BO’AO, Hainan – The global auto industry spotlight was in Bo’ao, China’s island province of Hainan in early July at the first annual World New Energy Vehicle Congress (WNEVC) hosted by China Association for Science & Technology (CAST) and the Hainan Provincial People’s Government.
The three-day event held on July 1-3 attracted more than 1,500 people, including over 100 speakers from the automotive and related industries as well as representatives from governments and organizations representing a dozen countries and regions including Germany, the U.S. and Korea. It focused on discussions on the current state and future of the Chinese and global NEV markets and how industry stakeholders would work together to advance NEV commercialization.
The event even drew a congratulatory letter from Chinese President Xi Jinping, who said in the letter that with a new round of scientific and technological revolution and industrial transformation in the making and rising, the NEV industry is entering a new stage of accelerated development, which not only adds strong new drivers to the economic growth of various countries, but also helps reduce greenhouse gas emissions, cope with climate change and improve global ecological environment.
“Staying committed to the path of green, low-carbon, and sustainable development, China is willing to work with the international community to speed up innovations of new energy vehicle technologies and development of related industries, so as to make greater contributions to building a clean and beautiful world and a community with a shared future for humanity,” Xi said in the letter.
Xi expressed hope that participants at the event will conduct in-depth exchanges, build consensus, and deepen cooperation, so that the results of innovative technological development can better benefit world people.
A major consensus was indeed reached at the event: the WNEVC Bo’ao Consensus, which describes the strategic results of the Congress, foresees NEVs accounting for 50 percent of annual global vehicle sales by 2035, when the global auto industry will have achieved its transformation to electrification.
The Consensus was announced by Chen Qingtai, former deputy director of the State Council Development Research Center and current president of China EV 100, one of the organizers of the event, at his opening remarks on July 2.
The Consensus also called for relevant stakeholders in the global auto industry to work together to promote the sustainable development of the industry, various governments should coordinate to provide policy environment suited for electrification, shared services and smart connectivity, and introduce relevant policies that help promote cooperation and integrated development within the industry. The industry should increase innovative investment in the areas of power batteries, fuel cell and intelligent connected vehicles, pay utmost attention on NEV safety, continue to strengthen safety technology research and provide effective solutions, as well as reduce cost and develop competitive and affordable NEVs. The stakeholders should also work together to eliminate market hurdles for the mass commercialization of NEVs through broader international exchange and cooperation, thereby boosting the transformation, upgrading and sustainable development of the industry.
One of the companies at the forefront of driving e-mobility in China and elsewhere in the world is Volkswagen Group, which also plans to increase the share of its NEVs in China to 50 percent of total deliveries by 2035, making China pivotal for the German automaker’s decarbonization strategy. It intends to offer 14 electrified models to Chinese customers this year and by 2028, more than half (11.6 million, to be exact) of the Group’s planned 22 million electric cars will be produced in China.
“The Chinese car market is of vital importance for Volkswagen’s e-offensive,” said Dr. Herbert Diess, CEO of Volkswagen Group. “We want to expand our leadership role through local partnerships and increased R&D work in the country.”
He emphasized the important role of the automotive industry on the way to fulfilling the Paris Climate Agreement by saying: “China also relies on emission-free mobility under its clear commitment to the goals of Paris. In this transformation, we are playing a key role in providing a comprehensive range of e-vehicles and strengthening the private charging infrastructure.”
In his speech, Dr. Diess however also underlined that a predictable and reliable legal and regulatory framework was necessary for the further development of electro mobility.
“We need the support of the Chinese government as well,” he said. “We appreciate a stable regulatory environment that enables us to prepare for regulations and customer demands. We need even more infrastructure to bring e-mobility the breakthrough – rather than subsidies for the market. And we all need to make a clear commitment to free and fair trade – especially in times like these. Multilateral commerce is the fundamental basis for prosperity, employment and growth.”
Wang Chuanfu, chairman and president of BYD Co., Ltd., China’s leading NEV manufacturer, suggested that China come up with a comprehensive development plan to electrify the entire vehicle fleet.
“The entire fleet of public transport buses should be electrified by 2020, taxis electrified by 2025 and private cars electrified by 2030,” Wang said. “Full electrification of the fleet is a necessity and an urgent matter.” He expected China’s NEV sales growth to slow to about 40 percent this year but is still confident BYD’s NEV sales can grow 70-80 percent.
Xin Guobin, deputy minister of the Ministry of Industry and Information Technology (MIIT), said that MIIT is currently in the process of drafting China’s NEV development plan for the period 2021-2035. The general approach of the plan follows three principles, according to Xin.
“First, encourage diversified technology development routes; second, speed up transformation of the role of the governmental functions and give more play to market mechanisms to vitalize enterprise innovation; and third, further optimize industrial output, improve infrastructure and deepen cooperation and opening up.”
MIIT recently released a draft version of the revised Parallel Administrative Measures for Passenger Vehicle Corporate Average Fuel Consumption (CAFC) and New Energy Vehicle (NEV) Credits – known as the “dual credit” scheme – which requires PV manufacturers or importers produce or import enough NEVs that generate NEV credits equivalent to 14, 16 and 18 percent of sales volumes in 2021, 2022 and 2023 respectively. The requirements for 2019 and 2020 are 10 and 12 percent, respectively.
Wan Gang, president of CAST, vice chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and president of WNEVC, said that while the new NEV development plan focuses on helping the industry transition to the electrification goal in 2035, efforts will also be made to improve the upgrading of internal combustion engines and improve legal and regulatory assurance for smart EVs. As NEV subsidies phase out, the country is also drafting non-fiscal support measures and relevant carbon-trading mechanisms to support NEV credit mechanism, and continue to support fuel cell vehicles and public transport.
China had 2.9 million NEVs on the roads at the end of 2018, three-quarters are passenger vehicles and of those passenger vehicles, more than three-quarters (76.5 percent) are battery electric vehicles, according to Wan. China also has about 1,500 fuel cell vehicles on the roads running in eight demonstration regions with 15 hydrogen filling stations. An additional 20 will be built in the near future.
Hyundai Motor, a global leader in the fuel cell vehicle space, for example has formed a $100 million hydrogen energy fund with Tsinghua University Industrial Park to service the hydrogen energy supply chain and incubate relevant startups.
“Reform and opening up is a driving force for China’s auto industry since it enables the industry to go global and attract world attention,” said Fu Yuwu, honorary chairman of SAE China.
Zeng Yuqun, chairman of Chinese battery giant CATL, predicted that China’s electrification penetration rate will surpass 25 percent by 2025, up from the current 5 percent, and further increase to 50 percent by 2030 and 70 percent by 2035. He expects that the lifetime cost of battery electric vehicles will be lower than that of traditional ICE vehicles by 2025 and upfront purchase cost of a BEV will be lower than that of an ICE vehicle by 2030. By 2025, power battery system energy density could reach 250 Wh/kg and battery cost could fall to $100 per kWh.
Xu Liuping, chairman of FAW Group, said 40 percent of the passenger vehicles produced by the company will be NEVs by 2025, and the ratio is expected to go up to 60 percent by 2030.
SAIC Motor said it is applying 5G technology to make driving more intelligent, while Chang’an Automobile aims to mass produce Level-3 auto-driving cars and connect all of its new products to the internet by 2020. It plans to launch 25 products covering BEVs, PHEVs and FCEVs by 2025.
Klaus Fröhlich, Member of the Board of Management of BMW Group responsible for Development, said that China will become the first country to have smart cities and BMW’s upcoming iX3 battery electric SUV to be produced exclusively in Shenyang in 2020 will be equipped with the German automaker’s fifth generation eDrive electric propulsion technology, which gives the vehicle a WLTP range of 600 km and the option to charge via 150-kW DC fast charging.