powertrain 2020
DESCRIPTION
Powertrain FutureTRANSCRIPT
Powertrain 2020A PERSPECTIVE FOR CHINA
1081013_PT2020_Challenges_Opportunities_Shenyang.pptxSHENYANG, October 31st, 2008
Di l iDisclaimer
> The conclusions and recommendations in this document are based on market knowledge of Roland Berger Strategy Consultants or drawn from information knowledge of Roland Berger Strategy Consultants or drawn from information and data gathered through desk research and interviews
> Interviews reflect the opinions of experts at individual companies and do not > Interviews reflect the opinions of experts at individual companies and do not necessarily reflect the official opinion of the interviewee's organization
> The statements made by Roland Berger Strategy Consultants are based on > The statements made by Roland Berger Strategy Consultants are based on assumptions held to be accurate on the basis of the information available
> Roland Berger Strategy Consultants assumes no liability for the correctness > Roland Berger Strategy Consultants assumes no liability for the correctness of the information and statements made within this document as well as for actions undertaken upon this document
2081013_PT2020_Challenges_Opportunities_Shenyang.pptx
> The document is for personal use only and not to be disclosed to third parties
INDEXINDEX
A. Tougher Regulations – Scarce Resources: The industry is forced to decrease emissions and fuel consumptionThe industry is forced to decrease emissions and fuel consumption
B. Powertrain Challenges:OEMs need to work on a broad technology portfolioOEMs need to work on a broad technology portfolio
C. Electric Vehicles:Open issues likely to be mastered EVs could gain a significant market shareOpen issues likely to be mastered – EVs could gain a significant market share
D. Opportunities for the Chinese Automotive Industry
© 2008 Roland Berger Strategy Consultants GmbH 3081013_PT2020_Challenges_Opportunities_Shenyang.pptx
A. Tougher Regulations – Scarce Resources: The automotive industry is forced to decrease emissions and fuel consumption
4081013_PT2020_Challenges_Opportunities_Shenyang.pptx
Th t ti i d t i f d t d i i d The automotive industry is forced to decrease emissions and fuel consumption
Legislative plans in major car growth regions
The EU will introduce tough CO2emission targets that need to be met by OEM car fleets in the near future
12 3
y
The US plan a China needs to slow down the growth of oil 2 3 4The US plan a
significant reduction of fleet fuel consumption and requires a share of
down the growth of oil consumption and regu-lates fuel consumption
zero-emission vehicles (ZEV) in California
Japan will probably apply i il li it t th EU
5081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger
similar limits to the EU
Th EU ill i t d t h CO i i t t th t d t The EU will introduce tough CO2 emission targets that need to be met by OEM car fleets in the near future
EU CO2 EMISSION TARGETS (g/km) STATUS QUO
170180190200 > European commission requires to
reduce CO2 emission to 130 g/km until 20121) (comparable to 5.2 l
li 4 8 l di l)
2008 2012 2020185
130140150160170 gasoline, 4.8 l diesel)
> Target 2020: 95 g/km(4.0 l gasoline, 3.6 l diesel)
161152
130
90100110120130
> Individual OEM targets based on vehicle weight, penalties if not reached between 15-90 EUR/g95
7080
1995
1998
2001
2004
2007
2010
2013
2016
2019
2022
2025
> CO2 tax for consumers planned, EUR 2-EUR 7 per g/year (over a certain limit)
6081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: ACEA; press, European Parliament, Roland Berger research1) Additional 10 g/km by improvements of tires, HVAC, use of biofuels, etc.
N l ll t EU d t CO t ti d l iti Nearly all western EU mandate CO2 taxation and several cities implemented a congestion tax
COMMENTS
Stockholm
Bergen
Oslo
> Nearly all western EU countries adopted tax relief to promote the purchase of low Stockholm
L dManchesterDurhan
Edinburghpollution vehicles
> Several cities in Italy, France, UK and Scandinavia also
Milan
Paris
London UK and Scandinavia also adopted city congestion tax
> In most major German cities pollution free "green" zones
Bologna
Rome
pollution free green zones rather than real congestion charges are implemented1)
7081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger
Country adopting CO2 tax reduction City adopting congestion tax 1) Obligatory environmental badge is available in three colors which describes the category to which the car is allocated together with the restrictions
I Chi A t ti b k d i f t t l d il In China, Automotive becomes a key driver for total crude oil consumption and is facing increasing demand pressure
Crude oil consumption in China [tons m]47580 500
T t l d il ti
320347
38060
70
350
400
450
57.0
Total crude oil consumptionAutomotive crude oil consumptionPercentage of automotive oil consumption in total
161197 211 228
249
320
167
256
30
40
50
200
250
30036.8
44.0
34.433.328.5
147 161
1240 48 65
83110 128
167
10
20
30
50
100
150
20022.720.3
7.57.5
11 120 0
50
2020E2010E20062005200320011999199719951993
9081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: China energy yearbook; China statistic bureau; Roland Berger
National energy security is threatened as automotive crude oil consumption is growing
C tl f l i h i d t dil f l t Consequently, fuel price has increased steadily – fuel accounts for more than 50% of costs of driving a passenger car
FUEL PRICE IN CHINA [RMB/TON] SHARE OF FUEL COSTS ON TOTAL COSTS (PASSENGER CAR)
7805
7500
8000 Gasoline 100% 100% 100% 100% 100%
6930
55096000
6500
7000
7500
Diesel
Other Costs
4022
47455047
4049
4642
5401 5509
4500
5000
5500
3627
40224049
3000
3500
4000
2004 2005 2006 2007 2007
Fuel Costs
10081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: FAW, Roland Berger
2004 2005 2006 2007 2008
N l ti li it f l tiNew regulations limit fuel consumption
RATIONALE/EXPECTED DEVELOPMENT
l/100 km g CO2/100 km (gasoline)
Fuel consumption limits China (phase II from January 2008)
> Weight-dependent fuel consumption limits to reduce oil consumption:> 2004: 120 m tons oil import >40% (6%
DEVELOPMENT
13
14
15 375
333
309 > 2004: 120 m tons oil, import >40% (6% of total import)
> 2020: >600 m tons oil (~ USA 2006)> Adaptation of Western standards in
mid-term (China IV stage emission 10
11
12 285
262
238
Vehicles with either - ATM or
- 3 or more seats/row
mid term (China IV stage emission standard equals EURO IV, to be introduced in Bejing in early 2008, nationwide in 2010)
> "The state will guide and encourage the 8
9
10 238
214
190Vehicles with manual transmission g g
development of clean and fuel efficient vehicles with small displacement, lead consumers to buy and use low energy consumption, low pollution, small
6
7 167
143
750 k
g
865 k
g
980 k
g
090 k
g
205 k
g
320 k
g
430 k
g
540 k
g66
0 kg
770 k
g
880 k
g
000 k
g
110 k
g
280 k
g
510 k
g
110 k
g
11081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: CATARC; SEPA; Roland Berger
displacement, new energy and new power vehicles"
≤ ≤ ≤
≤1,
≤1,
≤1,
≤1,4
≤1,
≤1,
≤1,
≤1,
≤2,
≤2,
≤2,
≤2,
≤2,
Th l i t d d ti t ill h il i fl The newly introduced consumption tax will heavily influence sales and pricing of cars with large engine displacements
Consumption tax rate in China as of Sept. 1st, 2008
E i ( 3) B f Aft C t t E l f VW M d lEngine (cm3) Before 09/2008
After 09/2008
Cost to consumer(Aug. 2008 = 100)1)
≤ 1,000 3% 1% 98
Example of VW Model
–
1 500-2 000 5% 5% 100
1,000-1,500 3% 3% 100
Jetta Bora Golf Sagitar Magotan
Polo 1.4
1,500-2,000 5% 5% 100
2,000-2,500 9% 9% 100
Jetta, Bora, Golf, Sagitar, Magotan, …
–
2,500-3,000 12% 12% 100
3,000-4,000 15% 25% 113
–
Phaeton, Touareg, Magotan 3.2
12081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger
≥ 4,000 20% 40% 1251) Assuming that import cost is usually overseas ex-factory price plus shipping price excl. insurance rate, 5% inspection fee and dealership mark-up; tax increased passed through
Phaeton 4.2/6.0, Touareg 4.2/6.0
NO d PM i i li it ill i R l t t d l NOx and PM emission limits will increase – Relevant today only for Diesel engines, but in future also for gasoline
COMMENTSDiesel emissions standards for passenger carsParticulate matter [g/km]0 16
> NOx is relevant for both diesel and gasoline, PMrelevant currently for
0.16
0.14
0.12Euro 2(1996)
1998
ydiesel engines only
> European, American and Japanese emission stan-d d ill i h
0.08
0.10
(1996)
Euro 3(2000)
2001Japan
dards will converge in the near future
> As a result, heavy invest-ments will be needed in
0.04
0 02
0.06(2000)
Euro 4 (2005)
20042004 2003 USA (CARB)
LSA (EPA)
ments will be needed in exhaust aftertreatmentand new technologies to optimize the combustion NOx [g/km]
0.90.80.7
0.02
0.000.60.40.30.20.1 0.50.0
Euro 61)
Euro 4 (2005)
Euro 5 (2008)200720072007
Japan
13081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: EPA; CARB; EU Commission; JAMA; Roland Berger
1) ProposedNote: EPA = Environmental Protection Agency; CARB = California Air Resources Board
processNOx [g/km]Euro 61)
(2014)2001Japan
I i k t i i t d d ill f th ti ht In emerging markets, emission standards will further tighten too, the "gap" to European standards will narrow down
Introduction of emission standards for passenger cars in selected growth marketsCOMMENTS2000 2005 2010 2015
> Standards are based on European regulations – introduction with significant time lag
CHINAEuro 1 Euro 2 Euro 3 Euro 4 Euro 5 g g
> Stricter regulations in urban areas
> Indian "Bharat stages" are also based on European regulations
Euro 1 Euro 2 Euro 3 Euro 4Euro 6
Euro 5
INDIAbased on European regulations
> Introduction starts in Delhi1) first, then spreads throughout the countryEuro 1 Euro 2 Euro 3 Euro 4
> Introduction of European regula-tions is planned with a time lag of approx. 3-4 years
RUSSIAEuro 2 Euro 3 Euro 4 Euro 5
14081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Dieselnet; Roland Berger1) And selected major cities/industrial areas
Introduction Expected introduction Regional distribution after introduction – capital city, industrial regions, entire country
M iti ill l j l i f t l ti 45 iti Megacities will play a major role in future regulations – 45 cities attended second C40 Large Cities Climate Summit in May 2007
COPENHAGENCity of Cyclists – over 36% of the city's population cycling to work every day
COLORADOSmartTrips website: Reduces drive-alone
NEW YORK CITY (PlaNYC)Extensive environmental approach including e.g. waiving of NYCs sales population cycling to work every day
SEOULCar-free days have redu-ced CO2 emissions by 10% annually
Reduces drive alone trips and increases biking, walking and public transit in specific city area
including e.g. waiving of NYCs sales tax on cleanest, most efficient vehicles and introduction of congestion charges
MEXICO CITYReplaced 3 000
10% annually
BEIJINGVehicles with high emis-sions are only allowed to
p y
Replaced 3,000 taxis with more fuel efficient models
sions are only allowed to take certain roads within the city (emission level marked through labels)
CURITIBA (Brazil)Roadway "arteries" in which traffic is more fuel-efficient and bordered by plantings that both
C40 Large Cities Summit objectives:> Drive down carbon emissions> Accelerate action on climate change
15081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: C40 Large Cities Climate Summit; Roland Berger
combat carbon emissions and increase biodiversity
> Accelerate action on climate change> Next meeting planned in Seoul, 2009
I th Sh h i i d t ti k h b lIn the Shanghai area, six demonstration parks have been plan-ned with over 1,000 electric vehicles in pilot operation by 2010
COMMENTSSHANGHAI ELECTRIC VEHICLE DEMO AREA
> Shanghai EXPO will 100% adopt zero emission vehicles not only inside the EXPO park but also in the surrounding areas
> A temporary EXPO electric vehicle
Long-term Temporary Chongming Eco Island
Total Bus Car Mini EV100 30 - 70Jiading International Auto City > A temporary EXPO electric vehicle
demonstration park will be established with 160 cars and 340 buses in operation by 2010
> 5 long-term demo parks have also been Pudong Demo Area
Total Bus Car Mini EV
J ad g te at o a uto C tyTotal Bus Car Mini EV100 60 - 40
planned in order to meet the requirement of programs like the establishment of ChongmingEco Island and Jiading International Auto City
100 50 - 50Downtown Demo Area
Total Bus Car Mini EV
100 50 - 50EXPO Demo Area
Total Bus Car Mini EVInside 320 160 40 120
Outside 180 180 - - > Over 1 000 electric vehicles will be showcased
Jinshan Hybrid Demo Area
Total Bus Car Mini EV
> Over 1,000 electric vehicles will be showcased in Shanghai– Started in 2008– Multistaged pilot with increasing number of
vehicles
16081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: SCEC; Roland BergerNote: Buses and cars refer to hybrid or fuel cell vehicles, while mini EV refers to pure battery-driven vehicles
100 - 100 - vehicles
B. Powertrain Challenges: OEMs need to work on a broad technology portfolio
17081013_PT2020_Challenges_Opportunities_Shenyang.pptx
Gl b l OEM ill f b th ti i i th i t l Global OEMs will focus on both optimizing the internal combustion engine and on long-range electrical propulsion
Technology focus and priorities
Integrated
…
N EN
GINE
+ stop-start
+ boost, short E-Drive
ghybrid
+ plug-in
OMBU
STIO
N
"Conventional" ICE
+ stop startrecuperation E-Drive with ICE
range extender
CO
ICE
EV with Fuel Cell rangePure EV
18081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Volkswagen, Roland BergerELECTRICAL PROPULSION
Fuel Cell rangeextender
Pure EV
With t h l i il bl i t ti i i iWith technologies available in next generation engines, signi-ficant reductions of CO2 and fuel consumptions are possible
CO2/fuel reduction potential of selected technologiesLEVER TECHNOLOGY SAVING POTENTIAL [%]
0 12107531Thermodynamicefficiency
Variable valve timing/lift2 4 6 8 9 11
Direct injection Stratified charge (lean burn/compl. strategies)Mechanicalfriction
Cylinder deactivation
Reduced engine friction1)
Downsizing
j g ( g )
yOptimized cooling circuit2)
Weight reductionStart-stop
30% BiW (~9% vehicle weight)With regenerative braking
Calibrationof all powertrainsystems
Dual-clutch transmissionOptimized gearbox ratios
Electrically assisted steering
19081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: TNO; IEEP; Roland Berger1) e.g., new cylinder construction, use of roller rocking lever, reduction of moving mass 2) Incl. electric water pump
Range possible CO2 savings Additional CO2 savings potential
systems
V i l t f h b id t i i L t ith Various layouts of hybrid powertrains are in use – Layouts with E-Motors close to the axle allow pure electrical driving
Examples of powertrain layouts used (front-wheel)
Serial hybrid
EVPower split hybrid
Secondary electric axle
Belt starter/ generator
Crankshaft starter/ generator
Parallel hybrid
Starter and generator
2)
1) 3)
4) 2) 2)
1)
FOCUS – ELECTRIC DRIVING POSSIBLE/PLUG-IN
20081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger analysis1) Generator 2) Starter 3) Belt starter/generator 4) ISG
ICE Gearbox Clutch E-motor
T h i l l ti d fi d b f ti lit d l t Technical solutions are defined by functionality and layouts –complexity requires clear strategy to allow economies of scale
Starter and generator
Belt starter/ generator
Crankshaft starter/ generator
Parallel hybrid Power split hybrid
Secondary e-axle
Serial hybrid E-Drive
Functionality
Layout
Mercedes S400BlueHybrid
BMW start stop
Smart mdhCitröen G3start-stop
> Start-stop
> Start-stop> Recuperation> Boost
Mercedes ML450BlueHybridToyota Prius
Lexus RX 400HAudi HelioProject (A1)
Toyota Prius
Porsche Cayenne hybrid
> Start-stop> Recuperation> Boost> E-Drive (short)1)
> Plug-in Mercedes
GM Volt
y(next generation)
g> Start-stop> Recuperation> Boost> E-Drive (medium)1)
> Plug-inR t d
S-Class plug-in
Tesla Roadster4)
> Range extender> Recuperation> E-Drive (long)3)
> Pure E-Drive> Recuperation
21081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger analysis1) Up to 3 hours 2) Up to 50 hours 3) More than 50 hours 4) Recuperation
Other denotations MICRO MILD MILD/ STRONG
FULL HYBRID ELECT. SEC. AXLE
EV WITH RANGE EXT.
EV
Mild d f ll h b id ill b d li ti i ll Mild and full hybrids will see a broader application especially with larger vehicles, combined with downsized engines
CO2 emission1) [g/km] per vehicle by weight
130 EU Objective 2012
kg
130
95
EU Objective 2012
EU Objective 2020
22081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: IAV; Roland Berger1) CO2 emissions according to NEDC
Off-RoadLarge carsSUV
Medium Compact
Small cars
kg
H b id hi l ith hi h l t i ill h i ifi t Hybrid vehicles with high electric range will have a significant advantages in certification
REDUCED FUEL CONSUMPTION OF HYBRIDS
CERTIFICATION POSSIBILITIES
-5-10%
tione
l Hyb
rid
Certifiedemissions/
fuel consumption
Add: Delta inbattery charge
Emissions inNEDC due to
ICE drive
Emissions in NEDC due to E-Motor drive -10-
12%
Conv
ent
Drive NEDC w/ battery charged w/ battery 15 26%
Fuel consumption
Optimized operating point
Start Stop Fuel consumption of br
id
Drive NEDC w/ battery charged … w/ battery discharged
Weighted25 km/(25 km+E-RW)
-15-26%
consumption Hybrid
operating point and energy
regenerating
consumption of ICE
Emissions in NEDC due to
Emissions inNEDC due to
Certifiedemissions/
Emissions inNEDC due to
Plug
-in-H
yb WeightedE-RW/(25 km+E-RW)
23081013_PT2020_Challenges_Opportunities_Shenyang.pptx
NEDC due to E-Motor drive
NEDC due toICE drive
emissions/fuel consumption
NEDC due toICE drive
E-RW: Electric range
Source: European commission for economy (rule 101)
C Electric Vehicles:C. Electric Vehicles:Open issues likely to be mastered – EVs can gain a significant market share
24081013_PT2020_Challenges_Opportunities_Shenyang.pptx
O i b bl b t d EV ill t lik l Open issues can probably be mastered – EVs will most likely gain a significant market share
OPEN ISSUES MARKET SHARE EV IN % OF NEW CAR SALES
“The future drives Electric”-Scenario, WESTERN EUROPE, 2020
100%
Battery power/energy/safety/cost
E M t l / t 90%80%70%
ICEInfrastructure availability
E-Motor supply/cost
60%50%40%30%
ICE
Business case for> Customer
30%20%10%
0%22%
PHEV
EV
> OEM> Utility
25081013_PT2020_Challenges_Opportunities_Shenyang.pptx
0% 2010 2015 2020Vehicle offerings
Source: Roland Berger
U til 2020 Li I b tt i ill id i ifi t d i i Until 2020, Li-Ion batteries will provide a significant driving range with lower costs
Overview of the EVs driving range evolution (" The future drives Electric“ scenario)
EV RANGE EVOLUTION FROM TODAY TO 2020 (km) MAIN ASSUMPTIONSEV RANGE EVOLUTION FROM TODAY TO 2020 – (km) MAIN ASSUMPTIONS
> Consumption1): 12.5 kWh/100 km400
> Vehicle GVW2): 1,100 kg
> Battery capacity by 2010: 200 kg
100
200
300
20 kWh> Battery weight: 200 kg –
kept constant over the years
Ni-MH today Li-Ion 2010 Li-Ion 2015 Li-Ion 2020Energy density
0
100
years> Battery and vehicle impro-
vements over time considered – (battery DoD
60 100 125 180
12 20 25 36
Energy density (Wh/kg)Battery capacity (kWh)
26081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Interviews with key battery suppliers, Roland Berger analysis1) Without auxiliary system consumption (e.g. HVAC); average city cycle speed of 25 km/h 2) Driver included
considered (battery DoD, vehicle air drag coefficient)Battery costs
(EUR/kWh) 400 300 200250
M i b tt li h diff t t h l i l h Main battery suppliers have different technological approaches to achieve development targets
Overview of major Li-Ion material compositions and selected suppliers
KEY DEVELOPMENT Li-metal polymer
KEY DEVELOPMENT TARGETS
> Energy density
OLYT
E Li-Ion polymer
(gel)
> Life cycle> Safety> Costs
ELEC
TRO
Li-Ion
(gel)> Fast charging
capability
Manganoxid Iron phosphate
Manganese spinel
Cobalt
Li Ion
27081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: CARB, interviews with Key Battery Suppliers, Roland Berger
CATHODE
phosphate spinel
Diff t H b id PHEV d EV t i f d Different Hybrid, PHEV and EV powertrain performance needs favor different E-Motor layouts
Sinus field machines and potential automotive applicationsPermanent ener-gized synchro-
Internally perma-nent energized
Magnetic reluctance
Synchronreluctance
Asynchronous machinegized synchro
nous machinenent energized machine
reluctance machine
reluctance machine
machine
PRO> Power to weight ratio> Efficiency at low speed and at high load
> Design and cost> Efficiency> Power to weight
> Very simple design> Very low cost
> Design and cost> Efficiency through-
out entire speed PRO Power to weight ratio
out entire speed and load spectrum
> Simple control
> Complex control> Low efficiency at max. speed
> Complex control> Maturity
> Very low power density
> Power to weight ratio
Potential application
> Hybrid drive> For long distance applications only with
> In discussion > None > Long distance drive for electric vehicles
CONLow efficiency at max. speed
> High cost> Complex safeguarding
Maturity density ratio
28081013_PT2020_Challenges_Opportunities_Shenyang.pptx
application > For long distance applications only with transmission possible
for electric vehicles
Copper coil Solenoids
Source: Roland Berger expert interviews
S li b i f E M t f l t i d i i i li it d Supplier basis for E-Motors for pure electric driving is limited –Inhouse production can be an interesting alternative
Sources for E-Drive motorsHigh > Licensing dedicated automotive concepts of small
Fit f
HighINHOUSE INDUSTRIALIZATION of existing expert concepts
Licensing dedicated automotive concepts of small E-Motor experts
> Inhouse industrialization with opportunity to benefit from scale effects and low-costs
Fit of existing concepts for E-Drive
Partnering with AUTOMOTIVE E/E SUPPLIER
> e.g. Bosch, Continental> Limited product offers for E-Drive applications> E-Motor competencies and resources currently
needed for Hybrid projects applica-tions
needed for Hybrid projects
Leverage NON AUTOMOTIVE > Large E-motor experience form train and machine
tool applications> D di t d t ti d t d t b
Low
B f Low Good
Leverage NON AUTOMOTIVE E-Motor SUPPLIER base > Dedicated automotive products need to be
developed> Chinese supply base large and could be
competitive
29081013_PT2020_Challenges_Opportunities_Shenyang.pptx
Base for industrialization
Source: Roland Berger
A h i i f t t i i it f t A charging infrastructure is a prerequisite for customer accep-tance – Various utilities work on it in different countries
Key EV charging infrastructure components
AT HOME AT PUBLIC SPACES AT WORK
Charging station at home Charging stations at public Charging stations at work g g g g pspaces
g gand other non-public places
30081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger
"Sense of infinity" for EV infrastructure needed from the very beginning!
Utilities are evaluating where to position along the E-Mobility value chain – several utilities in Europe have OEM-partnerships
Generation Grid Retail1) Recharge grid Add-on services
E-MOBILITY VALUE CHAIN
> Offer of recharge infrastructure in public places
> P i f
> Special tariffs> Vehicle to grid> Battery services/
l i
Utility core business – power generation & supply> Additional electricity demand by customers charging electric
vehicles, e.g. at home > Premium for access to infrastructure
> Call/billing for E Mobility
leasing> Product bundles
including car offers
vehicles, e.g. at home> Additional turnover in generation, grid fees and retail – without any
change in business model
E-Mobility
PASSIVE APPROACH ACTIVE APPROACHFocusing on core business and hoping for fair market shares Approach new market with new business in generation, grid & retail model to tap potential
? Upside potentialat some riskDefined return at low risk
31081013_PT2020_Challenges_Opportunities_Shenyang.pptx
at some risk
To be evaluated1) Without add-on services
Lif l t f EV ld b l th f ith Life cycle costs of EVs could become lower than of cars with an ICE1) – Especially if taxes are taken into account
ICE/EV life cycle cost comparison in 2010/2020
LIFE CYCLE COST IN GERMANY [EUR] KEY ASSUMPTIONSLIFE CYCLE COST IN GERMANY [EUR] KEY ASSUMPTIONS
> NPV perspective over 12 years> Discount rate of 6%
Mil f 180 000 k+6%
-20%
> Mileage of 180,000 km> Vehicle purchase price remains constant (ICE and
EV similarly expensive, without battery)> Gasoline and electricity price with 6% CAGR
47,705
38,6045,663
38,226
+6%
40,887
y> Subsidies and CO2 taxes not taken into account
12 000 6 000Battery costs [EUR]
2010 202017,660
3 344
26,761
3 344
10,142
4,484
6,000
5,624
12,00012,0006.514.51.60
6,0005.514.52.90
Battery costs [EUR]ICE consumption [l/100 km]EV electricity consumption [kWh/100 km]Gasoline price [EUR/l]
003,344 3,344
17,60017,600
6,000
17,600
ConsumptionVATBatteryV hi l
17,600
32081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Center for Global Energy Studies, Roland Berger analysis1) internal combustion engine
0.23 0.41Electricity price [EUR/kWh]EV 2010ICE 2010 EV 2020
Vehicle
ICE 2020
O 20 EV/PHEV d l f l di OEM d Over 20 EV/PHEV models from leading OEMs and newcomers are expected to enter the market until 2012
Overview of EV/PHEV global offering – 2008 to 201220122011201020092008
Mitsubishi iMiEV
SubaruR1e
Think City Nissan Cube Smart EV'Tata Nano ToyotaIQ, EV?
VWUP, EV?
Mercedes A-class EV?
Nice CarsZero
Tata Indica
A0, A AND B SEGMENTC D
XS 500 Tesla Whitestar?
e6F3e; F3DMF6DM
C, D SEGMENT AND SUV
GM VoltOpel E-Flex
GM Saturn Vue?
ZAP X Prius Plug-in
G
33081013_PT2020_Challenges_Opportunities_Shenyang.pptx
FiskerAutomotive
Tesla Roadster
SEGMENT
Source: Press, Roland Berger
B 2020 ll t bli h d OEM d l t f l ill h By 2020 all established OEMs and a lot of new players will have entered the EV market in the EU
EU: Overview of estimated electric vehicle market penetration
2016-20202011-20152008-2010 2016-20202011-20152008-2010FIRST-MOVER WAVE
Limited volume of"a new type of EVs"
Positive marketresponse and
volume ramp up
Second-generationEVs at competitive
t d i dMitsubishiMiEV
"SECOND"-
New PriusPlug-in
OpelE-Flex
Tesla
Nissan"Citycar"
Miles
volume ramp-up costs and improvedperformance
All major playersMOVER WAVE
MBEV
VW NSF BMWEV V Cit
Whitestar
… Renault"Cit "
XS 500 "Second" moversbenefit strongly
from the first wave
All major playersenter the EV market
BROAD MARKET PENE-
EV EV-Vers. Citycar "Citycar"
Chinese and all other playersenter the market with comp. EVs
34081013_PT2020_Challenges_Opportunities_Shenyang.pptx
PENETRATION
BYD Miles2. Gen
Ford? …
P li i ti t h i ifi t h f ld PHEV PRELIMINARY
Preliminary estimates show a significant share of sold PHEVs and EVs in a likely scenario
Share of powertrain type [% of sold cars]Western Europe Japan
3.2
19 12.7
0.8
5.10.9
4.2
19.1
2015 2020 2015 2020
US China
3.3
1.10.8
2.1
1.2
2.2
7.4
35081013_PT2020_Challenges_Opportunities_Shenyang.pptx
Downsized mobility PHEV EV The Future Drives Electric PHEV EV
2.1 2.22015 2020 2015 2020
Source: Roland Berger
D. Opportunities for the Chinese Automotive IndustryD. Opportunities for the Chinese Automotive Industry
36081013_PT2020_Challenges_Opportunities_Shenyang.pptx
M j hi t i l d t f i b t OEM f littl l Major historical advantages of incumbent OEMs are of little value since electric vehicles have specific business characteristics
Advantage incumbent OEMs vs. "new players"R&D Production Marketing Sales After Sales
IncumbentOEM
R&D
New skills
Production
Starts as
Marketing
Fit to
Sales
Focus
After Sales
Changing OEM advantage
New skills needed> Electrochemistry/
battery technology
Starts as "niche"> Flexible low-scale
manufacturing
Fit to brand?> Current brand
positioning/image
Focus metropolises> Network size/
location
Changing services> Staff qualification>
?> E-motor design> Energy mana-
gement> ...
> Low-cost footprint> ...
> Heritage, customer expectations
> Pricing/cannibali-zation
> "Flagship" stores, partnerships
> ...
> ...
> Complete vehicle design capabilities
> Quality and supply chain management capabilities
> ...
> Marketing budget > Financial services > Network infra-structure
37081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger
> ...capabilities
> ... > ... > ... > ...
N l f i k t l th i New players from emerging markets can leverage their low-cost structures
COST STRUCTURE AVERAGE CAR IN WESTERN EUROPE (OEM + Tiers)
EMERGING MARKET PLAYERSEUROPE (OEM + Tiers)
Material By leveraging factor 10 lower personnel costs costs can be
10%7%
OthersDepreciation & amortization
personnel costs, costs can be driven down to less than 50%
4%
3%3%3%
Depreciation & amortizationAdministration & marketingLogisticsR&D
70%R&D
38081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger study "The Next Wave: Emerging Market Innovation – Threats and Opportunities"
Total personnel costs
F Chi i h l d f ll l d Famous Chinese companies have already successfully leveraged their cost advantages to conquer established markets
Successful strategies of famous Chinese companiesHIGH-TECH AT LOW-COST VARIETY AT LOW-COST SPECIALITY AT LOW-COSTDawning Information Industry:Supercomputers, Servers
BYD: Rechargeable batteries (Li-ion)
Shinco: Portable DVD players and navigation systems
1990: 1995: 1994: 1990: Spin-Off from UniversityFirst Sales to Government
1993:Fi b il f
1995: Japanese companies global market share >90% - market entry through NiCad with own low-cost equipment and highly flexible, manual labor
1994: Video Compact Discs seen as niche market, low investments of established players, Shinco entering with own special technology with error correction capabilities1997First own supercomputer built from
components available in market ( clustering standard chips)
2001:
1998:Contracts with Phillips and VTech (cordless phone market leader)
2000:
1997:11 m. VCD players sold in China, reducing costs by 80%Establishing US-R&D center1999:2001:
2,000 supercomputers sold, Low-end server I220 launched
2007:
2000:Entering Li-ion, local equipment and high vertical integration.Motorola allocates 30% of purchasing
2008:
1999:DVD player with error correction – 28% in China, 120$ cheaper 2007:Shinco global #1 in portable DVD players,
39081013_PT2020_Challenges_Opportunities_Shenyang.pptx
2007:"Dawning 4000" ranked #7 globally
2008:BYD global #1 in Li-ion batteries expanding in portable GPS navigation
systems
Source: Zheng/Williamson: "Dragons at your door"; Roland Berger
M k t t id d " " b t bli h d OEM Market segments considered as "non-core" by established OEMs might be the "loose bricks in the walls" to enter these markets
Specialty at low-cost
"LOW-END" segments:Ultra-Low-Cost Cars
"PERIPHERAL" markets:Denmark, Israel, Norway, …
SUCCESS IN EUROPEAN
CORECOREMARKETS
"NICHE" t "NICHE" segments: Electric vehicles
High-Tech Variety
40081013_PT2020_Challenges_Opportunities_Shenyang.pptxSource: Roland Berger
at low-cost at low-cost
Chi OEM h ld f d i l d d fi Chinese OEMs should move forward aggressively and define an hybrid and electric vehicle strategy also targeted for export
Understand opportunities both in China and in “developed” countries (e g Understand opportunities both in China and in developed countries (e.g. UK, France, Portugal, Scandinavia, Israel, …): market development, taxes/subsidies, …
Develop product and technology strategy, define focus of own p p gy gy,competences and consider partnerships/acquisitions to get technology access especially in hybrid/electric drivetrains
Define and realize export strategy –
41081013_PT2020_Challenges_Opportunities_Shenyang.pptx
starting from low-end and niche-segments and peripheral markets
Source: Roland Berger
Chi l b d t dd k f t t Chinese supply base needs to address key success factors to thrive in the changing powertrain landscape
Understand functions and interfaces of relevant components in the context Understand functions and interfaces of relevant components in the context of complete powertrain – Deliver best components
Cost innovation to benefit from growth opportunities -g ppLeverage better cost structure
Define own strategy to achieve economies of scale –
42081013_PT2020_Challenges_Opportunities_Shenyang.pptx
Consider partnerships/acquisitions to get technology access especially
Source: Roland Berger
Pl t t f f th i f tiPlease contact us for further information
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Jun ShenPARTNERShanghai OfficeStuttgart Office Shanghai Office
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