Energy-saving and New Energy Vehicle Technology Roadmap 2.0 released in Shanghai

Today, the "Energy-Saving and New Energy Vehicle Technology Roadmap 2.0" revised and compiled by the China Society of Automotive Engineers was released in Shanghai. It made revisions to the Roadmap 1.0 and is very instructive in many places. The main point is that carbon emissions from the automobile industry must be reduced, and new energy vehicles must gradually increase, setting a target of 20% market penetration.

Figure 1 Corresponding major changes

01. Increased penetration of new energy vehicles

Figure 2 Development Vision of Roadmap 2.0

The goal of 7%-10% new energy vehicles in 2020 defined in Roadmap 1.0 is currently unattainable. The sales of passenger cars in the first three quarters were 667,000, and the sales of passenger cars were 13.376 million, which is currently at 5%. In the next three months, at 2 million per month, new energy passenger cars will increase to 950,000, and the estimated market penetration rate is 4.75%. After the roadmap firmly revised the penetration rate target for 2025 to 20%, it means that according to the roadmap, the next five years will reach a 15% increase, and the penetration rate will increase by 3% each year (if converted to 24 million, it will be an increase of 720,000).

The energy-saving cars mentioned in Roadmap 1.0 are currently clearly hybrids including 48V and HEV. The market penetration rates in September were 1.7% and 2.25% respectively. According to the expected share in 2025, it will reach 40%-48%. This expected growth rate is achieved by the automakers' self-iteration of powertrains. The current estimate of the fuel consumption targets for passenger cars with and without new energy vehicles is quite reasonable. As shown below, it is defined as the overall target of 5.6=>4.8=>4.0 under WLTC conditions, and hybrid 5.3=>4.5L and 4.0L. In other words, in the short term, automakers are encouraged to invest in the hybrid field. Within 15 years, by 2035, the sales of energy-saving cars and new energy vehicles will each account for 50%, and the automotive industry will achieve electrification transformation and the term "ban on combustion" will be completely separated. According to the design considerations of this roadmap, the survival of hybrid fuel vehicles may continue for a long time.

Figure 3: Hybridization mentioned in the technology roadmap

There is also a proposal in the overall goal that by 2035, new energy vehicles will account for more than 50% of total vehicle sales, and pure electric vehicles will account for more than 95% of new energy vehicles, that is, BEV is 47.5%, and PHEV+EREV is 2.5%. In other words, if the roadmap is followed, the overall growth of PHEV, which currently has a market share of 1.5%, will be high at first and then low in the next 15 years. It is also strange to put the 1 million fuel cells here.

02. Distribution of penetration rate according to the roadmap

We break down this ratio as above and believe that 48V will gradually give way to strong hybrids from 2025 to 2030, and the ratio of PHEV to BEV will transition from the current 20% to 15% to 5%. If the peak in 2025 is around 25 million, the corresponding number will be 1 million PHEVs, 4 million BEVs, 5 million HEVs, 5 million 48Vs and 10 million ICEs.

Figure 4 Powertrain ratio of Chinese passenger cars according to Roadmap 2.0

Summary: It is not clear whether this roadmap can be successfully implemented. However, it is conservatively estimated that it may be difficult for new energy vehicles to penetrate more than 10%. It will be easier to reach 15% to 20% in the future. This is because the current 5% regional concentration is directly related to local promotion policies. In order for new energy vehicles to form a relatively stable profit model, it will take some time to explore before reaching the other side.