Skip to content

Andy Frank talks China EV policy with me. I see wasted resources but a nice way to test new technologies.

August 16, 2012

I visited Efficient Drivetrains Inc. www.efficientdrivetrains.com  last week for the first time.  EDI, as it is usually known, produces a plug-in hybrid electric drivetrain and a continuously variable transmission.   I met EDI founder Andy Frank, the father of the plug-in hybrid electric vehicle, a few years ago at a conference in San Francisco.  I now know EDI CEO Joerg Ferchau and others at the small company, as well, and do some work for EDI.  But this was my first time to visit.   EDI is located in an office park in Dixon, CA, which is between Davis and San Francisco.  Its current space is small—just a few offices and a larger garage-like area.  But it recently rented more space in the business park, tripling its footprint there.  The growth is business-driven, fortunately, and some of the business is in China.  EDI opened an office in Wuxi, east of Shanghai, a few months ago.  The China deal that is the farthest along is an agreement to produce a PHEV bus optimized for both city and high-speed highway travel.  The Chinese company is bus producer Anhui Ankai Automobile Co.  http://www.chinabuses.com/english/manufacturer/ankai.htm based in central China’s Anhui province.  China is the initial target, but export is also possible Joerg told me.  Ankai has already exported buses to the U.K. and the U.S.

Andy and Joerg visit China frequently.  Both meet with a variety of company and government sorts and have great insights into the direction China’s EV policy is taking.  Joerg was out of the office, but I had a great talk with Andy about the China market.

Andy Frank, the father of the PHEV, loves his Volt. He has driven 21,000 miles and used 162 gallons of gas.

It seems to me that some resources are going to be wasted by the rather scattered approach China is taking to EV development.  On the other hand, some good technologies may emerge as well.  And Beijing is determined to develop China’s EV industry, it is clear.

Beijing i.e. China’s central government, recently released its new energy and fuel efficient vehicle development plan.  http://www.greencarcongress.com/2012/07/china-20120709.html The plan calls for China to have 500,000 PHEVs and/or BEVs on the road by 2015.  Since Chinese consumers aren’t going to be buying EVs in anything close to those numbers in the next few years, the government is brainstorming for ways that goal can be reached.  One idea it is considering, said Frank, is short distance (duan tu) vehicles.  I immediately said:  “Oh, Shandong province will like that because it has so many low-speed EV producers.”  No, said Andy, these are not low-speed EVs. They are short distance EVs.  Of course the details of this potential strategy aren’t worked out.  But as Andy explained it, these would meet regular vehicle standards but their batteries would not have much range.  I guess they would be city vehicles.   Range is the biggest issue with the current crop of batteries.  Sure, one can find batteries that can go hundreds of kilometers on one charge.  But those batteries cost a lot.  Producing a BEV with a limited range would lower the cost and potentially make it more commercially viable.

I have said a number of times that municipal fleets are the way Beijing will meet its EV goals.  http://www.chinadaily.com.cn/cndy/2012-07/30/content_15628934.htm  That, in my estimation,  is why so many municipal governments are now investing in companies with electric drivetrain and battery technology.  An executive at a foreign automaker in China that works with the Chinese government on electrification concurred that fleets are the likely solution.   He listed garbage trucks, street sweeping, postal and package delivery, and taxi and bus fleets as good candidates for electrification.  Some of those types vehicles – postal and package delivery and street sweeping for example – are also good candidates for the short-distance EV strategy.

Once upon a time, like 2009, Beijing thought China could become the BEV capital of the world quickly.  Now it is more interested in PHEVs in the near term.  Beijing thinks BEV is the ultimate, “but the technology is not here,” Frank told me.   “They feel the problem now, and the problem is to displace gas.”  That’s for sure.  A recent report by consultancy McKinsey says oil imports in China are likely to double by 2020, when it could amount to 16% of total world oil demand.  Andy is a true-believer in PHEVs, so he naturally thinks that the PHEV is better than a pure electric vehicle in any case.  As fpr the short-distance EVs,  I’m not sure how the mix between BEVs and PHEVs might play out.  After all, if range isn’t a big issue then BEVs might be more appealing.  I’m sure Beijing doesn’t currently know  what the mix will be either.  It will make up that part of the policy up as it goes.   Are short-distance EVs the way to go?  I think it would be an enormous waste of resources.   The minute the government hints that it is interested in a short-distance EV tons of companies will jump into that sea.  I can imagine many, many of the low-speed vehicle makers in Shandong going down that road.   Many already are, judging from what I saw at EVS25 in Shenzhen in 2010.  The majority would make a product that would be poor quality and find little market.   But some good technology might emerge.  I guess that is a chance the central government wants to take.

Professor Andy emerges as he tries to explain to me the difference between serial and parallel hybrid technology. EDI’s drivetrains have both.

Andy also helped me see that the pressure on local governments to electrify their fleets, while on the one hand a big waste of resources since economies of scale aren’t possible, is also a great way to test different technologies.  Think about it.  For a recent story for Automotive News, companies I talked to included PowerGenix www.powergenix.com , which has its own Nickel-Zinc battery chemistry and is working in part with a local government in central China’s Anhui province;  Protean Electric www.proteanelectric.com , which has in-wheel electrification and is working with the local government in the east China city of Liyang; and battery maker Boston-Power www.boston-power.com , which has Chinese investment and is also building a plant in Liyang. (Both B-P and Protean work with venture capitalist Sonny Wu, managing director of GSR Ventures.  www.gsrventures.com   Clearly Sonny has some guanxi in Liyang).

What China is doing, said Andy, is getting local governments  to test different technologies.  “After four or five years, they can see what works best,” he said.    Seems brilliant to me, though it will involve waste of local government resources.  A problem with that strategy is that gathering good data will be tough if the central government doesn’t step in.  Beijing had better get busy developing a data collection strategy.

Advertisements
10 Comments leave one →
  1. Marc C. permalink
    August 16, 2012 12:51 am

    Hi Alysha,
    Have you followed the events of the Hangzhou NEV Exhibition?

    • August 16, 2012 4:24 pm

      Hi Marc,
      I have not. It is hard for me to follow the smalller exhibitions from here in the U.S. Are you there? Given Hangzhou’s fairly aggressive plans to electrify fleets there is likely a lot to see at the Exhibition. Wish I could be there! Plus, Hangzhou is a nice city to spend time in.

      Alysha

      • Marc C. permalink
        August 17, 2012 6:18 am

        Alysha, Staying in Europe at the time of the Hangzhou exhibition I also wasn’t able to attend.
        Kandi Technologies has stolen the show there:
        The SGCC was demonstrating the automated battery swap for the compact Kandi City BEVs. Have a look at this article and video: http://goo.gl/mK11V
        The article clearly stipulates “In the near future, Hangzhou electric vehicles replace the battery will bid farewell to the semi-mechanical, semi-artificial “hand” operations.” In other words this Kandi patented QBEx design will become the standard for the SGCC EV Charging stations.
        In this context is worth to notice that with the blessing of the Hangzhou Government Kandi has signed an LOI for cooperation with Zotye: http://goo.gl/iqQJD

        Next, the start of 2 projects was officially announced:

        Project A) Hangzhou Electric Car Rental Project
        Coordinated by “Hangzhou electric vehicles Industrial Development Co., Ltd. (HEVID)” a tripartite Joint Venture set-up by “CALB-Air lithium”, the State Grid Corporation of Zhejiang Electric Power Company”, and Hangzhou Municipal Government.
        This HEVID was established in April (see (see: http://goo.gl/Deegz )
        On July 18 a document Air Lithium – CALB released a document with a lot of details about the “Hangzhou Electric Car Rental Project”, see : http://bit.ly/MtCWoC a.o. it mentions:
        – The establishment of a tripartite JV with “Air lithium”, the State Grid Corporation of Zhejiang Electric Power Company”, Hangzhou Municipal Government.
        – The purchase of the Kandi EV’s is commissioned to Hangzhou Electric Vehicles Industrial Development Company.
        – The planning for the deployment of the Kandi EV fleet.
        Finally, on August 12 at the Exhibition the formal announcement was done that the “Hangzhou Electric Car Rental Project”, had now started and lead by HEVID, a company newly established to this purpose.” (see:http://goo.gl/GWgwy )
        On August 13 we already learned that immediately after the announcement of the start of the Hangzhou EV Rental Project there were almost five hundred people in queue for registering online to lease one of 100 Kandi EV’s made available to start the project. (see: http://goo.gl/tK0b4 )
        On August 14 we saw an article that claimed more than 1000 people already registered for leasing the Kandi EVs (see: http://goo.gl/3zno4)

        Project B) Zhejiang Guoxin Vehicle Leasing Company Project
        On August 10, Zhejiang Guoxin Vehicle Leasing Company (ZGVLC) and Zhejiang Kandi Vehicles Co., Ltd. (“Kandi Vehicles”) have signed a Cooperative Framework Agreement which included a firm commitment from ZGVLC for a first order of 200 Kandi EVs and with a target of 100,000 Kandi EVs in Hangzhou in five years from now. (see: http://goo.gl/tFt7d )
        ZGVLC has nothing to do with project A and was established in 1994 and their car leasing activity was started in 2005. (see: http://bit.ly/MtCWoE)
        Later, there was more news in the Chinese press about this project B, see http://goo.gl/dRXkZ.

        Next at the show Kandi also presented the first fully operational 3-dimensional EV charging garage, see http://goo.gl/PGCMJ and Kandi presented its new 4-doors EV, see http://goo.gl/Lkuab

        It all clearly proofs that the concept of “short” distance compact city BEVs is taken seriously and that the SGCC is steadily executing its EV Business Plan with full integration into the Smart Grid. V2G has now become a reality in Hangzhou, see http://goo.gl/YEkwu

      • Marc C. permalink
        August 17, 2012 6:40 am

        Alysha, Staying in Europe at the time of the Hangzhou exhibition I also wasn’t able to attend.
        Kandi Technologies has stolen the show there:
        The SGCC was demonstrating the automated battery swap for the compact Kandi City BEVs. Have a look at this article and video: http://goo.gl/mK11V
        The article clearly stipulates “In the near future, Hangzhou electric vehicles replace the battery will bid farewell to the semi-mechanical, semi-artificial “hand” operations.” In other words this Kandi patented QBEx design will become the standard for the SGCC EV Charging stations.
        In this context is worth to notice that with the blessing of the Hangzhou Government Kandi has signed an LOI for cooperation with Zotye: http://goo.gl/iqQJD

        Next, the start of 2 projects was officially announced:

        Project A) Hangzhou Electric Car Rental Project
        Coordinated by “Hangzhou electric vehicles Industrial Development Co., Ltd. (HEVID)” a tripartite Joint Venture set-up by “CALB-Air lithium”, the State Grid Corporation of Zhejiang Electric Power Company”, and Hangzhou Municipal Government.
        This HEVID was established in April (see (see: http://goo.gl/Deegz )
        On July 18 a document Air Lithium – CALB released a document with a lot of details about the “Hangzhou Electric Car Rental Project”, see : http://bit.ly/MtCWoC a.o. it mentions:
        – The establishment of a tripartite JV with “Air lithium”, the State Grid Corporation of Zhejiang Electric Power Company”, Hangzhou Municipal Government.
        – The purchase of the Kandi EV’s is commissioned to Hangzhou Electric Vehicles Industrial Development Company.
        – The planning for the deployment of the Kandi EV fleet:
        1. To commence delivery in August 100 units
        2. To deliver 1000 units per month for the balance of 2012
        3. To deliver 2000 units per month for the balance of the contract
        Finally, on August 12 at the Exhibition the formal announcement was done that the “Hangzhou Electric Car Rental Project”, had now started and lead by HEVID, a company newly established to this purpose.” (see:http://goo.gl/GWgwy )
        On August 13 we already learned that immediately after the announcement of the start of the Hangzhou EV Rental Project there were almost five hundred people in queue for registering online to lease one of 100 Kandi EV’s made available to start the project. (see: http://goo.gl/tK0b4 )
        On August 14 we saw an article that claimed more than 1000 people already registered for leasing the Kandi EVs (see: http://goo.gl/3zno4)

        Project B) Zhejiang Guoxin Vehicle Leasing Company Project
        On August 10, Zhejiang Guoxin Vehicle Leasing Company (ZGVLC) and Zhejiang Kandi Vehicles Co., Ltd. (“Kandi Vehicles”) have signed a Cooperative Framework Agreement which included a firm commitment from ZGVLC for a first order of 200 Kandi EVs and with a target of 100,000 Kandi EVs in Hangzhou in five years from now. (see: http://goo.gl/tFt7d )
        ZGVLC has nothing to do with project A and was established in 1994 and their car leasing activity was started in 2005. (see: http://bit.ly/MtCWoE)
        Later, there was more news in the Chinese press about this project B, see http://goo.gl/dRXkZ.

        Next at the show Kandi also presented the first fully operational 3-dimensional EV charging garage, see http://goo.gl/PGCMJ and Kandi presented its new 4-doors EV, see http://goo.gl/Lkuab

        It all clearly proofs that the concept of “short” distance compact city BEVs is taken seriously and that the SGCC is steadily executing its EV Business Plan with full integration into the Smart Grid. V2G has now become a reality in Hangzhou, see http://goo.gl/YEkwu

  2. August 16, 2012 1:43 am

    Great post, Alysha!

    “Beijing had better get busy developing a data collection strategy.”

    You’re right, but I think this is part of a problem China has created for itself. Rather than punish the thing it doesn’t want done (e.g. by instituting a carbon tax), it has decided to throw money at a lot of technologies, hoping something works.

    If China (or the US, for that matter) were to adopt a gradual, scheduled increase in the gasoline tax, the market would gradually decide which technologies are more feasible as alternatives to gasoline. Since Beijing (and Washington to a far lesser degree) has decided to pick the winner, it will, as you astutely pointed out, waste a lot of resources in the process.

    On the other hand, maybe Beijing feels a need to take a strong role because it realizes China’s system, as it stands, doesn’t exactly provide the right kind of incentives for the private sector to carry out the necessary R&D.

    The real shame is that the US system does provide the right incentives, as is evidenced by all these US companies working on battery and EV technologies that Chinese companies cannot wait to buy. Unfortunately, the US lacks the leadership necessary to say no to the oil companies and lay the groundwork for a transition.

    China will waste a lot in the process, and hopefully some of they pasta they throw at the wall will stick. And if the US isn’t careful, American companies will find themselves paying royalties to Chinese companies for use of technologies invented here.

    • August 16, 2012 4:27 pm

      Ah, the carbon tax. That certainly worked in Europe to expand the use of diesel. (higher fuel taxes, that is) Not sure it has done the same for electrification. Boosting fuel efficiency standards can have a positive impact, as well, but the U.S. government is already backing down from its hard-core stance on that, it seems.

      • August 16, 2012 8:39 pm

        Clearly Europe’s implementation was lacking. Still, if you want the market to move away from carbon based fuels, they have to know it will be painful in the future.

        Unfortunately, yes, it will take more spine than any known politician has exhibited to take a leadership role in this.

  3. August 20, 2012 1:39 am

    @Marc. I allowed your post to stand, but please don’t post such blatantly promotional comments again. I have serious doubts about quality of Kandi EVs. I tried to contact the firm and no one replied to my inquiry. Have you driven a Kandi EV? Has a Kandi EV passed any tests verifying its technology? I have way too much experience in China to believe such claims without proof. Of course the Hangzhou government will support Kandi, just as Shenzhen supports BYD. That doesn’t make it a good product. Kandi makes low-speed EVs. It is a big leap to a true car that meets safety requirements and can go more than 35mph.

  4. Marc C. permalink
    August 20, 2012 3:43 am

    Alysha, forgive me to be shocked but why did you write “blatantly promotional comments”? Haven’t I added URL links and references to documents and press releases that allow the reader to judge for her/himself?

    If you have “serious doubts about Kandi Evs” would you mind to tell me why and state your references? I visited Kandi twice and have driven a Kandi and to my perception this KD5011EV as offered in Hangzhou at a leasing cost of $125 to $140 per month is great value for money for city dwellers. Of course such car isn’t comparable to a China M1 class EV such as the Roewe or Haima but while it never had that kind of ambition, it 100% fits to the vision of the Chinese Authorities as per the new 12th 5Y plan and NEV Development Plan.
    With your experience in China I believe that you know that the China State Grid Company and AVIC-CALB are both heavy-weights SOE in China and have the technical expertise to make their judgments about BEVs.
    Would you think that they didn’t intensively test these Kandi EVs for an extensive time (Sept. 2011 till April 2012) before they decided to put 20,000 of these EVs in the Hangzhou Car Leasing Program?

    • August 21, 2012 12:15 am

      Marc,
      I have doubts about the quality and safety of all small Chinese automaker’s cars. With my experience in China, I absolutely believe the State Grid would use cars that were not thoroughly tested. Are Kandi cars good enough to drive around West Lake? Probably. Does that make Kandi the world’s greatest EV maker and will it equal massive sales? I don’t think so.

      Alysha

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: