how policies driven china nev market? - lmc automotive · 2020. 10. 9. · toyota carolla beyond...

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How policies driven China NEV market?

Lancy Zhang, Powertrain and NEV

LMC Webinar

8th October, 2020

Electrification


Outline

• NEV Definition

• Government Policy and Regulations

• NEV Market Status

• Outlook

2


NEV definition

▪ Different definitions to NEV between the China government and LMC

3

Plug-in

❖ BEV: battery electric vehicle

Geely Kandi BAIC EU260 BYD Qin SAIC Roewe 550

❖ EREV: extended range electric vehicle ❖ PFCEV: fuel cell electric vehicle

Lixiang One Honda Clarity

Non-plug

❖ FHEV: full hybrid electric vehicle

Toyota CarollaBeyond China government’s definition to NEV

❖ MHEV: mild hybrid electric vehicle

Nissan Murano Lexus ES

❖ PHEV: plug-in hybrid electric vehicle


▪ Subsidy will extend to 2022, but the amount will decrease slightly

0

1

2

3

4

5

6

PHEV ≥50 100 - 150 150 - 200 200 - 250 250 - 300 300 - 400 ≥ 400

2017 2018 2019 2020 2021F 2022F

Government Policy_Subsidy

BEV Range (Km) Energy Density (Wh/Kg)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

90 - 105 105 - 125 125 - 140 140 - 160 ≥ 160

2017 2018 2019

Note:

- 23rd Apr to 22nd Jul 2020 is the

interim period

- subsidy only available for

vehicle’s price below 300,000

RMB, except for battery-

swapped vehicles

0,000 RMB

4

Year

Decrease

2020

10%

2021

20%

2022

30%

Purchase Tax Free

300,000 RMB

Battery-Swapped Vehicles


▪ Local governments offer some incentives on NEV since COVID-19 outbreak

Government Policy_Local Government

8

03.03.2020/Guangzhou:10,000RMB per vehicle

08.05.2020/Hainan:10,000RMB per vehicle

09.04.2020/Shenzhen:10,000RMB per vehicle

09.04.2020/Ningbo:10,000RMB per vehicle

23.04.2020/Shanghai:5,000RMB for charging fee

25.03.2020/Beijing:10,000RMB per vehicleAdd 20,000NEV car plates

27.05.2020/Shaanxi:6,000RMB per vehicle


▪ Change of test procedure

Revised Dual-Credit regulation published

10

Fuel type Ratio WLTC/NEDC*Gasoline 1.22

Diesel 1.20

LPG 1.16

Gas 1.36

HEV gasoline 1.32

HEV diesel 1.34

PHEV 1.00

Source: *Stefanos Tsiakmakis etc.. From NEDC to WLTP: effect on the type-approval CO2 emissions of light-duty vehicles

Gasoline

Diesel

Gaseous

Plug-in hybrid

Non plug-in hybrid

BEV

FCEV

WLTC

WLTC

CLTC

Fuel consumption

Fuel consumptionElectric consumptionPure electric range

Electric consumptionRange

TCAFC will adjust according to WLTC

After 2025, all vehicle types will change to CLTC

China Automotive Testing Standard Import Schedule

Type

Before 2025 After 2025

Light Vehicle(CVW≤3.5t)

All types

• Gasoline/Diesel• Hybrid Vehicles• Alternative fuel Vehicle

WLTC

CLTC

• BEV• Fuel Cell Vehicles

CLTC



▪ Flexible relationship between NEV credits carry-forward and ICE’s CAFC

12

𝐼𝐶𝐸𝐶𝐴𝐹𝐶𝑆𝐶𝐴𝐹𝐶

≤ 123%

2019 NEV positive credit

2020 NEV positive credit

2021 or afterNEV positive credit

year +1 year +2 year +3 year +4

100% 50% off 50% off

50% off 50% off 50% off

50% off 50% off 50% off

Data source: MIIT, LMC Automotive


2018 2019 2020 2021 2022 2023

8% 10% 12% 14% 16% 18%

BEV

PHEV

FCEV

0.5 0.3 0.2Low Fuel Consumption (LFC) Vehicle -

Standard credit per vehicle

0.012*R+0.8 0.0056*R+0.4

2.0 1.6

0.16*P 0.08*P

previous new

Year

required quota

▪ a) New NEV quota is set for 2021-2023

▪ b) Standard credit per vehicle is declined

▪ c) New concept, LFC, is proposed


13



What is LFCs

14

L/100km

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Fuel Consumption Target Value 2021 LFC condition(123%)

2022 LFC condition(120%) 2023 LFC condition(115%)

1090 2510Curb Mass (kg)

T=6.57

T=4.02

LFC Assessment requirement:Comprehensive fuel consumption ≤ Vehicle target value x Annual compliance requirement



▪ LFCs has coefficient bonus when calculating the output

▪ It gives OEMs more options in powertrain fitment not only focusing on pure electricity

▪ Japanese OEMs will benefit from it as their have LFCs

What is LFCs

5.175.51

5.85

6.95

7.738.08

4.00

5.00

6.00

7.00

8.00

9.00

1090 1350 1500 2000 2350 2510

2021 2022 2023

Camry HEVAccord HEV

Odyssey HEV

15

L/100km

kg

Corolla HEV

Crider HEV


What will be the impact by LFC?

▪ For example

16

Version 1.0 Version 2.0ICE 30,000 30,000Low fuel consumption* 20,000 20,000NEV Percentage 14% 14%NEV Standard Credit (30,000+20,000)*10%=5,000 (30,000+20,000*0.5)*10%=4000

NEV Credit

NEV Actual Credit

NEV Standard Credit

Credit per NEV Vehicle

NEV Total Volume

NEV StandardPercentage

ICE Total Volume

ICE LFC *0.5


CAFC performance

▪ CAFC has met the target, but there is still lots of pressure in the following years

17

6.436.05 5.8 5.56 4.60

6.88 6.78 6.62 6.48

0

1.5

3

4.5

6

7.5

2016 2017 2018 2019 2023 Target

CAFC with NEV bonus* CAFC without NEV**L/100km

𝐶𝐴𝐹𝐶 =σ𝑖=1𝑁 𝐹𝐶𝑖 × 𝑉𝑖σ𝑖=1𝑁 𝑉𝑖 ×𝑾𝒊

bonus coefficient

➢ TCAFC target is becoming smaller

➢ CAFC is becoming bigger due to Wi

smaller

2019 5.5 3.0

2020 5.0 2.0

2021 4.9 2.0

2022 4.8 1.8

2023 4.6 1.6

YearTCAFC

L/100kmMultiple of vehicle/WiCAFC credit = (TCAFC – CAFC) * output


▪ The more NEV share, the better CAFC performance

Some major OEMs CAFC performance

18Data source: MIIT LMC Automotive

Geely

SAIC

FAW-VW

Brilliance BWM

SGM

FAW-Toyota

SVW

GAC-Toyota

Beijing-Benz

DF-Honda

GAC-Honda

GAC

Great Wall

2017

SAIC

Geely

Brilliance BWM

GAC-Toyota

FAW-VW

FAW-Toyota

SVW

Great Wall

Beijing-Benz

DF-Honda

GAC

GAC-Honda

SGM

2018

SAIC

GAC

Brilliance BWM

GAC-Toyota

Great Wall

FAW-Toyota

Geely

GAC-Honda

DF-Honda

SVW

Beijing-Benz

FAW-VW

SGM

2019

Positive credit: Actual value < standard value


NEV credit performance

19

4.1%6.8%

16.5%

22.8%20.2%

2016 2017 2018 2019 2020 (Jan-Aug)

Actual NEV quota

3.00 2.90

3.60

4.20 4.10

2016 2017 2018 2019 2020 (Jan-Aug)

NEV credit per vehicle

▪ NEV credit is surplus， but will decrease sharply under new regulation

0

2

4

6

8

Tesla Model3 standardrange

BYD Han Luxury NIO ES8 2020 415KM NIO ES6 2020 430KMperformance

Trumpchi Aion S Buick Velite6

under previous policy under new policy

2020 target 12%

units

units


-47.0%

-71.9%

-45.7%

-30.8%-24.0%

-32.4%

28.7%

23%

-100%

0%

100%

200%

300%

400%

500%

0

20

40

60

80

100

120

140

160

180Ja

n-1

8

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

Dec

-18

Jan

-19

Feb

-19

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-1

9

Dec

-19

Jan

-20

Feb

-20

Mar

-20

Ap

r-2

0

May

-20

Jun

-20

Jul-

20

Au

g-2

0

Tho

usa

nd

s

EREV

PHEV

BEV

YoY

NEV market saw 29% decline in Q2

21Data source: CAAM, LMC Automotive

0

20

40

60

80

100

120

140

160

180

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Tho

usa

nd

s

2017

2018

2019

2020

▪ Q2 market improved greatly from Q1, but demand was still at a low level


NEV sales decline by major segment and OEMs

22

-49%

-64%

-55% 118%

-39%

BEV sales (Thousand) PHEV sales (Thousand)

NEV sales (Thousand)

-42%

-54%

-70%-85%

-13%-93%

-37%

-55%-71%

-23%-8%-39%


▪ Global brands starting to taking more and more share in NEV market

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

20

18

01

20

18

02

20

18

03

20

18

04

20

18

05

20

18

06

20

18

07

20

18

08

20

18

09

20

18

10

20

18

11

20

18

12

20

19

01

20

19

02

20

19

03

20

19

04

20

19

05

20

19

06

20

19

07

20

19

08

20

19

09

20

19

10

20

19

11

20

19

12

20

20

01

20

20

02

20

20

03

20

20

04

20

20

05

20

20

06

20

20

07

20

20

08

BEV

US

KR

JP

EU

CN

Global brands sales keep rising in NEV sector

23

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

PHEV

Data source: CAAM, LMC Automotive


-3.0%

1.0%

5.0%

9.0%

13.0%

17.0%

21.0%

25.0%

0

2

4

6

8

10

12

14

16

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Jan

-19

Feb

-19

Mar

-19

Ap

r-1

9

May

-19

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

Feb

-20

Mar

-20

Ap

r-2

0

May

-20

Jun

-20

Jul-

20

Au

g-2

0

Tho

usa

nd

s

NIO Xpeng Weltmeister Model 3 (domestic)

NIO share Xpeng share Weltmeister share Model 3 (domestic) share

NEV market: a volatile environment continues… ▪ New start-up companies facing more direct competition from Tesla

▪ Meanwhile Tesla is struggling with disruption of supply chain due to low local content rate.

24Data source: insurance data, LMC Automotive


Outlook

29

▪ NEV market is disturbed by COVID-19 in 2020, but will grow in the long-term

124 227 466

792 882 795

3,025

61 94

114

296 230 212

909

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2015 2016 2017 2018 2019 2020F 2025F

Tho

usa

nd

s

BEV PHEV EREV



Change

Kevin Riddell, Senior Manager

Global Light Vehicle Powertrain Briefing

8 October 2020

US LV Electrification In Turbulent Times


Contents

2

▪ US Electrification Environment

▪ US EV Sales Outlook

▪ North American EV Production Outlook

▪ Alternative Scenarios


The Last 4 Months Have Been Busy!

3

▪ June: Washington state adopted California ZEV regulations.

▪ June: The new SAFE regulations take effect.

▪ California restricted from instituting more stringent CO2 standards.

▪ August: California finalizes voluntary agreements with BMW, Ford,

Honda, VW, Volvo to meet stricter fuel economy standards.

▪ August: A reduction in fines imposed by NHTSA for missing fuel

economy targets reversed in U.S. Court of Appeals.

▪ September: Governor of California files and Executive Order that by

2035 new LV sales are to be Zero Emission.


Presidential Elections in November

4

VS.

Track record of reducing/removing environmental regulations to boost the economy.

Ensure the U.S. achieves a 100% clean energy economy and net-zero emission no later than 2050.


Contents

5






Source: JATO Dynamics, OEMs

0

10

20

30

40

50

60

70T

housands

BEV FCEV PHEV HEV

A Rough First Half of the Year for EVs

▪ Despite steady supply of new products, increased sales has been slow.

▪ In first half of the year BEV sales down.

6


A Closer Look at BEV Sales

7

• Coronavirus significantly

lowered near-term BEV sales.

• BEVs stated as top priority.

• Stable incentives.

• Many new entries coming.0

100

200

300

400

500

600

700

800

900

1,000

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

202

3

Thousan

ds

US LV BEV Sales

2020 Outlook from 2019 Q4: 288,000

2020 Outlook from 2020 Q3: 215,000

BEV Topline Change: 25%

BEV Market Share: 1.5%

Source: JATO Dynamics, OEMs, LMC Automotive


EV segment trends – CAGR 2019-2030

9

Non-premium Segments

Premium Segments 15%

SUV Pickup Car/Sporty MPV/Van

17%


100%

40%3%27%23%

7%8%23%

Source: LMC Automotive


BEV segment trends – CAGR 2019-2030

10

Non-premium Segments

Premium Segments 10%


30%


100%

139%2%36%51%

2%8%27%



Content

11






NA Electrified Light Vehicle Production

12

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

Millio

ns

BEV PHEV HEV

▪ BEV growth from

established OEMs

and startups.

▪ BEV, FHEV, MHEV

production shares

trending at similar

rates.

▪ Electrification

strategy varies

significantly

between OEMs.



NA EV Light Vehicle Battery Requirement

13

0

20

40

60

80

100

1202

01

5

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

Battery Requirements (GWh) for NA Light Vehicle Production

▪ Estimated 106 GWh

of storage capacity

required for 2025.

▪ Larger battery packs

accelerating the

curve.

Avg BEV pack capacity (kWh)

2015: 572020: 722025: 86



Content

14






0

1

2

3

4

5

2018 2021 2024 2027 2030

Millio

ns

US Light EV Sales

HEV PHEV BEV

▪ SAFE entrenched. No ZEV regulations.

▪ Higher percentage of HEV are 48-volt.

▪ BEVs still see significant growth, but slower.

▪ California/OEM agreement supporting EV

sales.

2030 Change over

Baseline

XEV: -14%

BEV: -24%

Republicans Win in November, California Lawsuit Fails

Source: LMC Automotive15


▪ State ZEV membership growing.

▪ Larger infrastructure ease plug-in anxiety.

▪ Tougher future CO2 targets?

0

1

2

3

4

5

6

7

8

9

2018 2021 2024 2027 2030

Millio

ns

US Light EV Sales

HEV PHEV BEV

2030 Change over

Baseline

XEV: +67%

BEV: +60%


Democrats Win in November, California Lawsuit Win

16


In Conclusion

17

▪ Highly fluid US market providing plenty of uncertainty for electrification

rollout.

▪ COVID-19, SAFE regulations, SAFE litigation, presidential elections

▪ Many factors continue helping BEV sales increase.

▪ Consumer costs continue falling, more diverse products, sustained

incentives, continued infrastructure investments

▪ NA EV production base remains important despite the US losing its global

sales lead.

▪ Strong investments, high quantity of local talent


Electrification

Al Bedwell, Director, Global Powertrain


8th October, 2020

Can Europe Sustain Momentum Amid the Turmoil?


Europe: Is the xEV Industry Knocked off Course?

On the whole, OEMs are striving to protect their xEV programs during the pandemic

• ID.3 build restarted in April with same 2020

target – Norway’s top-seller in September

• Mercedes-Benz back on track to produce

50k EQC this year – the original target

• Hyundai expands Kona Electric production

in Europe to 30k to ease supply constraint

• Tesla is forging ahead with the European

Gigafactory – wants to achieve what it did

in Shanghai – a 10 month build

• Porsche won’t cancel any projects. Taycan

Cross Turismo has a minor delay (but

that’s due to strong demand for Taycan)

2

0

30

60

2016 2017 2018 2019 2020 2021 2022

New BEV model launches


0

1

2

3

4

5

0

20

40

60

Europe vol ('000s) Europe %

Europe: Regulatory Impact on the BEV Market is Clear

Monthly PV BEV sales

• …

3

Sa

les (

‘00

0s)

Sh

are

(%

)

Source: LMC Automotive Global Hybrid & EV Forecast

Includes pan-Europe + CIS

BEV share 2019

BEV share 2020


Europe: Incentives+OEM Action Create Record BEV Sales

• Many markets set BEV sales records, despite the patchy recovery in car demand

• But will we see a cliff-edge decline when the boosted incentives expire?

0

2

4

6

8

10

12

14

16France

0

5

10

15

20

25Germany

0

1

2

3

4

5Italy

0

1

2

3Spain

0

5

10

15

20

25 UK

Monthly BEV sales, ‘000s

4


Includes pan-Europe + CIS= Record BEV sales


Europe: PEV* Market Moves into a Global Lead

• For first time since the start of China’s NEV boom, Europe’s plug-in sales lead

• Will China move ahead once more, or will Europe retain its position?


*PEV: Plug-in Electric Vehicle comprising BEV, EREV and PHEV


0

200

400

600

800

USA Europe China

PEV sales

Jan-Jul: 2019‘0

00s

0

200

400

600

800

USA Europe China

PEV sales

Jan-Jul: 2020

‘00

0s

128

486501

5


0.0

0.9

1.8

2020 2021 2022

Q4 2019 Forecast Q3 2020 Forecast

0

0.9

1.8

2020 2021 2022

Q4 2019 Forecast Q3 2020 Forecast

Europe passenger car PEV marketS

ale

s (

mn

un

its)

• For BEV in 2020, incentives, OEM push & buyer awareness balance COVID-19

Europe: How is the near-term Forecast Looking?

BEV PHEV

Sa

les (

mn

un

its)

6




Europe: Should Tesla-lovers Worry about Sales Figures?

• Is the competitor OEM BEV onslaught impacting Tesla, or is it a capacity issue?

• July, August look poor, but Tesla’s sales are often loaded to quarter-end

0

400

2019 2020

BEV sales

Aug YTD 19 v. 20

‘00

0s

0

60

2019 2020

Tesla sales

Aug YTD 19 v. 20

0

20

Ja

n-1

9

Feb

-19

Ma

r-19

Ap

r-1

9

Ma

y-1

9

Ju

n-1

9

Ju

l-1

9

Au

g-1

9

Sep

-19

Oct-

19

No

v-1

9

De

c-1

9

Ja

n-2

0

Feb

-20

Ma

r-20

Ap

r-2

0

Ma

y-2

0

Ju

n-2

0

Ju

l-2

0

Au

g-2

0

Tesla sales

Monthly

Q1 Q2 Q1Q3 Q2Q4

7

Q3

‘00

0s




Europe: New Plug-in Model Deluge

• Available PEV models jump from 77 last year to almost 300 by 2022

• PHEV is vital for meeting the next CO2 target, but then we think growth slows

0

100

200

2016 2018 2020 2022 2024 2026

BEVMainstream models on sale

22 3071

170222

0

100

200

2016 2018 2020 2022 2024 2026

PHEVMainstream models on sale

24 3182

122 137

8

255

144




0

20

40

60

80

100

0

5

10

15

20

2017 2020 2023 2026 2029 2032

% o

f S

ale

s

Sa

les (

mn

un

its)

BEV PHEV HEV PEV % ICE %

Europe passenger car xEV Market

• More than 90% of passenger car sales will be electrified by early next decade

• Plug-ins will account for 50%+ of the market, dominated by BEV

Europe: Longer Term xEV Outlook

BEV= 3.8mn

BEV= 8.8mn

9




-12

-10

-8

-6

-4

-2

0

2

26

36

46

56D

ec

-11

Ap

r-1

2

Au

g-1

2

Dec-1

2

Ap

r-1

3

Au

g-1

3

De

c-1

3

Ap

r-1

4

Au

g-1

4

De

c-1

4

Ap

r-1

5

Au

g-1

5

De

c-1

5

Ap

r-16

Au

g-1

6

De

c-1

6

Ap

r-1

7

Au

g-1

7

De

c-1

7

Ap

r-1

8

Au

g-1

8

De

c-1

8

Ap

r-1

9

Au

g-1

9

De

c-1

9

Ap

r-2

0

Au

g-2

0

Share YoY

W. Europe Car Market

▪ Decline has slowed with YoY share falling at between 2 and 4 percentage points

▪ 2020 forecast: 28.7% (-3.3pp), with diesel still needed for CO2 compliance

Europe: A Word on Diesel

Source: National Sources

Figures include diesel hybrid

Dieselgate

Die

se

l %

of N

ew

Ca

r S

ale

s

Yo

Y M

on

thly

Va

ria

nce

(P

P)

10


0

25

50

0

4

8

Diesel volume (left axis) Diesel share (right axis)

Ne

w D

iese

l P

V S

ale

s (

mn

)

▪ Diesel PV sales lose 2mn by 2032, becoming confined to the largest vehicles

Europe: Diesel Outlook

Die

se

l %

of S

ale

s

Source: National Sources, LMCA European Diesel Forecast; Includes diesel hybrid

1.1mn

7%

29%

4.6mn

11

3.2mn

32%

W. Europe Car Market


Electrification

Sam Adham, Senior Powertrain Analyst

Global Powertrain Webinar

8th October, 2020

A selection of various battery trends


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0

100

200

300

400

500

600

700

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

GW

h c

um

ula

tive

GW

h a

nn

ua

l

EMEA cumulative ROW cumulative EMEA annual ROW annual

• If 24 GWh each, implies a need for at least 25 European ‘Gigafactories’ by 2032

• Compare with ICE production: Currently 60 active engine plants in Europe

• BEVs account for 70% of total GWh demand now, rising to 90% in the future

Source: LMC Automotive Global Light Vehicle Powertrain Forecast with Battery & eMotor Module

EMEA & Global LV xEV battery requirement

World: Battery Demand Outlook

2


Operator Location Capacity Comment

Northvolt Sweden 16 GWh initial, rising to 32 GWh Expected 2021. Supplying VW, BMW

Northvolt Germany 16 GWh initial, rising to 32 GWh Expected Q1 2024. Supplying VW, BMW

CATL Germany 14 GWh initial, rising to 24 GWh Expected 2022

LG Chem Poland 10 GWh initial, rising to 65 GWh In operation

SK Innovation Hungary 7.5 GWh initial, 17.3 GWh by 2022 In operation

Samsung SDI Hungary 3 GWh current In operation

BYD UK ? Prospective. Potential JLR partner

Britishvolt UK 10 GWh initial, rising to 30 GWh 2023. Prospective. Potential JLR partner

Tesla Germany Would need to be ~8 GWh initially Planning

Saft/PSA France 8 GWh initial, rising to 24 GWh Expected 2023

Saft/PSA Germany 24 GWh Expected 2023. Plant conversion

Daimler Germany ? In operation; 2 plants; pack assembly

Daimler Poland ? In operation; pack assembly

VW Czech Rep. ? In operation; PHEV pack assembly

FCA Italy ? In operation. Final assembly

PSA Slovakia ? Final assembly

Volvo Belgium ? In operation. Final assembly

Europe: Importing Battery Cells & Packs isn’t Sustainable

Known and assumed major PEV battery production operations in Europe

3


35

40

45

50

55

60

65

70

2015 2020 2025 2030

We

igh

ted

Ave

rag

e

Ba

tte

ry C

ap

acity (

kW

h)

NEAR TERM: IMPROVING LITHIUM-ION• New anode and cathode materials• Stable and higher quality electrolytes

and additives• Better pack design and materials• Advanced control• Better manufacturing processes

MID-TERM: ERA OF DIMINISHING GAINS• Low-hanging fruit is harvested by

this time, and any advance is minimal, before switch-over to next-gen batteries

LONG TERM: BEYOND LITHIUM-ION• Battery cost and performance breakthrough• Solid state as an alternative to liquid electrolyte• Li-Air, Li-S, as an alternative to li-ion• Next gen liquid, gel, polymer electrolytes to

enhance performance of new anode and cathode materials

optimised lithium

diminishing gains

advanced lithium

Global BEV battery capacity trend – weighted average by volume

BEV Battery Technology Development

4

Source: LMCA Global Light Vehicle Powertrain

Forecast with Battery & eMotor Module


40

80

120

160

Next 10 years: -$8/yr

5

0

500

1,000

Pack W

ho

lesale

Co

st

($/k

Wh

**)

$156 (BNEF), $150 (McKinsey)

BEV-ICE cost parity* BEV-ICE profit parity*

• *Price representaive of mass market BEV model with NMC battery pack

BEV Battery Pack Price Outlook

Past 10 years: -$85/yr

$62 (BNEF)

$100 (BNEF)

$~150

Incentives needed

▪ This curve represents market

average – in reality the cost

depends on the segment, vehicle,

OEM, and cathode chemistry!

▪ Current view is that Li, Mn, Co &

Ni supplies will be sufficient to

keep up with demand, but prices

will be spiky

▪ We aren’t assuming a

commercial-level battery

breakthrough such as solid state

before 2030

▪ The outlook from here is Li-ion

with scale, optimisation and

incremental gains


BEV Battery Cathode Chemistry Outlook

Source: LMC Automotive G LVPTF Battery & eMotor Module

6

LFPNCA

NMC

2019

LFP LNMO (?)

NCA

NMC

NMCA

2025

Source: LMCA Global Light Vehicle Powertrain Forecast with Battery & eMotor Module

▪ LFP share suffered a

collapse towards 2019, but

is bouncing back in China

▪ NMC is dominant, but

cobalt-free imperative is

driving development of

alternatives

▪ LNMO is what we’re

assuming to be future

chemistry for Tesla and

SVolt


PHEV battery capacities are getting larger

Typical battery sizes by segment

7

5

10

15

20

25

Typ

ica

l B

att

ery

ca

pa

cit

y [

kW

h]

2015

2020

2025

Source: LMCA Global Light

Vehicle Powertrain Forecast with

Battery & eMotor Module

▪ In Europe, WLTP forced larger packs

▪ Will keep increasing with incremental

improvements in volumetric energy density


LCVs

David Leah, Senior Analyst


8th October 2020

The European LCV xEV Market


Current SituationTopline

1.5

1.75

2

2.25

2.5

2.75

3

Mill

ions

COVID-19

impactEurozone crisis

Recovery

Long term looks positive. Demand to

be driven by various factors, such as:

▪ Shift in consumer behavior to

online shopping/e-commerce

▪ Downsizing trends from HGVs to

LCVs (agile supply chains)

▪ Rise of last-mile delivery

▪ Environmental Factors: rise in

xEVs/CO2targets/Incentives/ZEZs

/ICE bans/Social reasonability

etc.…

= boost renewals

-16% YoY


Current SituationFuel Type

3

~10K ~ 50K

0.5%

4.9%

2016

93.6%

xEV

Petrol

Diesel

Other* CNG, LPG

1.0%

1.1%

6.7%

2018

91.2%

1.0%

2.4%

5.7%

2020

90.9%

1.0%

CAGR = 48.6%

▪ xEV set to account for ~2.4% of sales in 2020 (2% YTD)

▪ xEV demand has increased at a CAGR of 48.6%, albeit low base

▪ Diesel has remained the dominant fuel type (TCO & >torque benefits versus petrol)

Key


40%

36%

24%Small vans

Medium vans

Large vans

Current SituationSnapshot

4

Total xEV sales

+15% YTD

23kunits YTD

21

3

Renault Kangoo

best selling

model

France market

leaders in volume

terms ~6k

units YTD

Norway highest

xEV market

share~7%

YTD

~75% of xEV

sales = BEVs

40% of xEV sales small

or car-derived sized vans

YTD


260

190 180

12080

170

90 110

500

300400

100 100

400 400

200

800900

700

500

300

600

800 800

5

Current SituationYTD Analysis

900800

500

100

400

1,800

700500

J F M A M J J A YTD (Jan – Aug)

+0.1%

+8%

+210%

-35%

YTD Sales

6,000

5,500

2,500

1,200

Market share*%

~2.5%

~3.5%

~2.5%

~6.5%

*Of respective market


20%

40%

60%

80%

100%

0.0

0.4

0.8

1.2

1.6

2016 2018 2020 2022 2024 2026 2028 2030 2032

Mil

lio

ns

BEV PHEV HEV FCEV ICE %

ForecastxEV Outlook

7

▪ BEVs to account for around a

third of sales by 2032.

▪ ICE vehicles set to account for

around 50% of total sales by

2032.

▪ Tipping point for LCVs to be

around mid-2020

Note: PHEV includes EREV.HEV includes MHEV (48V), MHEV & FHEV.


ForecastxEV Model Launches

8

Note: Includes Vans & Pick-ups only. PHEV includes EREV. HEV includes MHEV (48V), MHEV & FHEV

610

23

4348

2

5

7

4

6

12

1

2

3

0

10

20

30

40

50

60

70

80

2016 2018 2020 2022 2025

BEV PHEV HEV FCEV

▪ Average CO2 A seven fold

increase in model launches

between 2018 and 2025.

▪ Competition set to intensify

putting pressure on OEMs.


0

25

50

75

100

125

150

175

200

2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Industry FactorsCO2 emission targets

9

2017: 175 g/km

2020: 147 g/km

2025: 125 g/km

2030: 101 g/km

Historical emissions

▪ Average CO2 emissions of new

vans in the EU will have to be

15% lower in 2025 and 31% in

2030 compared to the 2021

target.

▪ The ZLEV credit system

enables OEMs with an xEV (0

to 50g/km) share >15% in 2025

and >30% in 2030 to benefit

from less stringent CO2

requirements (capped at 5%).

Note: Figures are expressed in NEDC terms.*The binding emission targets for OEMs are set according to the average mass of their vehicles

Source: European Commission; ICCT


Industry FactorsIncentives

10

Tax Benefits Purchase Incentives Max (€) Subsidy

Acquisition Ownership Company Car Incentives

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Source: ACEA

≤20g CO2/km up to €7k subsidy

(6k from 2021)

≤50g CO2/km up to €6k govt + €3k

OEM subsidy (until 2022)

≤75g CO2/km & ≥16 km battery

range = up to €8k subsidy

Tax based on Weight, CO2 & Nox

levels: ~20 to 30% of passenger

car rates

≥30 km battery range = €4.4k

subsidy, rising to €6k if vehicle

scrapped

≤60g CO2/km up to ~€6k subsidy


ICE phase-out targets

Industry FactorsICE Bans / ZEZs

11

2025 2030 2035 2040

Norway Denmark

Netherlands

UK

Spain Sweden

Iceland

Scotland (2032)

London

2025

Proposed city-wide Zero

Emission Zones (ZEZ)/ICE

bans

Note: Phase out targets may exempt vans in some countries.

Source: ICCT

Note: On the whole, targets are progressive, starting in

specific urban areas before expanding to entire city

bans. In addition, some bans target diesel vehicles,

others all ICE.

*This slide does not include every country/city which

has announced ICE bans.

France Paris

2024

Oslo

2024

Amsterdam

2030

Rome

2030

Govt. national phase-out targets


Electrification

Al Bedwell, Director, Global Powertrain


8th October, 2020

Global Summary


0

1

2

3

0

50

100

150

200

World vol ('000s) World % Linear (World vol ('000s)) Linear (World %)

World: BEV Volumes are Starting to Recover

Monthly PV* BEV sales

• Although volumes have suffered as a result of the pandemic, share is growing

14

Sa

les (

‘00

0s)

Sh

are

(%

)


*including N. America LV


-30

-20

-10

0Market BEV

World PV* sales Jan-Aug: 2020 vs. 2019

World: BEV Sales have Outperformed the Market in 2020

• World BEV PV sales from January to

August 2020 were 955k compared with

1,035k in the same period in 2019.

• The out-performance of BEV comes

despite China NEV sales being

hampered by reduced subsidies, some

USA OEMs losing tax credit & cheap

gasoline almost everywhere.

• It’s Europe that has driven the strong

performance. Tesla started the year

well and there are more new models.

But even ageing BEV models are in

demand, bucking the market.

%


*including N. America LV

-23%-8%

15


…but the Regional Picture is very Mixed

• Europe’s BEV sales have greatly outperformed the market while China’s have

been curtailed by policy changes, and the USA’s have tracked LV sales closely


-40

-20

0

20

40

60

Market BEV

Europe PV sales

Jan-Aug: 2020 vs. 2019

%

+54%

-34% -40

-20

0

20

40

60

Market BEV

China PV sales

Jan-Aug: 2020 vs. 2019

-40

-20

0

20

40

60

Market BEV

NAM LV sales

Jan-Aug: 2020 vs. 2019

% %

-16%-26% -23% -20%

16


1.5

1.6

1.7

1.8

1.9

2019 2020

+11%

World: Despite USA/China/COVID-19, BEV Grows in 2020

40

60

80

2019 2020

World PV market (inc. NA LV)

Sa

les

(m

n)

-17%

▪ The positive result for BEV demand this year is entirely due to Europe


67mn 1.7mn

1.8mn

World PV BEV market (inc. NA LV)

80mn

17


World: Regional Long-Term Outlook

18

Global PEV Outlook by Major Market (mn units)


0.0

0.2

0.4

0.6

2015

China

Europe

NAM

World

0

1

2

3

2020

0

4

8

12

20250

10

20

2030

• Our analysis suggests that Europe retains the lead in plug-in sales this decade

16mn BEV

4mn PHEV


0

10

20

30

2017 2020 2023 2026 2029 2032

BEV PHEV HEV** FCEV

Sa

les (

mn

un

its)

World: Outlook by xEV Technology Type

19


*Including n. America light truck

** Full hybrid + mild hybrid + mild hybrid (48V)

World PV market*

BEV

21%

HEV

25%

PHEV

5%

All xEV

53%

• Global PV electrification achieves more than 50% within 12 years


0

10

20

Q3 2020

Q4 2019

World: COVID-19 doesn’t Impact the Long-Term Forecast


*Includes N. America light truck

Q4 19: 2020-31 - 111 mn

Q3 20: 2020-31 - 115 mn

Sa

les (

mn

un

its)

• There may be a net positive influence in BEV demand resulting from a

reluctance to revert to the use of public transport (especially in China).

• COVID-19 and the resulting improvement in air quality may act as a focal point

for public opinion to shift in favour of faster elimination of fossil fuel emissions.

World BEV PV market*

20

0

10

20

30

40

50

Q3 2020

Q4 2019

World xEV PV market*

Sa

les (

mn

un

its)

Q4 19: 2020-31 - 356 mn

Q3 20: 2020-31 - 350 mn

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