China Hopes to Leapfrog ICE, Hybrid Technology With Electric Vehicles

The problem with hybrids is “we lack technology in engine areas,” says the director of the Automotive Research Institute at Tsinghai University. “The core control technology comes from Delphi, Bosch and Denso.”

William Diem, Correspondent

May 10, 2011

8 Min Read
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SHANGHAI – China’s push to jump past internal-combustion engines with electric-vehicle technology means hybrids are not as high on the priority list here as they are in North America or Europe.

Executives from across the industry meeting at the recent Global Automotive Symposium held in conjunction with Auto Shanghai 2011, talked about China’s new-energy vehicles that include EVs, hybrids and plug-ins and the nation’s desire to reduce oil imports.

The problem with hybrids in China is that “we lack technology in engine areas,” says Chen Quanshi, director of the Automotive Research Institute at Tsinghua University.

“The core engine-control technology comes from Delphi, Bosch and Denso. These three have monopolized the engine market in China. Only a small share (are engineered locally). That is why we don’t have much passion for it.”

Additionally, a hybrid needs software control for seamless transitions between power sources in the myriad conditions in which vehicles operate, he says.

Among the frankest of the industry executives here is Wu Xuebin, chief engineer for the Foton Automotive Engineering Institute. Beiqi-Foton, part of the BAIC Group, produced 169 hybrid trucks, 1,010 electric trucks and 50 electric taxis last year.

“China wants to get rid of engine and automatic-transmission controls,” Wu says. “At Foton, we do not have the technology for hybrid-system control. On our hybrid bus, the key component comes from Eaton, a U.S. company.

“This is an area that Chinese companies need to work on very hard. If we put one more power source like a motor there, it makes the system more complicated. If we can’t control one source, how can we control two sources?”

PSA engineers in China developing hybrid version of new Citroen DS5 using rear-axle electric motor.

Lin Yi, deputy chief engineer at Beijing New Energy Vehicles, a BAIC subsidiary, says, “We have intellectual-property priorities for the battery and motor.”

The joint-venture car companies in China have international partners with 100 years of engine-control experience and more than 20 years with electronic controls.

For example, PSA Peugeot Citroen engineers in China are developing gasoline-hybrid versions of the Peugeot 3008 and 508 and Citroen DS5, using the rear-axle electric motor approach the auto maker developed for the diesel versions in Europe.

At the same time, because it wants to please the Chinese market, PSA plans to develop a battery-electric car for China in 2015, says Yongmei Kimmel, a PSA engineer in charge of e-mobility strategy.

No Chinese company has more EV aura than BYD, the battery maker that entered the automotive business in 2003. Last year, its F3 car with a gasoline engine was the top-seller in the local market, prompting some criticism the auto maker is promoting its battery expertise to make money from ICE-powered vehicles.

BYD appears to be following a conservative path toward mass production of its e6 electric car. While the company knows batteries, it knew nothing about automobiles when it jumped into vehicle manufacturing.

“The electric vehicle is a very complicated one,” says Henry Li, BYD’s executive director of auto export trade. The company’s strong point is its lithium-ion battery with LiFePO4 cathode, nicknamed “ferrous,” a battery technology that has less energy density than some.

“Others use a phosphorous battery,” he says. “Our ferrous battery was invented 30 years ago, and we should be able to mass produce it in a reliable way. Batteries for vehicles are much more important than batteries for a laptop.”

Another Chinese company, Zotye New Energy Vehicles, is trying to follow BYD’s path with an emphasis on battery power. Unfortunately, an electric taxi it produced spontaneously caught on fire last month.

Such public accidents “are only the tip of the iceberg,” Li say, noting 99% of the mistakes are found in the laboratory or during testing.

“We have done many years of hard work and a lot of improvements can still be made, but we are gradually experimenting on a large-scale basis and getting feedback from users,” he says. “This is a state we have to go through before large-scale commercialization.”

BYD currently has 50 e6 taxis running in its hometown of Shenzhen, as well as a few F3DM plug-in hybrids in both Shenzhen and in Los Angeles. The taxis so far have been driven 1.5 million miles (2.5 million km), and BYD plans to deliver 250 more taxis and electric buses by August.

BYD has 50 e6 electric taxis on road in Shenzhen.

The auto maker also plans to bring its e6 to the U.S. and Europe in late 2012, says Li.

Zotye, like BYD and Foton, has electric taxis in service. The advantage of this is they are fleet vehicles with a home base for recharging and have high-mileage duty cycles. Also, taxi fleets often are owned by regional governments that have a lot to gain if their local auto maker is a success.

Another reason China plans to shy away from hybrids is because they are not as efficient in terms of carbon-dioxide reduction and “their key technology is control of the engine,” says C.C. Chan, president of the World Electric Vehicles Assn. In addition, China doesn’t have its own automatic-transmission technology and EVs avoid that problem.

Chinese auto makers come to Schaeffler Group about supplying motors or transmissions for hybrids, says Vice-President Rolf Najork, but they do so “to meet emission levels,” not to satisfy customer demands.

“Foreigners can’t understand why China is so interested in the EV business,” says Jones Zhong, a journalist and consultant in Beijing. “The reason is China’s government says we should find some way to replace the need for oil. We (are) taking a leapfrog approach. Not just step by step. This is the reason.”

The view from North America forecasts small shares for EVs in 2020.

“The electric vehicle has some time before it becomes a real measurable quantity,” says Jeff Henning, global automotive markets leader at Ernst & Young. Government incentives and the market “are aligned with hybridization first, then battery-electric vehicles.”

Nancy Gioia, director-global electrification for Ford, says there is great uncertainty about how the industry will evolve. The 1% of vehicles that were electrified in 2010, all hybrids, could reach 10%-25% in 2020.

Whatever the total is, she says Ford believes 70% will be hybrids, which are the most affordable solution. Plug-in hybrids will make up 20%-25%, while battery-electric vehicles will be more targeted to fleets and urban customers, reaching a 2%-5% share in 2015.

Foton’s Wu predicts that 30,000-50,000 of the 500,000 new-energy vehicles in China by 2015 will be EVs, or 6%-10% of the total.

There is general consensus China will achieve its goal, because the government will provide the necessary subsidies. “Demand is huge now,” says Yale Zhang, managing director of AutoForesight Shanghai.

The money is there. “Central government investment is trying to move beyond internal-combustion engines,” agrees Tsinghua University’s Chen.

Of the RMB115 billion ($17.7 billion) China will invest in alternative propulsion vehicles over the next 10 years, RMB50 billion ($7.7 billion) will be for research and development directed toward EVs and plug-ins, Chen says.

Some RMB30 billion ($4.6 billion) will be for pilot projects, RMB10 billion ($1.5 billion) for key components and parts, RMB5 billion ($770 million) for battery-charging research and RMB20 billion ($3.1 billion) for hybrid vehicles.

Clearly, the EV age only is starting in China, but BYD believes the production of ICE passenger vehicles will start to decline in 2016-2017 as new energy vehicles take off.

For Foton’s Wu, the real mass market for EVs won’t start to grow until 2024, when a new battery technology can be expected.

Ford’s Gioia agrees. “We believe that (for EVs) to become mass market, we need two to four generations of battery technology,” from the current 661 lbs. (300 kg) to 121 lbs. (55 kg).

About 120 million Chinese currently have electric bicycles and scooters, but Gioia believes they will want a sophisticated vehicle meeting all their needs in an electric 4-wheel vehicle.

Zoyote CEO Wu Jianzhong, disagrees. “In foreign countries EVs try to compete with traditional vehicles for speed and range. I think that for EVs at the current stage, it is not necessary to compete with traditional cars.”

Indeed, China has hundreds of thousands of low-speed electric vehicles on rural roads powered by lead-acid batteries. However, there is a debate as to whether such vehicles, constructed without central government approval, should be encouraged.

Last December, Jianghuai Automobile put 585 Tojoy EVs on the road in its home market of Hafei. Although the vehicles have limited range, with subsidies their price is low and customers are happy, says Vice President Yan Gang. “Our pathway is small vehicles, cost effectiveness and a focus on power.”

But the desire of the domestic auto makers to leapfrog the Western industry has one big barrier, says Foton’s Wu. “China’s electricity supply and power grid companies are far behind understanding vehicle electrification.

“They have money and motivation, but they are not auto guys,” he says. “They don’t understand the vehicle, the customer and how he will get power into the vehicle. In Beijing, there are 1,500 electric vehicles, but where are the charge stations? It is hard to get electricity. This is the big block for further use of EVs.”

No matter how long it takes, the EV age is inescapable, says Ivan Hodak, secretary general of ACEA, the European auto maker’s association. The only way to meet environmental goals beyond 2025, he says, “is to go away from the internal-combustion engine. We all have to get somewhere with zero emissions.”

But Hodak also makes a point sometimes overlooked in the current rush to offer incentives: “The cost of running a car is ‘X’ and an electric vehicle is ‘X’ divided by 10, because there is no tax on electricity at this moment.”

But government has to have revenue, he says, and when it loses revenue from oil, it will tax electricity. “In developing our business models, we should never forget this.”

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