Analysis
13 Jun 18

China’s technology roadmap

China’s intention to increase the number of NEVs (New Energy Vehicles) over the next years is by now widely known. Most of the OEMs present in China (domestic and foreign) have been adapting and promoting the launch schedules or developments of vehicles that will fit the Chinese roadmap.

However, the acceleration of NEV production is only one aspect of a larger plan, the so-called “Technology Roadmap for Energy-Saving and New Energy Vehicles”.

“Made in China 2025”

China is preparing itself for a “next level economy”; it wants to become a manufacturing superpower (the “Made in China 2025 Roadmap”) and has decided that the automotive industry will be one of the pillars of this plan (the other pillars are: next-gen IT, robots, aerospace, high-tech ships, advanced rail equipment, power equipment, agricultural machinery, new materials and high performance medical equipment). This needed to go hand in hand with peripheral objectives, such as the reduction of pollution, decrease of congestion and technology enhancements. Last but not least, China wants to reduce its dependence on other countries for fossil fuel.

China has understood that the country needs knowledge from abroad and has consequently announced that the strict joint-venture regulations will be loosened for certain industries. Unsurprisingly, these industries are ship builders, airplane/aerospace and… NEV manufacturers.

The scope

For the automotive industry, 7 areas have been identified, each with a timeline until 2030.

  1. Energy-saving vehicles (HVs and internal combustion engine vehicles)
  2. EVs and PHVs
  3. Fuel cell vehicles (FCVs)
  4. Intelligent and connected cars
  5. Drive battery technology
  6. Lightweight technology
  7. Automobile manufacturing technology

(1) Energy-Saving Vehicles and (2) EVs and PHVs

China is already the global leader in EV/PHV sales, but the percentage is still relatively low (under 5%). From a technology and pricing point of view, the Roadmap wants a further focus from the OEMs on mid-size and medium to high KWh output EVs and PHVs – family cars, in other words. The objective is to have hybrids/electrics in the top 10 vehicle sales by 2020. By 2030, 50% of all vehicles need to be EVs or PHVs.

The average consumption of vehicles needs to go down to 3.2 litre for 100 km (73 mpg) by 2030.

(3) Fuel Cell Vehicles

FCV’s are, mainly because of price and infrastructure, not very popular in China (only a handful of registrations in 2017). Nevertheless, the Chinese Government believes that there’s a future for hydrogen, especially for public transit and heavy transport. By 2020, China wants to register 5000 FCVs for public transit up to 1 million FCVs by 2030 for public transit, commercial transport and private use. The cost of an FCV needs to decrease by 40% in the same time span.

(4) Intelligent and Connected

In June 2016, Shanghai’s Jiading District officially became home to China’s first national intelligent and connected car model district. It’s a test area for both vehicles and infrastructure that will serve as a model for the entire country.

80% of all newly produced cars in 2025 will be level 3 autonomous (autonomous driving on highways and cooperative convoy driving, etc.), traffic accidents should decrease by 80%, traffic efficiency increase by 30%, and fuel economy and emissions decrease by 20%. By 2030, 100% of the vehicles need to be at level 3 autonomous and 10% on level 5. The country is preparing, in parallel, infrastructure (roads) and connected control centres, with a focus on V2X or “Vehicle to Everything” tech that will need to come from Chinese tech companies.

(5) Drive Battery Technology

The short-to-midterm objectives are to increase energy density and reduce production cost of lithium-ion batteries. Mid-to-long term, new types of batteries need to be developed. Pure electric vehicles need to achieve a minimum range of 500km per charge by 2030; hybrid cars need to extend the range of both the electric engine and the ICE.

(6) Lightweight Technology and (7) Automobile Manufacturing Mobility

China wants to build better quality vehicles and the production time needs to be shorter. Also, vehicles need to become lighter, hence a strong focus on lightweight materials. It’s not surprising that the production of lightweight materials, not just for the automotive industry, is one of the pillars of “Made in China 2025”. Practically, it needs for the cost of carbon fibre (price per kg.) to go down from CNY 100 to CNY 50 by 2030 and the moulding cycle time of carbon fibre needs to go down to 1 minute by 2030 (about 4 minutes today). The overall weight of a vehicle needs to decrease with 25% by 2020 up to 40% in 2030, which needs to be reached by the increase of Aluminium (350kg by 2030), Magnesium alloy (45kg by 2030) and carbon fibre (5% of the vehicle by 2030)

Conclusion

The entire Chinese ecosystem – state, city, industry, legislation – is going through a change process to make the roadmap work; what is happening today has been anticipated by players such as Alibaba and Tencent, but also by the many EV start-ups that China is showcasing in motor shows and innovation fairs. The most remarkable fact is how fast the entire new tech industry, hand in hand with the legislative power, are changing the game and adapt to these new objectives.

Authored by: Yves Helven