China Autos:Key Takeaways,Dr Ray Chen on the EV space in China

HSBC Local Insights hosted Ray Chen, Ph.D. to present a talk on “Electric VehicleSpace in China & Globally: Powertrain and Component Makers, Demand & Trend”.

    The trend is to combine EV with networking and autopilot. Dr. Chen’s topic isprimarily EV Powertrain systems (Battery/Motor/Controller). Fundamentally EVs aresimpler to make than traditional ICE; but key to the powertrain system is integrationof components and systems to optimise the system efficiency, torque, and speed.

    China’s current policies are resulting in:(1) a focus on higher power density andefficiency both on battery packs and motors;(2) policy limits on ICE production havepushed many traditional auto makers to form JVs with local EV makers;(3) thecurrent EV map is more on smaller vehicle production. This trend is tending tocontinue for the time being. YTD A00EVs make up 60% of the EV/PHEV market.Over the past three years there has also been an increase of EV relative to PHEV.Dr Chen sees a lot of demand in China’s 3rd and 4th tier cities, where BYD is alsomaking a push with micro EVs to serve this market.

    Battery technology is key differentiator for all the EV manufacturers. Motor andmotor controller is a relatively smaller cost component but is also a key differentiatorfor OEMs vs. other companies.

    During this current rapid growth phase, securing customers and maintaining scaleis the key for component makers to survive and compete