China’s Electric Cars Sales Boom To Continue, Sales To Double In 2016, China Minister States
Originally published on Sustainnovate.
Electric vehicle sales and production will double in China in 2016, according to recent reports. This refers of course to both all-electric vehicles (EVs) and also to plug-in hybrids (PHEVs).
This matches a similar claim made by BYD founder and chairman Wang Chuanfu in an interview with Sustainnovate right after BYD won the 2016 Zayed Future Energy Prize in theLarge Corporation category.
Given that over 300,000 electric vehicles were said to be sold in China in 2015, that means that sales are expected to top 600,000 in 2016. Well, that’s the prediction of the head of the country’s Ministry of Industry and Information Technology anyways — predictions and opinions may vary.
The ministry head, Miao Wei, was quoted making the prediction while attending the recent annual meeting of parliament. Miao also commented to reporters at the scene that the country needs to (and presumably will be) speeding up the installation of EV charging stations in the near future.
Comments concerning the need to improve electric vehicle capacity, lifespan, and reliability, were also made by the Ministry of Industry and Information Technology head.
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OK, I’m going to recalibrate my electric car growth model based on a doubling of sales each year. 320,000 in 2014. Estimate very roughly ~500,000 worldwide in 2015 (300K China, 50K Tesla, 50K other western manufacturers, 100K other non-western). So call it 1 million in 2016, 2 in 2017, 4 in 2018, 8 in 2019, 16 in 2020, 32 in 2021, and by 2022 it’s more than half the global market of 90 million.
If I use a more conservative 60% growth rate, it takes until 2025.
It should take longer for electric cars to get the bottom half of the market, because we will only have purchase price parity for the upper half (or a bit more) of the market. But I think it’s fair to assume that the top half of the automobile market will be all-electric in the 2022-2025 time range.
Nope. Even if 200+ mile range EVs were already cheaper to purchase than same-model ICEVs EVs sales couldn’t reach those sorts of numbers by 2020. There simply won’t be enough battery capacity to supply that many EVs.
By 2020 Panasonic/Tesla should be able to cover a half million. LG Chem is likely to be a bit less than a half million. China may be able to produce batteries for a few million, I don’t think we know what sorts of capacity is being created. China may be able to supply 3 million. (A wild guess.)
Here’s my best fantasy. In a few days Tesla introduces a Model 3 that is everything we hope it will be. A very desirable 200+ mile range EV for $35k. Reservations go through the roof, Tesla has to close off the list after a few days because it would take at least three years to fill.
Car company execs startle from their sleep.
In late 2017 Tesla starts delivering the Mod3. Between now and then they continue to sell ModS and ModX, well over 50,000 a year and the waiting list continues to be full. The Mod3 turns out to be a wonderful car and the reservation list fills up for the 350,000 or so to be manufactured in 2020.
Prior to 2020 Tesla announces the sites for a couple of battery factories and a couple of car plants. Asia and Europe each get one of each. Possibly designed for 100,000 cars per year with plenty of room for expansion. Tesla talks 1.5 to 2.5 million cars per year by 2025.
Car manufacturers shit their pants.
By 2020 we hear about the start of several large battery plants and start to see serious EV models announced from most car manufacturers.
By 2025 most car manufacturer are selling EVs in meaningful numbers.
By 2030 it’s all over for ICEVs.
Yes, the plain reality is it takes a huge ramp up of factories both for batteries and Pv to supply even a 10% per year demand. And it is likely that a 10% replacement rate will be the most optimistic rate. But 2030 is still soon enough to declare a victory for a cleaner, quieter world. And since these vehicles will be truly autonomous, highway slaughter will end.
Here’s my best fantasy: Electric car sales continue to grow rapidly and by 2021 there are over 2-4 million electric cars sold. However 2 million of them are self driving and used massively by uber like companies for car pooling. Instead of one trip to and from work each day, each car makes about 3, and each time has on average 4 passengers. That car then displaces the equivalent of 10-12 ICE cars in passenger miles traveled. Those 2 million cars replace as much oil as 20 million normal electric cars. That is enough to cause oil use to enter a permanent decline, pretty much end the oil majors as they have expensive oil and remove all moneyed lobbyists from the west as there is no money behind them.
In this scenario especially with small battery packs per fleet car, battery capacity can very efficiently be used to displace oil usage.
Good answer Russell.
At sales of 1 million EVs a year and each car owner driving 12,000 mile a year oil demand will drop by about 8 million barrels per year. At a production level of 10 million a year oil use would drop 80 million barrels per year. That i going to wake up a lot of sleepy oil executives. The oil industry has never seen a sustained drop of demand like this.
ICE cars will be autonomous too but not before 2025-2027 earliest.
Those cars will at least travel double the distance. It will be after 2030 that ICE car numbers on the road start to decline. Probably not in most Afrikan countries and the poorer, developing Asian countries.
Policy could change that if emission standards simply only allow for Hybrids.
I hope to never see an autonomous ICE car – it would be clear evidence of misplaced priorities. If there are resources to put into making the car autonomous, then take those resources and instead put them into making the car zero emission.
If an ICE car is the equivalent of smoking in the kindergarten, then an autonomous ICE car would be the equivalent of walking into the kindergarten, lighting a cigarette, placing it in the ash tray without stubbing, and walking out again.
OK, I see your point: the limiting factor is going to be battery manufacturing capacity.
Tesla is explicitly planning to be able to produce ~500K-700K cars per year (depending on battery size) at “Gigafactory 1”. Assuming they can get the cash, Gigafactory 2 will be up and running as soon as possible.
Assume that LG Chem also attempts to match Gigafactory 1 production.
BYD is certainly going to be matching Gigafactory 1; they’ve said they will.
The other Chinese companies together should at least be able to manage what BYD is managing. (I don’t think we know the capacities; it might be as much as 3 million, as you indicate. But I’ll go with a low estimate of 500-700K.)
That’s, say, 5 Gigafactories in the 2022 time range, so that gives us maybe 3 million cars per year. Maybe 10 Gigafactories and 6 million cars per year.
There’s going to be a very dramatic effect on demand for gas cars in that timeframe. Since supply of electric cars won’t be able to meet demand, people will cancel planned purchases of ICE cars in order to get an electric car a year or two later. Used electric cars will be displacing *new* gasoline car sales. And this will also keep prices and profit margins of electric cars high.
I’m still not quite sure when gasoline cars will disappear permanently, but they’ll be relegated to the bottom of the market very quickly.
…anyway my reason for trying to work out these estimates is actually that this — ~6 million electric cars on the road in 2022 — should knock off at least 1/4 of 1% of global oil usage. Doesn’t sound like much but it’s enough to keep the price of oil down (important to know) and enough to suppress oil exploration, which is important.
Many well considered thoughts on this page on how fast the EV market will grow and why. I’ll put a few dollars down to say it will be faster than all estimates. For these reasons:
Energy density (kWh/kg) will improve. My daughter’s engineering cohort at Uni built an EV for final year project and we talked a lot around the fact that “if you can build a lighter car, you can build a lighter car”. A better cheaper lighter battery makes other things (tyres, brakes, bearings, suspension – all the structural and drive train related parts, including the battery!) cheaper. There’s a feedback loop of gains that’s hard to visualise. Four gigafactories will produce batteries for double the number of cars that were estimated in 2015.
People, even Elon Musk, are using the cost of the materials as the baseline. But some of those materials were previously niche market. So long as no materials are ‘rare’ (and by all reports they are not) economies of scale will kick in and competition will drive down the prices. The so called baseline itself will fall – enhancing the EV over ICEV advantage.
We armchair enthusiasts talk a lot about what we see happening. But how much of what is happening can we see? I suspect there’s a lot occurring in stealth mode and in non English speaking countries that will appear on the scene with little fanfare. For example I’d heard all about the Powerwall and nothing about Sonnenbatterie, yet the two are now competitors.
Cobalt is relatively rare and was already pretty heavily used. This is why I’d actually finger cobalt as the primary “negative” cost driver for the batteries. Nickel and aluminum prices might be relevant too, for similar reasons.
Lithium is cheap and will get cheaper, and the same is true of graphite. Manganese isn’t used for much now and definitely has room for process improvements in mining.
We’ve (in Australia) been shutting down Aluminium smelters:
http://theconversation.com/australian-aluminium-outgunned-by-cheap-coal-free-global-rivals-23135
The key sentence in that article is this one:
“Around the world, newly-built smelters have used gas, hydro, geothermal or nuclear power, with low or near-zero emissions.”
I don’t think there’s any shortage of bauxite – we’re not competitive because of the energy cost – less so when carbon tax is applied.
Cobalt appears to be a byproduct of nickel refining. That suggests that nobody has gone out of their way to look for cobalt as there was enough of the stuff coming out of nickel refineries. I feel confident that cobalt will be found, if the price rises sufficiently to warrant a search for it. If nickel ends up being a byproduct of cobalt, the price of nickel will fall.
But as electrics get to be more common, more people will know someone with an electric. As more companies acquire electric fleets, more people will get experience driving one at work. Soon everyone knows electrics are better.
Exactly. Each EV put on the road will probably teach a dozen or two people about EVs. After watching someone they know drive an EV for a few year the slow to adopt will start to entertain the idea of making their next car an electric.
From your keyboard to FSM’s inbox.
The only part I find difficult to believe is car company execs startle from their sleep. LOL. I predict Bob Lutz will stop predicting Teslas doom by 2050.
If Tesla quickly presells their 500,000 annual output and announces new car and battery factories then they’re no longer a bit player but on their way breaking into the top 20.
I don’t think the top 20 can avoid responding.
If Tesla sells that many, that means its US car sales will be almost that much (since Model 3 comes out in the US first). Fiat-Chrysler’s car sales are about 500,000 a year (vs 1.7 million truck-type vehicles). That will definitely require a response.
500k would be global sales for Tesla. And Fiat/Chrysler sells about 4.7 million cars and light trucks per year, globally.
But, yes, if Tesla shows an annual demand for 500k cars a year other manufacturers will almost certainly have to respond. Those that don’t do so quickly, well, divest….
It’ll be interesting to see reservation numbers. I have *no doubt* that Tesla can sell 500,000 cars per year, all ordered custom-configuration in advance, without building up inventory.
But how many people will make a reservation *sight unseen two years ahead of time*? I think that’ll be very interesting.
I bet $35,000 that Tesla won’t be able to deliver the Model 3 to customers by late 2017.
Is anyone surprised at your opinion?
(Looks around.)
Nope….
Tesla isn’t even promising to deliver in late 2017. They’re promising to *produce* in late 2017, leaving them leeway for the logistics of delivery.
I agree with the +/- 100% growth estimate.
The main reason is that the EV2.0 wave has not hit. By that I mean Tesla model 3 and all other competitors in the 30-40 K range.
But we should not be surprised. When you compare this to the adoption rate for microwaves (to go way back) PCs, smart phones, the IPad, etc. adoption of new tech with compelling price/performance benefits will be much faster than people think
Be aware that Chinese authorities are talking about new energy vehicles in general, so the +330K sold last year included buses, sanitation trucks and other heavy duty vehicles. Plug-in passenger cars is between 60 to 65% of total NEV sales. So, calibrate your forecast models againg.
The bus and truck switch to EVs is
(a) a great thing, and I wish it was happening faster
(b) will have knock-on effects in the car market. If people see that buses and trucks are electric, it makes electric drive seem more “real” to them for cars.
(c) each bus or truck uses way, way, way more batteries than a car, so if the bus/truck market starts to get saturated, that’s a *lot* of additional cars which can be manufactured with that battery manfacturing capacity.
China is no doubt emerging as a leader in the transformation of the world economy to a cleaner energy. Just the sheer size of its population and economy will force others to follow quickly otherwise they ll risk their own economic downturn.