Market demand drivers for e-mobility and PHEVs > Required PHEV and BEV sales > Incentives/Privileges...

Birmingham, 28th February, 2018

Market demand drivers for e-mobility

2 2018-01-26_RB_xEV_Global_Forecast_v1_tl.pptx

2010 2015 2020 2025 2030

1,000

900

800

700

600

500

200

100

300

0

400

Total cost of ownership will start to feature as a driver from 2022 on a case by case basis

xEVs are not expected to reach broad TCO parity with ICE vehicles before 2025

xEVs do outperform on TCO for some driving profiles, but limited infrastructure makes these impractical

Source: Bloomberg New Energy Finance, Roland Berger

Total cost of ownership ("TCO") of different powertrain technologies

Competitiveness of driving profiles at an oil price of 70 USD/bbl [Germany] LiB pack price, United States [USD/KWh]1)

xEVs are forecast to reach TCO

parity in the US over 2022-

2026, depending on

vehicle segment2)

1) Projected price, based on average of 14-19% experience curve; 2) EV cost parity is calculated on an unsubsidised basis

10k 15k 20k 25k 30k 35k 40k 10k 15k 20k 25k 30k 35k 40k 10k 15k 20k 25k 30k 35k 40k Mileage p.a.

C-Segment

E-share

80-100%

60-80%

40-60%

20-40%

0-20%

Diesel vs. Diesel PHEV Diesel vs. Gasoline PHEV

Gasoline vs. Gasoline PHEV

80-100%

60-80%

40-60%

20-40%

0-20%

80-100%

60-80%

40-60%

20-40%

0-20% D-Segment

E-Segment

Cost-efficient (TCO)

E-Driving share is difficult to be realized with a common vehicle usage profile for the respective annual mileage because of lacking broad public charging infrastructure coverage in most EU regions

Main usage Main usage Main usage


Until 2025 demand for xEVs will be driven by legislation in China and the EU, and customer preferences in the US

Drivers for xEVs1) until 2025

Source: Roland Berger

1) Both dimensions existing in all three regions, however, with different emphasis 2) CARB Section 177 States

Regionally dominating factor

Customer driven Legislation driven

Expected market development for EVs and PHEVs

> Required PHEV and BEV sales

> Incentives/Privileges

> Limitations for ICE

2)

> Fulfilling customer needs


xEV sales targets, CO2/fuel consumption targets and incentive programs are the most important drivers

Drivers for global powertrain electrification1) until 2025


1) Both dimensions existing in all three regions, however, with different emphasis 2) Push is dominating factor in CARB Section 177 States

Dominating driver Less dominating driver

Required PHEV and BEV sales

1 Incentives/ Privileges

2 City access and registrations bans for ICE

3

Fulfilling customer needs

4

Legislation driven

Customer driven

2)

Limited customer pull and only comfort leveled TCO benefit

Limited customer pull and only comfort leveled TCO benefit

Many countries with incentive programs, some countries with tax advantages

National subsidy based on vehicle weight and battery range

No ICE registration ban and limited access restrictions

Long term ICE registration bans in some countries and city access restrictions in several cities

No ICE registration ban and limited access restrictions

Short- to medium term: Highest customer pull due to "innovators"-image and TCO benefit

High incentives and some cities with eased registrations (e.g. license plates)

Corporate CO2 fleet emission targets

ZEV sales targets (CARB) and Fuel efficiency targets (CAFE)

CAFC NEV sales targets

Not relevant


Emission regulations increase pressure on automotive OEMs to improve CO2 emissions, fuel efficiency and exhaust gas emissions

GHG emissions/fuel consumption in NEDC g/km equivalent

Passenger car GHG emissions/fuel consumption and emission regulations

≙ 44.8 mpg

1) Weight-class based per vehicle and corporate average 2) Weight-based corporate average 3) Footprint-based corporate average; converted to NEDC

Source: Press research; ICCT; Roland Berger

127

95

-45%

2025

~81

tbd

2021 2013

93

117

171-46%

2025 2020 2013

97

125

159

2020 2013

-39%

2025

≙ 36.0 mpg

> CAFC1) (phase IV)

> NEV sales share > CAFE3) > Additional ZEV regulation CARB

(177 states)

> CO2 emissions target2)

≙ 5 L/100km

≙ 7.3 L/100km

1 Required PHEV and BEV sales


0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32

2,550

2,400

1,350

1,200

1,050

900

750

600

450

300

150

0

Ad

d.c

ost

2)[E

UR

]

CO2 emission reduction [g/km]

These emissions regulations can no longer be met by alternative IC-related technologies

Cost1) [EUR] and CO2 emission benefits [g/km] – B-segment petrol vehicle

1) System/component cost; 2) No CAPEX and integration cost in additional cost considered; 3) Industry average weight, aero efficiency, standard tires; 4) Body and some components but not considering additional weight saving potential in chassis, interior, electric and powertrain

40 EUR/g

30 EUR/g

20 EUR/g

15 EUR/g

10 EUR/g

5 EUR/g

Base vehicle: B-segment3)

Base engine: 80 kW

Base CO2 emissions: 115 g/km

ICE optimisation Most ICE optimisation levers have already been introduced and will be largely exhausted by 2020

Mild/Full hybrids Hybridisation offers additional CO2 emission reduction potentials once ICE measures have been exhausted

Light-weighting4) As emissions regulations become more stringent light-weighting could gain importance as other levers are exhausted

Source: EEA, IHS, Expert interviews, Roland Berger

1 Required PHEV and BEV sales


Indirect customer pull is targeted by incentives like advantages in plate registrations, particularly in China

2 Incentives/ Privileges

Regional incentives and privileges

Ince

nti

ves

Pri

vile

ges


National and city subsidies [max EUR k, 2016] in 39 demo areas, 88 cities

Country-specific incentives [max EUR k, 2016]

National subsidy based on vehicle weight and battery range

> License plate registration benefits in 6 cities with savings up to EUR 8 k (Shanghai) for NEVs

> Reduced/exempt parking fees, main-tenance etc. related to the use of NEV

> Minor privileges such as free parking and usage of bus lanes in selected cities (e.g. Hamburg)

> Exemption from registration or annual vehicle taxes especially in NL, DK

> Exemption from purchase tax (~6%) for NEVs

> Subsidies on charging and installation of charging facilities

> Subsidies will likely be counted

> Usage of commuter lanes

0

45664

7810

4

Shenzen Beijing Shanghai Jinhua

8

35

8

e-Golf S500e Panamera PHEV

Model S


Several cities already restrict or plan to restrict access for certain vehicles thus driving electrification

Overview of selected city access restrictions 1/2 (selection)

Expected impact on cars

> From 23rd Oct. 2017 minimum exhaust emission standards need to be met or daily £10 emissions charge

> Minimum emission standards are Euro 4/IV for petrol & diesel vehicles

> From 1st July 2017 all vehicles Mon-Fri 08:00 – 20:00 at least Crit 'Air' sticker 4 & heavy duty vehicles every day from 08:00 – 20:00

> Euro standards will be increased constantly, experiments with LTZ & ultra-low emission routes

> Six different levels of access restriction policy

> Goal is to achieve "a zero emission zone" in the historical center

> No restrictions for two-wheel vehicles

> LTZ Mon – Fri 06:30 – 19:00 & Sat. 14.00 – 19:00

> Night LTZ as well

Future restrictions

London Paris Rome

1,480,000 veh./ 120,000 sales

980,000 veh. / 60,000 sales

1,480,000 veh. / 60,000 sales

Total ~2.1% of EU-fleet and ~2.4% of sales

> Goal: Emission free city by 2025

> Stepwise increase of the restrictions 2017, 2018 & 2020 - lorry LEZ will be tightened

> Light Duty Vehicles will be affected soon

> Currently the LEZ applies to lorries over 3.5 tones

> In the budget for 2018/2019 construction measures for reduction of cars are already planned

> Transport development draft 2030

> smog alarm winter 2017/2018: ban of all diesel vehicles lower than Euro 6

> 2019 plan: car ban in the city center

> Ban of diesel vehicles January 2017 Tuesdays from 06:00 – 22:00 as long as air pollution remains severe

> The odd even number plat scheme can be used as well

> LEZ is expected in winter 2017 /2018

Amsterdam Stuttgart Oslo

330,000 veh. / 20,000 sales

270,000 veh. / 20,000 sales

No information available

Source: Local authorities; Roland Berger



Several cities already restrict or plan to restrict access for certain vehicles thus driving electrification

Overview of selected city access restrictions 2/2 (selection)

Expected impact on cars

> Wish to remove diesel vehicles from the city

> Number of access restrictions for cars will be increased

> By summer 2019 the Grand Via is sup-posed to be car free

> Residents with permit & elect. vehicles are allowed

> Charge park system

> Goal to remove diesel vehicles by 2025

> Foreign vehicles are not affected in Athen

> Rental & hire cars are not affected for the first 40 days

> Difference between city center scheme & whole Athens area

> City designed to ban vehicles of any kind post 2020

> Layout makes it easier to walk than drive (people can walk anywhere in 15 min.)

> Only half of the roads in the 80 k-person city will allow vehicles

Future restrictions

Madrid Athens Chengdu

952,000 veh. / n.a.

173,000 veh. / 24,500 sales


Total ~2.1% of EU-fleet and ~2.4% of sales

> Pedestrian-only island in Fujian Province with around 20 k inhabitants

> The only vehicles that are accepted are small electric buggies and governmental electric service vehicles

> Although no direct car ban is planned the number of pedestrian areas is increasing: E.g. Times Square, Herald Square, and Madison Square Park

> Ithaca Commons as largest car free area in NY with three-block pedestrian mall

> Plan to ban private cars on San Francisco's Market Street

> Car ban for private cars including ridesharing vehicles such as Uber and Lyft

> Delivery trucks will further have access

Gulangyu New York San Francisco




Source: Local authorities; Roland Berger


http://www.google.de/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjF9pPdzf7VAhVFvBQKHQiFBBcQjRwIBw&url=http://indulgd.com/car-free-city-plans-emerge-in-chinas-chengdu-great-city-project/&psig=AFQjCNF8dp0AVNll9KUCgq7R6lwIm-bf2Q&ust=1504170397082859


In EU28 we estimate these city regulations might affect approx. 66 m vehicles in use and approx. 3.8 m new car registrations….

Scenario III

66.4

33.8

25.9

6.7

Scenario II

34.7

22.6

11.6

0.5

Scenario I

16.0

9.3

6.3 0.5

Affected vehicles in use Affected new car registrations

Scenario III

3.8

1.8

1.7

0.3

Scenario II

2.0

1.3

0.7

0.0

Scenario I

0.9

0.5

0.4 0.0

Source: Eurostat; OICA; ACEA; Roland Berger

High polluted Medium polluted Low polluted

Vehicles in use/new car registrations affected by environmental city regulations [m units]


Scenario I:

Cities with >1,000k inhabitants, without suburbs

Scenarios

Scenario II:

Cities with >1,000k inhabitants, with suburbs ("greater cities")

Scenario III:

Cities with >500k inhabitants, with suburbs ("greater cities")


….meaning almost 25% of cars will be affected by city-level environmental regulations

Scenario III

286.1

76.8%

23.2%

(66.4)

Scenario II

286.1

87.9%

12.1%

(34.7)

Scenario I

286.1

94.4%

5.6%

(16.0)

Scenario III

15.8

76.0%

24.0%

(3.8)

Scenario II

15.8

87.0%

13.0%

(2.0)

Scenario I

15.8

94.2%

5.8%

(0.9)

Source: Eurostat; OICA; ACEA; Roland Berger

Not affected vehicles Affected vehicles

Vehicles in use/new car registrations affected by environmental city regulations in EU28

Affected vehicles in use of total car park [%; m unit] Affected new cars of all registrations [%; m unit]


Scenario I: Cities with >1,000k inhabitants, without suburbs; Scenario II: Cities with >1,000k inhabitants, with suburbs ("greater cities"); Scenario III: Cities with >500k inhabitants, with suburbs ("greater cities")


xEV sales shares2) 2016-2025 [m vehicle]


EU281) China NAFTA

1) Passenger cars 2) RB expects the EU commission to allow OEMs to meet 90% of the target in 2025 (similar as it is for the 2020 target)

94%88%

7%5%

20252)

17.3

2020/21

17.1

4% 2%

2016

17.3 0%

88%79%

17%9%

20252)

30.5

4%

2020

27.5

3%

2016

23.7 1%

88%

76%

9%

7% 15%5%

20252)

15.0

2020/21

14.9

2016

14.9 1%

Other PHEV BEV

City-level laws may help PHEVs as a medium term bridging technology, but BEV growth is expected to dominate after 2020


Given this combination of drivers, RB believes that xEV sales will grow from 0.7m in 2016 to 12m in 2025

xEV sales2) 2016-2025 [m vehicle]


EU281) China NAFTA

1) Incl. UK 2) Passenger cars, note that these geographies account for c. 70% of global sales

2025

2.01

1.16

0.85

2021

1.01

0.61

0.40

2016

0.11 0.04 0.08

2025

6.32

1.27

5.05

2020

3.39

0.83

2.56

2016

0.34 0.08 0.26

2025

3.63

1.39

2.24

2021

1.77

1.06

0.70

2016

0.22

0.11 0.11


For further information:

Wolfgang Bernhart, Stuttgart

Mobile phone: +49 (160) 7447-421

E-Mail: [email protected]

Tim Longstaff, London

Mobile phone: +44 (7880) 202910

E-Mail: [email protected]

mailto:[email protected]






Market demand drivers for e-mobility and PHEVs > Required PHEV and BEV sales > Incentives/Privileges...

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