New Energy Vehicles (NEVs) in China

tphuang

tphuang

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sunnymaxi said:
https://twitter.com/i/web/status/1563715239635349504
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All the people that talks about companies moving out of China due to 0-covid and higher labor cost don't seem to understand that's a good thing. As China's labor cost continues to increase, it is becoming more competitive in the far more important auto industry (and other similar higher tech industries). In a few years, China will become a massive net importer of cars/trucks to net exporter of cars/trucks.
 
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AndrewS

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@ZeEa5KPul

China produces about one-third of its oil consumption.

You can see from the analysis below that domestic oil production is insufficient even if all vehicles are electric in China.

But if you add in oil from friendly sources like Russia, there should be enough.



tphuang said:
As I was looking into Japan and oil blockade in another thread, I started thinking about the strategic implication of China turning to EV on mass.

First of all, the question is how much oil do they produce domestically. As you can see here, they hover at around 4 million bpd for several years now
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looks like the overall import is about 10 to 11 million bpd in 2021.

So, I looked up this article for the current oil usage break down in China. As recently as 2019, they were at 14 million bpd. Let's say they were using about 14.5 million at end of 2021 and that's where they are likely to peak in terms of ICE vehicles.
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Based on the chart from that webpage, the breakdown by sector is as follows:
Transportation 59%
Petrochemical 12%
Power 1%
Buildings 8%
Other industry 4%
Others 16%

Among transportation, 6.5% of 59% is jet fuel. My guess I that shipping/freight along with jet fuel represent 19% out of the 59% (based on diesel being about 26% of fuel demand and assumption half of the diesel fuel being trucks and other vehicles rather than shipping). So out of the 40% that is probably being used for grand transportation, how much can be cut.

There are 2 things to test out here. The first is what happens when China reaches 80% NEVs as new cars by 2027? Let's assume the following scale up.
2022 30%
2023 40%
2024 50%
2025 60%
2026 70%
2027 80%
The current average car age in China is about 5 years. Which means, the cars delivered from 2023 to 2027 will likely represent half of the cars on the road by 2027. So for half of the cars on the road, they are about 60% NEV. For other half of the cars on the road, let's they are 15% NEV. In total, it would be bout a 65%/35% mix of ICE to NEV cars on the road. If we assume there are some aggressive cash for clunkers trade in, it's not hard to see 60/40 split of ICE/NEV cars by 2027 vs probably 90/10 split right now. If we assume that in natural environment, fuel demand from cars increase 5% a year for the coming years (assuming some fuel efficiency improvement among ICE cars year on year), then by 2027, fuel demand may otherwise be 30% larger than what it is now. 1.3 * 60 = 78. So, fuel demand from cars might go down 15% during this time. Considering that trucks/vans/fork lift/other transportation sectors are also seeing massive electrification, it's not unreasonable to assume a similar 15% drop in fuel demand across the transportation sectors. Overall, that would drop transportation sector fuel demand from 40% of 2021 total to 34% of 2021 total. Even if we optimistically assume no growth in fuel consumption from jet/shipping/freight fuel, the entire transportation sector would still be at 54% of 2021 usage. It seems to me that China will not get a major drop in oil usage as long as industrial sectors continue to use oil at the same of higher rate. Although, if NEV adoptions reaches close to 100% by the end of this decade and we also start seeing sustainable fuel/electricity/hydrogen starting to get adopted in aircraft/shipping/freight, we could see entire transportation sector dropping 30% from its high point in 2021. And by 2035, we could see that number down 2/3 vs 2021 numbers as almost all the vehicles on the road becomes either electric or hydrogen powered and good chunk of the shipping/airline use sustainable fuel/hydrogen.

The other question is what happens by the end of this decade if a war breaks out and China loses its access to Middle East oil and only have access to oil from Russia through pipelines and Far East oil tankers + possible oil from Myanmar pipelines. According to
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They have the current pipeline running to Heilongjiang that currently supplies 600k bpd and then kazakhstan pipeline that supplies up to 400k bpd. There is also the far eat oil tanker from Russia that maxes out at 80 million tons a year, although only 40 million tons were shipped to all buyers last year (equivalent to about 600 bpd). Let's say they build higher capacity pipeline for both oil/gas over the next few years and upgrade that oil tanking facility, it's not inconceivable for Russia to continue to export up to 2 million bpd to China via pipeline, oil tankers and train. If China can get another half million bpd through Myanmar through pipeline/train/truck. They could conceivably get even more import from other countries that don't get cut off, then even in the worst case scenario of getting cut off from Malacca straits and Pacific Ocean, they can probably get 7 million bpd a day (if you include the 4 million bpd produced in China). If we look at China's oil usage in the transportation sector, they can easily just stop 90% of non-military ground transportation that use gas/diesel, because there will be so many PVs, buses, taxis, trucks and industrial vehicles using battery/hydrogen power, that society can still function without those 40% of vehicles on the road. If they significantly reduce commercial airline travel and shipping/freight (due to collapse in export), then transportation sector as a whole could be down 80% in gas consumption vs 2021 numbers which would be 59% * 14.5 million bpd * 0.2 = 1.7 million bpd in transportation. The remaining sectors could also see some reductions from less production of chemicals (like plastic) that are not needed in a wartime economy or just more savings. If, that's down 20%, then 41% * 14.5 bpd * 0.8 = 4.7 million. I think the Chinese economy/society would still function fine even if it only has access to domestic production + Russian/CIS/Myanmar imports. They would not even have to use strategic reserves. Countries like Japan and South Korea would suffer a lot more from getting cut off from oil producers in the Middle East/Africa, since they don't have domestic production and Russia can turn its back on them. More importantly, their societies are still too reliant on ICE vehicles for transportation to not get impacted by a 90% cut in oil import.
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Sincho

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China's continued efforts to further open up its domestic NEV market, the fastest-growing one in the world, comes as the US pushes for a decouple in the sector, with a new legislation reportedly aiming to "break China's hold on battery supply chains," ...
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Are the following assertions true? Surprising. If so, the situation need to be remedied fast otherwise the industry maybe open to chokehold blackmail.
According to Zhang, China still needs to import many core NEV parts such as automobile brake systems and safety air bags from abroad, while overseas companies like Nvidia and Qualcomm also provide NEV chips for electric cars sold in China.
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"So far, about 95 percent of China's NEV chips are still imported," Zhang said
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taxiya

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SteelBird said:
1000km challenge. I don't know how credible this test is but, if true, the figures are not impressive at all, especially when you need to charge the car every 150km.

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I highly doubt the article and its test to the point of regarding it as rubbish.

BYD Tang equips with 86.4 kWh battery. One of the "better" one is Audi e-tron 55 which has 95 kWh battery. Of course BYD will charge more frequently if everything else is equal. It is a no-brainer comparison, what is the point?

The article also said
One of the main issues for the BYD Tang is high energy consumption. According to the video, the average consumption amounted to 327 Wh/km (526 Wh/mile). For comparison, Audi e-tron 55's average is 24,3–22,0 kWh/100 km stated by Audi which is 243-220Wh/km. It sounds like Audi is better.

But the author Bjorn compared Audi and BYD in another test and results showing BYD is better than Audi. This is contrary to his test above. It also shows that BYD goes longer range than Audi with a smaller battery pack.

2022 BYD Tang EV​

Results at 90 km/h (56 mph)
  • range of 386 km (240 miles)
  • energy consumption of 216 Wh/km (348 Wh/mile)

Audi e-tron 55 (SUV)​

Results at 90 km/h (56 mph)
  • range of 370 km (230 miles)
  • energy consumption of 225 Wh/km (362 Wh/mile)
My conclusion therefor is that the author and website is very unprofessional in what he is doing and should not be trusted.
 
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tphuang

tphuang

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Sincho said:
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Are the following assertions true? Surprising. If so, the situation need to be remedied fast otherwise the industry maybe open to chokehold blackmail.
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I have seriously posted on this topic many times on this thread. It would be good if you can just read them through.

It depends on the type of chips. For power chips, Chinese domestic players capture 60% of the market. and among home grown automakers, domestic chip makers probably capture almost all the market share. The technology isn't that complicated. They just need to ramp up production. For the MCU market, it's also probably similar in market share. The only one that's still mostly imported is the mpu of the car. That is still mostly using Qualcomm and Nvidia. But byd is developing their own mpu and horizon robotics has developed a pretty competitive product too. As I said, there is a tsmc Qualcomm Nvidia cabal for the main processor that requires 5nm process to build. Once china complete the domestic 7 nm line, all that will jo longer be an issue.

I think people need to stop obsessing over chips so much. There are other important part of autonomous driving like lidar, ultrasonic radar and high resolution camera that also require more competitive domestic players.
 
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