China Passenger Vehicle Fuel Consumption Development Annual Report 2016
The Innovation Center for Energy and Transportation September, 2016
Acknowledgements We wish to thank the Energy Foundation for providing us with the financial support required for the execution of this report and subsequent research work. We would also like to express our sincere thanks for the valuable advice and recommendations provided by distinguished experts and colleagues.
Report Title China Passenger Vehicle Fuel Consumption Development Annual Report 2016
Report Date September 2016
Authors Liping Kang, Lanzhi Qin, Maya Ben Dror, Feng An
The Innovation Center for Energy and Transportation (iCET)
Phone: +86.10.65857324 | Fax: +86.10.65857394 Email: [email protected] | Website: www.icet.org.cn
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Executive Summary
One of the main drivers of the national increase of oil consumption, greenhouse gases, and pollutant emissions is the rapid growth of passenger vehicles ownership in China over the past decade. International experience demonstrates that fuel economy standards are one of the most effective policy instruments for improving vehicle fuel efficiency, promoting technological development, and reducing greenhouse gas emissions.
China started implementing fuel economy standards in July 2005. Since then, the policy has expanded the original by-vehicle weight-group fuel consumption limitation standard to also include by-vehicle weight-group fuel consumption targets, corporate average fuel consumption targets, also known as CAFC, and imported vehicles inclusion (as of Phase III, since 2012).
The Innovation Center for Energy and Transportation (iCET), the only domestic non-governmental organization to participate in the development of China’s passenger car fuel consumption standards, continues to track and analyze the implementation of these standards. iCET’s efforts are primarily aimed at advising policy-makers to design and enforce a robust and effective standard.
iCET’s “2016 China Passenger Vehicle Fuel Consumption Development Annual Report” – the sixth report of its kind – analyzes the gaps between Phase III and IV in China’s fuel consumption standard. The report is based on China’s 2015 fuel consumption (FC) data and production of each auto manufacturer. It presents auto manufactures’ individual FC performance, evaluates New Energy Vehicles’ (NEVs) contribution to corporate and overall car market performance, and proposes recommendations towards the 2020 target of 5L/100km and translates to CO2 emissions of 167kg/km (from the 2015 target of 6.9L/100km or about CO2 120kg/km). The report’s key findings are summarized below:
1. In 2015, domestic passenger vehicle manufacturers’ CAFC reached an average of 6.95L/100km. After including FC credits from NEV production, the average CAFC decreased to 6.60L/100km, outperforming Phase III FC target.
The 2015 domestic passenger vehicle FC target of 6.9L/100km was first announced in the “Energy Saving and New Energy Automobile Industry development plan (2012-2020)”. iCET’s analysis found that, if calculating FC values and production volumes of internal combustion engines vehicles (ICE) alone, China’s domestic passenger vehicle manufacturers’ corporate average fuel consumption (CAFC) reached 6.95L/100km. However, when accounting for new energy vehicles (NEVs, namely electric power engine vehicles) production and FC figures, the 2015 domestic average CAFC score improved by 0.35L/100km to 6.60 L/100km, well below the average FC -2-
target. On the other hand, importing enterprises’ CAFC was much higher than that of domestic passenger car manufacturers, reaching 8.44L/100km if excluding NEVs, the national average fuel consumption was improving slightly to 7.02L/100km if excluding NEVs, still some 0.12L/100km higher than the national average fuel consumption. Generally, the Phase III target is relatively easy for manufactures to achieve.
10.0 110%
9.0 105%
8.0
100%
7.0
95% FC,L/100km 6.0
95.1% 90% 5.0 93.1% 93.2% 92.4% 91.5%
4.0 85% National Domestic JV Independent Import Average
CAFC2015 TCAFC-III CAFC2015/TCAFC-III
Note: TCAFE-III stands for Target CAFC for the year 2015, the last implementation year of Phase III; By definition, domestic manufacturers CAFC is inclusive of both joint ventures (JVs) and independent manufactures. 2015 CAFC versus 2015 Target CAFC (By manufacturer type)
2. In the past decade, passenger car fuel consumption (excluding NEVs) has improved slowly, in large part due to a gradual increase in the production of bigger and heavier vehicle models. Thus, the standard and management regime can have a greater impact on fuel consumption and emissions by encouraging the production of smaller and lighter vehicles.
Overall FC levels have shown an average annual decline of less than 2% over the past decade. This represents a modest 0.10 to 0.25 L/100km annual reduction rate. Independent enterprises’ FC reduction rates were the slowest with an average annual decline of less than 1% (0.5L/100km decrease in the last decade). Increases in large weight-group models manufacturing helps to explain the annual slowing FC improvements. Statistics indicate that, between 2012 and 2015 (Phase III duration), domestic passenger cars’ average curb weight increased by 70kg while the average increase for independent passenger cars was 150kg. Generally, a 100kg increase in curb weight is accountable for an increase of about 0.4-0.6L/100km. Therefore, independent
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enterprises’ FC performance declines 0.6-0.9L/100km due to an increase in curb-weight. Better FC results could be achieved through an increased attention to model type and production volumes in China’s FC standards regime.
8.50 1400 1387 1372 8.16 8.11 1363 1360 8.00 7.99 7.97 3.4% 1313 7.88 1330
1320
4.4% 7.71 kg
L/100km 7.50 ，
， 7.53 7.33 1280 7.22
CAFC 7.00 6.7% 7.02 1240
Phase I Phase II Phase III Curb Weight 6.50 1200 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
National Average Fuel Consumpiton Average Curb Weight
2006-2015 National Average Fuel Consumption and Curb Weight Trends
8.50 1400 1361 1363
8.37 1369 1357 8.13 1350 8.02 1335
8.00 7.99 1321 1318 7.97 1313 L/100km 1300
7.75 7.69 ， 7.55 7.54 7.50 7.42 1250 7.43 1233 7.30 7.31 7.49 7.23 7.14 1200 1192 7.11 Curb Weight, kg 7.00 7.01 6.95 6.92 1150 FuelConsumption Phase I Phase II Phase III 6.50 1100 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 JV FC Independent FC JV CW Independent CW
2006-2015 Fuel Consumption and Curb Weight Trends for JVs and Independent Manufacturers
3. The NEV super credits in CAFC calculation helps independent manufacturers reach short-term targets, but also weakens the motivation behind technological upgrades for traditional cars, undermining the long term goal of the standard.
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In 2015, independent car enterprises produced about 95% of the NEVs (including imports) in China, delivering a 17% FC decline from 7.01L/100km to 5.82 L/100km, in contrast with a more modest decline of 0.5 L/100km achieved through technological upgrading of ICE vehicles. Over the past two years, the average fuel consumption of independent brand cars did not make any improvement and some manufactures CAFC even rebounded. Based on iCET analysis, some independent NEV manufacturers has almost abandoned fuel saving technological upgrading after reaching a critical production volume of NEVs. For example, Jiangnan Auto and Jiangling Motors’ FC levels increased by 10% in 2015, followed by BYD Auto, with a 5% FC increase, as illustrated in the below figures. The two biggest independent car producers Chongqing Chana and Great Wall saw an increase in fuel consumption in 2015.
21% 350,000 17% 300,000
108% 250,000 41% 78% 200,000 80% 42%
150,000 126% Prodution 100,000 64% 50,000 198% 0
2015 ICE Production 2015 5×NEV production Proportion
2015 NEVs Production vs. ICE Production by Major Domestic NEV Producers
10.0
10.5% 9.0
8.0 4.9% 10.7% -8.0% -5.3% -4.2%
L/100km -7.4%
， 7.0 4.2% 0.5% -2.2%
6.0 CAFC 5.0
2014 CAFC（excluding EV） 2015 CAFC（excluding EV）
2015 vs. 2014 CAFC Performance (Excluding EVs) of Major Domestic NEV Producers
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12.0 -43% 10.0 -58%
8.0 -56% -49% -20% -32% -17% -46% -33% -70% 6.0
L/100km 4.0
2.0
0.0 BAIC SAIC Linfa BYD JMC- Geel Jiang - Cher - n- BYD Indu JAC Hold y nan Mote ry Mote Mote stry ings r r r CAFC（excluding NEVs） 6.17 5.88 7.98 7.75 6.55 6.72 6.92 7.01 6.52 9.64 CAFC（including NEVs） 2.69 3.15 3.30 3.95 4.39 5.37 4.70 5.82 1.93 5.46
CAFC（excluding NEVs） CAFC（including NEVs）
2015 NEVs CAFC Credits Effects on CAFC of Major Domestic NEV Producers
4. Greater FC improvements, on the vehicle and corporate levels, are still in need and fuel saving technologies could effectively deliver the necessary FC improvements on the vehicle and corporate levels. The increased stringency of the CAFC Phase IV standards requires profound strategic changes in corporate technological development.
iCET’s 2016 CAFC analyses reveals that the CAFC2015/TCAFC-IV ratio is 136% and decreases to 129% only after including NEVs. Moreover, about 25% of the vehicle models produced in 2015 do not reach the FC limits of CAFC Phase IV, despite the fact that the new FC limits should have been met by 1 January 2016 for newly certified models, and by 1 August 2018 for produced models. While the first implementation years of Phase IV allow for some flexibility, with a five-fold calculation privilege for NEVs (with FC counted as 0 for EVs), the task of meeting the standards that increase in stringency over time will be tough. From 2018 to 2020, the required 10% decrease in
CAFC2015/TCAFC-IV ratio (annual FC decline of 0.5L/100km on average) will suffice fuel saving technologies. The projected three or two-fold calculation privilege for NEVs replacing the current five-fold in later stages of Phase IV, or re-considerations of NEVs’ energy consumption (from the current value of zero), poses a great challenge in meeting the CAFC target. Furthermore, iCET’s scenario analysis reveals that a 40%-80% FC decline can be obtained through fuel saving technologies, and another 5%-25% FC decline can be gained through off-cycle energy saving technologies (e.g. kinetic energy recovery systems, efficient air conditioning, idle start-stop system, and shift reminder). That means 65%-85% FC declines for CAFC Phase IV still depends on energy saving technologies, making it essential for the corporate sector to advance its traditional manufacturing lines. -6-
14.0 MT Phase III target & Phase IV limit 13.0 AT Phase III target & Phase IV limit
Phase IV target for Row<3
12.0 Phase IV Target for Rows>=3 ） 11.0 2015 new passenger car fleet
10.0
L/100km （
9.0
8.0
7.0
6.0
FuelConsumpiton 5.0
4.0
3.0 500 1000 1500 2000 2500 Curb Weight (kg)
2015 China New Passenger Car Fleet Fuel Consumption Distribution
5. An effective CAFC credits exchange mechanism that reward first movers is believed to be useful in advancing commercial technological developments. However, lack of enforcement and information gaps may lead to discrepancies and ineffectiveness of such market mechanisms, therefore, iCET calls for the separation of CAFC credits from any other NEV-related credits mechanism (e.g. the highly debated ZEV-credits inspired program).
The CAFC credits mechanism was introduced three years ago to allow manufacturers greater flexibility in meeting their targets. However, because the standards’ lead authority, the Ministry of Industry and Information Technology (MIIT), lacks any clear management and enforcement mechanisms, it is believed that the flexibility mechanisms unfairly serve the corporate sector by enabling them to avoid incurring higher costs. iCET’s 2016 CAFC analyses show that CAFC credits and debts are limited to a mere number of market players, and that credit volumes are higher than debt – implicating that the CAFC credits mechanism is ineffective. More effective and comprehensive CAFC mechanism needs to be put in place before advanced energy saving technologies are promoted, translating to a long-term impact on China’s overall auto sector fuel consumption. CAFC credits and NEV credits (ZEV-like credits) differ greatly in their policy goals and credits allocation mechanism. Moreover, potential mutual offsetting and adverse effects of the two different systems, should they be linked, calls for the independency of each of these regulatory tool at early stages. After reaching -7-
maturity and proving their effectiveness, an integration of some sort should be considered.
180 160 CAFC credits producers CAFC debt producters 140 120
100 10000 10000 L/100km
80 ， 60
/debt 40
20 credits
0
-20 CAFC
2015 2014 2013 2012
2012-2015 Main CAFC Credits/Debts Producers for Domestic Car Companies
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Content
Foreword ...... 13 1. China’s Fuel Economy Development ...... 16 1.1. Fuel consumption standard regime ...... 16 1.1.1 Introduction to China’s fuel consumption standard regime ...... 16
1.1.2 Introduction to Phase IV Fuel Consumption Standard ...... 19
1.1.3 CAFC calculation method ...... 21
1.1.4 CAFC NEV credits calculation ...... 22
1.2. CAFC’s Governing Framework ...... 23 1.2.1 Management Framework ...... 23
1.2.2 Administration ...... 23
1.3 A Comparison Between China and Global Fuel Economy Standards ...... 25 1.3.1 Target Comparison ...... 25
1.3.2 CAFE Management Systems Comparison ...... 27
2. 2015 Average Fuel Consumption of Companies ...... 29 2.1. 2015 Vehicle Fuel Consumption Distribution ...... 29 2.2 2015 Passenger Car Domestic Manufacturer’s CAFC ...... 30 2.2.1 Phase III CAFC Compliance ...... 31
2.2.2 Company Phase III CAFC Credits ...... 32
3. CAFC Trends and Technical Development ...... 36 3.1 Developing Trends of CAFC ...... 36 3.1.1 National Level CAFC and Curb-Weight ...... 36
3.1.2 Domestic Auto Companies: Major CAFC Trends ...... 36
3.1.3 Importing Auto Companies: CAFC Trends ...... 40
3.1.1 Conclusions ...... 41
3.2. Technology and FC Development of Popular Models ...... 42 3.2.1 Volkswagen-Lavida ...... 42
3.2.2 Ford Focus ...... 43
3.2.3 Honda Accord ...... 44
3.2.4 Hyundai Verna ...... 45
3.2.5 BYD F3 ...... 46
3.2.6 Summary of Energy-Saving Technologies on Different Models ...... 47 -9-
4. NEVs Impact on CAFC Performance ...... 48 4.1 NEVs Development in 2015 ...... 48 4.2 NEVs Contribution to CAFC ...... 48 4.3 The Contribution of NEVs to China’s 2020 FC Goal...... 52 5. Phase IV Implementation ...... 55 5.1 Phase IV Target Analysis ...... 55 5.2 Compliance Pressure Focus on Late Phase IV Stage ...... 59 5.3 The importance of advanced energy-saving technologies...... 60 5.4 CAFC Credit Should be Introduced as Soon as Possible and Implemented Independently CAFC ...... 62 Appendix I: Limit Values and Target Values of Vehicle FC in Phases I, II, III and IV ...... 65 Appendix II: Domestic Auto Companies Producing > 10,000 Vehicles ...... 66 Appendix III: Importing Auto Companies ...... 68 Appendix IV: FC for Domestic Auto Companies ...... 69 Appendix V: FC for Auto Importing Companies ...... 73
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List of Figures Figure 1: Light-Duty Vehicle Production Volume from 2006 to 2015 ...... 13 Figure 2: Light-Duty Vehicle Import Volume from 2006 to 2015 ...... 14 Figure 3: China's By-Phase Fuel Consumption Limits and Targets for Passenger Cars ...... 19 Figure 4: Management Organizations and Responsibilities of China Passenger Cars Fuel Consumption ...... 23 Figure 5: CAFC Reporting Responsibilities by the Corporate and the Public Sectors ...... 24 Figure 6: Passenger Car Actual FC and Target Comparisons – China and Abroad...... 27 Figure 7: 2015 New Passenger Car Fleet Fuel Consumpiton Distribution ...... 29 Figure 8: 2015 CAFC Versus 2015 Target CAFC (by Manufacturer Type) ...... 31 Figure 9: Best CAFC2015/TCAFC-III Performance of Domestic Manufactures in 2015 ...... 32 Figure 10: Best CAFC2015/TCAFC-III Performance of Importers in 2015 ...... 32 Figure 11: 2015 Major CAFC Credits Producers - Domestic Manufactures ...... 33 Figure 12: 2012-2015 Major CAFC Credits/Deficits Domestic Manufacturers ...... 34 Figure 13: 2015 Major CAFC Credits Producers of Passenger Car Importers ...... 34 Figure 14: 2012-2015 Major CAFC Credits/Deficits of Importers ...... 35 Figure 15: 2006-2015 National Average Fuel Consumption and Curb Weight Trends ...... 36 Figure 16: 2006-2015 Fuel Consumption and Curb Weight Trends for Domestic Car Fleet . 37 Figure 17: 2006-2015 Fuel Consumption and Curb Weight Trends for JVs and Independent Manufacturers ...... 38 Figure 18: 2012-2015 Best CAFC Improvement Domestic Manufactures ...... 38 Figure 19: SUVs FC Related Characteristics, 2015 Average Data ...... 39 Figure 20: Average Fuel Consumption of Compact Cars/SUVs/MPVs ...... 39 Figure 21: 2006-2015 Fuel Consumption and Curb Weight Trends of Auto Importers ...... 40 Figure 22: 2012-2015 CAFC Trends for Import Cooperates ...... 41 Figure 23: 2006-2015 Passenger Vehicle Fleets CAFC Development Trend ...... 41
Figure 24: 2011-2015 China Passenger Vehicle Fleet CAFC/TCAFC III Trend ...... 42 Figure 25: Fuel Consumption/Curb Weight/Displacement Trends of VW-Lavida Models ... 43 Figure 26: Fuel Saving Technology Applications Adoption Ratio in VW-Lavida Models ...... 43 Figure 27: Fuel Consumption/ Curb Weight/Displacement Trends of the Ford Focus ...... 44 Figure 28: Fuel Consumption/ Curb Weight/Displacement Trends of the Honda Accord .... 45 Figure 29: Fuel Consumption/ Curb Weight/Displacement Trends of the Hyundai Verna ... 46 Figure 30: Fuel Consumption/ Curb Weight/Displacement Trends of the BYD F3...... 47 Figure 31: DCT/CVT Application Trend in the BYD F3 ...... 47 Figure 32: 2010-2015 New Energy Vehicles (NEVs) Production and Imports ...... 48 Figure 33: 2015 NEV Preferential Accounting Impacts on CAFC by Cooperates Type ...... 49 Figure 34: 2015 ICE vs. NEV Volume of Major NEV Producers (IEC vs. 5 times NEV) ...... 50 Figure 35: 2015 NEV Preferential Accounting Impacts on CAFC for Main NEV Producers ... 51 Figure 36: 2015 vs. 2014 ICE Fuel Consumption of Major NEV Producers ...... 51 Figure 37: NEVs Preferential Accounting Impacts on FC Target Achievement of Phase IV ... 53 Figure 38: ICE FC Requirements with Different Accounting Ways with NEV Energy Consumption ...... 54 Figure 39: 2015 CAFC/ TCAFC IV by Corporation Type ...... 55
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Figure 40: 2015 Domestic and Import Cooperates TCAFC IV Distribution ...... 56
Figure 41: CAFC2015/TCAFCIV of Domestic Corporation (Excluding NEVs)...... 57
Figure 42: CAFC2015/TCAFCIV of Domestic Corporations (Including NEVs) ...... 58 Figure 43: CAFC2015/TCAFCIV for Import Cooperates (excluding EVs) ...... 59 Figure 44: Annual Average FC Reduction Rate Needed for Meeting the Coming Target in Various Regimes ...... 60 Figure 45: ICE Fuel Saving Technology and NEVs Preferential Accounting Impacts on National Fuel Consumption Target Achievement...... 61
List of Tables Table 1: China’s Passenger Car Fuel Economy Standards System ...... 16 Table 2: Explanation of Terminologies in China’s Fuel Consumption Regulatory System ..... 17 Table 3: China’s By-Phase Fuel Consumption Standard System ...... 18 Table 4: New Energy and Energy Saving Vehicles’ Production Privilege in CAFC Calculation (production volume multiplier) ...... 20
Table 5: CAFC/TCAFC-IV Requirement for Car Producers and Importers During Phase IV .... 20 Table 6: Comparison on FC Standard Targets of Main Countries and Regions ...... 26 Table 7: Regional FC Management Approaches Comparison ...... 28 Table 8: Average Fuel Consumption for Domestic Produced Car Fleets in 2015 ...... 30 Table 9: Average Fuel Consumption for Imported Car Fleets in 2015 ...... 30 Table 10: 2015 NEV Preferential Accounting Impacts on CAFC of Major NEV Producers .... 49 Table 11: Annual NEVs Relative Production to ICE Production – Assumptions ...... 52 Table 12: 2015 CAFC/TCAFC-IV by Cooperate Type ...... 55 Table 13: The Implementation Plan of CAFC/ TCAFC Phase IV ...... 60 Table 14: Advantages and Disadvantages Analysis for Separate or Joint Management of CAFC and NEV Credits ...... 63
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Foreword
China's light duty vehicle production and sales reached over 24.5 million units in 2015, marking China’s seventh consecutive year as the world's largest auto market. The production of this year only increased 3.3%, marking a slow-down in annual growth7. Passenger vehicles accounted for 20 million, or 86% of the total vehicle production, indicating a higher annual growth than that seen by the entire vehicle market (Figure 1).
30.0
25.0
LDVs PCs
20.0
15.0
Production, Production, Million 10.0
5.0
0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year
Figure 1: Light-Duty Vehicle Production Volume from 2006 to 2015
Last year, China’s imported cars amounted to 1.109 million vehicles, representing a decade annual decrease of 22.7%, and accounting for 4.5% of the total vehicle sales1.
1 CAAM. 2015 auto industry economy operation situation summary, http://www.caam.org.cn/hangye/20160229/0905186019.html. Checked online at July of 2016. -13-
1600
Imported car accounted for 1400 4.5% 4.5% of the total market 1200 in 2015
1000
800
600
Import Import volume, thousand 400
200
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Year
Figure 2: Light-Duty Vehicle Import Volume from 2006 to 2015
In order to alleviate pressures brought on by energy security and environmental degradation driven by China’s growing car use, the government recognized that vehicle fuel consumption should be reduced and vehicle energy efficiency should be increased. The State Council set clear objectives through its recently announced "Energy-Saving and New-Energy Automotive Industry Development Plan (2012-2020)" stating that by 2015 and 2020 the average fuel consumption of passenger cars should reach 6.9 L/100km and 5.0 L/100km, respectively2. In the recent “Made in China 2025” plan, a target of about 4L/100km by 2025 was suggested3.
Both domestic and international experience confirms that the implementation of fuel consumption standards is instrumental in improving vehicle fuel efficiencies and facilitating technological upgrades. China started implementing the first phase of its fuel economy standards in July 2005, since then, domestic passenger car average fuel consumption was reduced from 8.05 L/100km to 6.95 L/100km, an overall fuel economy improved of 13.6%. Since China entered its third phase of fuel economy standards in 2012, fuel consumption of imported cars reached an average annual decline of 3%-5%4. China is gradually forming an effective management system for overseeing the sound implementation of passenger car fuel consumption standards.
The Innovation Center for Energy and Transportation (iCET) is a unique China-based non-profit independent organization that has been involved in the development of fuel economy policies in China since 2002. Leveraging its deep market understanding and regulatory outreach, iCET developed China’s first and most
2 http://chinaafc.miit.gov.cn/n2257/n2260/c80857/content.html 3 MIIT-Interpretation of “Made in China 2025” plan. http://zbs.miit.gov.cn/n11293472/n11295142/n11299123/16604739.html 4 Based on research results of this report, as well as iCET’s previous fuel economy annual reports. -14-
comprehensive vehicle database from 2006. This year’s report is iCET’s fourth annual report, which tracks China’s fuel economy implementation status, trends and recommendations.
The analysis is based on fuel consumption and curb-weight data, which is available through vehicle labeling (based on official type-approval test results) and published on the Ministry of Industry and Information Technology (MIIT) website. Imported vehicles data is based on information purchased from China Auto CAIEC Ltd. (overseeing vehicle importation in China). Sales and production data is based on China Auto Industry Development Annual Report provided by China Association of Automotive Manufacturers (CAAM) and China Automotive Technology Research Center (CATARC).
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1. China’s Fuel Economy Development
This section will review the development of China’s fuel economy standards, compare previous, current, and projected fuel consumption targets and limits, and highlight the standard management framework and describes corporate average fuel consumption (CAFC) calculation methods.
1.1. Fuel consumption standard regime
1.1.1 Introduction to China’s fuel consumption standard regime
There are two standards that govern passenger vehicles fuel economy in China: (i) "Vehicle fuel consumption limit standard" (GB19578) is the first and core standard, which outlines fuel consumption limitations for passenger cars, steering China’s fuel economy as of 2004; (ii) "Passenger car fuel consumption evaluation methods and indicators" (GB27999) introduces evaluation methods and indicators for passenger car fuel consumption, as well as introduces corporate average fuel consumption, governing the current standards as of 2011. The complete fuel consumption standard regime is outlined in Table 1.
Table 1: China’s Passenger Car Fuel Economy Standards System Standard type Standards name and number
Testing standards Measurement methods of fuel consumption for light duty vehicles (GB/T 19233-2008) Test methods for energy consumption of light-duty hybrid electric vehicles (GB/T 19753-2013) Label standard Fuel consumption label for light vehicle (GB 22757-2016)
Mandatory Fuel consumption limits for passenger cars (GB19578-2014) standards Fuel consumption evaluation methods and targets for passenger cars (GB 27999-2014) Other voluntary Conversion methods for energy consumption of hybrid electric vehicles standards (in process) Off-cycle technology/device energy saving effects evaluation methods for passenger cars (in process)
The "vehicle fuel consumption limit" (GB19578-2004), is China's first mandatory vehicle fuel consumption management standard, which was implemented in two phases. The first phase ran from 1 July 2005 and 1 July 2006 steering the production of new
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vehicles and existing vehicles respectively. The second phase commenced on 1 January 2008 and 1 January 2009, steering the new vehicles and existing brands production respectively. The two phases grouped vehicles into 16 weight-bins according to each car’s curb weight, therefore fuel consumption limits and requirements are less for lower curb-weight vehicles. By the end of 2011, China issued the "passenger car fuel consumption evaluation methods and indicators" (GB27999-2011), which included the first-ever introduction of corporate average fuel consumption (CAFC) standards. Again, according to a car’s curb weight-bin, a 2015 target was set and subsequently, the first CAFC accounting methods and indicators were outlined. The CAFC targets all manufacturing enterprises (including domestic and imported) and sets corporate target as well as an annual gap from the target. These are determined and calculated according to the manufacturer’s vehicles actual fuel consumption and corresponding production volume. Manufacturers can therefore flexibly adjust their vehicles technologies (and weight) and vehicles’ production volume in order to meet the required annual CAFC. China’s Phase III sets the implementation requirements for 2015 CAFC at 6.9 L/100km. Table 2 explains the terminologies in China’s passenger car fuel economy standards. In January 2014, the forth phase of both the "vehicle fuel consumption limit standard" and "passenger car fuel consumption evaluation methods and indicators" was introduced, and has entered implementation in January 2016, targeting a CAFC of 5.0 L/100km by 2020. Phase IV is designed to increase fuel consumption limits by about 20% and fuel consumption targets by 30%-40%. The new standard provides more detailed technology pathways for reducing fuel consumption and further promotes new energy vehicles by detailing their relative fuel consumption calculation. The new standard requires an accelerated annual corporate average reduction rate of roughly 3% in the first year (2016) to about 9% in the last two years (2019 and 2020). Table 3 summarizes China’s fuel consumption’s by-phase development.
China’s passenger vehicle fuel economy standards have quickly evolved in the past decade and continue to advance vehicle efficiency technology improvements by aligning China’s vehicle market with global fuel economy standards by 2020. Figure 3 shows the four phases of the governing framework of fuel economy (more details can be found in Appendix I).
Table 2: Explanation of Terminologies in China’s Fuel Consumption Regulatory System Measurement Acronyms Explanation Reference Standard and Index timeframe Fuel Consumption FC Every individual vehicle models have to Starting 2005:GB19578-2004 Limit meet their corresponding weight-bin limit. (Phase I) The limit value of the fourth phase is about Starting 2016: B19578-2014 20% lower than that of the third phase, (Phase IV) equal to the target value in the third phase;
Target Fuel TFC Phase III implemented in 2012, also Starting 2012: Consumption introduced a FC target value associated with GB27999-2011 (Phase III)
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each vehicle model (according to its Starting 2016 weight-bin classification). There is no :GB27999-2014 requirement for meeting the individual (Phase IV
vehicle model FC target, however TFC is used to calculate the target value of average fuel
consumption (TCAFC) of auto companies. Actual Average Fuel CAFC Targeting auto companies, the CAFC is Same as above Consumption of calculated according to the annual vehicle Auto Manufacturers model type and volume output and the model’s actual fuel consumption. CAFCxxxx means CAFC for specific year, for example
CAFC2015.
Target Average Fuel TCAFC-III Target CAFC for the current phase period; Same as above
Consumption of TCAFC-IV Automakers have to meet their corporate Auto Manufacturers average fuel consumption (CAFCxxxx) target
(TCAFC-xxxx) is each model year (xxx).
Actual and Target CAFC2015 Annual CAFC actual /Target CAFC; By using Same as above
FC Ratio /TCAFC-III this calculation method, one can track the annual CAFC % gap from meeting the
CAFC2015/ ultimate target: TCAFC-III represents Phase III
TCAFC-IV (6.9L/100km by 2015) while TCAFC-IV represents Phase IV (5L/100km by 2020). CAFC Credits --- Auto manufacturers can earn credits if their The method for calculating (announced 2013) CAFC is above the annual target average fuel consumption of
(CAFC/TCAFC value is less than 100% in passenger car enterprises Phase III). Otherwise, they will be penalized – details of this regulation are still under discussion.
Table 3: China’s By-Phase Fuel Consumption Standard System
Phase Timeframe Title Comments
2005.07-2008.01 new models Phase I 2006.07-2009.01 in production GB19578-2004 models Single vehicle FC limit 2008.01-2012.07 new models (imported vehicles not included) Phase II 2009.01-2012.07 in production GB19578-2004 models
Single vehicle FC limit and corporate GB19578-2004 average FC target; (imported vehicles Phase III 2012.07-2015.12 GB27999-2011 included); including imported vehicles.
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Single vehicle FC limit and corporate 2016.01-2020.12 new models GB19578-2014 average FC target; (imported vehicles Phase IV 2018.01-2020.12 in production GB27999-2014 included); including imported models vehicles.
phase I -MT FC limit phase I- AT FC limit 17.0 phase II and III-MT FC limit 16.0 phase II and III- AT FC limit phase III MT FC target & phase IV MT FC limit 15.0
phase III AT FC target & phase IV AT FC limit
14.0 phase IV FC target<3
） phase IV target for rows>=3 13.0 12.0
L/100km 11.0 （ 10.0 30%-40% 9.0 increase in stringency 8.0 7.0
FuelConsumption 6.0 5.0 4.0 3.0 500 1000 1500 2000 2500 Curb Weight (kg) Figure 3: China's By-Phase Fuel Consumption Limits and Targets for Passenger Cars
1.1.2 Introduction to Phase IV Fuel Consumption Standard
Phase IV of China’s fuel consumption standard for light duty vehicles sets by-weight bin limits similar to the targets of Phase III, some 20% stricter than the limits set by Phase II. The standards provide 30% lower fuel consumption target requirements for most vehicles and over 35% lower requirements for vehicles exceeding the 1660kg curb-weight. The new draft differs from the previous phase mainly through the following additions and updates:
i. Expanding the scope of the standard to include electric vehicles, plug-in hybrid vehicles and gas-powered vehicles. ii. Although the new standard is not differentiating between automatic or manual models, it provides 3%-5% higher fuel consumption target for passenger cars with three seat rows and above. iii. Encouraging the use of off-cycle energy-saving technologies such as tire pressure
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monitoring systems, efficient air conditioning, idle start-stop system, and shift reminder, by rewarding vehicles that implemented one or more of these technologies with fuel saving credits of up to 0.5 L/100km from their Test-Approval FC value. While two off-cycle technologies and device energy saving effects evaluation methods for passage cars (start-stop system and eco-driving indicator device) have been drafted and recently entered into the public consultation stage5, the evaluation of the other two off-cycle technologies is still under research (air conditioning and shift reminder) and projected to be released next year. iv. The energy consumption of NEVs will not be calculated with 0, but converted into gasoline or diesel fuel consumption. The specific converting method has entered the public consultation process6. v. In advancing the adoption of new-energy and energy-saving vehicles, production or import volumes are encouraged to be gradually reduced as shown in Table 4. vi. The annual corporate average fuel consumption (FC) target will gradually increase in stringency, as detailed in Table 5. The standard directs less stringent FC reduction earlier during the standard period and more stringent reductions towards its end.
While the annual reduction in the CAFC/TCAFC2020 ratio is required in the first year of Phase IV is 2.9%, the annual reduction in the last year of Phase IV (2019-2020) can be translated into an annual reduction of about 9.1% in fuel consumption values. During the last two years, an annual decrease of 10 percentage points from the
previous year CAFC/TCAFC2020 ratio is required, translating to about a 0.5L/100km decrease in absolute fuel consumption value.
Table 4: New Energy and Energy Saving Vehicles’ Production Privilege in CAFC Calculation (production volume multiplier)
PEV FCV PHEV* ESV** ~2015 5 5 5 3 2016-2017 5 5 5 3.5 2018-2019 3 3 3 2.5 2020 2 2 2 1.5 * Plug-in electric vehicles (PHEVs) are defined as cars with electric range of at least 50km. ** Energy Saving Vehicles are defined as cars with fuel consumption lower than 2.8L/100km.
Table 5: CAFC/TCAFC-IV Requirement for Car Producers and Importers During Phase IV Required ratio Year (CAFC/TCAFC-IV) 2016 134%
5 Recommended national automobile standard “Evaluation methods of the energy-saving effects of off-cycle technology units for passenger vehicles” (exposure draft) http://www.catarc.org.cn/NewsDetails.aspx?ID=2641, Access in 22nd July 2016. 6 Recommended national automobile standard “Energy conversion method for EVs and PHEVs” (exposure draft). http://www.catarc.org.cn/NewsDetails.aspx?ID=2707, Access in 22nd July 2016. -20-
2017 128% 2018 120%
2019 110%
2020 100%
1.1.3 CAFC calculation method
In the below detailed explanation of the TCAFC calculation, CAFC/TCAFC will represent the indicator national standard (GB27999) target implementation status. The CAFC uses vehicle model, year, and annual sales to calculate a weighted average for fuel consumption based on the New European Driving Cycle (NEDC), as shown in the formula below:
N FCii V CAFC i1 N VWii i1
N: the vehicle model number FC: fuel consumption of the “i”th model V: annual production of the “i”th model
Wi: production times of the “i”th model, if “i”th model is qualified NEV or ESV
The CAFC Target is based on individual vehicle fuel consumption targets, which uses the quantity of annual production of each model to calculate a weighted average. See the formula below:
N TVii i TCAFC N Vi i
N: the vehicle model number T: fuel consumption target of the “i”th model V: annual production of the “i”th model
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The gradually changing fuel consumption targets are designed to account for the time that vehicle manufacturers require for product planning, technology upgrade, and new vehicle models development. The CAFC requirement was enacted in 2012 and allows automotive manufacturers until 2015 to gradually reduce their fuel consumption levels and meet the target, towards the CAFC binding period that started in 2015 and is at the heart of Phase IV (2016-2020). The annual target for phase IV does not decease at a steady annual rate as in phase III, but rather gradually increases in stringency year by year. The years 2019 and 2020 would require an annual FC decrease of 0.5 L/100km, a target that is projected to be achieved only should the flexibility mechanism (NEV supper credits) be employed by manufacturers.
1.1.4 CAFC NEV credits calculation
In 2013, a credits system for managing corporate FC values beyond or below the FC target was introduced through the “the method for calculating average fuel consumption of passenger car enterprises”7. Should CAFC be between the corporate limit and target (TCAFC), the corporate is not eligible for credits (0), whereas should the actual CAFC be below the target, credits could be gained. Before 2015, credits could be carried forward for three years.
푁
퐶푟푒푑푖푡푠 푠푢푟푝푙푢푠 = (퐶퐴퐹퐶 − 푇퐶퐴퐹퐶) × ∑ 푉푖 푖=1
푁
퐶푟푒푑푖푡푠 푑푒푓푖푐푖푡 = (푇퐶퐴퐹퐶 × 푅 − 퐶퐴퐹퐶) × ∑ 푉푖 푖=1
Whereas the “i” th of Vi represents the vehicle production volume; R represents the subject’s year CAFC/T CAFC ratio, which between 2012 and 2015 allows for 109%, 106%, 103%, 100% respectively. Appendix I lists the score of large corporation between 2012 and 2015. Corporations achieving CAFC /T CAFC <100% in 2015, can accumulate credits.
7 Five ministries jointly published “Calculation method of Passenger Vehicle Corporation Average Fuel Consumption” http://www.gov.cn/gzdt/2013-03/20/content_2358627.htm, Access in 22nd July 2016 -22-
1.2. CAFC’s Governing Framework
1.2.1 Management Framework
Currently, China’s average corporate fuel consumption standard implementation for passenger cars is jointly governed by several ministries – the Ministry of Industry and information Technology (MIIT), the National Development and Reform Commission (NDRC), Ministry of Commerce (MOFCOM), General Administration of Customs, and the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), as illustrated in Figure 4. MIIT governs motor vehicles verification, such as domestic manufacturers’ fuel consumption and manufacturing volume. The Customs Administration, AQSIQ, and MOFCOM are responsible for overseeing the fuel consumption, import volumes, and importing entities verification of imported passenger cars, while NDRC is mainly responsible for the planning, dissemination, and development of energy saving and new energy cars.
Management lead MIIT and policy initatior
Planning and NDRC Management
Executive MOFCOM Management Imported vehicles management CUSTOMS
CAFC car production AQSIQ Management Certification
NTCAS Auto manufacture participation Standard System SSC CATARC techinical support
Figure 4: Management Organizations and Responsibilities of China Passenger Cars Fuel Consumption
1.2.2 Administration
In order to improve vehicle management – and in accordance with the 2012 announced "State Council’s energy-saving and new energy automotive industry development plan (2012-2020)" – a joint-ministerial effort comprised of the Ministry of Industry and Information Technology (MIIT), the National Development and Reform
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Commission (NDRC), the Ministry of Commerce (MOFCOM), and Customs General Administration (AQSIQ) jointly developed an "Accounting Approach for Passenger Vehicle Corporate Average Fuel Consumption" 8 . The accounting approach was announced in March 2013 and went into effect on 1 May 2013.
According to the accounting approach, passenger car manufacturers and importers are required to submit their projected annual production or importation volume and each vehicle fuel consumption data as well as resulted CAFC, and report mid-year and year-end actual CAFC, according to the timeline described in Figure 5. The government is releasing the companies’ reported data by 20 March, and is supposed to report the final annual CAFC details and compliance status of China’s auto corporations (after scrutiny by five related ministries) by 1 June annually, however the reports in the previous couple of years have been postpones (for example, 13 July in 2016).
Figure 5: CAFC Reporting Responsibilities by the Corporate and the Public Sectors
No specific effective enforcement measurements were carried out to manufacturers to improve their fuel economy and fulfil the standards requirements. Afterword, MIIT published a management strengthening memo in October 2014 stating “shaming” as an approach, and threatened car makers that no new product models will be approved if they fail to meet the required demand.
On 15 May 2014, MIIT announced that a working group led by its Industry Division and Equipment Department would inspect approval testing to ensure the sound implementation of China’s third phase fuel consumption aimed at an average of 6.9L/100km by 20159. In September 2016, MIIT10 published its intended plan for the
8 http://chinaafc.miit.gov.cn/n2257/n2783/c86525/content.html 9 http://www.vecc-mep.org.cn/news/news_detail.jsp?newsid=62260 10 http://www.miit.gov.cn/n1146295/n1652858/n1653100/n3767755/c5261365/content.html -24-
implementation of CAFC with an inclusion of an NEV credits trading program. NDRC11 has separately published plans for creating an independent NEV credits system to the CAFC system as part of its ETS management system. Those proposals have entered the phase of public consultation. The final enforcement of the regulation is still pending final decision. Carbon Trading Law is part of NDRC’s planning authority. A feasibility reporting and auditing system is required for MIIT planning to avoid credit cheating.
1.3 A Comparison Between China and Global Fuel Economy
Standards
1.3.1 Target Comparison
Europe, the US, Japan, and other developed countries are all advancing fuel economy standards with increasingly stringent goals for 2020 and beyond. This includes technology roadmaps development for ensuring market effectives, implementation and enforcement mechanism for steering technological improvements, and even creating corresponding CO2 emissions standards for ensuring linkage to policy-makers’ pollution reduction commitments and goals.
In 2009, the EU replaced the voluntary CO2 emissions reduction agreement with mandatory legal standards, including CO2 emission limits and labeling requirements. These set a target requirement of 130g/km by 2015 (the equivalent of 5.6L/100k) and 95g/km by 2020 (the equivalent of 4.1L/100k). Japan has proposed the 2020 light vehicle fuel economy standards target to be set at 20.3 km/L (the equivalent of 4.5L/100k), representing a 20.3% reduction from Japan’s average of 16.3 km/L (the equivalent of 5.5L/100k). In April 2010 and August 2012, the United States issued light vehicle fuel economy and greenhouse gases (GHG) standards for governing 2012-2016 (first phase) and 2017-2025 (second stage) vehicle development. The standards are aimed at restricting 2025 US light vehicle average fuel economy at 54.5mpg (the equivalent of 4.6L/100k). Table 6 compares by-country FC standard targets.
Each country’s fuel consumption test conditions are different, so is the standard expression unit; therefore, all were transformed into the next level of the European conditions, namely the L/100km units to allow the annual comparison illustrated in Figure 6. Although China’s fuel economy standard has a rigorous 2020 target of 5L/100km, its stringency is moderate in relation to the advanced EU and Japanese standards.
11 http://auto.sohu.com/20160812/n463921515.shtml -25-
Table 6: Comparison on FC Standard Targets of Main Countries and Regions
Countries 2015 2020 2025 and Target NEDC Target NEDC operating Target NEDC operating regimes Requirement operating Requirement conditions Requirement conditions conditions (L/100km*) (L/100km*) (L/100km*) EU 130g/km 5.6 95g/km** 4.1 75g/km 3.2 US 36.2 mpg 6.8 44.8 mpg 5.4 56.2mpg 4.2 Japan 16.8km/L 6.1 20.3km/L 5.2 N/A N/A China 6.9L/100km 6.9 5.0L/100km 5.0 4.0L/100km** 4.0 * Converting the fuel economy level of various countries and regions into the value based on the EU NEDC operating level through ICCT conversion tool,12 and the results are slightly different from that of “the interpretation of the passenger car fuel consumption in the Phase IV” published by MIIT13 due to differences in factors used. ** 95g/km is the EU target for 2021. *** The goal of 4.0L/100km was proposed for the first time in "China made 2025" plan.
Since different countries use different test conditions and these are represented in different units, a method for comparison between the systems is needed. We’ve chosen the NEDC and L/100km, as these are the method and units used in China (and introduced throughout this report). All countries that have implemented a fuel economy system seem to have enjoyed reduction in their average FC. In 2014, the US passenger car fuel consumption reached approximately 7.0L/100km (35.2MPG), Japan’s FC reached approximately 4.9L/100km (21.8km/L), and the European Union achieved about 5.24L/100km (123.4 gCO2/km). China reached an average passenger FC of 6.98L/100km in 2015, as shown in Figure 6. Japan, the EU, and the US have all reached their FC targets ahead of time.
12 ICCT. Converting Tool. http://www.theicct.org/info-tools/global-passenger-vehicle-standards. 2015.07.01 13 “The interpretation of the passenger car fuel consumption in the fourth phase”. http://www.miit.gov.cn/n11293472/n11293832/n11294042/n11481465/16423221.html -26-
10.0
9.0 US EU Japan China 8.0
7.0 L/100km
， Japan 6.0 US 5.0
EU
4.0 China FuelComsuption
3.0
2012 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Note: Fuel consumptions are unified based on the NEDC driving-cycle by using the ICCT conversion tool (L/100km).
Figure 6: Passenger Car Actual FC and Target Comparisons – China and Abroad
1.3.2 CAFE Management Systems Comparison
All major countries, excluding China, manage their fuel consumption standard through penalties. Financial penalties are generally higher than the cost of technology integration. In the EU, for example, the penalty for the first 1g/km exceeding the target value is €95/vehicle, while the marginal cost of 1g CO2/km emissions reduction for most of fleet is about €25, meaning that the penalty was set much higher than cost for technology improvement, encouraging manufactures to enhance their technology in order to meet the standard. In Japan, non-compliance penalty can reach ¥1 million (nearly $10k, or RMB53k). In addition, several non-financial means are adopted, including product type certification and public shaming14, as summarized in Table 7.
China’s corporate average fuel consumption management model is mainly imitating the United States’ model, enabling implementation flexibility and utilizing administrative penalties rather than financial ones, due to lack of an adequate governing law and detailed management mechanisms.
14 In here, public shaming refers to when company’s poor fuel consumption performance and inability to meet the standard is being made public through postage on MIIT’s official website. -27-
Table 7: Regional FC Management Approaches Comparison Revoking product type Countries and Monetary penalty certification, limit or Public shaming regions stop production US √ √ EU √ Japan √ √ China √ √
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2. 2015 Average Fuel Consumption of Companies
2.1. 2015 Vehicle Fuel Consumption Distribution
In 2015, MIIT published a total of 4,292 light vehicle models’ fuel consumption data on its dedicated China Auto Fuel Consumption website, including 2,555 passenger car models (class M1) and 352 imported models, as shown in Figure 7.
About one quarter of 2015 models have not met their projected Phase IV limit, indicating no improvement was made in this respect from 2014. Phase IV requires new vehicles implementation as of 1 Jan 2016 and in-use vehicle implementation as of 2018. So more than 600 car models that were able to meet the standard prior to the required period can enjoy a two-year grace period. 2016 is projected to become a turning point for model upgrades by Chinese auto manufacturers and importers.
Overall, it is the hybrid vehicle models (for example: Toyota Ralink, Corolla, Land Rover), electric vehicle models (for example: BYD Qin, TangShang, BMW i3, BMW X5, Chuan Qi GA5, etc.), as well as some diesel cars (for example: BMW X5) that have met weight-bin phase IV fuel consumption requirements.
14.0 MT Phase III target & Phase IV limit
13.0 AT Phase III target & Phase IV limit
Phase IV target for Row<3 12.0 ） Phase IV Target for Rows>=3 11.0 2015 new passenger car fleet
10.0
L/100km （ 9.0 8.0 7.0 6.0
FuelConsumpiton 5.0 4.0 3.0 500 1000 1500 2000 2500 Curb Weight (kg)
Figure 7: 2015 New Passenger Car Fleet Fuel Consumpiton Distribution
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2.2 2015 Passenger Car Domestic Manufacturer’s CAFC
In July 2016, MIIT published the 2015 corporate average fuel consumption (CAFC) results of 89 domestic passenger car companies and 27 importing auto companies17, covering 20.15 million passenger cars. There were 22 domestic passenger car companies which did not meet the standard requirements, most of them are small independent brands, accounted for 1.6% of the national market. The other 67 domestic manufacturers, accounting for 98.4% of national production, met the standard requirements. Eight importing auto companies did not meet the standard requirements, most of them focused on sports and luxury cars. However the volume only accounted for mere 3.3% of total imports. Others accounted for 96.7%. In the past three years, the country has not imposed strict penalties on non-complying companies other than the notification and online shaming.
iCET ‘s CAFC analysis yielded results slightly different that those published by MIIT. This nearly 1% gap, illustrated in Table 8 and 9, most likely stems from differences and production data sources. This report is not meant to challenge MIIT’s official CAFC results in any way but rather is aimed at reflecting on the general direction , implications, and efficiency of the CAFC standard regime as a whole.
Table 8: Average Fuel Consumption for Domestic Produced Car Fleets in 2015 Index FC FC Difference MIIT published iCET evaluation
Production volume，10k 2015 1999* -0.8%
CAFC2015，L/100km 6.98 6.95 -0.4%
TCAFC-III，L/100km 7.49 7.46 -0.4%
CAFC2015/TCAFC-III 93.2% 93.2% 0.0%
Note: NEVs are excluded. Table 9: Average Fuel Consumption for Imported Car Fleets in 2015 Index FC FC Difference MIIT published iCET evaluation
Imported volume，10k 95 95 -0.1%
CAFC2015，L/100km 8.34 8.44 0.2%
TCAFC-III，L/100km 9.19 9.22 1.3%
CAFC2015/TCAFC-III 90.7% 91.6% 1.1%
Note: NEVs are excluded.
According to iCET’s calculations, domestic manufacturers’ CAFC reached 6.95L/100km. However, given the growing overall average curb weight of passenger vehicles nationally, the effective FC target value increased compared to previous years.
In 2015, the corresponding target value (TCAFC-III) was 7.46L/100km and
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CAFC2015/TCAFC-III was 93.2%, exceeding 100% of the annual requirement. The average corporate fuel consumption of importing auto companies was 8.44L/100km, with a corresponding target value of 9.22L/100km. Therefore CAFC2015/TCAFC-III reached as low as 91.5%, even lower than domestic manufacturers – as shown in Figure 8.
10.0 110% 9.22 9.0 8.44 105%
8.0 7.54 7.46 7.49 7.37 100% 7.02 6.95 6.92 7.01 7.0
95% FC,L/100km 6.0
95.1% 90% 5.0 93.1% 93.2% 92.4% 91.5%
4.0 85% National Domestic JV Independent Import Average
CAFC2015 TCAFC-III CAFC2015/TCAFC-III
Figure 8: 2015 CAFC Versus 2015 Target CAFC (by Manufacturer Type)
2.2.1 Phase III CAFC Compliance
All auto companies with an annual production exceeding 100,000 cars reached the standard target. The CAFC2015/TCAFC-III of the Top 10 companies was less than 90%, which is 10% higher than the annual target. The Top 3 CAFC2015/TCAFC-III performing domestic auto manufacturers were BMW Brilliance, Beijing Benz, and BYD. Great Wall Motor and Changan Ford slipped out of the Top 10, while Guangzhou Auto (GAC), Guangzhou Automobile Toyota moved into the Top 10, as shown in Figure 9.
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10.00 100% 90% 90% 9.00 87% 87% 88% 84% 85% 85% 80% 81% 83% 80% 8.00 7.09 6.93 6.86 6.77 70% 7.00 6.74 6.21 6.17 6.14 60% 5.88 5.78 6.00
L/100km 50%
， 5.00 40% FAW- Chana Chana
CAFC Brilia Toyat GAC- Bejing - GAC- FAW- - nce- BYD Geely a- Toyot -Benz Mazd Moter VW Suzuk BMW Tianji a a i n CAFC 2015 6.93 7.09 5.88 6.21 6.74 6.17 6.14 6.86 6.77 5.78 CAFC 2015 /TCAFC III 80% 81% 83% 84% 85% 85% 87% 87% 88% 90%
Figure 9: Best CAFC2015/TCAFC-III Performance of Domestic Manufactures in 2015
All importing auto companies with import volume exceeding 10,000 cars reached
the standard, except for SAIC-GM. The CAFC2015 of Volvo was only 6.91L/100km, and its
CAFC2015/TCAFC III ratio reached 77.3%, as illustrated in Figure 10. In general, importing companies can meet their target relatively easily as their fleets are comprised of large weight vehicles, and are therefore faced with relatively high FC levels as their targets.
11.00 100.0% 9.90 10.00 90.0% 9.12 9.11
9.00 8.37 8.34 8.54 80.0%
7.80 8.00 7.49 7.54 70.0% 6.91
7.00 60.0% L/100km
， 6.00 50.0%
CAFC 5.00 40.0% Jaguar Toyot Porsc Subar - Volks Volvo BMW Audi Benz Ford a he u LandR wagen over CAFC 2015 6.91 7.49 7.54 8.37 8.34 9.12 7.80 9.90 8.54 9.11 CAFC 2015/ T CAFC III 77.3% 83.5% 85.0% 86.9% 89.5% 91.9% 93.6% 93.8% 95.5% 95.7%
Figure 10: Best CAFC2015/TCAFC-III Performance of Importers in 2015
2.2.2 Company Phase III CAFC Credits
The "accounting methods of corporate average fuel consumption of passenger cars" released by MIIT in March 2013 defines CAFC credits calculation method and also states that CAFC credits would be incorporated into the fuel consumption management system. Although three years have passed, a clear credit calculation management regime has yet to emerge. This report’s CAFC credits calculation is therefore based on the original
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theoretical credits calculation method described in Chapter 1.1.4.
In 2015, 62 domestic auto companies earned positive credits (CAFC credit surplus) for meeting the annual target (a total of 10.61 million L/100km), marking an increase of 68% from the previous year. Among credit surplus producers, joint ventures reached 8.2 million L/100km, accounting for 80% of the total. Independent auto manufacturers reached more than 2 million L/100km, accounting for 20% of total annual credit surplus. Twenty-six companies failed to reach CAFC target with a total credit shortage of over 100,000 L/100km. The Top 3 CAFC-credit deficit producers of 2015 were FAW Volkswagen, Shanghai Volkswagen, and Changan-Ford, with 1.55 million, 960k, and 590k L/100km respectively, as illustrated in Figure 11.
In 2015, domestic auto companies gained 175,000L/100km negative CAFC credits and failed to meet their respective targets. Liebao, DFSK, and Jiangling Holdings exhibited the worst performance in 2015. Jiangling Holdings produced more than 5,000 of E100 electric vehicles, which will positively improve its negative rating if the NEV credits can run into CAFC credit system during Phase IV stage, even it can make a profit from selling out its positive credits.
180
160 155
140 2015 CAFC credit surplus: 106 million L/100km
CAFC credit deficit: 17,0000 L/100km L/100km 120 96
10000 10000 100
， 80 59 60 51 47 42 42 42 41 41 38 40 34 31 30 30 25 25 22 20
20 CAFC positive credit 0
Figure 11: 2015 Major CAFC Credits Producers - Domestic Manufactures
During the past four years (2012-2015), a total of 22.75 million L/100km positive credits have been generated (supply of credits, credits surplus), while the total credit shortage was less than 1 million L/100km (demand for credits, credits deficit). Credit supply is, therefore, exceeding credits demand and is generally confined to a limited number of supply and demand companies, as illustrated in Figure 12. Because of the
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lack of incentive measures, CAFC’s value has not been reflected. In general, CAFC failed to encourage companies to upgrade their energy-saving technologies. It further demonstrates that too many credits are produced because the standard is still not strict enough. Indeed, the vast majority of companies can easily meet the standard in the case of inconspicuous fuel economy improvement.
180 160
140 CAFC credits CAFC credits
10,000 10,000 120 surplus producers deficit producters ， 100
80 L/100km
credits 60
40
20 CAFC 0 -20
2015 2014 2013 2012
Figure 12: 2012-2015 Major CAFC Credits/Deficits Domestic Manufacturers
In 2015, importing auto companies achieved the target value and accumulated a total of 780,000L/100km credits, marking an increase of 10% from last year. Top performing companies were BMW, Mercedes Benz, and Toyota, which earned 260,000, 140,000, and 110,000 credits, respectively – as illustrated in Figure 13. Importing companies that failed to meet their target accumulated credit debt equal to 37,000L/100km, which is 54% lower than the previous year.
30 26 25 2015 CAFC credit surplus: 780,000 L/100km 20 CAFC credit deficit: 3,700L/100km
L/100km 15 15 12 10
10000 10000 6 5 4
， 3 5 2 2 2 -3 0
-5 CAFCCredit
Figure 13: 2015 Major CAFC Credits Producers of Passenger Car Importers
Between 2012 and 2015, a total of 1.2 million L/100km credits were produced by importing auto companies, while the shortage in credits amounted to 260k L/100km. As demonstrated in Figure 14, BMW, Mercedes Benz, and Jaguar Land Rover led credit excesses while Nissan, Chrysler, and SAIC GM led the credit debt.
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30 2015 2014 2013 2012 25 Excess credits Credit debt
20 producers producers 10000 10000 L/100km
15 ， 10
5
CAFCCredit 0
-5
-10
Figure 14: 2012-2015 Major CAFC Credits/Deficits of Importers
Currently, CAFC credits excess and debt continues to be led by several companies. The absence of CAFC credits trading facilitation and adequate management mechanism results in lack of motivation to integrate energy-saving technologies worthy of credits. This is arguably a major endogenic factor for the slow improvement in actual fuel consumption efficiency in China in recent years.
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3. CAFC Trends and Technical Development
3.1 Developing Trends of CAFC
3.1.1 National Level CAFC and Curb-Weight
Since China began the implementation of passenger car fuel consumption standards in 2005, the national average fuel consumption (including domestic and imported cars) declined by 13.9%, some 3% annually on average. The national average fuel consumption reached 7.02L/100km in 2015, 0.1L/100km lower than the target of standard of 6.9L/100 km, as shown in Figure 15. However, if the production and imports of NEVs, which exceeded 220k in 2015, were taking into account -- then the national average fuel consumption over the past year could have declined by 0.35L/100km, achieving a national average of 6.7L/100km.
At present, the curb weight of China's passenger cars is increasing by 13-30kg every year on average. In general, fuel consumption increases by 0.4L/100km for every 100kg of curb weight (prior to 2008 the increase was of 0.6L/100km per 100 kg). China’s national FC reduction goals could arguably be achieved if the average fleet curb weight remains the same.
8.50 1400 1387 1372 8.16 8.11 1363 1360 8.00 7.99 7.97 3.4% 1313 7.88 1330
1320
4.4% 7.71 kg
L/100km 7.50 ，
， 7.53 7.33 1280 7.22
CAFC 7.00 6.7% 7.02 1240
Phase I Phase II Phase III Curb Weight 6.50 1200 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
National Average Fuel Consumpiton Average Curb Weight
Figure 15: 2006-2015 National Average Fuel Consumption and Curb Weight Trends
3.1.2 Domestic Auto Companies: Major CAFC Trends
The CAFC level of domestic passenger car manufacturers has been developing very closely to the national CAFC level, from 8.05L/100km in 2006 to 6.95L/100km in 2015, -36-
as shown in Figure 16. The decline rate of joint venture’s CAFC is greater than that of independent auto manufacturers.
In addition, the increase of larger engine size and curb-weight cars portion of independent auto manufacturers’ fleet created challenges in the deliverance of FC reduction. Between 2011 and 2015, average curb weight of independent products increased by 150kg, while that of joint venture companies only increased by 50kg. Between 2006 and 2015, independent the CAFC of auto companies only declined by 0.5L/100 km, while JV’s CAFC declined by 1.4L/100 km, as shown in Figure 17.
8.50 1400
1366 1360 8.00 8.05 8.01 7.85 1340 2.5 % 7.83 1334
L/100km 7.78 kg
， 1320 7.54 ， 7.50 5.1% 1295 7.38 1280 7.22 1274 7.12 5.8% 7.00 1252 Curb Weight 6.951240 FuelConsumption 1228 Phase I Phase II Phase III 6.50 1200 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Domestic Car Fleet Fuel Consumption Average Curb Weight
Figure 16: 2006-2015 Fuel Consumption and Curb Weight Trends for Domestic Car Fleet
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8.50 1400 1361 1363
8.37 1369 1357 8.13 1350 8.02 1335
8.00 7.99 1321 1318 7.97 1313 L/100km 1300
7.75 7.69 ， 7.55 7.54 7.50 7.42 1250 7.43 1233 7.30 7.31 7.49 7.23 7.14 1200 1192 7.11 Curb Weight, kg 7.00 7.01 6.95 6.92 1150 FuelConsumption Phase I Phase II Phase III 6.50 1100 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 JV FC Independent FC JV CW Independent CW
Figure 17: 2006-2015 Fuel Consumption and Curb Weight Trends for JVs and Independent Manufacturers
In terms of companies, Figure 18 shows the domestic auto companies that achieved the greatest decline rate in CAFC between 2012 and 2015. During the past three years, Guangzhou Auto’s CAFC declined by nearly 30%. Guangzhou Toyota, Tianjin Toyota and other companies saw an impressive rate of improvement. These companies reduced their fuel consumption, engine displacement and curb weight as well as further adoption of fuel-efficient technology in order to meet the standard.
10.0 2012-2015 CAFC decreasing rate 9.5
9.0
8.5
8.0 L/100km
7.5
， 7.0
6.5 CAFC 6.0 5.5 5.0
-29.5% -22.4% -19.9% -14.3% -11.6%
2012 2013 2014 2015
Figure 18: 2012-2015 Best CAFC Improvement Domestic Manufactures
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In terms of vehicle types, SUV sales saw the most rapid growth in market share, some 40%-50% in recent years, positioning itself accountable for 25% of the total passenger car sales market. The curb weight of SUVs is typically about 200kg heavier than an average sedan, and so are the displacement and power, as shown in Figure 19.
1800 1767 1600
1520
ml kg
， 1500 1700 ，
1602 1400 1600 1302
1300
Curb Curb Weight Displacement 1500 1200 Car SUV Car SUV
Production 120 115 Car
110 kw
SUV ， 100 94 MPV Power 90
others 80 Car SUV
Figure 19: SUVs FC Related Characteristics, 2015 Average Data
The increasing share of SUVs is projected to bring challenges to the company’s attempt to comply with the national fuel consumption standard regime. The average fuel consumption of SUVs was 7.62L/100 km in 2015, 1.2L/100km higher than that of the average car fuel consumption. Therefore the standard of CAFC2015/TCAFC-III of of SUV is 6% higher than that of sedans.
9.00 150%
8.02 140% 8.00 7.62 7.39 7.26 7.24 130%
L/100km 6.66
7.00 6.44 6.44 120% ，
6.00 110% 103% 100% 5.00 98% 90% 89% 95% 4.00 80%
FuelConsumption Car SUV MPV others
CAFC2015 TCAFCIII CAFC/TCAFCIII
Figure 20: Average Fuel Consumption of Compact Cars/SUVs/MPVs
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3.1.3 Importing Auto Companies: CAFC Trends
Imported cars are typically luxury cars, sports cars, SUVs, and models with large displacement and high fuel consumption. Therefore, the overall fuel consumption level of imported cars is higher than that of domestic cars. A few years ago (2006-2011), imported cars were not included in the consumption management system, making their FC decrease rate slow, at an annual average of 1%-2.5%. Since imported cars were included in the fuel consumption management system starting Phase III in 2012, fuel consumption declined at a rate of 3%-5% annually – much higher than domestic cars manufacturers’ annual average CAFC decline. It is likely that the annual decrease in curb weight of imported cars (as oppose to domestic manufacturers) is a major contributor to the reduction of fuel consumption, as shown in Figure 21.
11.00 10.82 8.6 10.80 1847 10.67
10.50 4.2% 1828 1825 1820 10.18 10.36 1809 1805 10.00
L/100km 10.08
， 7.6% 9.57 1780 kg 9.50 ，
9.00 22% 18.5% 9.05 8.76 1740
11.8% Curb Weight FuelConsumption 8.50 8.44 Phase I Phase II Phase III 8.00 1700 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Average Fuel Consumption Average Curb Weight
Figure 21: 2006-2015 Fuel Consumption and Curb Weight Trends of Auto Importers
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15.0 14.0
13.0
12.0 11.0 10.0 9.0 -4.4% -30.1% -17.9% -13.9% -12.9% -8.6%
CAFC(L/100 km) 8.0 7.0
Decreasing presentage 2012 2013 2014 from 2012-2014
Figure 22: 2012-2015 CAFC Trends for Import Cooperates
3.1.1 Conclusions
While the "Energy Saving and New Energy Vehicle Automotive Industry Development Plan” (2012-2020) states an average national fuel consumption target of 6.9L/100km for the year 2015, the actual national fuel consumption level was 7.02L/100km, marking a 0.12L/100km gap. Fuel consumption level and FC reduction pressure on imported vehicles are high, yet their CAFC reduction has been faster than that of domestic manufacturers in recent years. A major reason is likely to be the shifts in average fleet curb weight. Importers are declining their average fleet curb weight while domestic increase their average curb weight.
Companies’ average ratio of actual to target CAFC (CAFC/TCAFC) is declining annually at a rate of 3%-4%. Domestic manufacturers ration dropped from 107% in 2011 to 93% in 2015, an overall decline of 14%, which was led by JVs. Importing companies CAFC declined by 17% in recent four years.
12.0 Domestic JV Brand
11.0 Independent Brand Import
10.0 ） 9.0
L/100km 8.0 （
7.0 CAFC
6.0 2006 2007 2008 2009 2010 2011 2012 2013 2014
Figure 23: 2006-2015 Passenger Vehicle Fleets CAFC Development Trend
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110% National Import 105%
JV III - Independent Domestic
CAFC 100% /T
2014 95% CAFC 90% 2011 2012 2013 2014 2015 National 106.8% 103.6% 98.3% 96.0% 93.1% Import 108.5% 104.5% 99.3% 95.2% 91.5% JV 106.8% 102.3% 97.9% 95.9% 92.4% Independent Domestic 105.3% 105.9% 99.2% 98.0% 95.1%
Figure 24: 2011-2015 China Passenger Vehicle Fleet CAFC/TCAFC III Trend
3.2. Technology and FC Development of Popular Models
We have selected five popular passenger vehicles from German, American, Japanese, Korean, and independent manufacturers for closer examination of their energy-saving technology development and resulted FC improvements from 2010 to 2015.
3.2.1 Volkswagen-Lavida
Lavida, a typical German Class-A car, manufactured by Shanghai-Volkswagen. During the last eight years, Lavida introduced several models every year with increasing sale volume, that reached 379,000 in 2015 (highest sales for the segment). Figure 25 shows that Lavida’s FC has decreased rapidly in recent years and reached around 6.0L/100km, while its average displacement and curb weight didn’t change significantly.
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8.0
） 1620 7.5 7.46
7.0 1520
L/100km 6.97
（ / Displacement
6.5 6.73 ） ）
1420 ml
kg （
6.0 （ 6.12 5.94 1320 5.5
FuelConsumpiton 5.0 1220 2010 2011 2012 2013 2014 Curb Weight
Fuel Consumption Curb Weight Displacement
Figure 25: Fuel Consumption/Curb Weight/Displacement Trends of VW-Lavida Models
Throughout the years, Lavida adopted a turbocharger engine, electric power assisted steering (EPS/EPAS), and advanced gearbox in order to reduce its fuel consumption. Currently, over 60% of its new models are turbo version, 40% use dual clutch transmission (DCT) or continuously variable transmission (CVT), and most of the new models have EPS loaded. This technology adoption trend is shown in Figure 26. Another strategy adopted by VW-Lavida, is the replacement of the engine block and cylinder head materials, from cast iron to advanced aluminum.
100% DCT/CVT 100% Electric Power Steering system 80% Turbocharging 66.60% 60%
40% 40%
20%
0% 2010 2011 2012 2013 2014 Figure 26: Fuel Saving Technology Applications Adoption Ratio in VW-Lavida Models
3.2.2 Ford Focus
The Ford Focus is a good example of a highly commercialized American compact car with relatively good FC development. In 2015, the sale volume of the New Focus reached 246,000 vehicles, ranked number 61 in sedan and number 71 in hatchback annual passenger car sales rankings. Figure 27 traces FC development of the average Focus model. While its average displacement was reduced by almost 30% (from 1,868 ml in -43-
2010 to 1,336 ml in 2015), its curb weight only increased slightly by 15kg. Before 2013 FC achievements were gained following curb weight increase, while from 2014 FC was reduced with the rapid decrease of displacement.
If we look into the application of energy saving technology, we can find that the 2015 Focus adopted Ti-VCT dual independent camshaft variable timing engine, MFI multi-point fuel injection technology, and Ti-VCT dual cam independent variable timing system to optimize the ignition advance angle of the engine. Additionally, the Focus is equipped with brake-assist technology in recent years to reduce the fuel consumption caused by improper start-stop process. The 2015 EcoBoost model is also equipped with a turbocharger to reduce fuel consumption while providing the same level of power output.
8.0 1900
7.93
7.6 7.65 1800
7.2 1700 6.95 6.8 1600
6.50 6.4 1500
6.10
6.0 1400
Fuel Consumption FuelConsumption (L/100km) Curb Weight Curb Weight (Kg)/Displacement(ml) 5.6 1300 2010 2012 2013 2014 2015 Fuel Consumption Displacement Curb Weight
Figure 27: Fuel Consumption/ Curb Weight/Displacement Trends of the Ford Focus
3.2.3 Honda Accord
The Honda Accord is a Japanese high-end car with high sales. More than 1.5 million Accords have sold since the sixth generation of the Accord entered the Chinese market in 1999. The Honda Accord ranked number 45 in passenger car sales, and sold 128,000 vehicles in 2015. Figure 28 illustrates the continuous decrease in average fuel consumption from 8.75 L/100km in 2010 to 7.0L/100km in 2015. The Accord’s large displacement models, such as 3.5 L model, are being withdrawn from the market, contributing to the reduction in average displacement from 2,362ml in 2010 to 2,176ml in 2015. Curb weight increases, by some 24kg over the period, has likely offset some of the FC benefits in displacement reduction.
The Honda Accord has adopted Honda's unique i-VTEC engine system, which emphasizes low rotational speed with low environmental impacts. From 2014, all Accord models were equipped with brake assistance and EPS. From 2013, all Accord -44-
models have variable transmission for reducing transmission interruptions, achieving improved FC level.
9.0 2400
8.75 8.5 8.65 2200 ） 8.49
8.0 2000
/ Displacement
） ）
L/100km 7.83
ml kg
（ 7.5 1800
（ （
7.0 7.00 1600
6.5 1400
2010 2011 2012 2013 2015 Curb Weight FuelConsumption Fuel Consumption Displacement Curb Weight
Figure 28: Fuel Consumption/ Curb Weight/Displacement Trends of the Honda Accord
3.2.4 Hyundai Verna
The Hyundai Verna, a typical Korean A0-class car, entered the market in the second half of 2010. The Hyundai Verna is equipped with 1.4L and 1.6L engine, and is a cost-effective car. The Verna is ranked 13th in passenger car sales, reaching 213,000 vehicles sold in 2015.
As an A0-class car the Hyundai Verna has a low fuel consumption level of 6.1-6.8 L/100km. In recent years, the average fuel consumption decreased marginally to around 6.2 L/100km. Figure 29 indicates that the average curb weight and displacement of the Verna model has not undergone significant changes. In the last six years, the Hyundai Verna did not make significant improvements to its engine and whole-vehicle technologies, adopting a continuous variable valve timing engine (CVVT). This kind of engine can control the valve opening and closing according to real time working conditions, enhancing power generation and maximizing fuel efficiency.
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6.30 1500 ）
6.25 6.27 1400 6.22
L/100km 6.20 6.22
（ 1300
6.15 ） ml
1200 kg)/ Displacement （
6.10 （ 6.10 6.05 1100
FuelConsumption 6.00 1000
2010 2012 2014 2015 Curb Weight Fuel Consumption Curb Weight Displacement
Figure 29: Fuel Consumption/ Curb Weight/Displacement Trends of the Hyundai Verna
3.2.5 BYD F3
China’s independent auto company, BYD, released the F3, an A-class passenger car, in April 2005. Since then, the F3 achieved sales in the mid-size car market reaching 143,000 in 2015, placing it at number 40 in national car sales. Figure 30 shows that the F3’s fuel consumption decreased from 7.2 L/100km in 2010 to 6.0 L/100km in 2015, coupled with typically small displacement (1.0L and 1.5L) and a slight increase in curb weight.
As of 2013, F3 models have gradually adopted variable valve lift technology (VVL). Therefore their valve formation changed along with the engine speed. At high speeds, long strokes are used to improve its power efficiency, while at low speeds, short strokes are engaged. Figure 31 shows that the application of DCT/CVT on F3 model has grown rapidly since 2012. These two kinds of gearbox help are highly supportive of fuel efficiency.
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1650 ） 7.4 7.21 ）
1550 ml 7.0 （
L/100km 1450
（ 6.6 6.16 1350 6.2 6.43
6.06 1250 /Displacement
5.8 ） kg
5.4 1150 （ FuelConsumption 5.0 1050
2010 2012 2013 2014 Curb Curb Weight Fuel Consumption Curb Weight Displacement
Figure 30: Fuel Consumption/ Curb Weight/Displacement Trends of the BYD F3
70% 58% 60% 50% 43% 38% 40%
ratio 30% 20% 3% DCT/CVT application 10% 0% 2010 2012 2013 2014
Figure 31: DCT/CVT Application Trend in the BYD F3
3.2.6 Summary of Energy-Saving Technologies on Different Models
The analysis of five best selling passenger cars’ fuel consumption development trends demonstrates that energy-saving technologies can decrease fuel consumption, especially in mid-size and luxury cars (segments that have higher cost). The analysis also indicates that cars’ curb-weight is growing over time and in some cases is offsetting the benefits of technological improvement. Policy guidance on lightweight production is needed.
Most popular energy-saving technologies include engine technology transformation such as turbocharging, direct injection, and variable valve, electric control technologies such as ESP, advanced gearbox technology such as electronically controlled mechanical automatic transmission, dual-clutch transmission, and continuously variable transmission, idling start-stop technology, and other techniques to reduce drag.
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4. NEVs Impact on CAFC Performance
4.1 NEVs Development in 2015
According to data released by China Automobile Manufacturers Association, China produced 340,000 new energy vehicles (NEVs) in 2015. This represents an annual increase of 3.3 fold and accounts for 1.5% of total vehicle output. 255,000 pure electric vehicles (PEVs) and 86,000 plug-in hybrid vehicles (PHEVs) were produced, indicating an annual growth of 4.2 and 1.9 fold, respectively. Among this, 151,000 passenger PEVs cars and 63,000 passenger PHEVs were produced, indicating an annual growth of 2.8 and 2.5 fold, respectively. Imported EVs (PHEVs and PEVs) surpassed 5,000 vehicles, as shown in Figure 32. NEV production in 2016 is expected to reach somewhere between 500,000 and 700,000 vehicles. China's NEV industry is rapidly advancing, and the focus of production has gradually shifted from the commercial and public sectors to the private sector.
250000 5284 200000
62608
150000
100000 NEVvolume 4568 152172 50000 14812 10699 16700 1137 5202 37800 0 2010 2011 2012 2013 2014 2015
PEV-domestic produced PHEV-domestic produced EVs imported
Figure 32: 2010-2015 New Energy Vehicles (NEVs) Production and Imports
4.2 NEVs Contribution to CAFC
The production and sales of NEVs in 2015 mostly consisted of small and mini-sized models, including Geely ZHIDOU D2, Zhongtaiyun 100, Chery eQ, QQ3, BAIC E series, Kangdi Panda, BYD E6, JAC Yue iEV5 (PEVs), as well as BYD QinTang, and Roewe 550 (PHEVs). According to the accounting methods of energy-saving and NEVs determined in the "Fuel consumption evaluation methods and targets for passenger vehicle15", the
15 Released by General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (AQSIQ) and Standardization and Administration of the People’s Republic of China, in 2012. http://www.chinaev.org/uploads/hhl/GB27999-2011.pdf -48-
accounting multiplier of pure electric vehicles, fuel cell passenger car and plug-in hybrid electric vehicle equipped with battery mileage exceeding 50km is 5, and the fuel consumption of these car types is calculated as 0. The incorporation of new energy vehicles has led to a decline of nearly 5% in China’s average FC, some 0.35 L/100km, reaching 6.67 L/100km. Energy saving technologies upgrading enabled the estimated reduction of the national average FC by just 0.2 L/100km.
In 2015, more than 30 companies produced NEVs, 95.8% of which are domestic independent auto manufactures. Among manufactures, eight reached more than 10,000 in NEV production, 14 manufacturers reached 5,000, and 16 produced over 1,000. The dominance of independent manufacturers entitled them to significant CAFC reductions: from 7.01 L/100km to 5.82 L/100km, a decrease of some 17% (1.19 L/100km) as shown in Figure 33.
9.00
-2.6%
8.00
L./100km -5.0% -5.0% -0.3% -17.0% ， 7.00
6.00
5.00 National Average Domestic JVs Independent Importers FuelComsumpiton Average Cooperates CAFC（excluding EVs） CAFC（Including EVs） Figure 33: 2015 NEV Preferential Accounting Impacts on CAFC by Cooperates Type
In 2015, Chongqing Lifan Company produced two NEV models, the 320 and the 520, with a production volume of about 6,500 units. The company’s annual production of traditional (non-NEV) cars reached 16,000 units. The NEV preferential accounting method led to a corporate average fuel consumption (CAFC) decrease of 4.59 L/100km (70%), reaching 1.93 L/Km. Tang, TengShi, and E6 of BYD contributed to a 58% decline of BYD’s CAFC, resulting in 4.67 L/100km. Geely, Chery, Jiangnan, and BAIC have all enjoyed large CAFC reductions as a result of their increase in NEV production. Once the implementation of the CAFC integral management approach enters into force, additional benefits are projected, as demonstrated in Table 10 .
Table 10: 2015 NEV Preferential Accounting Impacts on CAFC of Major NEV Producers NEV producer Main EV CAFC， CAFC， EV CAFC 5 times models L/100km L/100km impact Decreasing EV （excl’ EV） （incl’ on CAFC rate volume EV） L/100km / ICE volume -49-
Chongqing-Lifan 320, 620 6.52 1.93 -4.59 70.4% 198% BYD Industry Tang, Denza, 7.98 3.30 -4.67 58.6% 126% E6 Geely ZD, Kangdi, 6.17 2.69 -3.48 56.3% 108% DiHao EV Jiangnan Auto Yun100, Z100, 7.75 3.95 -3.80 49.0% 80% Jiangnan TT BYD Qin, Surui 5.88 3.15 -2.73 46.4% 78% JMC-Landwind E100 9.64 5.46 -4.18 43.4% 64% BAIC-Motor E series, 6.55 4.39 -2.16 33.0% 41% Shenbao SAIC-Motor Roewe E50, 6.92 4.70 -2.22 32.0% 42% 550 Chery eQ, QQ3 6.72 5.37 -1.35 20.1% 21% JMC-Holdings IEV5 7.01 5.82 -1.19 16.9% 17%
21% 350,000 17% 300,000
108% 250,000 41% 78% 200,000 80% 42%
150,000 126% Prodution 100,000 64% 50,000 198% 0
ICE NEV×5
Figure 34: 2015 ICE vs. NEV Volume of Major NEV Producers (IEC vs. 5 times NEV)
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12.0 -43% 10.0 -58% -49% 8.0 -56% -32% -17% -33% -20% -70% -46% 6.0
L/100km 4.0
2.0
0.0 BYD JMC- Jiangn BAIC- Cherr SAIC- Linfan Geely BYD Indust JAC Holdin an Moter y Moter -Moter ry gs CAFC（excluding NEVs） 6.17 5.88 7.98 7.75 6.55 6.72 6.92 7.01 6.52 9.64 CAFC（including NEVs） 2.69 3.15 3.30 3.95 4.39 5.37 4.70 5.82 1.93 5.46 CAFC（excluding NEVs） CAFC（including NEVs） Figure 35: 2015 NEV Preferential Accounting Impacts on CAFC for Main NEV Producers
When the ratio of the NEV production and ICE vehicle production reaches a certain level, these ten NEV car manufacturers are projected to completely abandon the traditional fuel-efficient technology upgrades. In 2015, the CAFC of these five companies did not decrease but increased. Jiangnan Automobile and Jiangling Holdings’ fuel consumption increased by 10%, BYD Auto Industry, and Chongqing Lifan also increased by about 4%. Especially for Jiangling Holdings, if NEVs are excluded from CAFC calculations then their CAFC2015/TCAFCIII would not be able to meet their corporate FC target, and will exceed the target valued by 11 percentage points. Other ICE vehicle producing companies such as JAC, BAIC, Chery Automobile, SAIC shares, and BYD rely on ICE energy-saving technology upgrades for decreasing their CAFC by 8.0%, 7.4%, 5.3%, 4.2%, and 2.2%, respectively, as shown in Figure 36.
10.0 10.5% 9.0
8.0 4.9% 10.7% -8.0% -4.2% L/100km -7.4% -5.3%
， 7.0 4.2% 0.5% -2.2%
CAFC 6.0
5.0
2014 CAFC（Excluding NEVs） 2015 CAFC（Excluding NEVs）
Figure 36: 2015 vs. 2014 ICE Fuel Consumption of Major NEV Producers
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4.3 The Contribution of NEVs to China’s 2020 FC Goal
According to “the energy-saving and new energy automotive industry development plan (2012 - 2020)” released by the State Council16, by 2020, pure electric vehicles and plug-in hybrid electric vehicle production capacity should reach 2 million, and the cumulative production and sales should exceed 5 million. To encourage their development, Phase IV provides accounting incentives to NEVs. However the preferences quota has been reduced in comparison with Phase III. The accounting multiplier of NEVs will remain five until 2017 but will later be reduced to three in 2018 and to two in 2020. By 2020, the fuel consumption of NEVs will be converted to energy consumption while that of fuel cell will be converted into zero.
In order to evaluate the effects of energy saving and new energy vehicles on the CAFC target value, a scenario analysis was conducted under the following assumptions (also see Table 11): (i) From 2015 to 2020, NEVs will account for 65%-80% of total new vehicles, showing an increasing trend. In 2020, total production of new energy vehicles will reach 5 million, of which the NEVs will comprise 3,760,000; (ii) ICE cars annual growth rate will maintain annual growth of 8%, from 21 million in 2015 to 31 million in 2020.
Table 11: Annual NEVs Relative Production to ICE Production – Assumptions Year NEV NEV cars ICE cars NEV cars production production production production/ （10,000） （10,000） （10,000） NEV production ~2014 16 9 / / 2015 34 22 2108 65% 2016 60 42 2275 70% 2017 80 40 2457 75% 2018 90 68 2654 75% 2019 100 80 2866 80% 2020 120 96 3095 80% 2020 Total 500 376 / /
Based on China’s Phase IV target set for 2015-2020 (i.e. 6.9, 6.7, 6.4, 6.0, 5.5, 5.0 L/100km target in each of the years beginning with 2016), and according to the above two assumptions regarding ICE and NEV growth, NEVs are likely to contribute to 0.3-0.7 L/100km reduction in the national FC, some 15%-35% of the required reduction, as illustrated in Figure 37.
NEV production of 220,000 units, can decrease national FC by 0.35 L/100km. As the NEV car production of 2016 is 50,000-70,000, and expected to grow fivefold each year by 2017, and as the multiplier for that period for NEVs is five, much of CAFC targets are
16 Announcement of distributing “Energy-saving and new energy vehicle industry development plan” by the State Council. http://www.gov.cn/zwgk/2012-07/09/content_2179032.htm Access in 8th December 20168. -52-
projected to be met through NEV production. By the end of Phase IV, after NEVs will have exhausted their regulatory benefits, energy vehicle technologies will most likely take the lead in generating CAFC improvements. Therefore, new energy and energy-saving technologies require coordinated development.
7.50 2015 national CAFC is 7.02 L/100km， 2016-2017 target is easy to achieve even 7.00 without ICE energy saving technology
improvement
6.50
L/100km
， 6.00 NEVs contribute 15-35% CAFC target gaps if its 5.50 energy consumpiton taken as zero 5.00 FuelConsumption 2015 2016 2017 2018 2019 2020
ICE FC requirement National Fuel Consumption Target Figure 37: NEVs Preferential Accounting Impacts on FC Target Achievement of Phase IV
According to the energy conversion method for electric vehicles and plug-in hybrid electric vehicles (Exposure draft), three conversion methods are recommended: (i)
Simple energy conversion, (ii) fuel life-cycle conversion, (iii) conversion based on CO2 emissions. At present, according to the dominant method (i), simple energy conversion method, the average power consumption of a typical PEV is 15kWh/100km, equivalent to gasoline consumption of 1.7L/100km. According to method (ii), the fuel life-cycle conversion method, the average FC of a typical PEV is about 3.44L/100km. According to method (iii), CO2 emissions conversion, the average FC of a typical PEV is about 4.6L/100km. Therefore the accounting method impacts the effects of the regulation on CAFC and subsequently the efforts of companies, as shown in Figure 38.
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7.50
7.00
6.50
6.00
5.50 L/100km Nationl FC target 5.00 ICE FC requirement with NEV FC accounted by zero ICE FC requirement with NEV FC accounted based on energy 4.50 ICE FC requirement with NEV FC accounted based on CO2 emission
4.00 2015 2016 2017 2018 2019 2020
Figure 38: ICE FC Requirements with Different Accounting Ways with NEV Energy Consumption
While the NEV accounting method as part of the CAFC regulation inspires the development and application of NEV technology and enables flexibilities in meeting Phase IV of the regulation which is gradually increasing in stringency, it also weakens national energy-saving technology development and adoption.
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5. Phase IV Implementation
5.1 Phase IV Target Analysis
This chapter will focus on analyzing the gap between the actual average fuel consumption (CAFC) and Phase IV target fuel consumption. In 2015, the CAFC/TCAFC ratio of domestic manufacturers was 135%, a 5% reduction from 2014, with the majority of reduction resulting from the inclusion of NEVs from independent manufacturers. This is demonstrated in Table 12.
Table 12: 2015 CAFC/TCAFC-IV by Cooperate Type
Company type 2015 CAFC 2015 CAFC * TCAFC-IV CAFC2015 CAFC2015/
（L/100km） （L/100km） （L/100km） /TCAFC-IV TCAFC-IV* National Average 7.02 6.67 5.17 136% 129% Domestic 6.95 6.60 5.12 136% 129% - JVs 6.92 7.11 5.12 135% 135% - Independent 7.01 6.77 5.11 137% 114% Importers 8.44 8.22 6.13 138% 134%
140% -4% -7% -7% 0% -23%
130%
120%
CAFC IV CAFC
/T 2015
110% CAFC
100% National Average Domestic Average JVs Independent Importers Cooperates
CAFC/TCAFC-IV（excluding EVs） CAFC/TCAFC-IV（including EVs）
Figure 39: 2015 CAFC/ TCAFC IV by Corporation Type
Stemming from variations in weight-bin and volume production by different auto corporation, the target range of various domestic companies was between 4.3L and 7.5L/100km in 2015, while the range for most larger companies (annual production volume over 100k cars) was between 4.5 and 5.0 L/100km. The Phase IV target for average models was 5.12L/100km, a slight increase from 2014 (5.08 L/100km).
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Imported cars, because of their models’ typically higher curb weight, have faced higher target values than domestic cars. Their target ranged between 4.8L and 6.8L/100km, an average of 6.13L/100km, 1L/100km higher than that of domestic manufacturers. The company’s CAFC target value distribution is shown in Figure 40.
50 Domestic Cooperate Importer
40
30
20
Cooperate Cooperate Number 10
0 <4.5 [4.5,5.0) [5.0,5.5) [5.5,6.0) >=6.0
Figure 40: 2015 Domestic and Import Cooperates TCAFC IV Distribution
Figure 41 shows CAFC2015/TCAFCIV values for companies that produced over 100,000 cars in 2015, excluding NEVs. Their score was between 117% and 151%. Fifteen companies, such as Changan Mazda, BYD Auto, BMW Brilliance, and Geely Automobile, have reached 134% of Phase IV target for 2016 in 2015, a full year ahead of schedule. Figure 42 shows CAFC2015/TCAFCIV values for companies that produced over 100,000 cars in 2015, including NEVs. Some new energy automotive companies have significantly reduced their CAFC/TCAFC-IV. For example, Geely Automobile, BYD Automobile, BYD Auto Industries, Jiang Nan Automobile, SAIC shares, and BBAIC have already reached the 2020 goal of Phase IV by producing NEVs.
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160 151 147 2016 CAFC/TCAFC IV requirement is 134% 145 145 146 143 2015 CAFC IV 140 141 141 average CAFC /T is 136% excluding EVs 138 138 138 139 140 140 136 136 136 136 137 137 133 134 135 135 135 130 131 132 132 132 126 126 127 123 123 124 118
120 117
, % ,
CAFC 100 CAFC/T 80
60
40
Figure 41: CAFC2015/TCAFCIV of Domestic Corporation (Excluding NEVs)
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2016 CAFC/TCAFC IV requirement is 134% 160 151 average CAFC2015/TCAFC IV is 136% excluding EVs 145 141 141 143 138 140 140 136 136 136 137 138 138 138 138 140 average CAFC2015/TCAFC IV is 129% including EVs 135 135 135 130 130 131 132 132 124 126 126 122 123 119 120
113
107 , % ,
CAFC 100 96 92
86 CAFC/T 80
62 62 60 55
40
Figure 42: CAFC2015/TCAFCIV of Domestic Corporations (Including NEVs)
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In recent years, the CAFC/TCAFCIV values of importing companies have continued to decrease significantly. In 2015, the value declined to 138%, a 10% reduction from the previous year. Figure 43 shows the trend for importing companies with over 10,000 cars volume. The CAFC2015/TCAFC IV value for BMW, Volvo, Porsche, and Audi are all below 140%. If importers can maintain the existing decline, it wouldn’t be difficult for them to achieve their goal of 134% in 2016.
180 2016 CAFC/TCAFC IV requirement is 134% 169 170
160 151
, % , 148 150 144 145 145 146
CAFC 141 143 2015 CAFC IV 138
/T CAFC /T is 138% 140 135
132 2015 130 126 127
123 CAFC 120 116
110
100
Figure 43: CAFC2015/TCAFCIV for Import Cooperates (excluding EVs)
5.2 Compliance Pressure Focus on Late Phase IV Stage
According to “the energy-saving and new energy automotive industry development plan (2012-2020)17” released by the State Council, the average FC of passenger cars should be reduced to 5L/100km by 2020. The average FC level of domestic auto companies in 2015 was 7.02L/100km, accounting for 136% of the target. The resulting pressure of reaching the Phase IV target is becoming similar for both domestic manufacturers and importing companies.
The implementation plan of CAFC/ TCAFC-IV standard is detailed in Table 13. The challenge posed for the first two years (2016-2017) is not big, and NEVs growth is high.
Yet in the following three years, from 2018 to 2020, CAFC/TCAFC-IV ratio is required to decrease by 8%-10%, translating to CAFC decreases of 0.5L/100km per year. NEVs alone may not support companies in reaching the later year targets, therefore energy saving technologies implementation needs to make advances.
17 Announcement of distributing “Energy-saving and new energy vehicle industry development plan” by the State Council. http://www.gov.cn/zwgk/2012-07/09/content_2179032.htm Access in 8th December 2016. -59-
China’s average annual FC decline must be 6.2% from 2015 to 2020 in order to meet the CAFC 2020 target. This makes the requirement even more challenging than that in the United States, the European Union, and Japan, as demonstrated in Figure 44.
Table 13: The Implementation Plan of CAFC/ TCAFC Phase IV CAFC CAFC annual Annual Year CAFC/ Annual L/100km reduction reduction reduction TCAFC2020 L/100km rate rate percentage points 2015 136% 3 6.90 0.22 -3.1% 2016 134% 4 6.70 0.20 -2.9% 2017 128% 6 6.40 0.30 -4.5% 2018 120% 8 6.00 0.40 -6.3% 2019 110% 10 5.50 0.50 -8.3% 2020 100% 10 5.00 0.50 -9.1% CAFC average annual decline rate during 2016-2020 -6.2%
Figure 44: Annual Average FC Reduction Rate Needed for Meeting the Coming Target in Various Regimes
5.3 The importance of advanced energy-saving technologies
During Phase IV of the CAFC standard (2016-2020), internal combustion cars are projected to continue to account for over 95% of China’s passenger vehicle market.
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Therefore energy-saving vehicle technologies are indeed advancing China’s CAFC target. In order to encourage the application of new energy-saving technologies, Phase IV includes several flexibility mechanisms, by which some technologies (e.g. efficient air conditioners, idle start-stop devices, shift reminder devices, and braking energy recovery vehicles) enable the decreases of up to 0.5L/100km per vehicle. These flexibility mechanisms can translate to as much as 5%-25% of average corporate compliance with the CAFC standard.
The above analysis demonstrates the role NEVs play in advancing China’s CAFC goals under the new super-credits platform. NEVs are projected to enable a decline of some 0.3-0.7L/100km in fuel consumption, which translates to a contribution of 15%-35% to fuel consumption reductions. Therefore, the remaining traditional automotive energy-saving technologies would need to account for some 40%-80% of China’s average FC decline from the current 7.02L/100km to the target of 5L/100km, or 0.8-1.6L/100km (average of 0.16-0.32L/100km) as demonstrated in Figure 45.
7.50
7.00
6.50
Drive-cycle ICE techology improvement may
6.00 contribute 40-80% CAFC,L/100km 5.50 Off-cycle ICE improvement credit may contribute 5-25%
NEV proferencial accounting may contribute 15-35% 5.00 2015 2016 2017 2018 2019 2020
Figure 45: ICE Fuel Saving Technology and NEVs Preferential Accounting Impacts on National Fuel Consumption Target Achievement
According to iCET’s 2013 comparison of the world's top ten best-selling light vehicles’ fuel-saving technology applications, EU cars are well performing on energy vehicle technologies (e.g. engine valve technology, booster technology, start-stop technology, and advanced diesel technology) while Japan has led hybrid technologies (alongside engine valve technology, start-stop technology, and other fuel-saving technologies). Compared to these regions, China's energy-saving technology application is relatively narrow, signaling that there is much room for improvement. The “Energy-Saving Automotive Technology Research Report 2016" composed by the Chinese Society of Automotive Engineers, stated that China’s automobile energy-saving
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technologies can improve fuel economy by up to 40%18. Recently, a clean vehicle technology roadmap has been drafted by SAE-China19.
5.4 CAFC Credit Should be Introduced as Soon as Possible and Implemented Independently CAFC
A calculation method of CAFC credits was first introduced in 2013 as part of the standards’ flexibility mechanism, "The average fuel consumption of passenger car business accounting approach20” (published by MIIT, NDRC, MOC, AOC and AQISQ). However regulation penalties, without which a trading mechanism cannot be implemented, have not yet been introduced. Auto corporations have therefore somewhat voluntarily produced NEVs and their credits have been calculated for reducing their CAFC. Credits accumulation was translated to a misleading and sharp decreasing trend in national average CAFC calculations.
In July 2016, MIIT introduced a new NEV-credits trading regulation draft under its overarching CAFC standard, "Recommended average fuel consumption of passenger cars and new energy vehicle credits synchronized management approach.” The new draft regulation intends to form and integrate a separate NEV credits system with the existing CAFC credits program. The CAFC credits mechanism will enter into effect after the release of the final regulations; the MIIT suggested NEV credits mechanism is planned to be implemented as of 2018.
The National Development and Reform Commission (NDRC), the ministry governing the Climate Change and Emissions Trading Systems (ETS) in China, has also recently announced its intention to include an NEV-credits mechanism as an independent trading system under its 4-year old emissions trading platform21, shedding some uncertainty around the question of which ministry should and would oversee China’s NEV credits. The existing ETS platform is operating under the low-carbon law, making an NEV-credits system operating under the ETS more feasible than that operating under the weaker CAFC regulation.
A coalition of researchers and NGOs are advocating for the decoupling of NEV credits from the CAFC regulation mainly because of the limited management capacity of MIIT over the existing CAFC regulation. The two regulations take different technology-forcing pathways, and the potential offsetting of CAFC ICE vehicle efficiency
18 40% fuel saving potential for ICE vehicles. http://www.caam.org.cn/hangye/20161103/1505200333.html Access in 8th December 2016. 19 Interpretation of “Energy-saving and new energy technology roadmap”.http://auto.sina.com.cn/news/hy/2016-10-26/detail-ifxwztru7231495.shtml Access in 8th December 2016. 20 Five ministries jointly published “Calculation method of Passenger Vehicle Corporation Average Fuel Consumption”, http://www.gov.cn/gzdt/2013-03/20/content_2358627.htm, Access in 20th February 2017. 21 http://www.cnemission.com/article/news/DomesticNews/201608/20160800001158.shtml -62-
technology upgrading targets by low-quality NEVs manufacturing. iCET hosted a highly publicized expert panel discussion in Beijing in August 2016, “CAFC Credits System and the New Energy Vehicle (NEV) Credit Management System Roundtable discussion.” The event was aimed at assessing the pros and cons of an independent and an integrated NEV system operating under MIIT and NDRC22. A summary of the findings are listed in Table 14.
iCET’s key recommendation is to keep the two system separate for the purposes of enabling more feasible and measurable implementation and management of each of the systems (either under the MIIT’s or NDRC’s management). We foresee that NDRC has more experience in setting targets and penalties on credits generation, and its legal basis provides more robust implementation potential. We also suggests a gradual reduction of CAFC credits car numbers multiplier, and a replacement of NEVs 0L/100km with more accurate life-cycle FC calculation capable of representing the actual FC and carbon output of NEVs.
Separate NEC credits systems approach: The CAFC credit and NEV credit programs each have their own mandatory targets, calculation methods, compliance requirements, trading rules, and independent penalty mechanisms. In the existing CAFC accounting method, a single NEV is considered as up to 5.0L/100km cars, and can be traded between companies for CAFC compliance purposes, providing direct benefits for its manufacturers. An NEV credit trading system would require the generation of credits through either the manufacturing or purchase of NEV credits (as % of company production or sales).
Integrated NEV credits systems approach: while an integration is possible as long as the management of each of the systems is separate and robust on its own, it requires a well-thought through credits transfer mechanism (including transfer ‘fee’, process and management). A core challenge is evaluating and improving the impact of each of the credits systems.
Table 14: Advantages and Disadvantages Analysis for Separate or Joint Management of CAFC and NEV Credits Pros Separate Integrated 1. Meeting China’s CAFC target √ 2. Drive NEV innovation √ 3. Regulatory clarity √ 4. Deceasing policy uncertainty with clear credit √ calculation, supervision and punishment rules. 5. Evaluate policy design and effectiveness √ 6. Enhance domestic independent manufacturers √ development
22 CAFC and NEV-credits management workshop. http://www.icet.org.cn/event.asp?id=41 -63-
7. Single stakeholder oversight √ Cons Separate Integrated 8. Double counting of NEVs √ 9. Complex trading management and implementation √ 10. Rewarding non-NEV manufacturers √ 11. Increased targets design and feasibility assessment √ 12. Increased pressure on local manufacturers meeting √ CAFC targets 13. Need for underlying law/authority development √
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Appendix I: Limit Values and Target Values of Vehicle FC in Phases I, II, III and IV Phase I: FC Limit Phase II,III: FC Limit Phase IV: Limit Phase III: Target Phase IV: Target (L/100km) (L/100km) (L/100km) (L/100km) (L/100km) Curb-weight (kg) MT AT or/and above 3 MT AT or/and above MT AT or/and MT AT or/and Less than 3 seat 3 or above seat seat rows 3 seat rows above 3 seat above 3 seat rows rows rows rows 7/2005-1/2008 (New Cars) 1/2008-current (New Cars) 1/2016-Ｎ／Ａ(New Cars) 1/2012-2015 2016-2020 2016-2020 Implementation 7/2006-1/2009 (Entire 1/2009-current (Entire 1/2017 (Entire Production) Production) Production) CM≤750 7.2 7.6 6.2 6.6 5.2 5.6 5.2 5.6 4.3 4.5 750＜CM≤865 7.2 7.6 6.5 6.9 5.5 5.9 5.5 5.9 4.3 4.5 865＜CM≤980 7.7 8.2 7 7.4 5.8 6.2 5.8 6.2 4.3 4.5 980＜CM≤1090 8.3 8.8 7.5 8 6.1 6.5 6.1 6.5 4.5 4.7 1090＜CM≤1205 8.9 9.4 8.1 8.6 6.5 6.8 6.5 6.8 4.7 4.9 1205＜CM≤1320 9.5 10.1 8.6 9.1 6.9 7.2 6.9 7.2 4.9 4.1 1320＜CM≤1430 10.1 10.7 9.2 9.8 7.3 7.6 7.3 7.6 5.1 5.3 1430＜CM≤1540 10.7 11.5 9.7 10.3 7.7 8.0 7.7 8.0 5.3 5.5 1540＜CM≤1660 11.3 12 10.2 10.8 8.1 8.4 8.1 8.4 5.5 5.7 1660＜CM≤1770 11.9 12.6 10.7 11.3 8.5 8.8 8.5 8.8 5.7 5.9 1770＜CM≤1880 12.4 13.1 11.1 11.8 8.9 9.2 8.9 9.2 5.9 6.1 1880＜CM≤2000 12.8 13.6 11.5 12.2 9.3 9.6 9.3 9.6 6.2 6.4 2000＜CM≤2110 13.2 14 11.9 12.6 9.7 10.1 9.7 10.1 6.4 6.6 2110＜CM≤2280 13.7 14.5 12.3 13 10.1 10.6 10.1 10.6 6.6 6.8 2280＜CM≤2510 14.6 15.5 13.1 13.9 10.8 11.2 10.8 11.2 7.0 7.2 2510＜CM 15.5 16.4 13.9 14.7 11.5 11.9 11.5 11.9 7.3 7.5
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Appendix II: Domestic Auto Companies Producing > 10,000
Vehicles
Company Full Name in Chinese JV or Models in 2014 ID* Beijing-Benz 北京奔驰汽车有限公司 JV BENZ-GLK, BENZ-E200,BENZ-C200 Beijing Hyundai 北京现代汽车有限公司 JV ELANTRA,VERNA,ix35 BAIC-Foton 北汽福田汽车股份有限公司 ID MP-X,MIDI BAIC-Moter 北京汽车股份有限公司 ID Weiwang, E150, E130 BAIC-YX 北汽银翔汽车有限公司 ID M20 BYD-Auto 比亚迪汽车有限公司 ID F3,L3,G3 BYD-Auto industry 比亚迪汽车工业有限公司 ID Sirui,G6,M6,F0,F6 Changhe-Suzuki 江西昌河铃木汽车有限责任公司 JV Big Dipper, Freda, Liana Changhe- Jiangxi 江西昌河汽车有限责任公司 ID Freda Xin Da Di-Chengdu 成都新大地汽车有限责任公司 ID Emgrand, GX, GC Chana-Ford 长安福特汽车有限公司 JV KUGA,MONDEO,VOLVO S80, FOCUS Chana-Suzuki 重庆长安铃木汽车有限公司 JV Alto, Lingyang ,Swift Chana-Mazda 长安马自达汽车有限公司 JV Mazda series,CX5,Fiesta Chana-Chongqing 重庆长安汽车股份有限公司 ID Star, EADO, Benni, Honor Chana-Hebei 河北长安汽车有限公司 ID Xingguang, Ruixing GWM 长城汽车股份有限公司 ID Voleex C30,C50,HAVAL M, HAVAL H DF-Honda 东风本田汽车有限公司 JV CR-V, CIVIC,SPIRIOR DF-Moter 东风汽车公司 JV S30,H30,A60 DF-LZM 东风柳州汽车有限公司 JV Lingzhi,Jingyi Dongfeng-Nissan 东风汽车有限公司 JV Tiida,Sunny,QASHQAI ,SYLP HY DPCA 神龙汽车有限公司 JV C-Elysee,C-Quatre (Dongfeng-Peugeot-Cit roen) DFSK 东风小康汽车有限公司 ID Xiaokang DF-YL 东风裕隆汽车有限公司 JV Luxgen DF-KIA 东风悦达起亚汽车有限公司 JV K2,K5,Sportage Soueast Moter 东南（福建）汽车工业有限公司 JV LIONVEL,LANCEREX, V5 Benz-Fujian 福建奔驰汽车工业有限公司 JV Vito, Viano GAC-Honda 广汽本田汽车有限公司 JV CITY,ACCORD, Crosstour GAC-Moter 广州汽车集团乘用车有限公司 ID Trumpchi
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GAC-Fiat 广汽菲亚特汽车有限公司 JV Viaggio GAC-Toyota 广汽丰田汽车有限公司 JV Camery, Yaris,Highlander GAC-Gonow 广汽吉奥汽车有限公司 ID Xia’ao,Aoxuan,GX5 GAC-Mitsubishi 广汽三菱汽车有限公司 JV PAJERO,AXR Hafei-Moter 哈飞汽车股份有公司 ID Alsvin, Luzun,Xinminyi Haima-Moter 海马轿车有限公司 ID M3 Hawtai-Moter 荣成华泰汽车有限公司 ID Aishang,Wangzi, Haima-Commecial 海马商务汽车有限公司 ID FSTAR Motor Chana-Hefei 合肥长安汽车有限公司 ID Benben mini，CX20 Briliance-BMW 华晨宝马汽车有限公司 JV BMW5,BMW3,BMWX1 Briliance -Jinbei 沈阳华晨金杯汽车有限公司 ID Junjie Briliance -Moter 华晨汽车集团控股有限公司 ID V5,H530 Haipu Motor 上海华普汽车有限公司 ID Haijing Geely-Haoqing 浙江豪情汽车制造有限公司 ID Yuanjing,GLEAGLE Geely-Moter 浙江吉利汽车有限公司 ID Dihao,Ziyoujian JAC 安徽江淮汽车股份有限公司 ID Heyue, Ruifeng,Tongyue JMC-Landwind 江铃控股有限公司 JV Landwind X8，X5 JMC 江铃汽车股份有限公司 JV Yusheng Jiangnan-Motor 湖南江南汽车制造有限公司 ID Z300,TT Chery 奇瑞汽车股份有限公司 ID Ruihu,QQ,E5 SAIC-VW 上海大众汽车有限公司 JV Passat, LAVIDA,Tiguan SAIC-GM 上海通用汽车有限公司 JV LaCrosse, Malibu SAIC-GM-DY 上海通用东岳汽车有限公司 JV ENCORE,AVEO,Excelle SAIC-Moter 上海汽车集团股份有限公司 ID MG3,Rongwei 550,MG6 FAW-Toyata-Sichuan 四川一汽丰田汽车有限公司 JV RAV,LAND CRUISER, PRADO FAW-Toyata-Tianjin 天津一汽丰田汽车有限公司 JV Vios,REIZ,COROLLA SAIC-GM-BS 上海通用（沈阳）北盛汽车有限公司 JV Cruze,Captiva SAIC-GM-WL 上汽通用五菱汽车股份有限公司 JV Wulingzhiguagn, Baojun 630 FAW-VW 一汽-大众汽车有限公司 JV Jetta, Audi A4, Audi Q5 FAW-Haima 一汽海马汽车有限公司 ID Family,Freema,S7 FAW-Jinlin 一汽吉林汽车有限公司 ID Jiabao, Yasen FAW-Moter 中国第一汽车集团公司 JV BESTURN,Mazda6,Hongqi FAW-Xiali 天津一汽夏利汽车股份有限公司 ID Xiali, Weizhi Chana-PSA 长安标致雪铁龙汽车有限公司 JV DS5 DF-Nissan-Zhengzhou 郑州日产汽车有限公司 JV Shuaike,NV200,Paladin Lifan-Car 重庆力帆乘用车有限公司 ID Lifan320,620,520 Linfan-Moter 重庆力帆汽车有限公司 ID Xinshun, Fushun
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Appendix III: Importing Auto Companies
Company Chinese Full name of Registered Vehicle Agent brands Importers Aston Martin 阿斯顿马丁拉共达（中国）汽车销售有限公 Aston Martin 司 Audi 奥迪（中国）企业管理有限公司 Audi BMW 宝马（中国）汽车贸易有限公司 BMW, Mini-cooper, Rolls-Royce Porsche 保时捷（中国）汽车销售有限公司 Porsche Lotus 北京路特斯汽车销售有限公司 Lotus Honda 本田技研工业（中国）投资有限公司 Acura Peugeot Citroen 标致雪铁龙（中国）汽车贸易有限公司 Peugeot, Citroen Volkswagen 大众汽车（中国）销售有限公司 VW, Lamborghini, Seat, Skoda, Bentley Dongfeng 东风汽车有限公司 Nissan Ferrari 法拉利玛莎拉蒂汽车国际贸易（上海）有限 Ferrari, Maserati 公司 Toyota 丰田汽车（中国）投资有限公司 Toyota, Lexus Ford 福特汽车（中国）有限公司 Ford GAC-Honda 广汽本田汽车有限公司 Honda Jaguar-LandRover 捷豹路虎汽车贸易（上海）有限公司 Jaguar, Land Rover Chrysler 克莱斯勒（中国）汽车销售有限公司 Chrysler, Dodge, Jeep Renault 雷诺（北京）汽车有限公司 Renault Suzuki 铃木（中国）投资有限公司 Suzuki Mazda 马自达（中国）企业管理有限公司 Mazda Maserati 玛莎拉蒂（中国）汽车贸易有限公司 Maserati McLaren 迈凯伦汽车销售（上海）有限公司 McLaren Benz 梅赛德斯-奔驰（中国）汽车销售有限公司 Smart, Benz Nissan 日产（中国）投资有限公司 Infiniti Mitsubishi 三菱汽车销售（中国）有限公司 Mitsubishi SAIC-GM 上汽通用汽车销售有限公司 Buick, Cadillac,Chevrolet Ssangyong 双龙汽车（上海）有限公司 Ssangyong Subaru 斯巴鲁汽车（中国）有限公司 Subaru Tesla 拓速乐汽车销售（北京）有限公司 Tesla GM 通用汽车（中国）投资有限公司 Opel Volvo 沃尔沃汽车销售（上海）有限公司 Volvo Hyundai 现代汽车（中国）投资有限公司 Hyundai, KIA
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Appendix IV: FC for Domestic Auto Companies
CAFC201 CAFC2015 2015 2015 2015 ICE CAFC2015 CAFC2015 CAFC2015 2015 2015 EVs Auto TCAFC IV 5 L/100km CAFC Curb productio /TCAFC IV /TCAFC IV L/100km Power production Company L/100km /TCAFC III (incl’EV credit weight n （excl’EV） %（incl’EV） (excl’EV EV) kW volume % EV) L/100km kg volume SAIC-VW 135.0% 135.0% 5.00 92.6% 6.75 6.75 962421 1310 91 1,777,562 0 SAIC-GM-WL 134.5% 134.5% 5.08 98.9% 6.84 6.84 132040 1266 76 1,734,990 0 FAW-VW 130.1% 130.1% 5.20 87.7% 6.77 6.77 1549677 1422 103 1,637,447 0 Beijing 139.7% 139.6% 4.99 95.5% 6.97 6.96 344976 1323 100 1,049,662 102 Hyundai DF-Nissan 137.3% 136.3% 5.00 93.7% 6.86 6.82 466361 1305 100 1,018,876 1398 Chana-Moter 138.9% 137.9% 5.05 98.2% 7.01 6.96 126261 1295 88 971,499 1404 Chana-Ford 136.5% 136.5% 5.26 91.4% 7.18 7.18 587373 1466 116 864,602 0 SAIC-GM 141.3% 141.3% 5.20 94.9% 7.35 7.35 300973 1415 105 762,286 0 Great Wall 138.0% 138.0% 5.37 93.5% 7.41 7.41 376171 1527 108 735,638 0 Moter DF-Peugeot-Cit 137.1% 137.1% 5.04 94.0% 6.91 6.91 308143 1321 93 693,489 0 roen DF-KIA 140.9% 140.9% 4.92 97.1% 6.93 6.93 121003 1276 96 589,753 30 GAC-Honda 132.1% 132.1% 4.99 89.8% 6.59 6.59 419039 1333 106 558,586 0 SAIC-GM-DY 132.2% 132.2% 5.15 89.7% 6.80 6.80 408513 1390 109 520,109 0 FAW-Toyota-Ti 126.5% 126.5% 4.85 87.1% 6.14 6.14 419204 1254 93 460,208 0
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anjin SAIC-GM-BS 142.6% 142.6% 5.32 96.7% 7.58 7.58 105946 1459 98 405,503 0 GAC-Toyota 130.6% 130.6% 5.25 87.2% 6.86 6.86 408277 1462 112 403,850 2 DF-Honda 134.9% 134.9% 5.19 90.2% 6.99 6.99 296441 1429 111 388,255 0 Chery 133.5% 110.8% 5.02 93.8% 6.72 5.56 161480 1301 85 360,982 15144 Geely-Haoqing 133.1% 130.9% 5.10 100.0% 6.78 6.67 0 1355 102 306,820 1093 JAC 135.9% 116.4% 5.15 95.1% 7.01 5.99 107729 1338 86 301,007 10225 BAIC-YX 138.4% 138.4% 5.15 98.6% 7.13 7.13 29312 1331 82 288,986 0 Brilliance 122.5% 119.4% 5.65 79.6% 6.93 6.75 509011 1675 157 286,203 1552 -BMW Beijing-Benz 124.4% 124.4% 5.70 81.0% 7.09 7.09 423384 1706 141 254,919 0 Geely-Moter 122.9% 60.5% 4.91 85.3% 6.17 2.97 250104 1245 74 235,704 50713 DF-LZM 136.2% 136.2% 5.46 95.0% 7.44 7.44 92352 1502 87 234,096 0 FAW-Moter 144.8% 144.8% 5.27 97.3% 7.62 7.62 47843 1447 104 227,821 5 BAIC-Moter 132.0% 101.3% 4.59 95.9% 6.55 4.65 61047 1244 76 220,640 18105 DF-XK 137.7% 137.7% 5.05 102.1% 6.95 6.95 -29933 1210 76 206,531 0 BYD-Auto 117.8% 68.0% 5.05 82.5% 5.88 3.43 252784 1336 87 202,622 31751 GAC-Moter 126.7% 122.7% 5.32 85.3% 6.74 6.53 215316 1472 102 185,750 1281 Chana-Mazda 116.8% 123.4% 5.03 83.7% 6.21 6.21 201481 1353 98 166,974 0 Jiangnan-Moto 145.2% 93.6% 4.60 99.3% 7.75 4.30 8723 1258 98 161,923 25928 r SAIC-Moter 135.9% 96.9% 5.14 92.6% 6.92 4.98 82658 1391 98 148,796 12369 FAW-Toyota-Si 151.1% 151.1% 5.57 98.8% 8.41 8.41 14710 1650 119 139,226 0 chuan Chana-Suzuki 125.7% 125.7% 4.59 89.5% 5.78 5.78 82426 1085 75 122,136 2
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BYD-Auto 146.1% 69.5% 5.28 97.1% 7.98 3.67 25221 1574 119 107,643 27227 industry Haima-Moter 140.5% 138.5% 5.09 97.5% 7.15 7.05 19357 1326 99 107,339 307 DF-Auto 147.3% 141.2% 5.28 99.9% 7.78 7.46 1159 1441 101 105,386 909 Soueast Moter 143.8% 131.5% 5.05 93.4% 6.79 6.65 34670 1311 99 72,712 312 FAW-Haima 144.9% 132.1% 5.15 91.2% 6.81 6.81 42121 1371 99 64,033 5 Brilliance 144.6% 126.6% 5.10 87.6% 6.45 6.45 58539 1336 84 63,968 6 -Moter FAW-Xiali 139.0% 134.7% 4.61 96.9% 6.21 6.21 11977 1069 68 61,243 0 DF-YL 151.0% 152.8% 5.33 101.2% 8.14 8.14 -5719 1514 130 60,256 0 Chana-Hefei 136.3% 120.0% 4.45 88.0% 5.34 5.34 43368 1023 69 59,779 0 GAC-Mitsubish 147.1% 144.6% 5.14 98.3% 7.43 7.43 7278 1421 117 56,340 0 i Changhe-Suzuk 136.1% 134.2% 4.43 98.6% 5.95 5.95 4834 991 63 55,624 0 i Brilliance 138.9% 137.2% 5.32 98.7% 7.30 7.30 4750 1363 79 50,820 0 -Jinbei JMC-Landwind 153.5% 104.6% 5.62 108.4% 9.64 5.88 -32279 1633 119 43,429 5545 Leopaard 149.2% 158.4% 5.74 106.2% 9.09 9.09 -20737 1683 127 39,349 0 DF-Nissan-Zhe 144.2% 146.5% 5.35 101.8% 7.86 7.84 -4554 1452 94 32,630 12 ngzhou Changhe-Auto 133.6% 139.7% 4.97 104.5% 6.94 6.94 -8670 1188 72 28,711 0 Chery-Jaguar 155.7% 137.2% 5.97 88.2% 8.20 8.20 29961 1885 177 27,237 0 Land Rover FAW-Jilin 135.0% 139.7% 4.84 103.5% 6.76 6.76 -5916 1133 65 26,006 0
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GAC-Fiat 149.4% 137.4% 5.26 92.0% 7.22 7.22 16246 1472 94 25,741 0 Chana-Hebei 135.1% 138.6% 5.08 102.6% 7.04 7.04 -4512 1225 74 25,346 0 JMC 155.6% 138.6% 6.40 89.1% 8.87 8.87 25731 2038 120 23,669 0 BAIC-Guangzh 150.7% 150.7% 5.50 100.0% 8.29 8.29 0 1564 130 22,589 0 ou Chana-PSA 151.2% 128.9% 5.33 87.3% 7.03 6.87 23059 1515 124 22,458 106
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Appendix V: FC for Auto Importing Companies
CAFC2015 2015 2015 2015 Auto CAFC2015 CAFC 2015 CAFC 2015 2015 2015 /TCAFC IV TCAFC IV CAFC displace Curb Importing /TCAFC III L/100km L/100km power production % L/100km credits ment weight company % （excl’EV） (incl’EV） kW （incl’EV） （incl’EV） L/100km L kg BMW 123% 5.99 83.5% 7.49 7.36 260020 2.0 1762 164.9 173817 Benz 135% 6.17 89.5% 8.34 8.34 145780 2.4 1840 176.4 149208 Toyota 127% 5.94 85.0% 7.54 7.54 115081 2.3 1728 135.2 86515 Chrysler 151% 6.14 100.4% 9.28 9.28 -2984 2.5 1829 142.2 82686 Jaguar-Lan 145% 217.6 dRover 6.85 93.8% 9.90 9.90 43867 2.6 2230 67030 Volkswage 143% 148.6 n 5.97 95.5% 8.54 8.51 22668 2.0 1767 56394 Porsche 126% 6.52 91.9% 9.12 8.19 49557 2.6 2012 218.7 56376 Audi 132% 6.36 86.9% 8.37 8.37 60266 2.6 1904 192.9 47916 Ford 145% 6.28 95.7% 9.11 9.11 17093 2.2 1907 183.4 41955 Subaru 138% 5.65 93.6% 7.80 7.80 19615 2.3 1560 122.0 36947 Hyundai 148% 6.12 98.8% 9.07 9.07 3465 2.3 1820 147.2 31824 Renault 141% 5.51 97.2% 7.80 7.80 5381 1.9 1501 103.2 23803 Mitsubishi 144% 5.81 97.3% 8.39 8.39 5442 2.4 1644 124.2 23382 SAIC-GM 169% 6.40 112.4% 10.80 10.80 -26544 3.0 1996 199.7 22219 Volvo 116% 5.97 77.3% 6.91 6.91 29058 1.8 1726 175.1 14318 Nissan 146% 6.10 96.8% 8.87 8.87 4132 2.5 1791 167.1 14172
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Maserati 149% 6.59 97.6% 9.85 9.85 1664 3.0 2005 246.3 6997 DF-PCA 146% 5.44 100.8% 7.95 7.95 -362 1.8 1442 115.2 5409 Suzuki 154% 4.84 111.4% 7.46 7.46 -3385 1.5 1156 74.4 4429 Ssangyong 139% 5.60 95.0% 7.79 7.79 1764 1.9 1565 105.0 4338 Tesla 0% 6.60 0% 0.00 0.00 2099 117.7 3272 Dongfeng 163% 6.64 106.3% 10.82 10.82 -1609 3.6 2116 1968.5 2506 Honda 146% 6.17 96.7% 8.99 8.99 737 2.8 1834 182.4 2393 Mazda 148% 5.69 100.2% 8.40 8.40 -21 2.0 1557 106.0 1002 Ferrari 191% 5.91 127.8% 11.26 11.26 -979 4.1 1718 449.5 400 Aston 223% 366.6 Martin 6.24 149.1% 13.94 13.94 -1244 5.8 1902 271 McLaren 212% 5.52 145.7% 11.70 11.70 -235 3.8 1510 478.3 64 GM 132% 5.88 88.8% 7.74 7.74 5 1.5 1688 119.2 5
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