Published on October 26th, 2019 | by Tim Dixon0
China × Cleantech — September 2019
October 26th, 2019 by Tim Dixon
Welcome to the next issue of China x Cleantech, our September 2019 edition. For our full China × Cleantech history, stroll over to the “Future Trends” section of our website. For the August edition, click here.
Jose Pontes reported on the sales numbers from the reduced-subsidy Chinese EV market this August, and the hangover continues. The market dropped by 12% year over year (YoY) and the plug-in hybrid market fared worse with a 51% decline YoY. The BEV market fared better and managed to grow 4%. The vehicle market as a whole dropped by 8% YoY.
Jose went into details about which cars are doing well in the market, highlighting the top 5 best selling electric cars. Jose also went into details about the 2019 rankings of PHEV and EV sales
Zachary Shahan cast his thoughts into the future in a thought experiment estimating how many electric vehicles Tesla, Volkswagen Group, and Nissan will sell over the next 5 years. As mentioned in the article, Tesla is investing in the Gigafactory 3 in Shanghai, which will allow it to tap into the massive market in China in a big way.
Tesla’s relentless push to make the world sustainable keeps going. There were too many highlights from China in September.
Maarten Vinkhuyzen looked at two perspectives on Tesla growth opportunities in China and puts the Tesla Gigafactory 3 into context: Firstly, “Tesla Bears” (an investor, analyst, or layperson who thinks Tesla has no long-term stock growth potential and even possible failure). Secondly, a “Tesla Bull” (an investor, analyst, or layperson who thinks Tesla has long-term stock growth potential). Maarten sides with the Tesla bull argument, as it seems more likely based on Tesla’s product, cost reduction, investment cost, and market opportunities.
Maarten Vinkhuyzen then provided a more detailed breakdown of the factors that a Tesla bull might be considering when it comes to gaining sales from Tesla Gigafactory 3 (GF3).
He started by warning everyone that it takes time for companies to go from low-volume test production to full-volume production, citing a number of examples. Then he went into the benefits of GF3 for Tesla Model 3s built in China, primarily a lower cost of goods sold. Added to this is the sales tax exemption, which lowers the price for the consumer. He finished by saying that these benefits will bring Tesla’s prime offering to a much larger audience in the world’s largest electric car market, and that this will be somewhat useful for Tesla.
Maarten Vinkhuyzen ended his September dreams of Bulls and Bears by dissecting the “Tesla China Bull Fairy Tale,” starting by explaining why he started thinking about this — bear criticism of the Tesla bull fairy tale. He detailed the assumptions bears made and why he considered them misguided.
Johnna Crider linked to a video from Galileo Russell about how Tesla is winning the US–China trade war. The final summary is that both Tesla and China win from Tesla doing well in China — Tesla makes money and China gets cleaner air.
Kyle Field reported that Tesla Gigafactory 3 was entering phase 2 of construction, with the groundbreaking happening as phase 1 of Tesla Gigafactory 3 was being prepared for the start of production. Kyle also discussed what possible function this phase will have due to its size: an energy storage system, Tesla Model Y production, or battery pack assembly were proposed.
Steve Hanley shared news of leaked photos showing the first Tesla Model 3 on the assembly line at Tesla Gigafactory 3 and rumors that the first Chinese manufactured Tesla Model 3s could be delivered as early as November 2019.
It should be said that early batch production does not mean volume production is near, as factories need time to ensure all processes are working seamlessly together. Read the article for full commentary on these leaks.
Johnna Crider reported on a recent world record by Tesla owners in Taiwan, where over a hundred drivers drove together on Autopilot. This event was reported in the local mainstream news media, which she put in contrast to the obsessively negative media coverage of Tesla and Elon Musk in the West.
She ended by highlighting the Tesla community and how Tesla makes products that people love even without marketing. Will the Tesla USA Tesla community sit by while China claims all the biggest Tesla world records? I expect them to step up and supersize this world record — and then we’ll see how it can be spun negatively by the western press.
Guest contributor Shankar Narayanan wrote up his thoughts about the opportunity that China poses for Tesla. He first outlined the point that many American companies feel that entering the Chinese market is hard and dangerous, in part because they are at a disadvantage. But they also understand its opportunity.
He then noted that the Chinese government has been very supportive of Tesla and actively reduced the burden faced by other US and European automakers, the removal of rules that require joint ventures, for example. He also made note of state-run banks loaning Tesla $521 million to build Gigafactory 3 and Tesla now benefiting from the 10% purchase tax exemption that Chinese made electric cars.
Shankar ends by highlighting that this will increase competition in the domestic EV market. I would like to add that the Chinese government support of Tesla is not a one-way street. Rather, it is something that is beneficial for both Tesla and the Chinese government.
Electric vehicle developments in China are impressive. The size and variety of the Chinese market are beyond any other market. Here are some more EV stories from last month.
Kyle Field reported on Byton bringing the production version of the M-Byte to the Frankfurt Auto Show. The article goes into details on the two versions they are bringing to market, the standard-range and long-range version. The article includes details on battery pack size, thermal management systems, range, power, and fast charging capability. It also includes numerous pictures. Kyle ends with updated details on when the M-Byte will come to market — in China in mid-2020 and Europe/America in 2021.
Kyle Field provided his thoughts about the production version M-Byte design that was shown at the Frankfurt Auto Show. He included an embedded video by the lovely Bjørn Nyland, who gives a walkthrough of the M-Byte interior in the video.
Nicolas Zart reported on Xpeng starting delivery of the Xpeng 2020 G3 in 2019. The article goes into what was said at the Chengdu Motor Show, especially the co-founder talking about the company progress in glowing terms (as expected). Then Nicolas went into some of the interesting details on Xpeng 2020 G3. The article ends with Nicolas congratulating Xpeng on doing the work, delivering the goods, and leaving the excessive hype to others.
Steve Hanley reported on BMW adding larger batteries to its PHEVs, which is good, as it enables more people to drive daily on electricity rather than petrol. He ended by noting that we should give BMW some credit, as many other large players in the auto manufacturing world are doing a lot less and this is still something towards the end goal of full electrification, as people get to experience an electrified drive and warm up to the concept of a fully electric vehicle. (While Tesla has a lot of demand, 100% of the market isn’t looking to buy a Tesla.)
Steve Hanley also reported on the first Chinese electric vehicle to receive EU approval to for consumer sales. That’s the Aiways U5 SUV. Steve went into details on the reported range, power, and even rumors about the EU price. The company reports that it expects to start selling the Aiways U5 SUV in Norway, followed by Sweden and Germany. This is welcome news for those who want to see more competition in the worldwide EV market.
The JAC Volkswagen joint venture has started selling the SOL e20x. The price is 128,000 RMB ($18,086) to 138,000 RMB ($19,499) which is somewhat affordable. The E20X has a reported NEDC range of 402 km and will come in 4 colors. I will visit their showroom in Hefei when I have time, and I have reported on them extensively: regarding the reveal, a case study on if it’s a badge job, its future factory, and its extensive use in a Chinese ride-hailing service. The joint venture website is now fully functional.
Renault unveiled the KZ-E (Chinese name: 雷诺 e诺 ) on October the 1st. The KZ-E has been rumored for some time, since the creation of a joint venture between Renault and Dongfeng in 2017. Note that Renault bought a stake in the Chinese EV manufacturer JMEV in 2018.
The Renault KZ-E is a compact car which is styled to look like an SUV. Its design is related to the Renault Kwid in India but its powertrain might be related to the JMEV E300 (2019) or a Dongfeng EV, which would be expected, because upgrading the design and components while borrowing EV powertrain and domestic manufacturing is an ongoing theme of western automakers entering into the Chinese EV market.
At present, the price is listed post-subsidy as 61,800–71,000 RMB ($8,726–10,025), which would track with the pricing of similar size/type cars. It is affordable. The range is reported as 250 km (NEDC).
Carlos Ghosn, who is the Chairman and CEO of Groupe Renault, introduced the KZ-E in a Renault press release:
“Groupe Renault was a pioneer and is the European leader in electric vehicles. We are introducing Renault K-ZE, an affordable, urban, SUV-inspired electric model combining the best of Groupe Renault: our leadership in EV, our expertise in affordable vehicles and in forging strong partnerships.”
So, a more affordable electric vehicle for the Chinese market by Renault. I will report news on this when its production version is unveiled.
Renewable energy growth in China is massive.
Joshua Hill reported on news that in Q2 of 2019 global wind turbine order capacity increased by 111%. The report from Wood Mackenzie detailed China’s contribution to these numbers, including “Developers in China ordered more than 17 GW in Q2 2019, a 267% uptick YoY compared to Q2 2018.” Read the article for more detailed breakdown of the report.
Joshua Hill reported on the news that Envision, which is a Shanghai-based energy technology company, has joined the RE100 initiative and set a target to become 100% renewable energy powered by 2025, this includes facilities in China and around the world.
Joshua Hill reported that the second stage of Ørsted’s Formosa 1 offshore wind farm has generated its first power. The second stage has 6 of 20 offshore wind turbines online and once completed will have a power capacity of 128 MW, which will be able to power the equivalent of 128,000 homes.
Joshua reported that the market for offshore wind power is heating up, with two batches of wind power being approved in 2018.
Chinese Blue Skies
China is fighting a war, a war for blue skies and ecologically sustainable civilization.
Michael Barnard talked about how China climate action is not getting much recognition from the rest of the world, using the observation from a long-term business collaborator and friend who had come back from a business in China.
Noting that the air is clear and blue, the streets are quiet even when packed with cars and people, he noted the disparity between the common idea of what China looks like and what is the reality on the ground.
He mentioned how this distortion is used in politics in the west to dodge climate action and then goes into what China is doing to combat global warming, such as building massive amounts of renewable energy and deploying massive fleets of electric vehicles, buses, vans, trucks, cars, and bikes.
Mike implored people to understand the reality of climate action in China, and for people to look at China as inspiration for climate action rather than an excuse to avoid personal (national) responsibility. An interesting read, I advise you to check it out.
Chinese Global Sustainability Expansion
The Chinese government and Chinese companies wish to be like any other developed country and export products around the world. Here are some reports about that from last month.
Kyle Field reported on BYD getting an order for 10 electric buses from a Jerusalem transit operator. The most interesting thing is this is a returning customer.
Kyle Field reported on the electrification of a bus line in Indianapolis, the 13 buses being built by BYD in the United States (California). He reported that these 13 buses are just the first batch and that 18 more buses will be delivered by the end of the year.
Again Kyle Field reported on a BYD order, this time in Germany. Two transport operators in The Ruhr valley ordered a total of 22 electric buses from BYD, the first order of its kind from Germany.
Saurabh reported on the recent milestones of two large Chinese solar module suppliers (Trina Solar and Jinneng Clean Energy Technology), which illustrate the interconnected nature of renewable energy development worldwide and the massive share Chinese companies have in India’s solar market. Read the full article to see what these milestones are and how the Indian market is reacting to Chinese low-cost modules.
CATL’s Energy Storage Systems Solutions Show Strong Momentum Following U.S. Debut At Solar Power International 2019
This sponsored article talked about CATL’s recent US energy storage debut at Solar Power International 2019. The article talked about the strengths of CATL, its technology, and its success to date. Read the full article to see what they think about their technology.