Tariffs and the Difference between Chinese BEVs & PHEVs

Comparing the best selling Chinese BEVs’ competitiveness to the local competition, and then doing the same for the best selling Chinese PHEVs, we notice the difference that increased tariffs make and the reason why I think China’s top OEMs will focus on the PHEV market in the near future.

OEMs growth - July 2020

 

If the plugin market as a whole grew 76% in July, in that period, some OEMs grew above average, so this post mentions who was in the fast lane, last month.

Average in July: +76% growth YoY.

Fastest growers:

#1 - PSA (+2.477% YoY);

#2 - Ford Group (628%);

#3 - Volvo Group (360%);

#4 - Daimler (351%);

#5 - VW Group (268%).

For further information, Hyundai-Kia was up 91% YoY and Tesla 49%.

Of course, this simplistic approach is skewed to help smaller OEMs, because if you sold 2 units instead of 1, it means a 100% growth, hence the success of the Top 3 OEMs.

So the best approach is to look at total volume, and here, the OEMs that grew more regarding July 2019, volume wise, are:

#1 - VW Group (24.909);

#2 - Daimler (11.534);

#3 - Tesla (10.816).

If the first spot of the Volkswagen Group can surprise some, if you think about the sales uptick that the German Conglomerate had in the past year, it should come as no surprise, as the sheer scale of the Group means that a couple percent of electrification translates into several thousand units.

The real surprise, including for me, is the second place of the Daimler Group (Mercedes + Smart), that just managed to overcome Tesla, mostly thanks to a surge in sales of the Smart brand, as well as the ramp up of the Mercedes PHEVs and even the EQC has started to be delivered in decent volumes.

Finally, Tesla. And a disclaimer. Because this is the first month of the quarter, one shouldn't read too much into these numbers, as the previous normal quarters (Q4 2019; Q1 2020) saw Tesla increasing the seasonality of sales, with lower than average numbers in the first two months, and then an end of quarter month with higher than usual deliveries, so i wouldn't be surprised if the same happened again this quarter.

EV Business Case Q4 - 2013

Batteries are critical for EV's

Batteries Edition

Just like engines in Formula One cars, batteries are the most important component for plug-ins and the one thing that usually car manufacturers don't build in-house, preferring to buy them/cooperate from established battery makers.

Digging a little deeper and finding out the relationships between EV and battery makers allows us to see a somewhat concentrated market, where three manufacturers dominate 80% of the market: AESC, Panasonic and LG. Let's look at them more closely:

- AESC is a joint venture between NEC and Nissan and they provide batteries for the Nissan Leaf and most of Renault's EV's, thanks to the global success of the Nissan Leaf and with the help of Renault sales, this is the #1 battery manufacturer, grabbing some 33% of the EV market in 2013;

- LG has been cooperating with GM and Ford, providing batteries for their EV's, and on top of that, it also sells batteries to Renault, allowing the South Korean company to have some 24% of the EV batteries market;

- Panasonic is the third musketeer and the one with the most high profile customers: Toyota and Tesla use Panasonic batteries, if the first is leader in hybrid cars and an important player in EV's, the second is currently the main consumer of battery cells thanks to the cell-heavy batteries of the Model S. With talks of Tesla and Toyota cooperating in the future and with Tesla ambitious growth plan, Panasonic should do well in the next few years;

 - Other contenders are Lithium Energy Japan (GS Yuasa / Mitsubishi), providing batteries for Mitsubishi, Siemens has a partnership with Volvo and Deutsche ACCUmotive is the provider for the Smart ED, others develop batteries in-house (BYD, Bolloré), while other battery makers are still on their first stages of EV partnership (Toshiba is teaming up with Honda and there's rumors that Samsung will cooperate with Renault).

EV Business Case Q3 - 2013

Tesla is banking on european waiting lists

Waiting Lists Edition

With several waiting lists around the world, mounting to several thousand reservations, Tesla has its hands full to satisfy all of them, right now Europe's waiting lists are being delivered, to be followed early next year by Asia and left-hand drive countries, so only in the next Spring on we'll see if Tesla sales isn't just a early adopter thing and can keep growing without the need of reservation lists.

Volvo also had a unexpected success with the Volvo V60 Plug-In, especially in the Netherlands, where in a certain moment it had a thousands waiting list, now being delivered, and now responsible for a surprising #1 spot there. A promising start for the swedish automaker.

Speaking of Netherlands, Mitsubishi has allegedly a 8.000 waiting list in the Low Countries and more than 10.000 reservations of the Outlander Plug-In in Europe, an already enormous number that still has the thousands of japanese reservations left out. Mitsu will need several months to satisfy all these reservations, so it's no surprise that  the US landing of the japanese SUV was postponed several months, they just don't produce enough cars to satisfy all this demand.

BMW i3 "Angry Puppy" look

BMW - When the bavarian automaker announced the "i" sub-brand, with the advanced carbon fibre platform and two dedicated plug-ins, i feared they would be sold with speculative prices to a selected few, but to my surprise, the prices aren't that high (For a premium plug-in, at least), with the i3 starting at some 40.000$ and the i8 at 135.000$. Too bad that the i3 side profile was ruined...But still, BMW conservative sales goals should be surpassed and next year some 15.000 "i's" might be zooming down the streets, so their profitability should be a slam dunk.

Ford - After the first baby steps (Focus Electric), then came the Energi brothers to put the american learning to walk and now, with the first steps in Europe, it's preparing itself to run along Renault, Toyota or Mitsubishi. Battery costs must be down and it won't be long for an extensive price cut (2014 models?). As for the second generation of batteries, a tip: Make them smaller, so it won't ruin trunk space...

Renault - Two Words for their bad sales moment: Batteries and Rentals. The first bad option was delivering cars without the battery ownership option, cutting off sales, aggravated by the high rental/low mileage ratio. The second bad option has to do with the fact that the french manufacturer concentrated its focus just in Europe, almost completely ignoring the rest of the world, where 3 (USA, Japan and China) out the 4 largest EV markets are...And Renault's presence in ev-friendly scandinavian countries can only be classified as Marginal...

My 2013 EV Preview

Opel Ampera

Based on what the media said that this year was going to be like, with one side, known as tree huggers reporting that EV sales would stratospherically climb to record heights, and some manufacturers hoping saying that this was the year of the electric car, while the other side of the spectrum, like Fox News, was classifying this type of vehicle like a fad, forecasting that sooner than later, they would disappear again in the ocean of bad ideas, just like they did by the end of the 90's, early 00's.

Well, with more than 100.000 units sold from January until November, how does it look the EV market?

First fact: Pure electric cars (BEV) like Nissan Leaf aren't growing that much, if at all, range anxiety is a reality, price tags are still on the high side and they suffer the competition from improved gas powered cars and Plug-In Hybrid Vehicles (PHEV), which leads us to...

Second Fact: Until November, Plug-In Hybrids grew by more than 300%! Not only the Volt family removed Nissan Leaf from the #1 spot this year, but also Toyota Prius PHEV got in it's first year the #2 EV spot, leaving the Nissan in a surprising third place. And for the first time, there were more plug-in hybrid sales (55.000) than pure electrics (52.000). This leads me to think that people prefer to have a middle term between gas and electrics vehicles, even if they have to sacrifice the EV range.

Deep down, both ends of the spectrum were wrong, people didn't started to buy EV's just because they existed, but the electric thing isn't going away anytime soon, as sales keep growing in a steady pace, reaching more and more countries and next year there will be new manufacturers joining the party, with the existing ones reinforcing the investments, contributing for the EV market to grow from the 120.000 units of 2012 to some 180-220.000 by the end of next year.

Let's see some of these new models:

Cadillac ELR - Well, hello gorgeous! One of the most handsome cars to be launched this year and certainly the first Cadillac that doesn't remind of J.R. Ewing of Dallas or rap music celebrities, this is the real entry of the storied marque in the XXI century, too bad it will cost some 60.000$...

GM Springo - It's design didn't came from the future like a Fisker Karma, but being derived from a conventional car can be a quality, especially a popular one like the Chevrolet Sail, because it assures that it can be sold cheaper and in this case, "cheap" is an important asset. Although without a Chevrolet badge, this EV is part of GM's worldwide strategy and was made with the chinese market in mind. If it can crack that market, there's a open road to make it a major EV seller. But that is a big "if".

Renault Zoe - The fourth musketeer in Renault's charge in the electric market, this is the car that will decide if Carlos Ghosn push into BEV was visionary or not. A handsome B segment with 210 kms range for just 21.000 € (plus a monthly battery fee), apparently the Zoe as it all to become the best selling EV in Europe.

Ford C-Max Plug-In - This was launched just a couple of months ago and it's already making an impact on the US market, previewing a great 2013 for Ford on the EV front. Along with the Fusion Plug-in, these two cars will put the Blue Oval as challenger in the US market, preparing the way for a worldwide distribution and become Ford an EV global player.

Tesla Model S - If there is a poster car for the electric revolution, this is it. Great looks on the outside, spacious on the inside, powerful, and above all, with an unparalleled electric range, this is a car intended to be the best car in the world. It's not going to top ranking sales, but it will do wonders for EV visibility.For some reason Toyota and Daimler-Mercedes have agreed collaborations with start-up Tesla...

BYD Qin - Same goal as the Springo, different approach. Instead of a conventional design borrowed from a conventional  gas powered car, this is one stands out (especially the back) and has a Plug-In Hybrid powerplant instead of a pure electric approach. Visually appealing for chinese standards, the Qin has 315 hp in Hybrid mode, making it 2 seconds (0-62 in 6.9s) faster than the Chevrolet Volt. All things considered, it has a real chance to be successful outside its home market. Will it sell more more than its predecessor (F3 DM) in China? Probably, the question is how much.

Roewe E50 - Finally someone other than BYD playing the Plug-In game in China. Despite a low-profile launch last December, this funky little hatch delivered a good starting month at 238 cars, so BYD could have  a worthy contender here.

BMW i3 - The first true electric car from the bavarian maker, when it arrives to the market it will satisfy the ones who look for sporty DNA and the latest in technology (Built with carbon-fiber plastic), but don't mind to pay more for that. The question is how much more urbanites are willing to pay for it.

Volkswagen e-Up! - VW is coming late to the electric party, but it hopes to make an entrance with a splash and one of the first models will be this, an electrified version of the tiny Up!. With a promised price tag of 24.000 €, the e-Up! will help EV's popularity in Europe and especially in Germany, EU's largest market.

Volvo V60 Plug-In Hybrid - One of the favorite combos in Europe are station wagons with a diesel engine, so it isn't rocket science to think that adding electricity to that combination can be a sales success, so Volvo went for it and the first 1.000 units were sold even before the first car was delivered. The carmaker expects to sell 5.000 units in 2013, but i think that in this case actual sales will be stronger than the manufacturer's forecasts.