Will Growth of Electric Vehicles in China Fall Short of Goals?

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I visited Shanghai EDrive on October 24 as part of the Clean Truck and Bus Forum, sponsored in part by CalStart. The visit confirmed what I had heard about EDrive from industry sources; it is a well-run company. The visit also confirmed my and many others’ suspicions that the growth of the electric vehicle sector in China will fall far short of the government’s goals, at least for the next few years. The most recent New Energy Vehicle policy, which incentivizes commercial vehicles more generously than non-commercial vehicles will also result in a lopsided growth pattern. But that is not necessarily a bad thing.

The building, on the outskirts of Shanghai, looks like all the other white-grey multi-story buildings in the industrial zone. Inside are clean rooms for manufacturing electronic controls and less-spotless but still clean rooms for the permanent magnet motors themselves.

We were greeted and given an introduction and tour by Dr. Zhang Zhouyun, vice general manager and senior engineer. EDrive has been growing like gangbusters since its establishment in 2008, with staff increasing 30-50% annually, he said. It has devoted 20% of its budget to R&D each year and holds 10 patents in China as well as many overseas patents. In 2013 EDrive aims for 400 million RMB in sales.

Interestingly, it seems EDrive sees the market for mini BEVs taking off much more quickly than that for larger vehicles. Not low-speed BEVs, but those able to achieve higher speeds than the 25 mph or so LSEVs are typically capable of. Some 180,000 units will be produced in China in 2014, EDrive figures. The company aims to supply 28% of that market, or 50,000 units.

Shandong is currently conducting a test project with such mini electric vehicles, says Dr. Zhang. Shandong already dominates China’s low-speed electric vehicle production; it seems Shandong figures that expertise can be leveraged into higher speed models.

Chery and Geely are two companies that are planning volume production of the mini-BEVs, says Dr. Zhang. Some domestic manufacturers are testing in-wheel motors on the mini EVs, he says.

As for passenger car PHEVs, five or six companies plan to produce them starting in 2015 and EDrive has contracts with some, including FAW and Chery. But the EDrive folks seemed to think the production levels would be very low. They will mainly be test vehicles.

The big growth in NEVs over the next few years, as EDrive CEO Dr. Gong mentioned in our interview, is commercial vehicles, the EDrive guys confirmed.

So, an interesting visit to a company that should do well if the Central government sticks to its guns and enforces the latest NEV plan. But even at EDrive, an admission that all those announcements about NEV passenger cars are mainly for show and that volumes will be quite small for at least the next few years. Still, as I mentioned up top, the new policy’s focus on commercial vehicles/fleets is a good thing. Applications are more apparent and with volume production some breakthroughs, or at least cost reduction on some components, should be possible.

Article by Alysha Webb, a freelance automotive journalist and founder of ChinaEV Blog.

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  • http://www.citsengine.com basil van rooyen

    Dear Alysha, here is my article on :When will all-electric cars be affordable to the mass markets?

    One of the great challenges facing all nations this century is reducing the air-pollution emitted by vehicles of all types. Seventy million new cars are produced annually, adding to city smog and health issues. With petrol-costs rising inexorably on an exponential curve for more than half a century, a solution is becoming critical. Electric vehicles reduce emissions significantly, but they cost many times more than petrol equivalents. Thus only a niche market can afford them, making them a nice conversation piece, but irrelevant as a global green solution.

    • Electric cars (EV’s) like the Nissan Leaf and Mitsubishi IE, cost three times as much as a petrol equivalent.

    • EV’s give limited ranges of about 150km, causing range-anxiety, and traffic chaos if their batteries go flat.

    • EV’s 150km range batteries need longer charging – adding emissions at fossil-fuelled power stations

    • Plug-in hybrid cars (PHEV’S) like the Chevy Volt, solve the range problem by having a back-up petrol engine.

    • PHEV’s have a smaller 70km range battery, for average daily commuting, needing only overnight charging on off-peak power, when the power stations cannot switch off – thus adding no extra emissions for charging.

    • BUT, the PHEV also costs about three times that of an entry-level petrol car.

    Can this massive price-chasm to an affordable PHEV be bridged in the near future?

    Three new technologies have emerged simultaneously, to make emission-free average daily commuting possible:

    • A new battery has been announced, with triple density, and about half the cost, and scheduled for mass production in two to three years – see http://www.enviasytems.com. Others batteries are also being developed.

    • An electric “In Wheel” motor, eliminates a car’s entire transmission – gearbox, clutch, drive-shafts, and C/V joints, representing a massive saving in cost, weight, friction and bulk. One already in an advanced prototype stage is the Protean in-wheel engine pictured below. See http://www.proteanelectric.com .

    • The back-up petrol engine in the PHEV Chevy Volt, is a 4-cylinder 4-stroke engine producing about 100 kW. A new patented technology CITS two-stroke engine, pictured below, which eliminates burning all its lubricant as two-strokes usually do, can produce this same output, from just two cylinders. CITS makes possible a V-twin so well-balanced that it can run about 60% more smoothly than before. So now the renowned low cost of a two-stroke engine can be teamed up with the cost-saving of needing only two cylinders. In a simple PHEV, where the engine charges the batteries on-the-run when needed for longer trips, it can run at constant rpm, where it can be super-tuned for power, emissions and economy. See http://www.citsengine.com.

    Smart Investment capital enabled the former two inventions to become commercial realities for industry. The CITS engine has passed early prototype stage. Funding is now sought via a share-offer for the final stage, that of direct-injection and scientific data-capture and publication, to gain the attention of the motor industry. They receive hundreds of patented inventions, but as each needs much evaluation, they concentrate on their in-house engine R & D, or on those inventions that have been scientifically proven. That is the strategy in place for the CITS engine – which has been awarded a nomination by the Society of Automotive Engineers (SAE-A) for “Excellence in Automotive Engineering” and an independent appraisal by an internationally respected expert.

    Maybe you can help CITS PL reach an investor ? Please contact me for details after reading the citsengine.com website overview. Thanks, Basil basilvr@bigpond.com