Transportation Deployment Casebook/2018/Electric Cars in China

= Analyse the historic life-cycle of a transportation technology -  Electric Cars =

= Overview = An electric car is powered by an electric motor instead of other type engines (gasoline, diesel, natural gas etc.). Electric vehicles are divided into AC electric vehicles and DC electric vehicles. Generally, an electric vehicle uses a battery as an energy source and converts electrical energy into mechanical energy through controller and motor.

= Technologies and Advantages =

1.    Battery Electric Vehicle (BEV)
The main difference between BEV and petrol vehicles can be found in four major components, drive motors, accelerators, power batteries, and car chargers. The quality, value and usage of BEV all depends on those four components. Different from gas stations, it subsists of utility fast charging stations. BEV’s speed replies on power and performance of drive motor. The travelling range is relative to the size of an on-board power battery, which is commonly made of lead-acid and zinc. Carbon and lithium batteries have different volume, weight, power and cycle life which depends on manufacture and utilization

The technology of BEV is relatively elementary, in consideration of charging electricity.

2.    Hybrid
Hybrid refers to a car that can derive power from the following two kinds of stored energy - consumable petrol/diesel or rechargeable energy/a depository device for energy.

Based on the structure of the energy system, hybrid vehicles can be categorised as:

Series Hybrid Electric Vehicle (SHEV)
The vehicle's driving force only comes from an electric motor. The structural feature is that the engine drives generator and provide electricity, where electric energy is sent to motor. What’s more, the battery power provides electrical energy to the engine for driving

Parallel Hybrid Electric Vehicle (PHEV)
A hybrid (electric) vehicle in which the driving force of vehicle is supplied by engine and motor separately or simultaneously. The structural characteristic is which the parallel drive system can use electric motor or engine as an energy source alone, but can also use engine and electric motor together to drive the car.

Combined Hybrid Electric Vehicle (CHEV)
A hybrid vehicle that has series and parallel drives. The structure feature is which it can operate in series hybrid mode or be able to operate in parallel mixed mode, involving both series and parallel.

The engine operates under well-maintained operating condition with less pollution and low fuel consumption. While energy of the high-power internal combustion engine is not enough, it is supplemented by the battery; when the working load is low, the extra energy is able to c provide electricity for battery charging. It is also very easy to recover energy during downhill, braking, and idle. Within the bustling urban area, the internal combustion engine can be shut off and driven solely by the battery to achieve "zero" emissions. The existing gas station can be utilized for adding fuel without further investment. If the battery could be maintained in a good condition - no overcharge, over discharge, the service life will be extended with a low cost.

3.    Fuel Cell
There is no harmful emission during the fuel cell chemical reaction process thus the fuel cell vehicle is a car without pollution. The working efficiency of a fuel cell energy conversion is about 2 to 3 times more than normal engine, which make it a perfect vehicle from the energy perspective. Each fuel cells have to be associated with fuel cell stacks to obtain the essential energy to satisfy the requirements of vehicle use.

Comparing to traditional cars, fuel cell cars have plenty of advantages:

·        No emissions or almost zero emissions;

·        Prevent pollution from oil leaks;

·        Reduced greenhouse effects;

·        Increased fuel efficiency;

·        Increased engine combustion;

·        Smooth operation with no noise.

= Main Markets = The electric car market in 2016 experienced a significant change compared to 2015. In China, BEVs, which are only associated/powered by battery, increased at a rate of 75%, to 257,000 sales, while PHEVs, which are powered an internal combustion engine, grew 30% to 79,000.

= Alternatives – Gasoline Cars = Electric cars and hybrid vehicles are new products whereas gas-powered vehicles seem to be the majority in amount. Advocates of the surroundings have entailed the lessened use of gas to power cars on condition that they're prejudices to the globe people tend to board.

It contributes to pollution;

It is a health hazard;

Gasoline-powered vehicles are not as it were the issues for environment but moreover cause wellbeing issues for people. An individual filling up the tank is uncovered to gasoline, but more regrettable things can happen: a gas spill within the motor or a common spill or mischance. According to the Department of Public Health US, taking large amount of chemicals from gasoline exposure like benzene may cause cancer.

It relies on fossil fuels;

The fossil fuel supply on earth is waning and there is no exact verification of how much more is there for utilization.

It causes some countries to hold too much power.

Wars have been raged because of oil. Much of the Middle East is wealthy in furl and the world is relying on them. Finding another resource will reduce their stranglehold and possibly indeed bring around much required peace.

= Early Stage (1881-1885) = In the 19th century, several important developments happened in the field of electricity:

·        Alessandro Volta invented a copper-zinc battery in 1800;

·        Michael Faraday discovered electromagnetic induction in 1831;

·        In 1835 Francis Watkins exhibited a small motor in London;

The first car which ran on the road was invented by R. Davidson in 1873, using a single iron-zinc battery. Gaston Plante invented the lead-acid battery in 1859. It is the most common type of battery used in electric bikes and automobiles. Since the appearance of lead-acid batteries, its structure and principles have not changed substantially because of electrochemistry. Benefits to lead-acid batteries, rechargeable electric vehicles using lead-acid batteries were invented. In 1881, G. Trouve invented the first rechargeable electric vehicle with Plante's lead-acid battery. This was a few years earlier than Carl Benz's invention of a fuel car (1885).

In the next a few years, Belgium, the United States and other countries had started to develop electric vehicles, however, the speed was around 20km/h, and battery life was limited (less than 100km). It was much worse than the current electric vehicles. However, these electric vehicles had lighting capabilities, four seats, and various other functions. Moreover, electric vehicles havd also begun to find applications in the actual market, such as taxis (city commuting, short-haul transportation, frequent stop/start and recharge).

In addition, lead-acid batteries have been accompanied by development of automobiles. However, they are more often used as starting and stopping power supplies for vehicles.rather than used as the main source of power.

= Initial Growth (1885-1925) = In the beginning, related technology of internal combustion engine was still immature. The driving experience of fuel vehicle was poor, since noise, emissions, and frequent bumps were major problems. The battery-powered electric car whereas was much better—has good ride comfort and low noise. The electric vehicle technology was also constantly evolving. With the improvement of technology - for example, in 1899, Jenatzy increased top speed of his electric vehicle to 98km/h. In 1900, the number of electric cars in the US market was more than that of fuel cars and steam engines.

Although fuel vehicles were also evolving, electric vehicles had always been the mainstream of market. In 1912, the United States reached a peak of 30,000 electric vehicles.

A few years later, fuel-automobile technology progressed rapidly - fuel vehicles had developed automatic starters, mufflers and other equipment. These inventions had greatly improved the comfort of fuel vehicles. In World War I, the fuel car began to be used on a large scale where its performance was demonstrated on the battlefield. One of the key reasons is still the competitiveness of fuel vehicles due to inherent high energy density of fossil fuels, which is a core reason that electric vehicles have been criticized.

In this process, electric vehicles do not have much technological advances whereas cost was even higher, so the market scale continued to shrink. In the 1920s, electric vehicle manufacturers either went bankrupt or began to turn their heads to fuel vehicles. The electric car industry began to fade.

= Declined (1925-1960) = Steam engine cars and electric cars almost disappeared in the market. At this stage, fuel vehicles was widely used throughout the world. Fuel-automobile technology continued to develop and improve. The global gasoline supply was sufficient. There was not concern about environmental protection. In addition, new energy technologies, such as batteries, havd not shown any significant progress.

= Bounce Back (1960-2000) = After World War II, electric cars began to receive attention again, and the electrification of automobiles gradually regained focus. Many large automobile companies havd carried out research and development of electric vehicles (GM, FORD, etc.), mostly based on the conversion of fuel vehicles into electric vehicles.

In fact, from 1960s, one of these main reasons why electric cars are receiving attention is that many cities have suffered from haze caused by car exhaust. For example, in the 1940s, California and especially the Los Angeles region suffered severe haze; in 1959, the Department of Public Health of the State of California issued the first state air quality standard. The legislature also established the California Motor Vehicle Pollution Control Board (CMVPCB). At that time, the car had a large displacement (an American muscle car), and emission standards just began to gradually become strict.

In 1973 it was the first time that people deeply felt the fear that petroleum might not be enough. Therefore, the publication of low-emission quantification, light weight vehicles and electrification began to affect the automotive industry. The development of power electronics, secondary batteries, and fuel cells had also received more support and attention. The development of these technologies had been accumulating, and had resulted in a lot of achievements that have gradual influence.

= Rapid Growth (2000-Present) = Toyota Prius was published in 2000 around the world, which immediately evolved into a advancement with celebrities, assisting to lift profit. To create Prius as a reality, the manufacture applied a nickel metal hydride battery -- which was approved by the Energy Department’s research. Also, growing petrol costs and rising worries on greenhouse pollution assisted to lead the Prius as the best-selling hybrid globally for 10 years.

Another case which assisted to redefine EVs was a message that a small Silicon Valley opening in 2006, Tesla Motors, began manufacturing a luxury electric sports car which is able to drive 300 kilometres on one charge. In 2010, Tesla accepted a $465 million investment, which is supported by Department of Energy’s Loan Programs Office. The loan which Tesla reimbursed a full nine years early -- to build an industry place in US. Within a short time, Tesla had earned wide attention on autos and had evolved into the biggest automobile dealer in US.

Over subsequent few years, other car manufactures started involving into electric EVs in the U.S; whereas costumers were dealing with an early challenge of EVs – finding a place to charge their vehicles. By the Recovery Act, the Energy Department made an investment about more than $115 million for a national EV-charging facilities, establishing approximately 18,000 public chargers, residentiary and commercial nationally. Auto manufactures as well as other private business owners established their private chargers in important locations as well; leading more than 8,000 different places with more than 20,000 charging facilities today.

Meanwhile, a new battery technology began striking the car market, assisting to improve a plug-in EV range; which was approved by the Energy Department’s Vehicle Technologies Office. The Department’s study also assisted to develop a type of lithium-ion battery technology. A recent report indicates that the Department’s investment in battery development has helped save the cost of EV battery by 50 percent; meanwhile continuously enhancing the EV batteries performance, which has helped lower the cost of EVs, leading a more affordable price for customers.

Customer nowadays have much more choices for choosing and buying an EV. Since gasoline prices is continuously rising whereas the prices on EVs is experiencing a decline – leading to have more than 200,000 plug-in EVs and 3.3 million hybrid EVs in the U.S. today.

= S Curve Analysis = The input data was based on the China EVs sale statistics, from the year 2011-2017. It consists both PHEVs and BEVs statistic data. After applying different values of K, the largest RSQ value was determined as 0.963148, while the K value is 1,100,000. Hence the value of b was then decided. The predicted S curve was the generated, along with the actual curve. It indicates that the Chines market of EVs is still in the growth – in the tendency of rapid increasing. It has past the birth period, but has not reached the market maturity. Additionally, the generated S curve is considerably reliable – shares similar tendency and pattern with the actual curve though the difference in year 2015 is large.







= Transport Policies Evolve – A Case Study of EVs in China = Chinese EVs policy began in this century. In 2001, China government published the 863 plan for major EV projects, which involved include three types: battery electric vehicles, hybrid vehicles and fuel cell vehicles.

In 2006, the Ministry of Finance stated clearly that certain tax incentives would be applied to EVs. Since 2007, the state has begun to organize research and development of EV through the 863 Program; invested nearly 2 billion Chinese Yuan. From November 1, 2007, the “Regulations on the Management of Production Access to New Energy Vehicles” was formally implemented. This rule defines new energy vehicles, including hybrid electric vehicle, electric vehicle, fuel cell electric, hydrogen engine cars, other new energy sources, etc. The rules also specify the qualifications of production enterprises of new energy vehicles and reporting requirements. This means that EVs have their own industry guidelines and is also seen as China’s encouragement to develop EVs, is hailed as a milestone in the EV development history.

On January 14, 2009, the China Council announced the “Auto Industry Adjustment and Revitalization Plan” in principle. It clearly stated that EVs manufactures should be implemented and 100 billion Chinese Yuan was allocated for the support.

On January 23, 2009, the Ministry of Finance and Ministry of Science & Technology issued a program which allowed that in Beijing, Shanghai and other 13 cities carry out pilot projects for promotion of EVs. This promotion project was designed to help independent innovation through industrial revitalization and technological innovation policies, and encourages the use of EVs in the public transportations. Also, it also gave EVs a single fixed amount of subsidies, ranging from 4000 RMB and 0.42 million; zero-emissions electric and fuel cell vehicles participating in the demonstration and promotion pilot project will also receive a cost ranging from RMB 60,000 to RMB 600,000. This financial subsidy measure has a major impact on the market, investment promotion and industrial development of EVs in China.

On March 20, 2009, China promulgated the "Auto Industry Adjustment and Revitalization Plan", proposed the implementation of EV strategy and published a major ambition for the scale of production and sales of EVs. The planning amount requirements will reach 500,000 by 2011, accounted for about 5% of the total car sales; promoted the industrialization of EVs. The government should arrange financials to provide subsidies and support medium-sized and large cities to demonstrate and promote EVs to prioritize the use in urban public transport, postal services, public service, airports, etc.; establish an ultra-charging network of EVs and accelerate the building for public charging infrastructures for examples parking spaces.

On November 17, 2009, during President Barack Obama’s visit to China, Chinese and U.S. presidents reached a consensus on the cooperation in environmental protection and clean energy, including investment in the next five years and cooperation in establishment of clean energy between the US and China, enables two countries to put into use several million EVs in the next few years, starts cooperation agreements on efficient use of coal, renewable energy partnerships and Sino-U.S. energy cooperation projects.

On December 7-18, 2009, the Chinese government promised at the Copenhagen Conference that, by 2020, reducing the carbon dioxide emissions by 40% to 50% compared with 2005. In order to achieve this goal, it is imperative to reduce emissions in the transportation sector. On March 5, 2010, EVs had become the only sub-industry among many low-carbon concepts selected for government work report. This shows that the country attaches great importance to this area, and it is expected that EVs in the future will gain greater support than other low-carbon industries. After June 18, consumers received a subsidy of 3,000 RMB for each EV purchased. On June 1, 2010, the Ministry of Finance, issued a project which allowed an implement up to 60,000 subsidies for EVs

As an important part of the national energy conservation and emission reduction, EVs are listed as one of the seven strategic emerging industries that accelerate the cultivation and development, and will continue to provide key support at the fund and policy level. In the Chinese Lianghui in 2011, Miao Wei, Minister of the Ministry of Industry and Information Technology, had submitted a report to the China Council for approval, which encouraged, China's new EVs manufacturing. It indicated that the market for EVs will exceed 500,000 vehicles; by 2020, China's new EVs will be industrialized and industrialization and market scale of new energy vehicles will reach the top in the world.

On March 15, 2013, the National Ministries and Commissions reached a consensus that the subsidy policy for EVs will be extended for three years. It is still crucial for policies to help the development of the new energy auto industry during this period.

On July 13, 2014, the guide EVs used by government agencies and public agencies had been clarified; in 2014, 2015 and 2016, new EVs purchased by government agencies and public agencies should not be less than 10%, 20% and 30% respectively. The purchase tax exemption policy implemented in September 2014 opened the market for China's EVs. The promotion and application of this policy achieved remarkable results, and promoted a rapid growth of production and sales of EVs.

Between 2014 and 2017, EVs were excluded from buying taxes and the government has recharged that the exemption till 2020. Additionally, government has begun a customer subsidy program which diminishing subsidies and increasing qualification threshold. In 2012, the year when subsidy program lapsed, the government spent half year to renew it. In the following year, the subsidies were changed to 35,000 Chinese Yuan for each PHEV, while for BEV, it ranged from 35,000 to 60,000 depends upon a vehicle's driving range. The subsidies decreased by five percent in 2014 and by 10 percent in 2015 based on the 2013 standard. It will decrease by 20 percent in 2017 and 2018 based on 2016’s standard, and by 40 percent in 2019 and 2020 based on 2016’s standard. China plans to phase out the subsidy entirely by 2020.

Another Chinese vital policy is named the “dual-credit policy,” was effected from this April. This policy set obligatory goals for vehicle makers beginning from next year. Automobile makers will be evaluated in regard to the EV production and consumption of fuel and so as to gain the credits. In the purpose of earning these credits, manufacturers will have to make a required amount of EVs. The number of credits which they get is relative to the elements for example EV weight and their driving range. It also required a minimum of 10% of a car manufacturer’s total credits have to include new energy credits in 2019 and 12% in 2020. A requirement of 12% in 2020 is equal to about 4%-5% of actual vehicle sales. Manufacturers which are unsuccessful to satisfy the standards will result in fines or alternatively get other’s credits by paring a considerable amount of money.

China plants to create 12,000 stations for charging by the year 2020, which are able to supply six million EVs. If a local government satisfied certain standard, for example, achieving a set number of EV sales, it could get 90 million for building charging facilities.