Why is there a two-year gap between French and German car companies on 48V?

Although the 48V system is something that most car companies are calling for, Buick and Chevrolet use it more in China. In Europe, except for German car companies that are really urgent, most other car companies (especially French car companies) regard it as an option and are expected to start large-scale deployment around 2022, which is about 2 years later than German car companies. This article attempts to analyze this reason and the   subsequent deployment strategies of PSA and FCA.

01

CO2  emissions in 2020

Based on the European settlement situation, ICCT released "EUROPEAN PASSENGER CAR REGISTRATIONS: JANUARY–APRIL 2020". This document contains several valuable data. 

Carbon emissions by brand in Europe from January to April

This table summarizes the NEDC carbon emissions data (for April and January-April 2020) of various automakers based on settlement units, plus the actual targets and gaps calculated using Phase in, ECO and Super Credit. In fact, according to this data, the only companies that cannot meet the targets this year without the electric car craze are Daimler, VW and Ford. 

Table 1: Situation by automobile enterprise group in 2020 

Because it is related to sales volume, I made the current situation, target and sales volume into a bubble chart. The area below the diagonal line is unqualified and the area above is qualified. The size of the circle represents the quantity that can be sold.

1) Daimler has the biggest gap. It cannot effectively reduce emissions by relying on 48V and fewer BEVs. Therefore, Daimler's BEVs will be under great pressure in the future. PHEVs will have to make every effort to increase sales in the second half of the year. 

2) VW: Volkswagen is under great pressure. Under the condition of large volume, it has to move itself into the compliance zone. On the one hand, it has to equip a large number of fuel vehicles with 48V, and on the other hand, it has to increase the volume of MEB. This will definitely be the next key assessment project. 

3) PSA-Opel: PSA is working with Opel to adjust the product matrix. Due to the vehicle classification and more efforts in the engine, the combination of PSA and Opel is even better than Toyota Mazda in 2019. 

4) Renault and Nissan combination: Renault is the leader of the alliance in Europe. Both companies are mainly BEV and have no PHEV strategy, so whether they do 48V or not will have a long-term impact. 

5) BMW: BMW is a mirror of Daimler. Its BEV is not very good, but its PHEV sales are very obvious.

Figure 1 CO2 emissions compliance of various automakers in Europe from January to April 2020 

This data result is based on the overall decline in sales due to the epidemic, so that Volvo and Nissan, which are currently the highest, have new energy vehicles accounting for nearly 25% of their sales that month, and in 2020, Volvo now accounts for nearly 23% of new energy vehicles (without BEV). The two French companies, Renault and PSA-Opel, also have a low overall share of new energy vehicles, at 8% and 6% respectively.

Figure 2: Proportion of new energy vehicles sold by various automakers in Europe in 2020 

So we look at the sales volume share from 2018 to 2019. As the European market becomes increasingly difficult to operate, with such a strict approach, the focus of Japanese automakers such as Nissan, Mitsubishi and Honda will gradually move away from Europe. The biggest pressure is on German and French automakers. 

02
PSA’s 48V deployment

The following chart is actually quite clear. In 2020, Phase-in, Super Credits and Eco-Innovation Bonus, according to the market environment, it is actually a very cost-effective deal to make some PHEVs and BEVs. At present, France is very firm in the carbon emission package. This time, Macron also visited the Valeo 48V system factory to discuss the subsidy adjustment and the auto industry rescue plan. This is a long-term plan. 

Figure 3: The CO2 rules in Europe are still mainly controlled by Germany and France. 

Therefore, for FCA, since the overall requirements can be met, the strategy chosen is mainly to increase the sales volume of PHEV on the EMP platform and BEV (50kwh) on the CMP platform, and to maximize the effect. The 48V is a strategic goal for 2022. That is why we saw in early June that PSA Group and Punch Powertrain had signed an agreement to establish a second joint venture to manufacture and supply Punch Powertrain's DT2 dual-clutch transmission for the next generation of Mild Hybrid (MHEV) and plug-in hybrid (PHEV) vehicles. 

Note: PSA makes 48V, and in CMP and EMP, the motor is placed on the gearbox, which is considered to be in place. The reduction of CO2 is matched with the above -5% per year. There is still some gap between the benefits of BSG and ISG and P2 48V.

Figure 4 MHEB on the PSA platform will be around in 2022

From the perspective of core electrical components, we will first make the BEV's motor, electronic control reducer, and battery system, then the PHEV and 48V gearbox, and finally the battery cells. 

Figure 5 Investment in core components of PAS 

Summary: I think the increase in new energy subsidies led by Germany and France is mainly to save German companies, especially Volkswagen's BEV. They have to rush in July, otherwise they don't know what to do later. The software problem of MEB is definitely beyond Volkswagen's original expectation. It was already on the way, but now it has to stay at the starting point for a while. So for most other car companies, there will be many 48V projects in 2020, but the iteration from the previous P0 48V to a more efficient 48V may be around 2022, which involves a lot of investment issues.