I figured I should give the BYD F3DM hybrid car www.byd.com a chance to prove itself, so last week I dropped by the Housing Authority of the City of Los Angeles. The HACLA has ten F3DM cars (and some Toyota Priuii) in its fleet. http://www.hacla.org/byd-and-the-hacla-launch-electric-vehicle-testing-program/
The visit proved to me that BYD still has some work to do.
Lowie Bacierto, a housing inspector, is driving one of the BYD cars on his rounds. He took me for a spin around the neighborhood. Bacierto, an amiable guy who drives a Toyota Tacoma pickup when he is not at work, said he had no real complaints about the F3DM.
“It brings me from point A to point B. I’m happy,” he said.
Will that be enough for American consumers to spend their own money on this car? I think not.
For those of you who aren’t up on BYD models, the F3DM (DM stands for “dual mode”) runs on pure battery power for a while, then switches to a gas engine. BYD claims the battery recharges in about 7 hours on a 220 volt outlet. (Bacierto confirmed this.) With a special outlet –and it must be a really, really special one— BYD claims the battery can recharge 50% in 10 minutes.
One of the HACLA's fleet of BYD hybrids recharges in the garage. Takes about 7 hours at 220V.
BYD issued the hybrid to a few corporate entities in China in 2008. In March of 2010, it made the car available to private buyers. By the end of 2010, it had sold fewer than 1,000 units. http://chinaautoweb.com/2011/02/byd-delivered-only-33-units-of-e6-417-f3dm-in-2010/
That’s not surprising—the technology was new, and at RMB 169,800 (about US $25,800 at current exchange rates) before rebates–the price relatively high. The car is about the size of the Toyota Corolla, and it looks a lot like the Corolla, too (more on that later). The non-hybrid version of the F3 starts at around RMB 60,000.
Okay, pioneering technology costs money. But the technology has to be worth the extra cost, and I don’t think BYD’s F3DM is worth that premium.
To be sure, the F3DM feels okay to ride around the block in. That’s not a true test of a car, natch, but it didn’t make any ugly noises or stop unexpectedly. We ran on pure electric power for a few blocks, then Bacierto manually switched it to the gasoline engine. No loud noise, though he said that when the car makes the switch automatically , which occurs then the battery has about 25% charge left, it does sound like a car whose engine is cold in the morning trying to start up.
(That’s a much kinder description than that of Brad Berman, who reviewed it for the New York Times. He said it “screeches like a banshee.” We didn’t drive for very long, so I didn’t hear any screeching. ) http://www.nytimes.com/2011/02/20/automobiles/autoreviews/byd-f3-dm-review.html?pagewanted=1&_r=2&sq=BYD&st=cse&scp=1
Indeed, we only drove the F3DM for about 2 miles. The battery was 100% charged when we left the underground garage that houses the fleet. When we returned, the battery charge was down to 88%. Hmmmm. BYD claims the car will run on pure battery power for 62 miles. Perhaps, driven carefully on the highway with few stops. Bacierto said he drove it to San Pedro, about 49 miles, on all electric.
Bacierto said he always tries to drive the F3DM like a conscientious environmentalist. Okay, he didn’t put it exactly that way. But he did say that since it wasn’t his car, he tried not to stomp on the accelerator. Doing that drains the battery, he said.
Clearly, BYD’s Fe battery needs some improvement. Maybe a lot of improvement. To harp on a popular theme of mine, BYD should have its battery tested at Argonne National Lab www.anl.gov or a similar type of testing facility so we can know what it is truly capable of.
As for the F3DM’s appearance, “The first thing I said is it looks like a Corolla,” said Bacierto. And it does. An older Corolla. You be the judge.
http://www.toyota.com/corolla/
http://www.byd.com/showroom.php?car=f3dm&index=3
The interior is okay. Not bad, just boring and tan. http://www.byd.com/showroom.php?car=f3dm&index=3
Very much like the Coda electric car www.codaautomotive.com , the body and interior of which is produced in China . Must be a Chinese characteristic.
The display isn't exciting and high-tech like the Leaf, but it does provide the info you need, like the battery state of charge.
There are some issues with the design, however. The F3DM is not very roomy. One of the housing inspectors is nearly 7 feet tall, and he can’t fit in the F3DM at all, said Bacierto. Also, “the Chinese must drive on the opposite side of the street, the side mirrors are backward on this car,” said Bacierto. That is, the driver’s side mirror was for distance; the passenger side mirror for close up. No, the Chinese drive on the same side of the street as we do, I said. Oops.
A little whine—there are no cup holders in the middle. Not round ones, anyway. I’m not in Texas anymore so I don’t drink as many Diet Coke Big Gulps. Nonetheless, we Americans love our round cupholders.
BYD has said it is leasing the hybrid cars to the Housing Authority to learn about and work out these bugs. The design is tweakable, obviously. Still, how many tries does BYD need to get these simple things right? BYD has already redesigned the chassis so the battery pack hump doesn’t take up lot’s of room in the back seat. (Full disclosure: I forgot to check out the rear seat room.)
Those are very minor issues compared with the battery technology, however. And I’m not convinced BYD’s battery technology is very good.
Already, American consumers are disposed not to trust China-brand cars. His fellow inspectors didn’t want to drive the BYD car, said Bacierto. To overcome that skepticism, BYD needs to get it mostly right all at once, not incrementally. It needs to show us a really nice-looking hybrid or electric vehicle, with an interior that meets or beats the highest demands American consumers have for a non-luxury car that size. Since the F3DM looks so much like a Corolla, BYD could at least benchmark Corolla quality!
BYD people are meeting with Bacierto and others from the Housing Authority later this month for feedback. I don’t think they will like what they hear if he and others tell BYD hard truths.
Uber-investor (don’t know how to type an umlaut on this laptop…) Warren Buffett said in his latest note to investors that his investment company, Berkshire Hathaway www.berkshirehathaway.com , was looking to buy companies. I wonder if it has considered selling its stake in Chinese automaker BYD? www.byd.com
Because a recent move by BYD to end a slide in its car sales by cutting prices will not only fail to shore up its sagging sales, it will be bad for the brand, and will hurt the company’s attempt to portray itself as a high-tech pioneer.
Many seem to see the Buffett investment as a guarantee BYD won’t fail.
A New York Times reporter recently reviewed BYD’s F3DM hybrid vehicle. He wrote glowingly of its performance in electric mode. http://www.nytimes.com/2011/02/20/automobiles/autoreviews/byd-f3-dm-review.html?pagewanted=1&_r=2&sq=BYD&st=cse&scp=1
But, when the car switches to its gasoline engine, it “screeches like a banshee,” the steering wheel vibrates, and the dashboard hums, he added. That’s not all. Instead of becoming silently electric when the car stops, the engine “stays noisily on task,” wrote the NYT reporter.
He dismisses these problems as growing pains, and trots out Buffett’s investment as proof that BYD is capable of turning its alternative-fuel cars into inexpensive cars that Americans will want to buy. Besides, he points out, BYD had the best-selling compact car in China in 2010.
Well la di da, as Diane Keaton said in the Woody Allen classic “Annie Hall.” Has he ever seen, let alone ridden in or driven, an F3, as the compact is known?
Let’s dig a little deeper into the BYD story. Past Buffett’s investment.
Last week, BYD, based in the east China city of Shenzhen, announced it would cut prices on its models by up RMB 15,000 per model. http://www.cnbc.com/id/41656075/China_s_BYD_Says_Cuts_Car_Prices_by_Up_to_19
The cut represents an almost 20% reduction for some models.
Cutting prices is a business model that does not work, says Randy Berlin, global account director for Detroit-based consultancy Urban Science. www.urbanscience.com “BYD is putting things on a slippery slope for the perception of the brand, dealers’ profits, and the profitability of the company,” he says.
BYD has thrived in China’s cut-throat automotive market by offering affordable transportation, and until the second half of 2010 that strategy seemed to be working. BYD sales more than doubled in 2009 on the back of its best-selling F3 compact. The first half of 2010, sales continued to rise. Then the decline began. BYD’s sales fell each month for the last six months of 2010 compared to the previous year. It ended the year with a 17% sales increase, according to J.D. Power and Associates.
In most markets, that would be a triumph. But not in China, where the overall market for passenger vehicles grew by 37%, according to J.D. Power. In early 2010, BYD announced it would sell 800,000 vehicles in 2010. Instead, it sold fewer than 520,000.
Price isn’t the only problem BYD faces. Its standards for its cars haven’t kept pace with those of Chinese consumers’. Foreign automakers have come out with low-priced models for the domestic market, for example General Motor’s New Sail. www.gmchina.com Foreign brands are often perceived by Chinese consumers as higher quality, with justification. Suppliers say that BYD sometimes sacrifices quality to keep prices low.
The second half of 2010 had another unpleasant surprise for BYD. In October, land in Xian on which the company planned to build a plant was seized by the Ministry of Land and Resources, and BYD was fined RMB 2.95 million. The Ministry said the land’s zoning was illegally changed from agricultural to industrial. http://online.wsj.com/article/SB10001424052748704763904575549793829052072.html
That might turn out to be a blessing in disguise, however, as it appears BYD isn’t going to need the additional 200,000 unit capacity the Xian project would have added.
Here in the U.S., meanwhile, BYD is busy promoting itself as a high-tech company. Besides leasing a small number of hybrid cars to the Los Angeles Municipal Housing Authority, http://www.hacla.org/byd-and-the-hacla-launch-electric-vehicle-testing-program/ BYD has signed an agreement with the city to provide batteries as storage devices for a planned wind farm. http://mayor.lacity.org/PressRoom/PressReleases/LACITYP_011469
Last year, it showcased its solar panels, LED lighting, and home vehicle chargers at a model home in the Los Angeles suburb of Lancaster. http://www.evoasis.com/news/city-of-lancaster-byd-and-kb-home-provide-a-look-into-the-future-of-energy-efficiency/
After a press event showcasing that home, I said BYD might be successful with those technologies. It may still be. But its recent price cutting move dented my faith in the company’s ability to succeed. Even if Warren Buffett has invested in BYD.
I recently wrote a column for auto163.com, a Chinese-language automotive website, about how China and the U.S. could both be winners in the race to develop the electric vehicle sector. http://alyshawebb.blog.163.com/ Well, a fine example of that just fell right into my lap—the joint venture between battery maker Ener1 Inc. and Wanxiang Group. http://www.ener1.com/?q=content/ener1-press-releases
Talking with Tom Goesch, president of the transportation group at Ener1, made me realize the win can be on several levels—both market access and intellectual property protection.
In January, battery maker Ener1 Inc. www.ener1.com of New York and Wanxiang Group www.wanxiang.com of Hangzhou, a city in the east China province of Zhejiang, agreed to form a battery joint venture in China.
Wanxiang chairman Lu Guanqiu and Ener1 chairman and CEO Charles Gassenheimer shake on a deal to build batteries together in China.
Besides being one of China’s largest producers of universal joints, bearings, and CV joints, Wanxiang also produces electric vehicle batteries and entire electric vehicles. The Ener1 joint venture is with the Wanxiang Electric Vehicle Co. Ltd., a division of the Group. http://www.wanxiang.com/Wanxiang%20EV_general.pdf
“We are putting our entire intellectual property portfolio into this,” Tom Goesch, president of the transportation group at Ener1 told me. “In particular our experience in building large scale battery packs.”
Goesch, president of Ener1's transportation group, thinks having a strong Chinese partner is the best protection again intellectual property theft.
What!?! Isn’t he worried that his intellectual property will be stolen? Nope, said Goesch. “We feel the strategy of having a partner like Wanxiang, a China-based company, will provide us the best protection we can find. Wanxiang has all the reason in the world to protect that intellectual property.”
That assumes that Chinese companies have more than just cheap labor to contribute to a joint venture. Wanxiang brings both technology and connections to important customers to the partnership.
Wanxiang has been converting buses into electric vehicles since around 2006, said Pin Ni, president of Wanxiang America. It already buys some components from Ener1, and Wanxiang America is working with Ener1 here in the U.S., he said. The joint venture is a positive addition to that existing cooperation, said Ni.
“It’s better that we can join together to grow the market,” he told me.
The joint venture will produce lithium ion batteries aimed– initially at least– at China’s electric vehicle fleet market, said Goesch. It may also export to other countries in Asia eventually, he adds.
“For the foreseeable future we will concentrate on China,” said Goesch. “There is so much opportunity in China right now.”
Indeed, China has millions of buses in its municipal fleets, an area in which Wanxiang has much experience, and many connections. As Goesch put it, “Wanxiang has done a lot of customer development.”
In 2006, Wanxiang formed a joint venture with the government of the city of Hangzhou to build and operate a fleet of fully electric buses. That has expanded. Now, Wanxiang has fleets in 24 cities in China.
Wanxiang also provided 50% of the electric vehicle fleet and 100% of the hybrid fleet for the Shanghai Expo, a world’s fair-type event held in Shanghai in 2010.
“We have built hundreds of vans and busses,” said Ni.
That fleet experience is why Ener1 is comfortable with Wanxiang’s technology, said Goesch. It has proven itself. Ener1 also has sent some of its most senior technical people to Hangzhou, and done an internal analysis. “We have more investigation to do, but we are confident they have good technology under their belts,” he said.
Still, U.S. battery technology is more advanced than China’s, said Goesch, because companies in the U.S. have been producing batteries longer. Chinese battery manufacturers still have issues with getting all the different elements in an electric vehicle to talk to each other, and with producing large-scale battery packs.
Wanxiang will need that know-how in the very near future. Because Wanxiang is located in the city, Hangzhou received a grant from China’s central government to build a fleet of electric buses, said Ni. There is a catch, though. Rather than converting buses with internal combustion engines into electric buses, which is what it has been doing, Wanxiang must build a fleet of 1,000 electric buses from scratch.
Ener1 provides batteries for a fleet of fuel cell hybrid buses in northern California and has teamed with Sweden’s Think www.thinkev.com to provide electric drive trains for Japan’s postal fleet. That experience, combined with Wanxiang’s experience, should spell success. I’ll have to take an electric bus next time I’m in Hangzhou and see if it works!
In his State of the Union address on January 25, President Obama challenged the U.S. to be “the first country to have one million electric vehicles on the road by 2015.” http://abcnews.go.com/Politics/State_of_the_Union/state-of-the-union-2011-full-transcript/story?id=12759395
That may prove as elusive as China’s goal to have five million battery-electric and plug-in hybrid electric cars on the road by 2020. (China also aims to be producing one million such vehicles annually by 2020.) http://www.reuters.com/article/2010/10/16/retire-us-autos-china-idUSTRE69F0J820101016
Regardless of whether or not those targets are met, however, the race to grow the electric vehicle segment could be a win-win for China and the U.S.
China may grab the number one spot in the electric vehicle market, just as it has in the overall vehicle market. But that doesn’t mean foreign automakers and suppliers can’t benefit from China’s push to develop electric vehicles. And, foreign automakers can be major players in the electric vehicle market in China.
Let’s do a little comparison of some measures the two countries have announced to develop the sector (this is clearly not an exhaustive list.).
The day after the State of the Union address, Vice President Joe Biden laid out steps the government proposes to reach that goal:
http://detnews.com/article/20110127/AUTO01/101270345/Biden-touts-jolt-for-electric-cars
- Transform the US $7,500 tax credit consumers currently receive for purchasing certain alternative fuel vehicles to a rebate. That would allow the buyer to get the money back quickly rather than waiting until the tax returns are filed.
- Increase R&D investment in new vehicle technology in the 2012 budget by 30%.
- Include funding in the 2012 budget to offer up to US $10 million in competitive grants to 30 communities. To win the grant, the community would need to foster electric cars by building a recharging infrastructure and providing other incentives such as commuter lane access, streamlined regulations, and public vehicle fleet conversion to electric vehicles.
How does this compare to China’s plan to promote new energy vehicles? Measures include:
- Budgeted RMB 100 billion (US $15.2 billion) over the next decade to develop electric vehicles.
- Designated six cities to develop an electric vehicle recharging infrastructure.
- Offered up to RMB 60,000 (US $9,100) to manufacturers for each new energy vehicle sold.
- Subsidized electric vehicle fleet operators in 25 cities.
The U.S. should seriously xuexi (study) that fleet subsidy policy. But I digress.
Despite the large number of Chinese companies with plans to produce electric vehicles, China still lacks good battery management technology. It also has issues with product consistency. It needs foreign technology to develop its electric vehicle sector.
It is getting that—through joint ventures. There are new announcements all time about foreign firms teaming up with Chinese companies.
For example, battery manufacturer Ener1 Inc. www.ener1.com announced recently it would jointly manufacture batteries for the China market with Chinese supplier Wanxiang Electric Vehicle Group Ltd. http://www.wxev.com.cn/ (An aside: I interviewed Wanxiang Group founder Lu Guanqiu about eight years ago in his office in Hangzhou. He had a lot of chocolate bars in his little office fridge. Twix Bars, I think.)
So Ener1 will benefit from growth in China’s electric vehicle market.
American companies also need China’s low-cost manufacturing, even if they aim to sell in the U.S.
Atul Kapadia, CEO of storage systems manufacturer Envia Systems of Newark, CA, www.enviasystems.com told me a few days ago that Envia has 30 people in China producing Envia’s high-capacity manganese rich cathode battery cells. Why China, I asked?
The U.S. was simply too costly, he said. “China is the least expensive place, and business is all about finding the right resource,” said Kapadia.
Of course, the issue of intellectual property rights looms large. Kapadia emphasized that all of Envia’s core intellectual property will remain in the U.S.
Let’s face it, tech transfer—and some outright IP theft—is going to occur. As suppliers tell me all the time, it’s just part of doing business in China. As they also tell me, it just means they have to keep innovating.
As China’s electric vehicle market develops, who will grab market share? Well, let’s consider the market now. Though China’s domestic brands as a group hold about a third of the passenger vehicle market, none have more than about 3% market share. Volkswagen, Toyota, Hyundai, Nissan, and Honda were the top five brands in China in 2010. Why should the EV market be any different?
China is working with the Argonne National Laboratory www.anl.gov in Argonne, IL on a wide range of issues centered on batteries.
Said Jeff Chamberlain, leader of Argonne’s Energy Storage Initiative: “The complicated aspect is to find a way in which we can collaborate in the science while recognizing ultimately we will be competing.”
Competing, yes. But both countries can gain much from the race itself. So let the competition begin!
Murtaugh will have a tough job at Coda even if mission is selling electric vehicles in China
Coda Automotive announced last week that it had hired Phil Murtaugh to be the company’s permanent CEO. In the sense that he is replacing temporary CEO Mac Heller, that is. Heller was filling in for former CEO Kevin Czinger, who resigned in November because, Czinger told me at the LA Auto Show, he felt “there are different roles at different times in a movement.” (Coda sees itself as the initial vanguard of a movement away from dependence on oil and into a new reality, Czinger told an audience at the show.)
Is Phil the right man to lead Coda’s movement? Depends on what that movement really is.
To be sure, Murtaugh has more experience in China’s automotive industry than just about any other foreigner. In 1996 he negotiated the original agreement that paired SAIC www.saicmotor.com with General Motors www.gm.com , forming Shanghai GM www.shanghaigm.com . The partnership now encompasses multiple companies, and is arguably the most successful Sino-foreign partnership in the world.
Murtaugh said his job at Coda was to launch a new car into the market, the same situation he faced in China in 1996. “But I don’t have to negotiate the joint venture,” he said. He also said something I hadn’t previously heard from anyone at Coda–that Coda would sell its vehicles in China as well as the U.S.
Coda Automotive www.codaautomotive.com , based in Santa Monica, CA, is a manufacturer of electric vehicles. The chassis and body of the electric car it will launch is produced in China at Hafei Automobile Group www.hafeiauto.com.cn . The car is based on the same aged Mitsubishi model as Hafei’s Saibao, though Coda says the design has been substantially modified.
The battery is also produced in China, at Lio Energy Systems, a joint venture in the north China city of Tianjin between Coda and Tianjin Lishen Battery Joint-Stock Co. http://en.lishen.com.cn The remaining components are from multinational suppliers such as Delphi, Borg Warner, and Lear. Final assembly will take place in the U.S.
I like and respect Murtaugh, whom I have known for a decade. But I think he faces a much different task at Coda than he did at GM. He is not backed by General Motors, one of the world’s largest and, at the time, most successful, automakers. GM had a stable of proven, popular products it could bring to the joint venture.
China was, to be sure, a difficult market for a foreign company to do business in at that time. But GM had the help of SAIC, a well-connected state-owned company. And the competition was limited. Volkswagen was the only foreign automaker with successful joint ventures at the time—it had two, with First Auto Works www.faw.com and SAIC. (My friend/translator/editor Kevin Huang pointed out that the Guangzhou Auto and Peugeot joint venture was still limping along at that time, as well. It closed in 1997 because of poor sales.)
With Coda, Murtaugh has a relatively expensive, unproven vehicle. In the U.S., Coda is selling its electric car for $37,400 after a federal tax break. It will be fighting for share in a small market with many established brands.
Coda originally planned to deliver 14,000 units of its electric car in 2011. Now, the start of production has been delayed until the second half of 2011. It will deliver more than 10,000 units within a year of starting production, said Forrest Beanum, Coda’s vice president of public affairs and communications.
However, Coda has not yet finalized the location of its assembly plant in the United States.
As for the China market, Coda hasn’t given me any more details about the China electric vehicle launch plan–yet. I’ve submitted questions and have been nagging Beanum. But, the China market for electric vehicles will be at least as competitive as the U.S. market. And, the Saibao, the car on which the Coda is based, doesn’t have an especially good track record in China. Hafei sold fewer than 1,200 in 2010, according to J.D. Power and Associates www.jdpa.com . Of course, Coda did upgrade the small sedan’s looks. But it will also be trying to sell an electric vehicle, a segment for which there is essentially no market in China right now.
As I wrote last year, I think Coda is really just using the car as a marketing tool for the battery. Coda denies this publically, though people it has approached about investing have told me the company is upfront about the strategy. Coda does say it also aims to market the battery for electric utility grid storage.
Murtaugh said Coda’s product “is truly going to be a very, very competitive.” He also said Coda’s business model of marketing the battery as an electricity grid storage device had as much potential as the automotive applications. Well, if Phil is aiming to sell batteries as storage devices, there isn’t really a market for that yet, either. But it will probably develop.
If his aim is volume sales in China of Coda’s electric vehicle, the size of China’s electric vehicle market remains to be seen (as does the size of the U.S. market). But I think he faces an even tougher challenge than he did when he was at General Motors. Still, Coda couldn’t have found a better man to lead that movement.
Will plug standards be China’s perestroika?
A favorite phrase among China’s leadership these days is building a harmonious society. http://english.peopledaily.com.cn/200506/27/eng20050627_192495.html
If China hopes to supply electric vehicles to the world, the leadership needs to also promote a harmonious electric vehicle plug standard.
Recharging is a major concern for potential electric vehicle consumers, in China just as in the U.S. http://www.zpryme.com/
Without a widespread universal plug standard, a consumer could end up having to carry lots of plug convertors around, just as I already do when I go to China. (An aside: Hong Kong has four different kinds of plugs. I am not making that up.)
Just kidding. It’s unlikely that a convertor would be robust enough for an EV plug. So, if no standard is implemented, a driver could have the ability to recharge in, say the southeast China city of Shenzhen, http://www.shenzhen-standard.com/2010/11/08/electric-charging-stands-to-be-installed-thoughout-shenzhen/ which is already building out a recharge network using its own standard. But if the EV owner decides to drive to Fujian, a city in a neighboring province, he wouldn’t be able to “refill.”
Making a plug that is internationally compatible is an even bigger issue, if China’s EV makers want to one day export their vehicles. The cost of producing a compatible car for each country would be huge. Utilities and charge station producers have a stake in the game, too.
“To the extent that we can harmonize anywhere in the world, it is cheaper for the automaker,” says Kristen Helsel, vice president of EV solutions for AeroVironment Inc. of Monrovia, CA. http://www.avinc.com/ Also, “the infrastructure providers can build business models based on higher volumes.”
AeroVironment produces charging stations as well as systems to test EV batteries. It is supplying home recharging stations for the Nissan Leaf electric car, and eyeing China for future business. “We’re spending a lot of time there,” says Helsel.
The J1772 standard for Level 1 (120V) and Level 2 (240V) charging was developed in the U.S. and is accepted by many in Japan and Europe. J1772 was issued in by the Society of Automotive Engineers (SAE) in 2010. http://standards.sae.org/j1772_201001
As for Level 3, or DC fast charging, there is currently no standard though a Japanese standard known as CHAdeMO has achieved some acceptance (and is used in the Nissan Leaf electric car). http://www.chademo.com/
Given that there are very few electric cars on the market, and very few Level 3 charging stations yet being built, that hasn’t been a problem.
To get ahead of the issue, the Society of Automotive Engineers (SAE) is spearheading an industry group attempting to come up with a next generation J1772 standard that combines Level 2 and Level 3 plugs, says Jack Pokyzrwa, SAE’s director of ground vehicle standards.
China wants to be part of the group and has met with SAE several times, he says. Frequent communication is tricky given the language and time differences, says Pokyzrwa. But it is important that China be included. So SAE is going to create an official liaison position with the China Automotive Technical and Research Center, he says. CATARC sets automotive standards in China. http://www.catarc.org.cn/
“We see a trend of (China) trying to adopt a more Western-type process,” Pokyzrwa told me. “They are much more involved with us.”
That is not as “well duh” as it might sound. China is famously secretive about its decision-making process, and that extends to plug standards. Generally, there is a lot of consultation (such as the industry group meeting now on the next-gen J1772); a proposed standard is released; then a government can chose to adopt the standard in part of full, says Pokyzrwa.
In China, he says, it seems a standard is developed and adopted, then announced. “Our process is more transparent,” he says.
China released a Level 1 and 2 standard last year, but the standard does not seem to be widely used in the country. At the EVS25 forum and conference in Shenzhen last November, a dozen or more Chinese companies displayed recharging stations with unique plug standards.
The Chinese standard resembles the German standard, says Ted Bohn, a power electronics engineer, at the Advanced Powertrain Research Facility in the Argonne National Laboratory. www.anl.gov But the Chinese standard cuts out an interlocking circuit, he says. The circuit is an extra safety measure; without it, the car could not be sold in the United States, says Bohn.
The committee working on the next gen J1772 plug standard has some 130 international members. Within that, a task force of 20 or 30 meets twice a month. Pokyzrwa says his best projection (or perhaps his hope) is that a year from now there will be a new standard that combines AC and DC charging capabilities. Implementation wouldn’t start until as late as 2020, Pokyzrwa figures. China may be on board.
“China is coming to the table,” says Pokyzrwa. “They do have a different standard, but the next release can be harmonized.”
Back in the old days, 2006 that is, Chinese automakers thought getting their cars ready for the U.S. market would be easy. Do you remember the Geely car in the lobby of Cobo Hall at the North American International Auto Show? At that time, Geely was talking about starting exports to the U.S. in 2008. http://www.autonews.com/article/20060116/SUB/60113044 Chery has similar grand, or rather grandiose, plans.
They soon backed off those optimistic predictions. Sure, meeting stiff U.S. emissions and safety standards was tough. But even tougher, engineers in China admitted to me, was getting the fit and finish right. U.S. consumers wouldn’t put up with the imperfections that Chinese consumers were willing to overlook.
Five years have passed. Cars in China look a lot more polished than they did back then. Now that a lot of companies are talking about selling China-made electric vehicles in China, the fit and finish shouldn’t be a problem, right? Wrong. Even if they have the technology, Chinese automakers still have trouble parsing U.S. consumer demands.
So BYD Auto Co. www.byd.com has delayed launching its cars here in the U.S. partly so it can make them more suitable for the U.S. market, Michael Austin, VP of BYD America told me. BYD plans to hire industrial engineers here in the U.S. to tweak its design for the U.S. market. Already, it has repositioned the integrated chassis and battery unit on the model of the e6 electric car destined for the U.S. to add leg room in the rear seat, said Austin.
More changes are doubtless on the way. As part of a broader agreement signed in mid-2010, the City of Los Angeles Housing Authority http://www.hacla.org recently leased ten of BYD’s F3DM hybrid cars. That fleet will test both the technology and the design. Fit and finish suggestions will be incorporated into the e6, as well.
BYD will show a version of the e6 at the Detroit auto show next week. www.naias.com But, “we won’t launch if there are concerns that are not addressed,” said Austin.
Zotye Holding Group www.zotye.com is another Chinese automaker that is grappling with the fit and finish issue. Zotye is a small SUV maker located in east China. It recently signed a 10-year extension of an agreement with Green Automotive Co. Inc, http://www.usaelectricauto.com a Dallas, TX-based company, to distribute its small electric SUV in the U.S. No Zotye vehicles are here yet. Well, maybe one or two that Green Auto execs can drive around and show off.
Last July I wrote a not-too-skeptical blog about Green Auto’s plans to import Zotye’s electric SUVs. As it turns out, my usual degree of skepticism was called for. Steven Fly, who was CEO at the time, is gone. Who knows how long the new management team will last. At the time, Fly admitted that the Zotye SUV’s fit and finish needed work. It still does.
Don't expect to see more of the Zotye EV in the U.S. any time soon
A few days ago, I talked with Zotye’s Wu Aibing, special assistant to the general manager of overseas projects. He said Zotye was working very hard to get the cars ready for the U.S. market. But he wouldn’t predict when the cars would be ready. “We have a lot of things to do,” said Wu.
Why do Chinese automakers have such a hard time getting the finer details of a car’s fit and finish right? I guess it is still the prevalence of a “cha bu duo” mentality. The phrase translates as “more or less,” and it implies that something is good enough. But good enough isn’t enough for the U.S. market. It should be the highest quality. That’s not just a process technology issue; it’s a mindset issue, as well. Changing a cultural mindset is hard. Five years wasn’t enough. Maybe ten?
If you are an engineer with some EV experience, China needs you!
I’ve written about potential potholes in China’s road to world domination of the electric vehicle segment. They range from lack of domestic battery management system technology for large battery packs and short battery life to process technology issues. http://www.autonews.com/article/20101213/OEM06/312139964/1429
Even if China can avoid these potholes—it can simply buy some of the technologies, for example—it faces another potentially serious problem. There aren’t enough engineers in China with expertise in electric drivetrains.
There is a lot of controversy in China about the availability of engineers in China, says Majdi Abulaban, managing director, Asia Pacific for Delphi Automotive LLP. www.delphi.com Delphi has a large technical center in Shanghai that employs 700 engineers. For all of China, http://delphi.com/careers/international/china/ Delphi employs about 1,500 engineers. Not all work on electrification, however. Delphi has about 150 (please note this is a correction. Delphi sent me an incorrect figure initially.) engineers in the Asia Pacific region working on China-related hybrid and EV projects, says Abulaban.
Majdi Abulaban, managing director Asia Pacific for Delphi Automotive, says there is a shortage of engineers with electrification experience in China. Not too surprising since the technology is so new.
Sure, Chinese universities graduate a lot of engineers each year, he says. But trained engineers, with five to 10 years experience, are hard to find. “There is an ample supply of college graduates,” he says. “The issue for us is, do we have time to train them?”
This problem isn’t unique to China. In the December 13 issue of Automotive News, Dave Guilford writes that automakers and suppliers in the U.S. are having a hard time finding enough engineers to work on electric-drive powertrains. http://www.autonews.com/article/20101213/OEM06/312139964/1429
The scale of the problem in China is worse, however. For one, rather than a handful automakers (and, granted, quite a few suppliers) trying to find engineers to work on electrification, China has dozens of automakers being “urged” (and that was toned down, at C.C.’s request) by the government to produce electric vehicles, says C.C. Chan, president of the World Electric Vehicle Association. www.electricdrive.org Chan, who is based in Hong Kong and Shanghai, advises the Chinese government on its electrification strategy.
C.C. Chan says the government is pressuring all of China's domestic automakers to develop electric vehicles.
To refresh your memory, or create one: By 2020, the government’s plan calls for China to produce and sell one million battery-electric and plug in hybrid electric cars annually. Some 5 million such vehicles will be plying China’s roads by then, if all goes according to plan.
This mandate is likely giving the top guys at China’s domestic automakers gray hairs, though they will use black dye to hide them. Indeed, Abulaban, says they are all trying to figure out how to comply.
“How do you map this out when you haven’t figured out how to compete in the traditional (automotive) technology?” he asks rhetorically. “If you can’t develop and design a traditional combustion vehicle, how can you leapfrog into the electric vehicle segment?”
For Delphi, the mandate to create a huge EV industry in China is very good news, however. Delphi has long been a leader in two areas crucial to electrification—green technology and vehicle connectivity, says Abulaban. From battery cell monitors to DC/AC inverters, Delphi produces everything in an electric drivetrain except the battery cell itself, and the motor.
So while Abulaban doesn’t think the number of EVs in China will reach the “ambitious” levels the government is calling for, electrification will be an important part of Delphi’s future business in China, he says.
Already, the China market is growing so fast (for traditional technology as well as EV technology), that Delphi is considering adding another technical center, most likely in one of China’s inland cities, says Abulaban. Cities that are already have a large automotive base such as Chongqing, Chengdu, or Wuhan are top candidates, he says.
“The manufacturing base in the west is well-established,” says Abulaban. “The question is: How fast can you develop the technical facilities?” That is, can you hire enough engineers?
Tom Gage, CEO of AC Propulsion, www.acpropulsion.com made a telling statement to me today. He told me that I might see a China-made vehicle powered by an AC Propulsion electric drive train on the road in the U.S. within five years.
“We are talking to many automakers in China, and I think they all have plans to export,” he said.
I’ve scoffed at the chances for Chinese automaker BYD’s e6 www.byd.com/showroom.php?car=f6 electric sedan to succeed in the U.S. market. Ditto for Coda Automotive’s plain jane electric sedan http://www.codaautomotive.com/all-electric-car/with a Chinese body. Of course, the Coda is pretty pricey at $37,400 after a federal tax rebate. Even with a lower priced car, however, I still think U.S. consumers will demand a similar level of refinement in their electric vehicles as they do in their current cars.
Gage argues that ain’t so. He believes that there is a market in the U.S. for China-made electric vehicles with less content than competitors, at a lower-price. If he is right, the China competition could benefit U.S. consumers by forcing other automakers to innovate at the low-end in the electric vehicle segment. That’s what happened in China with regular cars.
Now, because this is my blog, I am allowed to digress without a subhead and give you some background on AC Propulsion’s recent activities in China.
AC Propulsion just announced it is building a new electric drivetrain plant in Beijing. The plant is due to start production in late 2012. The capacity will be more than double that of AC Propulsion’s current plant in Shanghai, says Gage. That plant produces between 1,000 and 2,000 units annually, he says. Most of the output of the new plant is destined for the greater China market, though a few hundred units will be exported, says Gage.
“We are planning for the era (in China) five years and beyond when people are saying there will be one to five million EVs on the road,” says Gage. He doesn’t necessarily believe those numbers, he says, but does believe the market will be substantial.
AC Propulsion, which is based in the Los Angeles suburb of San Dimas, provided the drive train for BMW’s Mini E. In China, it has signed preliminary agreements with some Chinese automakers, says Gage. He wouldn’t reveal any names.
If some of those EVs eventually end up in the U.S., it will create an interesting market dynamic. Will that create a low-end EV segment? Will Chinese EVs dominate the low-end EV segment in the U.S., the way they initially did in China?
We all know what happened when the low-end segment for traditional cars in China took off. Okay, we don’t all know. What happened was that foreign automakers found ways to make cars for less, so they could compete in that segment too. For example, Shanghai General Motors launched the New Sail, http://media.gm.com/media/cn/en/vehicles/chevrolet/NewSail/2010.brand_gm.html a domestically-developed small car that costs only 56,800 RMB, or US $8,530 at current exchange rates. J.D. Power and Associates http://businesscenter.jdpower.com/ says the SGM New Sail “not only grabs market share from its peers in (the sub-compact) segment, but also from high-end mini cars.”
General Motors just announced it is hiring 1,000 engineers and researchers http://www.bloomberg.com/news/2010-11-30/general-motors-said-to-hire-1-000-electric-vehicle-engineers-in-michigan.htmlto work on electrification. They better start honing their low-cost production skills. If Gage is right, the Chinese are coming.
Swimming, and drowning, in the electric vehicle sea
When I lived in China in the early 90’s, going into business for ones’ self was known as “xia hai,” or jumping in to the sea. These days, many Chinese companies are jumping into the sea of electric vehicle manufacturing, and some of them are going to drown. That’s the way the market works.
I saw a lot of these companies in Shenzhen a few weeks ago at the 25th World Battery, Hybrid, and Fuel Cell Electric Vehicle Symposium and Exhibition, an international conference and electric vehicle show.
There were several dozen companies showing mini EVs. Some were already manufacturing the tiny cars, some were hunting for partners. All saw the sector as a good business opportunity.
Why? The government. As I learned from several presentations by government officials at the Symposium, mini EVs and buses are important stepping stones in the evolution of China’s electric vehicle segment. So, the government is encouraging their production.
That, in turn, has encouraged companies that had no previous experience in manufacturing cars to jump into the electric mini vehicle sea.
At EVS25 I met people such as 24-year old Zhang Biao, assistant general manager of the Dongyuan Three New Electric Vehicle Technology Co. Ltd. www.dg.sysu.com The company is attached to the Sun Yatsen University Research Institute in south China’s Guangdong province.
We have the technology and we see a good business opportunity, says Zhang of the EV sector.
The university has developed its own electric drive train and battery management system, he says. Now, it’s looking for someone to produce an EV using that technology.
“We think there are many opportunities in the EV sector now,” says Zhang.
Then there was the Shandong Bidewan Power Technology Co. Ltd., www.byvin.cn which gets my vote for the cutest mini EV, mostly because it was pink and had a stuffed bear hanging on the side mirror. Byvin, as it goes by, started selling its low-speed EVs mini EVs last year for 29,800 RMB or US $4,487 at current exchange rates. More than an electric bike, but cheaper than a Chery QQ, which starts around 31,000 RMB.
Does the bear come with the car?
Privately-owned Shandong Baoya New Energy Vehicle Co. Ltd. www.baoya-ev.com started making mini EVs three years ago, piggy backing on its electric bike technology.
Luojo (Weihai) EV R&D Co. Ltd. produced an electric vehicle that meets Euro 4 emissions standards a year ago, claimed sales manager Andy Yang. Now the company is looking for a partner to mass produce its mini EV.
Clearly not all of these companies are going to make it. For one, the government may not license their vehicles for sale. And there is a debate going on right now about allowing such low-speed vehicles on China’s roads. But, it seems that will be decided in the affirmative as the government is promoting the sector.
The privately-owned companies face the biggest hurdle because funding will be hard to come by and they won’t have a local government propping them up for job creation. So, is Beijing wrong to encourage investment in the sector?
No, I don’t think so. While this may not produce breakthroughs in EV technology, it already has produced a flurry of research and development. What the government should do is set high technical standards for these mini cars, to push companies to innovate.
Will some of the companies fail? Yes. China may end up with a bunch of tiny EV makers on the local governments’ payrolls. That’s what has happened in the regular automotive sector. That would be bad.
And, the roads could be clogged with slow-moving mini EVs. That’s the biggest harzard.
Alysha Webb
Alysha Webb's ChinaEV Blog 