JEC COMPOSITES MAGAZINE - Issue #119 - March 2018 - 25

China: driving the whole car supply chain,electric vehicles are in full swing

facilities at BBAC - their joint
venture Beijing Benz Automotive
Co., Ltd. (BBAC) - to manufacture new-energy vehicles and sell
them under the Mercedes-Benz
brand.
Since 2012, Daimler has partnered with BYD, China's leading
manufacturer of electric cars
holding 22% of the market, to
produce and sell electric vehicles
under the Denza brand.
In August 2017, Renault-Nissan
and long-time partner Dongfeng
established a joint venture to develop an electric model based on
a small SUV platform developed
by the French-Japanese alliance.
Called eGT New Energy Automotive Co., the joint venture will
produce the electric vehicles at a
factory in Shiyan, Hubei Province.
In November 2017, Ford Motor
Company and Zotye reached a
final agreement to establish Zotye
Ford Automobile Co., Ltd., a new
joint venture that plans to offer a
range of all-electric vehicles for
consumers in China under a new
indigenous brand. The new JV
will leverage a combined investment of CNY 5 billion (US $756
million). A new manufacturing
plant for the JV will be construct-

ed in Zhejiang Province.
Being owned by Chinese car
manufacturer Geely, Volvo can
produce and sell vehicles in China
without having to follow the rules
applicable to foreign companies.
The company has started manufacturing its performance electric
cars - whose main body parts are
made from carbon fibre - under
the Polestar brand at a new factory
in China, the Polestar Production
Centre located in Chengdu,
Sichuan Province.
Tesla, the first foreign brand of
electric cars in China with 13,700
electric vehicles sold between
January and September 2017, i.e.
more than 80% of the new-energy vehicles imported to China
during the period, is the only
foreign brand to have established
a manufacturing site without
Chinese partners. This was a first
for a foreign car manufacturer. In
November 2017, Tesla reached
an agreement with the Chinese
government in Shanghai to build
a production facility in the city's
free-trade zone. The deal is undoubtedly beneficial to the entire
car supply chain in China and it
could drastically cut production,
labour and transportation costs
for Tesla cars sold in China.

BUSINESS

Market share of new-energy vehicle manufacturers by volume in China
Jan.-Oct. 2017 (Source China Passenger Car association)

However, some industry observers argue that the cars produced
under the new factory deal are still
likely to be considered as imports
and face a 25% duty.
Still a tiny market
According to the July 2017
McKinsey report, as for demand,
China's high marks are evidenced
not only by the number of vehicles sold but also by the variety of
choices available. Approximately
25 new EV models were introduced to the Chinese market in
2016. By 2020, a Chinese consumer will be able to choose from
hundreds of different EV models.
China provided monetary subsidies to launch and sustain the
EV market but the government

said it will gradually shift from
direct subsidies to non-monetary
incentives by 2021.
In 2016, the country expanded
its EV-charging infrastructure to
a total of 107,000 public charging
outlets - a 118% increase over
2015. The State Council said
China would build more than
12,000 new charging stations
before 2020 to fulfil the demands
of over 5 million plug-ins.
Still, Chinese EV penetration in
its light-vehicle market was 1.4%
in 2016, whereas it was about
24% in Norway. In relative terms,
electric vehicles are still a tiny
market in China and represent
large growth opportunities.
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Ultra-performance electric cars showcase China's technical skills and ambition
An electric two-seater with
strong lines and a top speed
of 313 km/h was on show at
the Shanghai Auto Show in
June 2017. It was created by
NIO, a Chinese-Western hybrid with bases in Shanghai,
London and the Silicon Valley.
NIO is part of a wave of fledgling automakers, including
Detroit Electric, Qiantu
Motor, Thunder Power and
NEVS - all backed at least
in part by Chinese investors
- that are aiming to compete
with Europe, the USA and
Japan by offering top speeds
over 240 km/h and features
including carbon fibre bodies
and web-linked navigation
and entertainment. With
investors such as Chinese
tech giant Tencent Holdings and computer maker
Lenovo Group, NIO recently

developed
partnerships
with Kangde Group in many
areas including products,
technologies and funds. At
the start of Kangde Group's
new carbon fibre project in
Changzhou, NIO Vice President Zhong Wanli declared
in a related press release
that "the new plant will
greatly enhance the depth
of cooperation between the
two sides. In June 2017, NIO
and Kangde Group signed
a purchase agreement for
mass-produced carbon fibre
automotive parts for smart
electric vehicles worth more
than CNY 1 billion (US$ 155
million). The construction
of additional Kangde Group
factories in East China is very
good news as it will shorten
the distances between us and
facilitate cooperation. It will

enable us to work together
to promote large-scale applications of carbon fibre in the
field of new-energy vehicles."
Unlike NIO, which has no
sales plans and is taking
bespoke orders, Qiantu
Motor (Qiantu means Future
in Chinese), a wholly-owned
subsidiary of Beijing CH-Auto
Technology Co., plans to invest more than CNY 2 billion
(US$ 300 million) in the first
phase to produce up to 50,000
units of its K50 electric sports
car annually in its Suzhou
manufacturing base, near
Shanghai. "Different from
the manufacturing process
of traditional vehicles that focuses on pressing, welding,
painting and the general assembly process, the Suzhou
manufacturing base will take
advantage of lightweight maN°119 March 2018

terials", said Qiantu Motors
Chairman Lu Qun during the
New Energy Vehicles Show
in October 2017 in Beijing
as reported by the Chinese
economic newspaper Caijing.
"Through a large number of
experiments and innovations,
Qiantu Motor will be the first
to introduce carbon fibre on a
large-scale in vehicle mass
production in China and as a
result, the K50's 29 carbon
fibre panels only weigh 46
kg."
The first K50 models will be
launched on the Chinese
market in June 2018 and,
although no prices have
been announced yet, Lu Qun
said he wanted more middle-class and mainstream
consumers to enjoy electric
sports cars.

/ jec composites magazine

25
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