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BYD, BAIC and SAIC: A comparison of China’s three major NEV manufacturers

In February of 2014, the BYD e6 was approved for both central government and Beijing municipal subsidies. The Qin, too, has fared well since its launch. BYD was a rather unexpected leader for the Chinese NEV market. BAIC and SAIC are the most influential companies in the industry, as they are the “elder brothers” of all other automakers in China. These two, along with BYD, are perhaps the most representative examples of China’s NEV manufacturers, and so a comparison of their R&D styles may give insight into the direction of the industry.

 

BAIC: Steady going with tech-first design

BAIC NEV is an independent company under the BAIC umbrella, dedicated to the production of new energy vehicles. At Auto China 2014 it announced two EV models, the second-gen E150EV and the C70GB. Both generations of E150EVs are based on BAIC’s non-NEV E150 line.

The first E150EV was rather experimental, and after two years on the market (as a taxi and government vehicle), BAIC decided to release an upgrade. The second generation first appeared at Auto China 2014. It was still built on the same E150 template, but the battery’s energy density and engine performance were upgraded from the first generation, and its range was extended to 200 km.

The C70GB, which will likely be used mostly as a government vehicle, is close to being an EV version of the Senova D. Like the E150, it is a mature model affixed with an electric motor. The powertrain may be switched out for a component manufactured through BAIC’s partnership with Siemens. To lower cost and improve range, the battery may also be switched out for an iron-based or ternary lithium unit. Assessments of performance and cost will be the deciding factors for this

BAIC NEV has its own independent manufacturing centers, and is steadily using the “technology-first” model of development. Tech-first development refers to basing a new model on a previous, mature design and then improving it with new technology. It is a relatively rapid and inexpensive way to produce reliable models. This is in contrast to “parameter-based” design, which is making a new model from scratch according to specific design goals. This method takes up much more time and resources at the R&D stage, but often results in streamlined high-performance models.

Perhaps it is because it is state-owned that BAIC NEV adopted its cheap and results-based development model. Technology and R&D will decide the speed of BAIC NEV future progress.

 

SAIC: Tech-first and parameter-based design under one roof

SAIC and Jinan University created Shanghai Fuel Cell Vehicle Powertrain Co., Ltd. It was created for fuel cell research R&D, going along with the country’s “863” project, but within a few years moved towards iron battery research. SAIC has joint ventures with GM and Volkswagen, as well as domestic marques, including Roewe.

The Roewe E50 is an EV built by parameter-based design, and using components from global manufacturers. It was an expensive production, with SAIC funnelling ¥800 million ($130 million) into it. Everything from the quality of the vehicle as a whole, to the craftsmanship of its minor details, shows impressive originality. Its only drawback is the ¥125,000 price tag, which is after the subsidized discount.

Roewe’s 550 Plug-in is a PHEV built on the basis of the Roewe 550, with an upgraded powertrain. What it sacrifices in power output, it makes up for in reduced fuel consumption. Its craftsmanship and overall quality retain the excellence expected of SAIC.

The E50’s design is parameter-based, and the 550 tech-first. They are in different tiers, but in these tiers both are technologically outstanding models. The company’s traditional models and its NEVs are both supported by global suppliers, and final construction is done by SAIC itself. The E50’s parameter-based design may be a high-risk investment, but the reputation of its component manufacturers assures its quality. China’s market is primed for NEVs right now, and the E50’s sales will turn out well.

 

BYD: No choice but independent R&D

In the somewhat strange world of private automakers in China, the investments put into EV R&D are staggering. Even in depressions they stay the course and spend their capital on lithium-iron phosphate batteries. BYD’s e6 and K9 EVs, as well as its Qin hybrid have all sold well and have even been exported. Since its F3DM came out in 2008, it has made EVs the focus of the company’s future development. Its EV technology was already mature in 2013, but what it was missing was government subsidy support. This changed with its recent subsidy approval.

BYD’s work with major suppliers has not always gone perfectly, perhaps due to its non-government origins. Looking back now, it is precisely these early difficulties that led to BYD’s current self-directed approach to core technology.

For the e6, BYD’s R&D was purely parameter-based, precisely tuning its standards and goals before even beginning development. Its hybrid Qin is also selling well. It is modeled on the fuel-powered Suri. With its hybrid system added on top of a mature powertrain design, BYD was able to lower costs and quicken the R&D process. In fact, many other models, like the K9 bus, the T5 truck, and the Tang SUV, were all produced in this tech-first fashion by taking a mature design and adding a BEV or HEV powertrain.

As can be seen from the R&D trajectories of the above three companies, each has been very carefully moving forward in their NEV projects. BAIC is investing small and producing fast. SAIC has multifaceted R&D and cooperative production. And finally, BYD is focusing on core technology and keeping to self-direction in its product development. These three styles reflect the attitudes toward NEV production for most of the major automakers in China.

 

How can these three complement each other?

All of China’s automakers took action after Chairman Xi Jinping first announced his support for the NEV industry. BAIC is quickening its tech R&D, and even though it has some obstacles in its way it is cooperating with other automakers to fix them. It has taken its wait-and-see attitude and started to bring in more experienced talent to develop its core technology. Even more than BAIC, SAIC has made NEVs the focus of future profit growth. It is taking advantage of all its resources for NEV development, and also making an attempt at more independent R&D. BYD is the most experienced NEV producer of the three. Although originally it was forced into “passive” development of its core tech, it now has invested in ambitious projects to develop even more cutting-edge technology. However, tech has always been its focus, and now it is facing the battery capacity bottleneck. This has caused some sluggishness in its production.

China’s NEV industry is still in its infancy, lagging far behind the U.S. and Europe. In terms of government policy support and general importance to the industry, BAIC has a clear lead. SAIC, however, has the advantage of high-quality suppliers. BYD has a clear lead in core technology. Now, could there be a way for these three to come to a consensus and complement each other?

The central government is supporting the growth of the NEV industry now more than ever, and doubts about the capabilities of industry manufacturers are lessening. But the problem remains that, just like in China’s traditional vehicle industry, core tech innovation is lacking for NEVs. BAIC, SAIC and even FAW all have dedicated NEV research centers. BAIC’s R&D capability is rather weak, and so it seeks to improve through horizontal cooperation. SAIC can rather easily get its hands on high-quality and mature subsystems, but its independent R&D and production are not up to BYD’s level. The future of China’s NEV industry lies in independent R&D and manufacturing. Taking foreign manufacturers as a reference point is okay, but it is not necessary. BAIC, SAIC and BYD may have their differences in R&D style and company origins, but they all share the goal of making NEVs that are tailored to today’s China.

The future of China’s NEV market may not be fully predictable, but it surely will not be monopolized by a single company. Rather than butting heads, it would be better for these companies to work together to help grow the industry.

(Rewritten by Oliver Spiro based on author’s article on d1ev.com)

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