The EV Revolution and Its Limits: Is an EV Mass Market Feasible?

The EV revolution and its limits: is an EV mass market feasible?

Tommaso Pardi (director GIS Gerpisa, CNRS IDHES ENS-Paris Saclay)

Executive summary

New registrations of electric cars1 hit a new record in 2016, with over 750 thousand sales worldwide. With a 29% market share,2 Norway has incontestably achieved the most successful deployment of electric cars in terms of market share, globally. It is followed by the Netherlands, with a 6.4% electric car market share, and Sweden with 3.4%. The People’s Republic of China Page | 5 (hereafter, “China”), France and the United Kingdom all have electric car market shares close to 1.5%. In 2016, China was by far the largest electric car market, accounting for more than 40% of the electric cars sold in the world and more than double the amount sold in the United States. The global electric car stock surpassed 2 million vehicles 0,2%in 2016 ofaft ether cr ototalssing the 1 million Electricthreshold i ncar 201 5stock (Figure 1(2010). -2016) stock of vehicles Figure 1 • Evolution of the global electric car stock, 2010-16

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E 0.5 China BEV 0.0 BEV + PHEV 2010 2011 2012 2013 2014 2015 2016 Notes: The electric car stock shown here is primarily estimated on the basis of cumulative sales since 2005. When available, stock numbers from official national statistics have been used, provided good consistency with sales evolutions. Sources: IEA analysis based on EVI country submissions, complemented by EAFO (2017a), IHS Polk (2016), MarkLines (2017), ACEA (2017a, 2017b) and EEA (2017). Key point: The electric car stock has been growing since 2010 and surpassed the 2 million-vehicle threshold in 2016. So “Infar, b 2016,attery ele cthetric v eelectrichicle (BEV) u pcartake hstockas been cgrowthonsistently awashead o f60%, the uptak edown of plug-i nfrom hybrid e l77%ectric ve hinicle s2015 and(PHEV s85%). in 2014. The year 2016 was also the first time year-on-year electric carUnt isalesl 2015, tgrowthhe United hadState sfallen accoun tbelowed for th 50%e large ssincet portio 2010”n of the g(Globallobal elect rEVic ca routlook stock. In 2017, 2016, China became the country with the largest electric car stock, with about a third of the OECD/IEA,global total. Wit hp.6) more than 200 million electric two-wheelers,3 3 to 4 million low-speed electric vehicles (LSEVs) and more than 300 thousand electric buses, China is also by far the global leader in the electrification of other transport modes. As the number of electric cars on the road has continued to increase, private and publicly accessible charging infrastructure has also continued to grow. In 2016, the annual growth rate of publicly available charging (72%) was higher, but of a similar magnitude, than the electric car stock growth rate in the same year (60%).

1 Electric cars include battery-electric, plug-in hybrid electric, and fuel cell electric passenger light-duty vehicles (PLDVs). They are commonly referred to as BEVs, PHEVs, and FCEVs in this report. Given their much wider diffusion, the scope of this report is limited to BEVs and PHEVs. 2 Market share is defined, under the scope of this report, as the share of new registrations of electric cars in the total of all PLDVs 3 In this report, the term “two-wheelers” refers to motorcycles and excludes bicycles.

Executive summary

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E 0.5 China BEV 0.0 BEV + PHEV 2010 2011 2012 2013 2014 2015 2016 Notes: The electric car stock shown here is primarily estimated on the basis of cumulative sales since 2005. When available, stock numbers from official national statistics have been used, provided good consistency with sales evolutions. Sources: IEA analysis based on EVI country submissions, complemented by EAFO (2017a), IHS Polk (2016), MarkLines (2017), ACEA (2017a, 2017b) and EEA (2017). Key point: The electric car stock has been growing since 2010 and surpassed the 2 million-vehicle threshold in 2016. So far, Averagebattery ele csubside:tric vehicle $7500*720(BEV) uptake ha000s bee =n c$5,4onsist billionently ahe aford of 1%the u marketptake of p-lushareg-in hy brid electric vehicles (•PHWaiversEVs). on regulations that limit the availability of licence plates for ICE vehicles U• nExemptionstil 2015, the U fromnited Saccesstates a crestrictionscounted for ttohe urbanlargest areasportio.n of the global electric car stock. In 2•01Exemptions6, China bec afromme th usagee coun feestry w forith specificthe large portionsst electric of ca ther st oroadck, w networkith about a third of the g•loDedicatedbal total. W iparkingth more tandhan 2access00 mill itoon publicly electric t wavailableo-wheele rchargings,3 3 to 4 m infrastructureillion low-speed. electric vehicles (LSEVs) and more than 300 thousand electric buses, China is also by far the global leader in the electrification of other transport modes. As the number of electric cars on the road has continued to increase, private and publicly accessible charging infrastructure has also continued to grow. In 2016, the annual growth rate of publicly available charging (72%) was higher, but of a similar magnitude, than the electric car stock growth rate in the same year (60%).

Global EV outlook 2017 © OECD/IEA 2017 Two million and counting

Despite a continuous and impressive increase in the electric car stock, electric vehicle supply equipment (EVSE) deployment and electric car sales in the past five years, annual growth rates have been declining. In 2016, the electric car stock growth was 60%, down from 77% in 2015 and 85% in 2014. The year 2016 was also the first time year-on-year electric car sales growth had fallen below 50% since 2010. Page | 6 Declining year-on-year increments are consistent with a growing electric car market and stock size, but the scale achieved so far is still small: the global electric car stock currently corresponds to just 0.2% of the total number of passenger light-duty vehicles (PLDVs)4 in circulation. Electric vehicles (EVs) still have a long way to go before reaching deployment scales capable of making a significant dent in the development of global oil demand and greenhouse gas (GHG) emissions. “Assessments of country targets, original equipmentResearc hmanufacturer, develop (OEM)ment and deployment (RD&D) and mass production prospects are leading to announcementsrapid batte randy c scenariosost dec onlin electrices an d increases in energy density. Signs of continuous improvements car deployment seem to confirm these positivefrom t signals,echno indicatinglogies c ua rgoodren tchancely be ing researched confirm that this trend will continue, narrowing the thatcos thet c electricompe cartit istockvene willss grangeap b etween EVs and internal combustion engines (ICEs). Assessments of betweencountr y9 milliontarge andts, 20or millioniginal bye q2020uip ment manufacturer (OEM) announcements and scenarios on and between 40 million and 70 million by 2025elec”t (EVric coutlookar de p2017,loym OECD/IEA,ent seem p.6) to confirm these positive signals, indicating a good chance that the electric car stock will range between 9 million and 20 million by 2020 and between 40 million and 70 million by 2025 (Figure 2). Figure 2 • Deployment scenarios for the stock of electric cars to 2030

220 IEA B2DS

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IEA RTS

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l 40 Cumulative country targets E (as of 2016) 20 Cumulative OEMs 0 announcements (estimate) 2010 2015 2020 2025 2030 Notes: The RTS incorporates technology improvements in energy efficiency and modal choices that support the achievement of policies that have been announced or are under consideration. The 2DS is consistent with a 50% probability of limiting the expected global average temperature increase to 2°C. The B2DS falls within the Paris Agreement range of ambition, corresponding to an average increase in the global temperature by 1.75°C. Sources: IEA analysis based on EVI country submissions, complemented by EAFO (2017a), IHS Polk (2016), MarkLines (2017), ACEA (2017a, 2017b) and EEA (2017). Country targets in 2020 reflect the estimations made in EVI (2016a) and updates in 2016. Sources listed in Table 2 have been used here to assess the magnitude of OEM announcements. The methodology used for this assessment is discussed in the main text. Projections on the stock deployed according to the Paris Declaration are based on UNFCCC (2015a). Projections on the EV uptake in IEA scenarios were developed using the IEA Mobility Model, March 2017 version (IEA, 2017a). Key point: The level of ambition resulting from the OEM announcements assessed here shows a fairly good alignment with country targets to 2020. To 2025, the range estimated suggests that OEM ambitions lie within the range corresponding to the Reference Technology Scenario (RTS) and 2DS projections from the IEA, broadly matching the Paris Declaration on Electro-Mobility and Climate Change and Call to Action (Paris Declaration).

4 PLDVs include passenger cars and passenger light trucks but exclude two-wheelers, three-wheelers, and low-speed/low- power four-wheeled vehicles. The classification used here attempts to match, to the extent possible, the "Category 1-1 vehicle" defined in UNECE (2005) and its following amendments, and, in countries where this regulation applies, "Category M1" defined in UNECE (2016).

Global EV outlook 2017 Global EV outlook 2017 © OEC©D O/EICEDA/IE 2A 020117 Two million and counting Two million and counting

assesses them against targets established by individual countries and announcements from major Despite a continuous and impresOsEivMes. increase in the electric car stock, electric vehicle supply The assessment of OEM announcements in terms of stock growth, as presented in Figure 9, was equipment (EVSE) deployment ande veelloepcedt rbiyc t ackainrg isntaol eacsc oiunnt tchumeu lpataives ts afleisv tear gyeetsa art sa, g iavennn puoiantl ing rtiomwe, itf hth erya wterse have been declining. In 2016, the eavleailcatbrlei,c o rc acarlc usltaotincgk t hgermo own tthe wbaasis o6f 0sa%les, tdarogewtsn, a sfsruomming 7a 7li%nea irn d e2ve0lo1p5m eannt odf Page | 24 sales growth from now until the target year (typically 2020 or 2025). In cases where the target 85% in 2014. The year 2016 was yaealsr owa st h20e20 ,f tihres tlo wtiemr beou nyde oaf rth-eo snto-cyke garorw teh lfeorc 2t0r2i5c wcaas rca lscualaletesd agssruomwingt hco nhstaandt fallen below 50% since 2010. sales, while the higher bound was derived from the application of RTS sales and stock growth to the available information on 2020. In the case of China, the lower bound estimate for 2020 Page | 6 Declining year-on-year incrementsm aatcrhees cthoen 2s misiltlieonn atn nwuailt hele catr icg craor wcaipnacgit ye plreodcutcrtiocn cgoavre rnmmeanrtk teartg eta bnyd 2 0s2t0o. Tchke upper bound estimate reflects the growth in production capacity announced by the OEMs, size, but the scale achieved so far fiasc tsortiinlgl isn ma 6a6%ll :c atphaceit yg ultoilibsaatiol ne rlaetec.1t9 ric car stock currently corresponds 4 to just 0.2% of the total number oTafb lpe 2a •s Lsiset nofg OeEMr s laingnhoutn-cdemuetnyts vone ehleicctrlice csar (aPmbLitDioVnss, a)s o fi nAp rcili 2r0c1u7 lation. Electric

vehicles (EVs) still have a long way toO gEMo before reaching dAennpoluoncyemeentn t scales capable of Smouarcek ing a 0.1 million electric car sales in 2017 and 15-25% of the BMW

significant dent in the developmenBtM oWf global oil demand and greenhouse gas (GHGL)a mebmerti s(2s0i1o7bn) s. “Assessments of country targets, original group’s sales by 2025 equipmentResearc hmanufacturer, develop (OEM)ment and deploCyhemvroelent (tG M()R D3&0 tDho)u sannd dan nmuala elsecst ripc craor sdaluesc bty i2o01n7 prospects Laovreeda yl e(2a01d6)i ng to announcements and scenarios on electric Chinese OEMs 4.52 million annual electric car sales by 2020 CNEV(2017)

rapid battery cost declines and increases in energy density. Signs of continuous improvem ents car deployment seem to confirm these Daimler 0.1 million annual electric car sales by 2020 Daimler (2016a) positivefrom t signals,echno indicatinglogies c ua rgoodren tchancely be ing Froerds earched1 3c noenw fEiVr mmod telhs bayt 2 0t2h0 is trend will continue, Fnorad r(2r0o17w) ing the Two-thirds of the 2030 sales to be electrified vehicles Honda Honda (2016) thatcos thet c electricompe cartit istockvene willss grangeap b etween EVs and i(ninctluedrinng ahylb rcidos,m PHbEVus, sBtEVios annd eFCnEVgsi) nes (ICEs). Assessments of

betweencountr y9 milliontarge andts, 20or millioniginal bye q2020uip mReenatu lt-mNisasann uf1a.5c mtuilliroen cru m(uOlatEiveM sa)le s aofn elnecotriuc cnarcs ebym 20e20n ts and Cosbcb e(2n01a5br)i os on and between 40 million and 70 million by 0.5 million annual electric car sales by 2018 Goliya and Sage (2016), Tesla 2025”elect (EVric coutlookar de p2017,loym OECD/IEA,ent seem p.6) to confirm thes1e m ipllions aintniuvael e lsecitgricn caarl sa,l eisn byd 2i0c2a0 ting a good chTeaslan (c20e1 7tah) at the

electric car stock will range betweeVonlk s9w amgeni llion2 -a3 nmidllio 2n a0n nmuali ellleioctrnic cbary s a2le0s b2y 020 2a5n d between V4ol0ks wmagielnl i(o20n16 )a nd 70 million by 2025 (Figure 2). Volvo 1 million cumulative electric car sales by 2025 Volvo (2016) Note: Chinese OEMs include BYD, BJEV-BAIC Changzhou factory, BJEV-BAIC Qingdao factory, JAC Motors, SAIC Motor, Great Wall Motor, GEELY Auto Yiwu factory, GEELY Auto Hangzhou factory, GEELY Auto Nanchong factory, Chery New Energy, Changan Figure 2 • Deployment scenarios for tAhuteom osbtiloe, GcAkC Gorofu pe, Jliaengclitngr Micot ocrsa, Lrifsan tAouto ,2 M0IN3 A0N Auto, Wanxiang Group, YUDO Auto, Chongqing Sokon Industrial Group, ZTE, National Electric Vehicle, LeSEE, NextEV, Chehejia, SINGULATO Motors, Ai Chi Yi Wei and WM Motor. Sources are indicated in the table. 220 Key point: By April 2017, nine global OEMs had publicly announced their willingness to crIeEAat Be2 oDrS significantly widen

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s their electric model offer over the next five to ten years. Several Chinese OEMs also announced very significant electric

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car stock stemming from the OEM targets could range between 9 million and 20 million by 2020.

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e 9-20 millions EVs on the road by 2020 v announced to 2020, the OEM announcements listed in Table 2 could lead toIE A4 0RT-7S0 million electric

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c e l 40 ambitions lie within the range corresponding to the RTS and 2DS projCeucmtiuolnatsiv ef rcoumnt rtyh tear gIeEtAs , E (as of 2016) 20 broadly matching the Paris Declaration. In order to see these ambitions materialise, EV (and Cumulative OEMs 0 announcements (estimate) 2010 2015 2020 2025 2030 19 This rate matches the indications currently available for the average capacity utilisation of Chinese auto manufacturing plants given the information available from CAAM (2017) and IHS (2017). Notes: The RTS incorporates technology improvements in energy efficiency and modal choices that support the achievement of policies that have been announced or are unde r consideration. The 2DS is consistent with a 50% probability of limiting the expected global average temperature increase to 2°C. The B2DS falls within the Paris Agreement range of ambition, corresponding to an average increase in the global temperature by 1.75°C. Sources: IEA analysis based on EVI country submissions, complemented by EAFO (2017a), IHS Polk (2016), MarkLines (2017), ACEA (2017a, 2017b) and EEA (2017). Country targets in 2020 reflect the estimations made in EVI (2016a) and updates in 2016. Sources listed in Table 2 have been used here to assess the magnitude of OEM announcements. The methodology used for this assessment is discussed in the main text. Projections on the stock deployed according to the Paris Declaration are based on UNFCCC (2015a). Projections on the EV uptake in IEA scenarios were developed using the IEA Mobility Model, March 2017 version (IEA, 2017a). Key point: The level of ambition resulting from the OEM announcements assessed here shows a fairly good alignment with country targets to 2020. To 2025, the range estimated suggests that OEM ambitions lie within the range corresponding to the Reference Technology Scenario (RTS) and 2DS projections from the IEA, broadly matching the Paris Declaration on Electro-Mobility and Climate Change and Call to Action (Paris Declaration).

• The present was already supposed to be « electric »

Renault forecasts that at the horizon 2020, electric vehicles will represent 10% of the world market. (Renault, Press release, 2009)

EV market share EV on the road

Source : Plan national pour le développement des véhicules électriques et hybrides rechargeables, 2010 Global EV outlook 2017 © OECD/IEA 2017 Two million and counting

Despite a continuous and impressive increase in the electric car stock, electric vehicle supply equipment (EVSE) deployment and electric car sales in the past five years, annual growth rates have been declining. In 2016, the electric car stock growth was 60%, down from 77% in 2015 and 85% in 2014. The year 2016 was also the first time year-on-year electric car sales growth had fallen below 50% since 2010. Page | 6 Declining year-on-year increments are consistent with a growing electric car market and stock size, but the scale achieved so far is still small: the global electric car stock currently corresponds to just 0.2% of the total number of passenger light-duty vehicles (PLDVs)4 in circulation. Electric vehicles (EVs) still have a long way to go before reaching deployment scales capable of making a significant dent in the development of global oil demand and greenhouse gas (GHG) emissions. Research, development and deployment (RD&D) and mass production prospects are leading to rapid battery cost declines and increases in energy density. Signs of continuous improvements from technologies currently being researched confirm that this trend will continue, narrowing the cost competitiveness gap between EVs and internal combustion engines (ICEs). Assessments of country targets, original equipment manufacturer (OEM) announcements and scenarios on electric car deployment seem to confirm these positive signals, indicating a good chance that the electric car stock will range between 9 million and 20 million by 2020 and between 40 million and 70 million by 2025 (Figure 2). Figure 2 • Deployment scenarios for the stock of electric cars to 2030

220 IEA B2DS

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IEA RTS

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l 40 Cumulative country targets E (as of 2016) 20 Cumulative OEMs 0 announcements (estimate) 2010 2015 2020 2025 2030 Notes: The RTS incorporates technology improvements in energy efficiency and modal choices that support the achievement of policies that have been announced or are under consideration. The 2DS is consistent with a 50% probability of limiting the expected global average temperature increase to 2°C. The B2DS falls within the Paris Agreement range of ambition, corresponding to an averag9e -in20cre amillionsse in the glob aofl te EVmper aonture theby 1.7 road5°C. in 2020 And between 40 and 70 millions in 2025 / 11-15% market share Sources: IEA analysis based on EVI country submissions, complemented by EAFO (2017a), IHS Polk (2016), MarkLines (2017), ACEA (2017a, 2017b) and EEA (2017). Country targets in 2020 reflect the estimations made in EVI (2016a) and updates in 2016. Sources listed in Table 2 have been used here to assess the magnitude of OEM announcements. The methodology used for this assessment is discussed in the main text. Projections on the stock deployed according to the Paris Declaration are based on UNFCCC (2015a). Projections on the EV uptake in IEA scenarios were developed using the IEA Mobility Model, March 2017 version (IEA, 2017a). Key point: The level of ambition resulting from the OEM announcements assessed here shows a fairly good alignment with country targets to 2020. To 2025, the range estimated suggests that OEM ambitions lie within the range corresponding to the Reference Technology Scenario (RTS) and 2DS projections from the IEA, broadly matching the PaWhyris Declarat ishouldon on Electro-Mo bbeility a nitd Cl imdifferentate Change and Call tnow?o Action (Paris Declaration).

The 2016 cost and energy density assessment draws from the results developed by the US DOE (Howell, 2017). The assessment aims to reflect the production cost of technologies that are currently being researched once they achieve commercial-scale, high-volume production (US DOE, 2017). The US DOE estimate is higher than the USD 180/kWh to USD 200/kWh range of battery pack costs announced recently by GM and LG Chem (Ayre, 2015) or Tesla and Panasonic (Field, 2016; Lambert, 2016a, 2016b) for batteries that will be used in new EV models. The estimates are also lower than the costs estimates for commercially Page | 14 available technologies reported in other assessments, which range between USD 300/kWh (Slowik et al., 2016) and USD 500/kWh (US DOE, 2017). Overall, this confirms that technologies currently in the R&D stage have better performance than those available on the market. Since the cost estimates for the scale- up of lab-scale technologies are projections of the expected costs in three to five years for high-volume production (US DOE, 2017),12 the assessment suggests that battery costs will continue to decline. Figure 6 • Evolution of battery energy density and cost

1 000 500 Conventional lithium ion Advanced lithium ion 900 450 Beyond lithium ion

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200 100 US DOE energy density (PHEV)

100 50 US DOE energy density (BEV)

0 0 US DOE energy density target (PHEV) 2009 2010 2011 2012 2013 2014 2015 2016 2020 2022 Potential

Notes: Contrary to the results assessed for 2009-15, which targeted PHEV batteries, the 2016 estimates of costs and volumetric enTechnologicalergy density by the US DOE (costs are to be interpreted as projections for the high-volume production of technologies currently being researched) refer to a battery pack that is designed to deliver 320 km of all-electric range and is, therefore, suitable for BEVs. Thprogresse latest updat:e of this cost assessment was developed accounting for an advanced lithium-ion technology (with silicon alloy- co-mpNewosite a ngenerationode). Being a techofno logy that is still being researched today, this is currently deemed to have a greater cost but also a larger potential for cost reductions compared with conventional lithium-ion technologies. batteries Sources: Howell (2017), EV Obsession (2015) and Cobb (2015a). - Connected cars Key point: Prospects for future cost reductions from the main families of battery technologies confirm the encouraging signs in cost and performance improvements observed over the past decade. Source: ExWhypansions i nshould production vol ubemes a itnd pdifferentack size bear the ca now?pacity to reduce unit costs (Howell, 2017IEA). 2016 According to the US DOE, increasing production volumes from 25 000 units to 100 000 units for a BEV (100 kWh) battery pack allows a cut in battery pack production costs per kWh by 13%. Other studies confirm that production volume is a key factor in battery pack cost reduction: battery pack production volumes of over 200 000 battery packs per year are estimated to cost USD 200/kWh or less. This is roughly one-third lower than the USD 300/kWh estimated for production volumes ranging between 10 000 and 30 000 units in 2015 (Slowik et al., 2016). Increasing the pack size from 60 kWh to 100 kWh (roughly reflecting, in the case of an average car sold in the United States, an increase in range from 200 km to 320 km) would also lead to a 17% reduction in cost per kWh at the pack level (Howell, 2017).

12 Looking at the historical assessment of technologies being researched (Figure 6) against the costs estimated for commercially available applications today also suggests that lab-scale technologies tend to be three to five years ahead when compared with the average commercial technologies. - 95€ penalty for each gram of CO2 beyond the 95 gCO2/km * total number of vehicles sold (the problem of the mix gasoline/diesel)

- Each new car whose emissions of CO2 are below 50 grams will count double in 2020, for 1,67 cars in 2021, 1,33 cars en 2022 and 1 car from 2023 (why EVs are crucial)

Source: ICCT

From NEDC toWLTC (2017-2021) + RDE (coefficient of 2,1 in 2017 and of 1,5 2020) – EURO 6 (80 mg NOx/km)  Carmakers will have more than double their efforts to reduce

CO2 emissions and at least multiply by 5 (and by 20 for certain Dieselgate VW brands and models) those for the NOx

 Shift to 95 g. CO2 in 2021

Radical change of strategy of world leader OEM (VW)  domino effect? Why should be it different now? - Acquisition and utilization costs - Development of infrastructure - Uncertanties of utilization

Obstacles Changes to powertrains Small car BEVs will become increasingly economically attractive for customers post 2020

Four-year TCO* (€) of powertrain technologies for average European customer 2015 to 2030

24,000 Small car In France for instance the Hybrids likely to take Average customer: significant market share 23,000 17,000 km travelled p.a. ‘bonus’ (10 000 € for EV) is as TCO approaches that Gasoline and Diesel 22,000 financed by the ‘malus’ of diesel – diesel (penaltiesoffering best T forCO, polluting cars) customers likely to have 21,000 however gasoline better high propensity to switch. for most customers. 20,000 APVs not attractive from Further increase of TCO perspective. hybrid share. 19,000 How to move from the Gasoline and Diesel Move to pure EVs for some EV 18,000 subsidized phase to offering best TCO, customers based on however gasoline better economics, further move to 17,000 a mass market (without for most customers. EVs requires subsidies. Hybrid 3,263 APVs not attractive from 16,000 Diesel subsidies)2016 ? prices for fuel Diesel is expected to be TCO perspective. and electricity largely substituted by 15,000 Gasoline assumed constant. gasoline, hybrids and EVs This questions should also post 2030 as its cost and 14,000 emissions advantages take into account: disappear. 13,000 • the reduced tax revenues 12,000 from fuel consumption  - 77,9 billion $ in the US 2015 2020 2025 2030 2015 (2014) 2020 2025 2030 • the fast raising cost of rare Source: AlixPartners Note: * Four year amortisation period earths required for the production of batteries Obstacleswww.alixpartners.com / Costs (lithium & cobalt)31

Infrastructure

Historical charging infrastructure rollout lags behind EV uptake

EV car parc (thousands vehicle BEVs and PHEVs) actual EV public charge points (thousands of exclusive private Residential charges are defined in two 2012 to 2015 residential), 2012 to 2015 separate categories: EVs per 5.0 7.3 6.4 6.6 charger • Private residential (i.e. from someone’s home) – excluded in analysis 1,257 +71% • Public residential (i.e. at street level or +78% 190 in a parking complex) – included 28 • Even with the below than expected recent growth in EVs, the actual car parc has grown significantly from a low +111% base and well above the growth in EV +84% 707 111 charge points. 17 +45% • Limited plans to meet even 5% of the +114% 162 infrastructure deployment requirement 383 in major cities across the globe with no 52 co-ordination between relevant parties. 36 7 94 179 5 How can the rollout of infrastructure meet 45 31 the expected demands of electric vehicles? What business models are 2012 2013 2014 2015 2012 2013 2014 2015 need to scale up investment and

Fast Slow services?

Source: 2016 EV Outlook OECD/IEA, AlixPartners Auto Study 2014 and 2015

www.alixpartners.com 38 + Integration in the electric grid  Paris (150 millions of euros available nationally to finance 16000 extra charging points / 1,1 billion of euros are required by 2020 / and 4,4 billions for 2025) // No business model! Obstacles/ Infrastructure Despite technological progress ICE • Sell EVs to households cars will remain for a long period Autonomy / Recharging time the best choice for households

• Commercial carsharing Almost not impact on diffusion and utilization (no modal transfer)

Largely subsidized by regional and local administrations / little impact and no business model

Obstacles/ Uncertainties of use-value Technological break: law of Moore applied to batteries (?) / Fast recharge / EV platforms

Despite technological progress ICE • Sell EVs to households cars will remain for a long period Autonomy / Recharging time the best choice for households

• Private carsharing + carpooling - It reduces acquisition and utilization costs of EVs - It optimizes average utilization - It gives access to other cars for extreme utilization

Problems: trust / no solutions for peri-urban and rural users / how to manage utilization peaks (holidays, week-ends, commuting peaks…)?

Which solutions to overcome the obstacles? In 2016 the sales of New Energy Vehicles ! in China represent: 500.000 NEV • 57% of the world BEV (cars) sales / vendus en 2016! 80% of the growth ! • 35% of the world PHEV (cars) sales / ! 20% of the growth Des ventes,! multipliées par Sales BEV 231 626 (1%) 6,8 ! (86% NEV) depuis 2014! Sales of PHEV 38 492 (0,2%) ! (14% NEV) décollage ! ou bulle?!

Source: CAAM, elaboré par M-R Duran Ortiz, Wikipedia ! And if China was the game-changer? Part de Marché Part dans le Province BEV marché total total BEV (BEV) x Zhejiang 17723 1462756 1,2% 7,7% Anhui 11265 883838 1,3% 4,9% 8 Provinces (on 33) Jiangxi 7738 600434 1,3% 3,3% 30,1% of total car market x Shanghai 9632 636901 1,5% 4,2% Shandong 31187 1882055 1,7% 13,5% Market share BEV 2,4% Shanxi 19237 588936 3,3% 8,3% 74% of total BEV sold x Tianjin 16122 249673 6,5% 7,0% x Beijing 58196 737476 7,9% 25,1%

Beijing / Tianjin (7,5% BEV market share/ 32,1% of total BEV market (4,3% of total car market) Bonus: - 7000 € (>100 <150 km) -12500 € (>150 <250 km) - 15000 € (>250 km) - Exemption to the VAT (10%) - Automatic (3-4 years waiting) and free (2500 €) licence - Only 50 000 available in Beijing List of eligible models: 1 BAIC (Beijing) / 2 BAIC NEV (Beijing) / 3 BYD (Guangdong) / 4 Hunan (Hunan) / 5 Geely (Zheijang) / 6 JAC(Anhui) / 7 Chongquing (Chongqing) / 8 Tesla (Beijing) / 9 BYD (Guangdong)  35 models (130 models on sale)…

BAIC 35,4% / BYD 29,9% / JAC 11,6% / GEELY 8,8% = 88% NEV Market

Research in cooperation with Deng Xiaoxiang (IDHES – GERPISA) • To reach 70 millions EV (cars & CV) on the road and a market share of 11% in 2025 the rate of growth of EV sales should be of at least 40% each year from 2017 onward ➢ Battery technology progress are crucial but highly uncertain // Rare earth prices (lithium & cobalt) should not grow ➢ Massive state support is crucial until and well after 2025 • Subsidises to sales  in 2016 $1 billion in the US for 1% market share / $3,4 billions in China for 1,2% • Subsidises to infrastructure • Diminishing revenues from fuel taxes  road infrastructures

• Carmakers need to substitute gasoline/diesel cars with EVs to survive the new regulatory framework (WLTP + RDE) / they do not need an EV revolution (3%-5% market share in 2030 is enough) • Carsharing / Carpooling revolution ? No real progress since 2015

Conclusions