E-mobility index by Roland Berger and fka for Q1 2015: Stricter CO2 limits force European OEMs to adopt a new model strategy

• “E-mobility index” by Roland Berger Strategy Consultants and Forschungsgesellschaft Kraftfahrwesen mbH Aachen for Q1 2015: Stricter CO2 limits force European OEMs to adopt a new model strategy
• Lighter materials can offset the increased battery weight but modular vehicle platforms restrict the scope for applying lightweight design concepts
• China is conspicuous by its active industry and regulatory policy: High subsidy levels help to double the sales of electric models in the last 12 months

Munich/Aachen, 27-3-2015 — /EuropaWire/ — German OEMs have relinquished their leading position with electric and hybrid vehicles as the value for money of their cars has diminished. They now rank in fourth place, slipping down the rankings largely due to the expiration of R&D subsidization programs in late 2014 and the wider range of expensive electric models now on offer in the premium segment.

In terms of sales figures, Germany enjoyed 13 percent growth and is thus drawing ever closer to the leading nations of France, Japan and the US, but sales currently remain at moderate levels. This is one of the conclusions of the latest “e-mobility index” by Roland Berger Strategy Consultants and Forschungsgesellschaft Kraftfahrwesen mbH Aachen (fka) for the first quarter of 2015. The index compares the relative competitive standings of the top seven automotive nations (Germany, France, Italy, the USA, Japan, China and South Korea) in the electromobility segment. The outcome is based on analysis of three indicators: technology, industry and market.

“German automakers have invested a great deal in the development of e-mobility in recent years and have now reached a very high level on the technological side,” said Roland Berger Partner Wolfgang Bernhart. “This has enabled them to mass produce e-models even in the premium segment. But OEMs are still struggling with high battery costs and weight.”

Stricter CO2 limits and lightweight design principles could stimulate e-mobility

From 2020 onward, 95 percent of newly registered cars in Europe will have to meet CO2 limits, which are going to be even tighter from 2021. Then, new car emissions will be limited to just 95 grams of CO2 per kilometer driven – down from the current 130 grams. The tightening of European directives is placing OEMs under increasing pressure: In the coming years they will need to offer at least one hybrid or fully electric model in all ranges in order to meet the CO2 limits. “The stricter European directives favor premium OEMs most of all,” explained Roland Berger Partner Thomas Schlick. “That’s because their high-price models make them more able to tap into a wealthy clientele than automakers who sell high-volume vehicles.”

This, however, is all set to change in the future, as the conditions are now in place to enable OEMs to manufacture electric cars featuring more mature technology more cheaply. The application of lightweight design principles could deliver major impetus for the evolution of electromobility. Automakers are compelled to reduce the weight of electric cars dramatically to offset the extra weight of the battery. But to date, the design, the modular construction systems and the materials used in the vehicles were still aligned toward the conventional model series.

“Modular construction systems enable car manufacturers to produce higher unit numbers at lower costs,” explained Markus Thoennes, Senior Engineer at fka. “However, electric cars can be between 10 and 30 percent heavier than conventional vehicles. This makes them less efficient. OEMs should therefore focus more on alternative materials like carbon fiber reinforced plastics and aluminum. Cost considerations do mean, though, that OEMs will not be able to migrate completely over to lightweight design concepts in the near future.”

China is the frontrunner in e-mobility subsidies

China has been driving the expansion of electromobility with extensive subsidization programs for years now. The government is currently subsidizing the development of e-mobility to the tune of almost 7.7 billion euros. China has also widened its network of charging stations and established a cooperation network for public sector companies engaged with e-mobility solutions.

More significant still is the country’s active industry and regulatory policy: “Electric vehicles from foreign automotive manufacturers can only be registered in China if one of their three key components – the engine, the battery or the power electronics – was supplied by a Chinese patent holder,” reported Markus Thoennes.

Nevertheless, even though China’s absolute sales figures (53,000 new cars) make it the world’s second-largest market for electric cars, the share of electric and hybrid vehicles sold in the market as a whole is just 0.2 percent, putting it significantly behind the leading automotive nations. As such, the Chinese government is coming under increasing pressure to significantly reduce particulate pollution levels in the country’s megacities. Consequently, the new programs subsidize only hybrid vehicles and electric-only cars. China is also focusing to a growing extent on electric bikes and scooters and on alternative drive concepts in public transportation.

Technology – Industry – Market: Rankings by indicator

The Roland Berger and fka experts analyzed the seven major automotive nations’ performance in three indicators: the technology, the industry and the market.

• Technology: China remains the frontrunner in the subsidization of research and development activities, making just under 7.7 billion euros available in the period to 2016. Japan increased its subsidies slightly to 171 million euros through 2016. Most of the automotive nations have seen the public subsidization of e-mobility decline dramatically. The US and Italy offer the least subsidization.
• Industry: Japan, the US and China are the top 3 nations, with these activities accounting for a high share of the GDP – both automotive manufacturing and battery production. The strong domestic demand in Japan and the US is also having a negative impact on European OEMs’ production forecasts. “European electric models play a very marginal role in the American market,” explained Roland Berger Partner Wolfgang Bernhart. “European OEMs are therefore missing out on a significant sales market for their new electric cars.”
• Market: The US remains the lead market for e-mobility, selling some 120,000 electric and plug-in cars in the past 12 months. But the Chinese market has seen the biggest growth, more than doubling its sales year on year, with almost 53,000 cars sold. One of the main reasons for this is the strong demand from cities and local authorities. Double-digit growth rates have also been recorded in Germany (27%) and France (13%). Looking at the number of e-vehicles as a proportion of a country’s entire automotive market, France leads the pack with 0.90 percent market share, followed by the US (0.73%) and Japan (0.71%). Germany’s standing remains somewhere in the middle, at 0.43 percent.

E-MOBILITY INDEX – 1ST QUARTER 2015

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