The future of transport is a common theme at GITEX. This year, the Power Play conference will see a number of presentations on electric vehicles.
GITEX Times: What are the key areas you will discuss when you’re here for GITEX? Dr. Feng An: I am going to talk
about electric vehicles, the roadmap for electrified transportation in China and how it is going to impact on the oil demand in China. GT: What do you know about the Middle Eastern market, have you been here before? Dr. An: I know very little, I have just been to [Saudi Arabia]. I know they have aggressive plans for solar panels, but I don’t know their plans for EVs. I know that it is very hot and in extreme weather conditions, either very hot or very cold it is going to be challenging for EVs.
GT: You mentioned that the extreme heat and extreme cold could be very hard on EVs, in what way? Dr. An: If you turn on the A/C all the time it will shorten the battery life. Also, very hot weather will shorten the battery life. Like the cold weather – in cold weather you need heating and the battery will perform very poorly in the cold conditions. Also, heating [a car] can consume a lot of electricity [from the battery.] And the same thing in hotter weather conditions it impacts battery life. Those are big factors.
GT: What is the roadmap for EVs in China and what will be the impact on oil consumption? Dr. An: The impact is going to be pretty profound because China imports 71% [of its] oil each year. The government wants to dramatically reduce the oil dependency. Forty percent of imports [are] going to road transportation for passenger vehicles. And a further 80% is from all transportation. So they have an aggressive plan to reduce the demand from the transportation sector. Oil demand will peak around 2025 and there will be a decline by 2050. I expect that demand will reduce by 80% from the transportation sector.
GT: What is the government doing in terms of building the charging infrastructure for EVs? Dr. An: The Chinese government has huge subsidies. The central government [offers] the equivalent of US$6,000 subsidies, and the local government has been ordered to come up with another US$6,000 [for cars]. In total US$12,000 subsides for cars. The number for buses is even higher! But China is going to freeze out the subsides; number one [because] the financial burden is just too large, and number two; for trade with the US China has promised to phase [them] out. The subsidies will go to building the charging infrastructure, rather than for the cars. That will be the next phase of rapid development. The charging stations will pop up!
“There are something like 400 EV makers in China... Many of those factories will go under and the market will consolidate in the next five to ten years.”
GT: The other issue is the environmental disposable of batteries once the vehicle life is finished. How is China planning to tackle disposal of batteries? Dr. An: Four and a half percent of new [vehicle] sales are EVs, so it is still kind of a new phenomenon. So China hasn’t seen massive wastage from batteries yet. But there are a lot of proposals and ideas being thrown around. People talk about the secondary use for batteries; so the battery can be used for volt storage in a secondary life.
GT: Which are the successful Chinese electric vehicle brands?Dr. An: There are some big players like BYD and Beijing Auto and there are several joint ventures. And there are several new players, like Neo. BYD is doing best… BYD has plans
for the US market for its buses. Cars will be more challenging. But most of the new players are in a survival [mode], I don’t think they have plans to export. They are just trying to survive.But established brands like BYD may try for developing countries like India, but not for mature markets, because they are still new brands. I think the most challenging thing for many EV markers, is just to try and survive because none of them are making money. They live by government subsidies, and when the subsidies are gone they have to be able to survive. Dr. Feng An, founder and executive director, Innovation Centre for Energy and Transport (ICET), appears in the ‘Power Play’ Conference at GITEX Technology Week.