challenges facing auto industry in chinachallenges facing auto industry in china weijian han, ph.d...
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![Page 1: Challenges facing auto industry in ChinaChallenges facing auto industry in China Weijian Han, Ph.D Ford Motor Company University of Michigan Nov 12, 2014-](https://reader033.vdocuments.net/reader033/viewer/2022041623/5e409dbd2b6923266f64668a/html5/thumbnails/1.jpg)
Challenges facing auto industry
in China
Weijian Han, Ph.D
Ford Motor Company
University of Michigan
Nov 12, 2014
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-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
-
100,000
200,000
300,000
400,000Actual Sales Projected Sales
Vehicle Population VP Forecast
Vehicle Stocks (1,000 units) Sales (1,000 units)
2013 Sales: 22.0m
2013 Parc: 126.7m
China automotive growthCONTEXT
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Crude Oil
(Mt)
Natural Gas
(billion cubic meter)
Coal
(Mt)
Proved reserve
(at end of 2013)2,467 3,272 114,500
Consumption (2013) 489 169 3,625
Domestic extraction (2013) 208 121 3,700
Current R/P ratio 12 27 31
Domestic coal reserves surpass other fuel sources.
At current rates of extraction, coal reserves will last 3 times longer than those for crude oil, which will be exhausted in about 10-15 years.
China energy resourcesCONTEXT
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• BAU driving distance 15000 km/yr。RVMT driving distance reduced to 12000 km/yr in 2030
• RVMT & PHEV: Phase in PHEV-30 in 2015,PHEV new car market share less than 0.1%,increased to 50% in 2030,when PHEV accounts for 12.5% in the parc.
• Fuel consumption for average new cars in 2020 is 5.0 liter/100km,and 3.8 liter/100km in 2030
Energy security: Crude oil
0
300
600
900
MtRefining Capacity
Historical Demand
Demand Projection-Low with PHEV
Demand Projection-Low
Demand Projection-Central
Demand Projection-High
Historical Domestic Supply
Projected Domestic Supply
CHALLENGES
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55
Imported Oil Transport Paths
Imported Oil Origins (2013)Saudi
Arabia
Angola Oman Russia Iraq Iran Venezuela Kazakhstan Others
Volume (Mt) 53.90 40.01 25.48 24.45 23.51 21.44 15.75 11.98 65.62
Percentage 19.1% 14.2% 9.0% 8.7% 8.3% 7.6% 5.6% 4.2% 23.3%
9%
4%
~85%Malacca
~40%Hormuz
Hot War ZoneUnstable Country
2%
China oil import origins (2013)CHALLENGES
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6Policy trends
Sale control - Registration control- Retirement incentiveAnnual miles travel control- Public transportation- Fuel price hike-Permit to enter city- Parking fee
DECREASEFuel consumption- Engine efficiency- Light weighting- Hybridization
Ga
p b
etw
een
De
ma
nd
&
Su
pp
ly
INCREASEAlternative fuel supply- Bio-fuel- CNG/LPG- Coal based fuels- Methanol fuel- Electricity- Diesel
Gasoline Supply Depend on- Domestic Oil Production- Oil Import Potential- Gasoline Refinery Capacity
DemandLDVs’ Fuel Demand
LDVs’ Fuel Demand= Fuel Consumption × Vehicle Miles Travelled × LDV Stocks + Other UseCrude Oil Demand= Oil Products Demand / Oil Products Yield Rate
Gasoline Supply Limit
CHALLENGES
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2002
• 9.L/100km
• 26mpg
• 215gCO2/km
2010
• 7.7L/100km
• 31mpg
• 180gCO2/km
2015
• 6.9L/100km
• 34mpg
• 162gCO2/km
2020
• 5.0L/100km
• 47mpg
• 117gCO2/km
7
Targets of fuel consumption of new cars
• 2010-2015: 12% improvement on fuel economy,
less than that (18%) during 2002-2010.
• 2015-2020: another 40% improvement, very tough
challenge to the auto industry.
Fuel consumption standardsCHALLENGES
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New car ownership restrictions
8
• License plate auction
– In Shanghai since 1994
• License plate lottery
– In Beijing and Guiyang since 2011
• Combination of license plate auction and lottery
– In Guangzhou since 2012, and in Tianjin and
Hangzhou since 2014
– Guangzhou: EV lottery: car lottery: car auction=1:5:4
(120,000 plates per year)
– Tianjin: EV lottery: car lottery: car auction=1:5:4
(100,000 plates per year)
– Hangzhou: car lottery: car auction=8:2
(80,000 plates per year)
CHALLENGES
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27.5
23.2
21.2
16.1
12.4
21.8
19.4
0
5
10
15
20
25
30
An
nu
al
Dri
vin
g D
ista
nce (
1,0
00km
) Beijing Cars Beijing Private Cars China Cars
Average driving distance trend
• Annual driving distances in Beijing and
China
one day per week restriction in BJ
14.5
Data Source: Beijing Transportation Annual Report; Huo, 2011
CHALLENGES
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10
1010Alternative fuel vehicles landscape
Current focus remains on electrification
AFVTypes
Alternative FuelsAlternativePropulsion
Fuel Cell
Electric
Hybrid
Bi-FuelDual-Fuel
Dedicated
GasolineCNG
GasolineLPG
Diesel
CNG/LPG
H2ICE
FFV
E85
M85
E10/M10
CHALLENGES
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Electricity mix in different gridsCHALLENGES
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Electricity mix in selected citiesCHALLENGES
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0
50
100
150
200
250
WT
W G
HG
Em
iss
ion
s (
gC
O2
/km
)
Feedstock Stage Fuel Stage Vehicle Operation Stage
20202012
WTW GHG emissionsCHALLENGES
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Reference paper 1
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Emission standards
Emission standards adopted for new vehicles
Improvements in fuel quality
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
LDGVs
Nationwide Euro IV Euro V Euro VI
Beijing Euro IV Euro V Euro VI (LEV III?)
HDDVs
Nationwide Euro III Euro IV Euro V
Beijing Euro III Euro IV Euro V Euro VI
Beijing (Buses) Euro IV Euro V Euro VI
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Gasoline
Nationwide Euro III Euro IV Euro V
Beijing Euro IV Euro V
Diesel
Nationwide Euro II Euro III Euro IV Euro V
Beijing Euro IV Euro V
CHALLENGES
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Air quality becomes critical
71 out of 74 cities failed to meet air quality attainment of China (annual average under 35 µg/m3) in 2013.
2014-01-16
2013-01-29 2013-04-22
2013-07-18 2013-10-06 2014-01-16
CHALLENGES
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Controversy source appointment CHALLENGES
• Beijing Environment
Protection Bureau (EPB)
reported automobile
emissions contribute to
22% to 31% of the total
PM2.5 concentration.
• Although this has been
widely quoted by media,
details of the study
methodology, data
assumptions were not
published in a public
report or journal paper.
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Ford-Tsinghua studyCHALLENGES
(Preliminary Results)
January July
Vehicle
5%Vehicle
12%
Residential
56%
Residential
17%Industry
47%
Industry
24%
Agriculture
12%
Power
7%Others
8%
Others
3%Power
9%
Note:
1. Heavy-duty diesel vehicles and off-road engineering machineries
contributed 3 times more to PM2.5 pollution than gasoline vehicles do
2. Residential includes cooking, heating and other applications of local
residents
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Take away points
• Vehicle parc will approach 400 million in China, and
vehicle density will be close to 300 units per 1000
population.
• Average travel distance of a LDV per year will continue
decrease. It could be between 9,000 and 12,000 km per
year.
• Peak of oil demand in China will occur around 2025,
import of oil will be 70-80% of total oil consumption.
• Tough fuel economy standards imply that HEV/PHEV
and BEV may become main stream products.
• Vehicle electrification in China by 2030 could be effective
solution to energy security, not necessary to total CO2
reduction.
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Reference paper 2
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Reference paper 3
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Thanks
Questions?