CURRENT STATUS of China's NEV market Presentation document

Beijing, April 16, 2014 SUMMARY

1 CHINAS EV MARKET is still in a developing stage – It shows significant potential going forward

2 CHINESE OEMs are dominating the EV market – More players will enter the market in coming years

3 CHARGING INFRASTRUCTURE is underdeveloped – Its build-up is essential for positive market development

4 SERVICES related to E-Mobility are proven concepts – Innovative services will attract and retain customers

Source: Roland Berger 20140416_EV Status China_speech_vsend.pptx 2 China's electric vehicle (EV) market is still in a development stage compared to other mature markets

Position of China in the global EV environment

Roland Berger E-Mobility Index 2013/2014 Study methodology INDUSTRY > Yearly study comparing selected 5 countries based on three dimensions – Industry index: EV vehicle 4 production and cell production Japan USA – Technology index: EV performance 3 and government funding – Market index: EV sales ratio South Korea 2 France Comments

1 > USA is leading in the EV sales volume which reached 96,000 units in 2013 China Germany Italy > Japan is leading in both technology 0 and industry dimensions 0 1 2 3 4 5 > China is still behind the market TECHNOLOGY leaders, especially in the technology perspective Note: Circle size shows EV/PHEV share of total vehicle market, Korea has yet to introduce EV/PHEVs in the market Source: FKA, Inside EVs; Roland Berger 20140416_EV Status China_speech_vsend.pptx 3 USA and Japan remain most important production locations – Germany and France on a level with each other in medium term

Projected production of EVs and PHEVs through 2016

Country Domestic production of EVs/PHEVs ['000] Top 3 models in each country

Tesla Model S, Chevrolet Volt PHEV, 118 462 Nissan Leaf EV Toyota Prius PHEV, Nissan Leaf EV, 104 385 Mitsubishi i-MiEV

96 262 BMW i3, VW Golf PHEV, VW up! EV

Renault Twizy EV, Renault ZOE Z.E., 84 254 smart fortwo EV Chery QQEV, JAC Tongyue EV, 49 164 Chang'an E30 Hyundai BlueWill PHEV, Kia Ray EV, 20 56 Chevrolet Spark EV

2012-2015 2016

Source: FKA; Roland Berger 20140416_EV Status China_speech_vsend.pptx 4 China leads global markets with regard to government R&D funding programs

State R&D funding for e-mobility [EUR m], [% of GDP]

Country [EUR m] 1) [% of GDP] 2)

7,684 0.114

2,172 0.018

1,984 0.076

925 0.046

220 0.024

180 0.012

150 0.003

1) Not including subsidy programs that expired at the end of 2013 2) Subsidies expressed as a share of current GDP (2013) Source: FKA; Roland Berger 20140416_EV Status China_speech_vsend.pptx 5 Domestic OEMs currently dominate the EV market – Chery and JAC accounted for approximately 50% of total production in 2013

Competitive environment – Key players

OEMs' market share 2013 Key models

∑ = 14,000 units BYD E6

Roewe Others Zotye Roewe E50 6% 3% BAIC 6% Chery 10% 41% BAIC E150 BYD 8%

19% 8% Zotye Kangdi 5008 Langyue Kangdi JAC JAC Tongyue > EV PV production volume increased rapidly (2011-2013 CAGR = 77%) Chery QQ3 M1 > Chery and JAC lead the market with low price models

Price after central and local incentive < RMB 100 K 1) Market share calculation based on production volume in 2013; excluding FBU models Source: CATARC; Roland Berger 20140416_EV Status China_speech_vsend.pptx 6 More EV models will be launched by domestic and international OEMs – Enhancing consumer choice and awareness

Planned market introductions – Selected models

55 44 No. of 30 EV/PHEV 15 models 12 in China 2011 2012 2013 2014E 2015E

Selected Chery QQ3 Roewe E50 BYD Qin BMW i3 Roewe 950 PHEV EV models

JAC Tongyue Changan E30 Zinoro 1E Tesla Model S Venucia e30

Source: Roland Berger 20140416_EV Status China_speech_vsend.pptx 7 Case study – Tesla Tesla has achieved more than 1,000 pre-orders for the Model S in China – For successful launch infrastructure to be tackled

Case study Tesla in China

Tesla Showroom > Up to 4th March, 2014 more than 1,000 pre- orders have been received in Parkview Green FangCaoDi (Beijing) > Pricing of approx 734k RMB for Model S considered as a fair price compared to overseas markets

> Basis is charging at home to ensure that end users can install a wallbox at home ("residential overnight charging") Tesla "Supercharging" > In a second step a fast charging network shall station in the US be build up (similar to the US), providing fast charging in highway from Beijing to Shanghai > Local governments have announced ambitious plans to support fast charging infrastructure > Real Estate developers and property managements offices show increasing openness – key partner for success

Source: Roland Berger 20140416_EV Status China_speech_vsend.pptx 8 China government has launched the second round of EV promotion policy to reach its ambitious sales target

China Government EV/PHEV targets

China EV car parc1) and installed charging pillars ['000] Current EV market situation in China

13 14 20 400 N.A > From 2009 to 2012, led by the Ministry of Science and Technology 5,000 – EVs were promoted mainly through demonstration projects in 25 pilot cities 500 – Six cities were selected to pilot EV private user development > Central and local government launched new NEV promotion policies recently – Specific NEV promotion volume target in more than 42 cities (28+14) – New subsidy schemes for private EVs 38 8 21 – New building standards integrating EV charging facilities in new real estate 2011 2012 2013 2015 2020 projects SECOND ROUND POLICY xx # of charging pillars 2011-2015E/2020E

1) Including both commercial vehicles (CV ) and passenger vehicles (PV) Source: CATARC, China Green Tech Initiative report; Roland Berger 20140416_EV Status China_speech_vsend.pptx 9 42 cities and regions are now following the Central Government new EV promotion – Higher commitments to private EVs

China NEV demonstration cities/regions

Overview of 2nd NEV1) subsidy scheme2)

Private NEV NEV new parc targets of selected cities ['000] Approximately 329,500 24% EV volume units car parc in total Beijing Shanghai plan > Private NEV: 78,800 units > Public NEV: 250,700 units 76% 35 Public NEV 10 25 10 7 3 > Charging pillar: 193,000 Infrastructure units plan 3) > Charging station: 1,700 35 16 10 4 19 > Local governments, grid 6 Investment companies and plan companies' investment: Guangzhou Shenzhen RMB 20 billion Private NEV Public NEV

1) NEV: EV , PHEV, fuel cell vehicle; 2) Ending at the end of 2015; 3) Part of charging stations can also provide battery swapping service Source: Ministry of Industry and Information Technology; Roland Berger 20140416_EV Status China_speech_vsend.pptx 10 Hefei and Hangzhou have successfully demonstrated the potential of electric vehicles and E-mobility in China

EV promotion – Best practice cities

No. 1 for private EVs EV taxi and EV sharing

HEFEI HANGZHOU > Comprehensive network of EV charging stations > Low price EV model (RMB 75k after subsidy) > Comprehensive battery swapping network > Subsidy from Central/Hefei government and JAC > Subsidy from Central/Hangzhou government > Hefei Grid's support > Hangzhou grid's support and deep involvement > Free charging at work for JAC employees > Low financial pressure for private customer and EV taxi company

Source: Roland Berger 20140416_EV Status China_speech_vsend.pptx 11 There are still obstacles for customers to choose EV – Especially in charging facility purchasing and installation

Challenges for private EV/PHEV customers

PHEV PHEV

/ /

USAGE

EV EV

FACILITY FACILITY

CHARGING

PURCHASING

INSTALLATION PURCHASING &

> Lack of EV/PHEV model > Lack of installation process > No electricity fee subsidy options and limited subsidy guidelines/unclear responsibilities > Lack of public charging support for imported EVs > Policy restrictions, e.g. fire facilities > Customer concerns existing prevention act GB50067-97 > Limited compatibility across regarding technical > Limited subsidy for private brands maturity/safety charging facility purchasing or > Limited after sales network for > Due to lack of scale, most installation EV/PHEV maintenance and EV/PHEV models are not > Limited awareness at some key repair competitive with comparable stake holders, e.g. real estate ICE models (TCO) > No mobility guarantee developers solutions, e.g. HOV lane access, free parking, free toll fee

Source: Roland Berger 20140416_EV Status China_speech_vsend.pptx 12 Global best practices show innovative downstream solutions in order to attract customers and enhance ownership experience

International best practices – Selected topics/markets

Leading EV market EV sales share > 3% Innovative services

CALIFORNIA NORWAY NETHERLAND (AMSTERDAM)

> Clear private installation > Preferential policies, e.g. free > Purchasing subsidy and road process and policy parking, bus lane access tax/purchase tax exemption enforcement > Purchasing subsidies > Innovative car sharing > Incentives for new properties concepts combined with EV with EV charging pillars > Tax exemptions for e.g. import tax, VAT etc. > Subsidy for the installment of > Fast charging stations - Eight charging infrastructure in operation and country-wide roll-out planned

Source: Roland Berger 20140416_EV Status China_speech_vsend.pptx 13