecardeclinedfrom30,200unitsin2014to17,269in2015.

ChevroletVoltunitsalesalsodeclined,from18,805in2014to15,393in2015,andthemodel’smarketsharedeclinedfrom16%in2014to14%in2015.

BEVs71,064;62%

Plug-InHybrids*

42,958;38%

TotalPlug-InVehicleSales:114,022(-4%YoY)EVs’ShareofAllVehicleSales:0.7%

Tesla,NissanandChevroletaretheleadersintheUSplug-inEVmarket.In2015,Tesla’sModelSbecamethebest-sellingplug-inEVintheUS,with26,200carssold.

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Figure14.USPlug-InEVSales,byModel

Source:USDepartmentofEnergy/Hybridcars.com


GovernmentsupportfortheEVmarketintheUSincludestaxcredits,nonmonetaryincentivessuchashigh-occupancyvehiclelaneaccess,andgrantsandinvestmentfromthegovernmenttodevelopthemarket:

• Taxcredits:AccordingtotheEnergyImprovementandExtensionActof2008,buyersofnewEVscanenjoya$2,500–$7,500taxcredit,dependingonthecar’sbatterycapacity.Thetaxcreditwillphaseoutonceamanufacturersells200,000EVsintheUS.

• Otherincentives:Plug-invehicleswithspecialstate-issuedlicenseplatesmayusehigh-occupancyvehiclelanesregardlessofthenumberofpassengersandareexemptfromparkingfeeschargedbystateorcountyauthorities.

• Federalgrants:PresidentObamapledged$2.4billioninfederalgrantsin2010tosupport48advancedbatteryandelectricdriveprojects.Partofthiswasgiventomanufacturerstoexpandbattery-recyclingcapacityandproduceelectricdrivecomponents.

• InvestmenttoaddressEVadoptionbarriers:TheDepartmentofEnergyinvested$225millionin2013and2014throughthe“EVEverywhere”programtosupportR&DtoreduceEVcosts,improvecharginginfrastructureandpromoteconsumeracceptance.

0

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2011 2012 2013 2014 2015

Thou

sand

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icles

Mercedes-BenzB-ClassElectricBMWi8

ChevroletSpark

VWe-Golf

SmartFortwoEV

Fiat500E

FordFocusEV

BMWi3

FordC-MAXEnergiPHEV

FordFusionEnergi

ToyotaPriusPlug-in

TeslaModelS

23%

15%

14%

25%

16%

14%

Plug-invehicleswithspecialstate-issuedlicenseplatesmayusehigh-occupancyvehiclelanesregardlessofthenumberofpassengersandareexemptfromparkingfeeschargedbystateorcountyauthorities.

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Challenges

TheUSEVmarketfacesthecommonconsumeradoptionchallengeswementionedearlier,suchaslimitedchargingstationsandbatterytravelrange.AccordingtoarecentsurveybyNavigantResearch,36%ofrespondentscitedalackofcharginginfrastructureorothercharginginconvenienceasthemainreasonfornotswitchingfromagas-toanelectric-poweredcar.

ChargingInfrastructure

AccordingtotheDepartmentofEnergy’sAlternativeFuelsDataCenter,asofJune2016,therewere13,720electricchargingstationsand33,891chargingoutletsintheUS.ThenumberofchargingstationsintheUSismuchhigherthaninChina.TheUSalsohasalargenumberofchargingoutlets,but,duetoitssize,thecountryisnotassaturatedasJapanisintermsofEVchargingpointdensity.

EuropeEuropesawsignificantgrowthinEVsalesin2015,althoughitwasnotasdramaticasinChina.TheNetherlandsledtheWesternEuropeancountrieswithintheEUintermsofsalesgrowth.SalesinsomeEasternEuropeancountriesgrewrapidlyin2015,whileplunginginothers.

EventhoughtheEuropeanCommissionsuggestedthattheEVmarketinEuropeisnowreadytomovefromatestingandexperimentingstagetofull-scalecommercialization,themarketstilldependsonsupportpoliciestosomeextentandisvulnerabletochangesinsuchpolicies.

EventhoughtheEuropeanCommissionsuggestedthattheEVmarketinEuropeisnowreadytomovefromatestingandexperimentingstagetofull-scalecommercialization,themarketstilldependsonsupportpoliciestosomeextentandisvulnerabletochangesinsuchpolicies.

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MarketSizeandTrends

AccordingtotheEuropeanAutomobileManufacturer’sAssociation,salesofEVs(includingBEVs,PHEVs,EREVsandfuel-cellEVs)intheEUgrewby108.8%yearoveryearin2015,to146,161vehicles.Plug-inEVsalesgrowthwasmuchhigherintheEUthanwashybridelectriccarsalesgrowth(23.1%).Salesofotheralternative-fuelvehicles(naturalgasvehiclesandLPG-fueledvehicles)declinedby8.4%yearoveryear.

Salesofalternative-fuelvehicles(includingEVsandHEVs)totaled582,135unitsin2015,up20%fromthepreviousyear.Theserepresented4.2%oftotalpassengercarregistrationsintheEU,whileEVsaloneaccountedfor1.1%ofnewpassengercarregistrationsin2015.

Figure15.EVSalesinEurope,2015

*BEVs,PHEVs,EREVsandfuel-cellEVs**EVs,HEVsandotheralternative-fuelvehiclesSource:EuropeanAutomobileManufacturers’AssociationSalesbyCountry

EVsalesintheNetherlandsgrewby193.4%yearoveryearin2015,to43,441,makingittheEuropeancountrywiththehighestEVsalesduringtheyear.

TheEVmarketinEasternEuropeisunderdeveloped,andsalestendtofluctuatebycountryintheregion.EVsalesinHungarygrewby233.3%in2015,to130,butinEstonia,salesdeclinedby90%,to34,duringtheyear.

EVs*146,161,25%

HEVs217,261;38%

OtherAlternapve-Fuel

Vehicles**218,713;37%

TotalNewPassengerCarRegistrapons:13,713,526(+9.3%YoY)EVs’ShareofTotalPassengerCarSales:1.1%Alternapve-FuelVehicles’ShareofTotalPassengerCarSales:4.2%

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Figure16.EVSalesinEurope:YoY%Change,2015

Source:EuropeanAutomobileManufacturers’Association

NorwayandtheNetherlandsledEVadoptioninEurope(intermsofmarketshare)in2015,andadoptioninbothcountrieshasbeendrivenbyincentives.TheNetherlands’CO2-basedvehicletaxationschemefeatureshighrebatesforvehiclesthatemitlessthan50g/kmofCO2,whichhascontributedtoitsstrongEVmarket.FiscalincentivesprovidedbythegovernmentinNorwayhavealsounderpinnedthestrongmarketinthatcountry.

MajorMarketPlayers

Mitsubishi,NissanandRenaulthaveledEurope’sEVmarket.Inthefirstmonthsof2016,salesoftheMitsubishiOutlanderslightlyoutpacedthoseoftheNissanLEAFandtheRenaultZOE,butin2015,Renaulthadthehighestmarketshare,withoverallEVsalesof23,086vehicles(up49%yearoveryear).SalesoftheRenaultZOEreached18,453in2015,increasingby68%yearoveryearandmakingitthemarketleader.

233.3193.4 187.3

96.6 83.7 83.0 79.0 70.6

-43.6

-90.0-150

-100

-50

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Figure17.EVSalesinEurope,byModel,Jan.–Apr.2016

Source:CleanTechnica


EuropeancountrieswithhighEVadoptionratestendtohavemoresupportivepoliciesandfiscalincentivesthancountrieswithloweradoptionrates.AccordingtotheEuropeanAutomobileManufacturers’Association,someofthecountriesprovidingpurchaseandtaxincentivesforEVsin2016aretheNetherlands,Germany,FranceandtheUK:

• IntheNetherlands,vehiclesemitting50gCO2/kmorlessareexemptfromtheannualcirculationtax.EVsarealsoexemptfromthecountry’sregistrationtax.

• InGermany,EVsareexemptfromtheannualcirculationtaxforaperiodof10yearsfromfirstregistration.

• InFrance,regionshavetheoptiontomakealternative-fuelvehiclesexemptfromtheregistrationtax(eithertotallyorat50%).Also,EVsareexemptfromanycompanycartax.SinceJanuary2016,abonusof€6,300hasbeengrantedforanyvehicleemitting20gCO2/kmorless.

• IntheUK,EVsareexemptfromtheannualcirculationtax.SinceApril2010,pureelectriccarshavebeenexemptfromanycompanycartax.

NorwayhasbeenimplementinggenerousEVincentives,suchasaVATexemptiononEVpurchases.Its2015budgetrevisionmaintainedmanyincentives(includingtaxbreaks)forEVsuntil2017,butafterthat,someincentiveswillbegraduallyphasedout.Forexample,after2017,theVATexemptionincentivewillgraduallydecline.

TheEuropeanCommissionsuggestedthatsupportiveEVpoliciescangraduallybereducedoncecostscomedownandEVsbecomeacommonchoiceforthemainstreammarket.

2,0772,495

2,8832,9013,1713,492

4,3154,345

7,7977,827

8,386

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BMWX5xDrive40eVWPassatGTEAudiA3e-tronVWe-Golf(VII)

VolvoXC90T8PHEVBMWi3

TeslaModelSVWGolfGTERenaultZOENissanLEAF

MitsubishiOutlanderPHEV

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Challenges

AmajorchallengefortheEuropeanEVmarketistheneedforharmonizedstandardsforEVchargingsystems.TheregionhasworkedtointegratethechargingsystemforEVsintoEurope’selectricitynetworks.Anumberofmajorautomanufacturers,includingAudi,BMW,Daimler,Ford,GeneralMotors,PorscheandVolkswagen,havecollaboratedinrecentyearsinformingasystemthatintegratesallchargingconfigurations.Whilesomestandardshavealreadybeenachieved,theindustryisnowworkingtofurtherharmonizeEVtechnologyandstandardsnotonlyinEurope,butalsobetweentheEUandtheUS.


TheEU’sCleanPowerforTransportDirectivesetatargetof800,000publiclyaccessibleEVchargingstationsthroughoutEuropeby2020.TheNetherlands,Germany,FranceandtheUKareallleadingcountriesincharginginfrastructuredeployment.TheNetherlandshadroughly1.1chargingstationspervehicleasof2013,thehighestintheworldatthetime.

WesternEuropehasbetterchargingstationcoveragethanEasternEuropedoes,butsomeEasternEuropeancountriesaremakingadvancesinEVinfrastructuredevelopment.Forexample,EstoniaofficiallyopeneditsnationwideEVfast-chargingnetworkin2013.

JapanMarketSizeandTrends

Japan’scarmarketsuffereda9.3%declinein2015.Newcarsalesdroppedto5,046,511duringtheyear,accordingtoJapan’sAutomobileDealersAssociation.However,EVsaleswerestrongdespitetheweaknessoftheautomarket.ArgonneNationalLaboratorydatashowthatplug-invehiclesalesinJapangrewby51.6%yearoveryear,to46,339in2015.

AccordingtotheIEA,Japan’sEVmarketsharewas0.6%lastyear.However,apassengercarmarketsurveyconductedbytheJapanAutomobileManufacturersAssociationin2015indicatedthat30%ofrespondentsareinterestedin“next-generation”alternative-energyvehicles.Thesurveyalsofoundthatmorethan60%ofrespondentswereawareofhybridandelectricvehicles,andaround40%wereinterestedinself-drivingcars.

MajorMarketPlayers

TheNissanLEAFelectriccarhasbeentheEVmarketleaderinJapan,whichisalsoNissan’shome.TheLEAFwasoneofthefirstmainstream,mass-marketedEVs,andithasremainedabest-seller,withcumulativeglobalsalesofmorethan200,000unitssinceitwaslaunchedin2010.Almost65,000LEAFshavebeensoldinJapan.

TheEU’sCleanPowerforTransportDirectivesetatargetof800,000publiclyaccessibleEVchargingstationsthroughoutEuropeby2020.

ApassengercarmarketsurveyconductedbytheJapanAutomobileManufacturersAssociationin2015indicatedthat30%ofrespondentsareinterestedin“next-generation”alternative-energyvehicles.

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Figure18.EVSalesinJapan,byModel,LaunchDate–Apr.2016

Source:Mitsubishi/Toyota/InsideEVs


InJapan,EVsbuyersenjoytaxbreaksontonnage,acquisitionandownershiptaxes.Thetaxbreakamountdependsonthefuelefficiencyandtypeofvehicle.Vehiclesthatare20%morefuelefficientthanthe2015standardsareeligibleforthemaximumtaxreduction.Thetonnageandacquisitiontaxbreakperiodwasextendedin2015,andwillnowlastthrough2017.


JapanhasrelativelybetterEVcharginginfrastructurethanothermajorEVmarkets.A2015surveybyNissanindicatedthatthereweremorethan

64,978

33,991

22,100

11,144

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NissanLEAF MitsubishiOutlanderPHEV

ToyotaPriusPHV Mitsubishii-MiEV

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40,000electriccarrechargepointsinJapan.Thatisincomparisonto34,000gasstationsnationwide.AccordingtoIHS,Japanhadmorethan2,800DCfast-chargingstationsusingCHAdeMO(theJapanesefast-chargingstandard)asof2015,andaccountedforabout50%ofCHAdeMOstationsworldwide.

FutureDevelopment:InnovativeBusinessModelsandE-MobilityTheautomobileandrelatedindustrieshavebeenworkingtowardfurtherinnovationsinEV,batteryandchargingtechnologies.Theyareaimingtoreducebatterycosts,lengthenbatterytravelrangeandimprovechargingspeedinordertoaddressconsumers’mainconcerns.

Industryparticipantsarealsolookingatnewapproachesandbusinessmodels,capturingopportunitiesintheevolvinge-mobilityecosystem.ManyofthenewopportunitieslieintheareaofEVcharging:

• Infrastructure:Somecarmanufacturersareplayingarolebeyondcarproductionandareenteringtheinfrastructurearea.Forexample,TeslahasdevelopedSuperchargerstationsforitscars.

• Carsharing:CarsharinghasbecomeaglobalphenomenonanditisimpactingtheEVmarket.Car-sharingservicesattractcustomerswhoareinterestedinusinganEVoccasionallyforlowcost,withoutbearingthefullcostandresponsibilityofowningone.

• Batteryleasing:InadditiontoofferingEVleasing,somemanufacturershavebeenexperimentingwithbatteryleasing,offeringconsumersthechoiceofbuyingthecaroutrightorleasingthebatterypack,whichmakesupasignificantpartofthecostofBEVs.

• Batteryswapping:BatteryswappingcanprovideaquickrechargealternativeforEVdriversandsolvethelong-charging-timeissue.

• Charging-pointinstallationandmaintenance:Somecompaniesareprovidingservicesforprivatecharging,includinginstallingchargingpointsathomesandofficesandprovidingmaintenanceservices.

• Smartgrid:IncreasedEVadoptionhasledtotheneedforsmartgridapplicationsthatcanmanagethechargingneedsofthegrowingnumberofEVs.

• UsingRFIDinchargingservices:Charging-servicesprovidersaregivingcustomersRFIDpassesforidentification,paymentandbilling.

• Chargingapps:ChargingappscanconsolidatemultipleRFIDcardsfromdifferentserviceprovidersandprovideinformationsuchasavailabilityofchargingstationsandchargingprices.

• Operatingcharginginfrastructureincombinationwithretail:Thereisabusinesscaseforoperatingchargingoutletsincombinationwitharetailcomponentsuchasvendingmachinesorconveniencestores.TeslaisreportedlyintalkswithEastCoastconveniencestoreandgasstationchainSheetzregardingtheinstallationofSuperchargerstationsforTeslavehicles.

Car-sharingservicesattractcustomerswhoareinterestedinusinganEVoccasionallyforlowcost,withoutbearingthefullcostandresponsibilityofowningone.

Thereisabusinesscaseforoperatingchargingoutletsincombinationwitharetailcomponentsuchasvendingmachinesorconveniencestores.

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ConclusionDemandforEVshasgrowntremendouslyoverthepastfiveyears,mostnotablyin2015.EVsalesgrowthoutperformedoverallautosalesgrowthinmostofthemajorEVmarketsin2015,includingEurope,ChinaandJapan,andglobalEVstockisforecastedtoincreaseto20millionvehiclesby2020.

YettheEVmarketfaceschallengesthatcouldinhibititsgrowth.AsEVmarketsgrow,governmentincentivesinsomecountries,suchasChinaandNorway,aregraduallybeingphasedout.Withlessgovernmentsupport,broadconsumeradoptionwillrequirefurthertechnologicaldevelopmenttolowerbatterycostsandEVprices,andtolengthentheEVbatterytravelrange.

Thatbeingsaid,advancesintheindustryhaveledtoane-mobilityvaluechainthatisgivingrisetonewbusinessmodels,includingEVsharing,batteryleasingandservices,andcombiningretailwithcharginginfrastructure.WeexpecttoseedynamicdevelopmentintheEVindustryoverthenextfiveyears,includinginnovationsthatupendourunderstandingoftransportationandmobility.

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DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:[email protected]

KirilPopovSeniorAnalyst

ChimSauWaiResearchAssociateHONGKONG:10thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223002470NEWYORK:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017LONDON:242–246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988FBICGROUP.COM

electric vehicles global markets by fung global retail ......these vehicles. it also analyzes the...

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