APAC Market for Neighbourhood Electric Vehicles

Analysis of APAC Market for Neighbourhood Electric Vehicles

Vijay Rao, Research ManagerAutomotive & Transportation

4th April 2011

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Agenda

Definitions – Battery Electric Vehicles

Market Overview

Market Life Cycle Analysis

Market Structure of NEVs

Key Components of NEVs

Global Electric Vehicle Demand Analysis

NEV Market Breakdown By Region

Market Share of OEMs

Threat Analysis for Market Entrants

Conclusions and Recommendations

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Definitions – Battery Electric Vehicles

Neighbourhood Electric Vehicles (NEVs)

NEV is a US DOT

classification for

vehicles weighing less

than 3,000 lbs (GVW)

and having a top speed

of 25 mph. NEVs are

generally restricted to

operate on streets with

a speed limit of 35 mph

or less.

A city car is a

European classification

for small and light

vehicles intended for

use in urban areas

although capable of

operating in mixed city-

highway environment.

In Japan, city cars are

called kei cars.

These vehicles have

an internal combustion

engine (ICE) or other

secondary source

connected in a series

configuration to a

generator to supply the

batteries. The drive

range and speeds are

comparable to IC

engine vehicles.

High-Performance Electric Vehicles (HPEVs)

These are sporty

PHEVs or battery

electric vehicles with

top speeds exceeding

100 mph and driving

range exceeding 100

miles. The price of

these vehicles is

expected to approach

or exceed $100,000.

GEM e2, e4, e6; REVA

G-Wiz i; ZENN; ZAP

and others

Smart EV, Th!nk City,

BMW Mini and others

Chevy Volt, Opel

Ampera and othersTesla, Venturi Fetish,

Lightning GT, etc

City Electric Vehicles

(CEVs)

Toyota Prius PHEV,

Ford Fusion PHEV, etc

Plug-in Hybrid Electric Vehicle (PHEVs)

A plug-in hybrid

electric vehicle (PHEV)

has an internal

combustion engine

(ICE) with a motor

along with a battery

connected in parallel to

the ICE. They are

generally regarded as

full hybrids with bigger

motor/battery and a

plug to recharge.

Battery Electric Vehicles: Electric vehicles (EVs) use electric motors instead of an internal combustion engine (ICE) to propel a vehicle. The electric power is derived from a battery of one of several chemistries including lead acid, nickel metal hydride (NiMH) and lithium-ion (Li-ion).

Extended-range

EVs (E-REVs)

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• Most countries in APAC Region are in the process of building recharge infrastructure for EVs. In most regions, this is a joint effort of OEMs, electric utility companies and the government

• The market is dominated by small and mid size OEMs manufacturing NEVs primarily for exports to high growth US and European markets. Chinese OEMs dominate the global NEV market by supplying all categories of NEVs

Market Overview - Low emissions, lesser vibrations, suitability for short distance driving, low maintenance and recharge cost are the key drivers for market growth

Neighbourhood Electric Vehicle Market: Market Overview (APAC), 2010

• The market for NEVs in APAC is still at introductory stage. Several OEMs in the region such as Reva, CT&T, Kandi Technologies have launched NEV models for various applications. Several new models from the above OEMs are also in the pipeline

• Low vehicle speed, limited range on one charge and competition from other alternate fuel vehicles are the key market restraints affecting growth

• Limited consumer acceptability, Lesser range and top speed, competition from higher speed electric vehicles, limited recharging infrastructure, absence of legislations and limited subsidies and incentives are key industry challenges

• Prices of NEVs in APAC range from USD 2,223 for Tara Tiny to USD 16,000 for CT&T e-zone. Running cost ranges from 0.50 cents/km to 6 cents/km

• NEVs in APAC have both commercial and passenger applications. China, South Korea and Philippines, NEVs are emerging as a suitable transport medium for government utility vehicles, patrol vehicles and commuter shuttle transport vehicles respectively. In India and Japan, NEVs are used as personal transport.

Source : Frost & Sullivan

• Presently more than 75% of NEVs in APAC work on rechargeable lead acid batteries and DC electric motors.

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Market Life Cycle Analysis - The NEV market is at the introductory stage in APAC and is expected to reach high growth phase by 2015

2001 2009 2020 20502040Introduction Growth Maturity Decline

• Early NEV Adopters:

REVA (now Mahindra REVA) ,

India

• Growing Electric Vehicle Adopters:

Qingdao Greentec, China, Kandi Technologies, China, CT& T South Korea, Eu Auto Technology, Hong Kong

Tara International, India, Zerosports Motor Co., Japan.

• High Growth Market in APAC : China, India and South Korea

• Threat due to City Electric Vehicles with Safety Features

City electric vehicles are capable of running up to 150 km/hr with safety features.

• Saturation and Decline of NEVs:

Fight for market share retention and difficult to expand market share significantly and growth of hybrid and fuel cell vehicles.

Neighbourhood Electric Vehicle Market: Life Cycle Analysis (APAC), 2001-2050

Source: Frost & Sullivan

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Market Structure of NEVs

Neighbourhood Electric Vehicle Market: Market Structure (APAC), 2010

Utilities

China State Grid, KEPCO TEPCO, BSES, Delhi

Charging Station Manufacturer

ECOtality Inc, Hero Electric, Electrotherm

OEMs

CT&T, Kandi Technologies, Mahindra Reva, Qingdao Green Tec, Shifeng Auto

Assemblers/ Integrators

PhUV, Philippines, Club Car, Australia

Government

China, South Korea, India, Philippines, Japan , Australia

Component Suppliers (Battery)

Trojan Battery,Exide, SK Energy

Source : Frost & SullivanThe company logos mentioned are only for descriptive purpose

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Lead Acid A storage battery in which the electrodes are grids of lead containing lead oxides and electrolyte is dilute Sulphuric Acid

Lead Acid AGMThis is a low maintenance Lead Acid Battery (also known as VRLA) which features a thin fibre glass felt that holds the electrolyte in place like a sponge preventing the battery from leaking if inverted or pierced

Lithium-ionBattery in which a lithium-ion moves between the anode and cathode. During discharge the lithium-ion moves from the anode to the cathode and from the cathode to the anode while charging

DC motor A motor which runs on direct current

(DC) electricity

AC motor A motor that is driven by an

alternating current.

Key Components of NEVs - Batteries and Electric Motors used in NEVs

• Presently more than 75% of NEVs in APAC use rechargeable lead acid batteries and DC electric motors.

• Some companies such as Reva, CT&T and EuAuto Technology have plans to offer the option of lithium-ion Batteries in their NEVs.

Neighbourhood Electric Vehicle Market: Battery Systems Used (APAC), 2010

Neighbourhood Electric Vehicle Market: Electric Motors Systems Used (APAC), 2010


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Global Electric Vehicle Demand Analysis – Potential Sales of 2.2 M in F&S Scenario by 2017

Electric Vehicle Market: Sales Forecasts Scenario Analysis (World), 2009-2017

Scenario's 2009 2010 2011 2012 2013 2014 2015 2016 20172020

(% of Total Car Sales)

Optimistic Scenario

4,500 23,100 123,800 289,500 665,000 1060,400 1,714,500 2,220,300 3,202,000 10-12%

F&S Scenario 4,500 16,500 72,000 193,000 453,000 792,000 1,287,500 1,736,000 2,203,000 5-7%

Conservative Scenario

4,500 13,500 35,600 82,500 150,300 195,100 300,500 450,000 670,000 3-4%

Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

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NEV Market Breakdown By Region - China is likely to be the biggest market for NEVs both in terms of production and sales

Others include Australia, Thailand, Malaysia, Indonesia, Philippines

China India Korea Japan Others0

10,000

20,000

30,000

40,000

50,000

60,000

Production Sales

Unit

Ship

ments


Neighbourhood Electric Vehicle Market: Market Breakdown by Region (APAC), 2009 - 2016

2009

12,455

Production of NEVs in APAC Countries, 2016 151,990

2016

India and China to account for more than 50% of the NEV production in 2016

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Market Share of OEMs

Neighbourhood Electric Vehicle Market: Market Share of OEMs (APAC), 2009 and 2016


Country China India South Korea Japan Rest of APAC

Volume Sales 2009 2016

400-450 300-350 30-50 100-150 80-100

9,500-10,000 10,000-12,000 7,500-8,000 1,000-1,500 800-1,000

Volume Production 2009 2016

2,000-2,500 5,550-6,000 4,000-4,500 100-150 130-150

45,000-50,000 35,000-40,000 25,000-30,000 2,000-2,500 1,500-2,000

Number of Players (2016) 8-10 3-5 2-3 1-2 10-15

Number of Models (2016) 10-15 5-7 4-5 3-4 15-20

Number of Model Variants (2016) 15-20 10-15 8-12 5-8 25-35

Leading OEMs

Kandi Technologies, CMEC Suzhou,

Green Tec

Mahindra Reva, Tara

International

CT&T, AD Motors Takeoka Eu Auto, PhUV

etc

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Neighbourhood Electric Vehicle Market: Threat Analysis (APAC), 2010

Threats Analysis

Technical and speed limitations of NEVs restricts their growth to niche markets

• NEVs have a maximum speed of 50 mph (80kmph) and can only run 50 to 70 kms on one charge and hence are suitable only for short distance city driving. They are hence targeted at niche markets such as for senior citizens, new drivers and as second car for running errands

EV charging infrastructure is still under development in APAC

• EV charging infrastructure in APAC is still under the development stage. OEMs such as BYD and Chery in China, Toyota, Nissan, Mitsubishi, and Fuji Heavy Industries in Japan and Hero Electric in India are working together with the government and utility companies to develop charging stations

No specific legislations promoting the uptake of NEVs

• Unlike countries like US, Canada, UK and Germany which have legislations encouraging the use of NEVs, APAC does not have any specific legislations in this regard


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Threats Analysis

Vehicle cost continues to be high due to limited uptake

• Due to the limited uptake of NEVs in APAC, the prices of NEVs continue to be at par with small size but higher speed petrol cars, further limiting their consumer appeal

Offer of incentives or subsidies on purchase of NEVs yet to be implemented

• Though APAC governments have announced plans to offer incentives and subsidies to purchasers/users of eco-friendly EVs including NEVs , they are still under implementation stage and they are likely to be available to buyers only in the short to medium term

Competition from higher Speed EVs from reputed OEMs and competition from plug-in hybrids and fuel cell cars.

• Reputed OEMs such as Toyota, Nissan, BYD are in the process of introducing EVs which offer all the advantages of NEVs together with a higher speed at par with petrol cars. There is also competition from plug-in hybrids (Toyota Prius) and fuel cell cars

Neighbourhood Electric Vehicle Market: Threat Analysis (APAC), 2010

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Conclusions and Recommendations

China, India and South Korea to be production hubs for NEVs in APAC exporting to markets such as Europe and North America

Market players to push governments to develop legislations for NEV use in APAC

OEMs to form international partnerships to exchange information and experience to promote the development and growth NEV markets in APAC

OEMs to continue to work in tandem with governments, suppliers and electricity Companies to develop EV infrastructure

Focus on developing commercial applications of NEVs as urban commuter transport, fire trucks, garbage, patrol vehicles

Neighbourhood Electric Vehicle Market: Recommendations (APAC), 2010

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For Additional Information

Alice ChiaCorporate CommunicationsAsia Pacific+603 6204 [email protected]

Vijayendra RaoResearch ManagerAutomotive & [email protected]

APAC Market for Neighbourhood Electric Vehicles

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