Benchmark of seven powerhouses in the e-mobility automotive market

10 July 2017 Consultancy.uk

The global trend toward electrification of the vehicle market looks set to continue, as technology advances, prices become more competitive, driving new consumer demand. In a new report, current market trends in seven major developer and producer countries show that China leads in terms of production, while France lead in technplogy, having recently announced plans to ban petrol and diesel vehicles by 2040.

Electrification has been deemed one of the four global mega-trends set to transform the automotive industry over the coming three decades. The technology has the potential transform the industry, reducing various negative externalities, including pollution and energy efficiency.

In a new report by Roland Berger, in association with Forshungsgesellschaft Kraftfahrwesen, the consulting firm explores current market trends in the e-mobility industry pertaining to the seven of the largest countries active in the segment. The research considers three key indicators, technology, in so far as R&D into electric vehicles is taking place; industry, in how far countries are active in production (both vehicles and batteries); and in the electric vehicle sales market.

E-mobility index

The headline result shows that France and Germany and Japan are vying for the number one spot, at a score of 2.6, 2.5 and 2.5 respectively. France's edge stems from focus on pure electric vehicles, with the newly elected government having just announced plans to ban all petrol and deisel cars by 2040, while Japan is charging ahead on the back of high quality at a low price. South Korea takes the number four spot with a score of 1.6, while China and the US lag behind on 1.2 and 1.1 respectively.

In terms of industry, China is the forerunner, with a maximum score of five. The country has a strong local production, and develops its own batteries and has prices in regional purchasing price parity (PPP). The US follows, also with a five. Japan and Germany have relatively strong scores of 3.3 and 3.0 each, Japan is finding it hard to compete with its offering overseas, while Germany lacks batter production capacity. France has a low score in this segment – dragging down its average – with a score of 0.7.

In terms of market, France leads, with a score of 5.0 largely due to the value of its market share, although China too scores the maximum score, largely due to volume. The US and Germany come third and fourth respectively, at 4.5 and 3.9 each. South Korea and Italy take the last two spots in the category respectively.

Global e-mobility trends show industry uptick across globe

The study finds considerable changes in competitive position across the various indicators, for some countries, between Q2 2017 and Q3 2013. Germany’s commanding technology lead has seen some decline, although not as steeply as that of South Korea. The US has managed to bring its position upward slightly, while China has suffered a decline. France has remained relatively steady.

In terms of industry, Germany has seen its production ramp in the earlier quarters of 2017. France and the US have been steady at high levels for the entire period, while China has ramped up steadily since the start of the analysis period.

Market has continued to be strong in France and the US over the whole period, although there was a decline in Japan. Germany has seen a small dip in the latest period, while South Korea has seen a slight uptick.

Value for money of market-ready BEVs and PHEVs

The research also looked at the value for money of the various battery electric vehicles (BEVs) and plug-in hybrid electric vehicle (PHEVs) sold in various countries across the globe. With the industry on the upward curve amid continued concerns surrounding the cost of pollution, the research finds that France has a relatively good overall performance, with relatively low average sale price and high levels of technology – although the latter came with a cost. Japan too has seen its cost profile increase on the back of better technology.

The US has very high costs, while the technology is virtually the same standard as that produced in competing countries. Germany too has high costs, but with relatively high levels of technological advancement. China has a moderate cost profile, although its technology lags that of the other major players.

The firm’s analysis of key investment into R&D within the segment shows that China is out ahead, pumping €4.7 billion into the industry – or around 0.047% of its GDP. Germany and France have similar levels of investment relative to their GDP and 0.046% each – amid speculation of a ban on the sale of new petrol-fuelled cars in the Germany, as well as a number of other EU nations – while Japan has seen a dramatic decline although in absolute terms. The Japanese industry falls €0.4 billion behind China, who sit at €1.4 billion, and the US, South Korea and Japan are all spending lower amounts in relevant R&D subsidies.

State of R&D funding for e-mobility

Roland Berger also found that China is by far the leader when it comes to the projected absolute production of EVs and PHEVs through to 2019. The country will, based on the firm’s projection, produce around 3.5 million vehicles; the US meanwhile will produce around 1.5 million new vehicles, while Germany is set to produce around 1 million of such vehicles in the same period. Japan, France and South Korea will produce around 1.1 million between them, with Japan the largest producer of the three by more than half.

Commenting on the anticipated capacity coming out of Chinese factories in the segment, Stefan Riederle, a senior project manager at Roland Berger, said, "The big European OEMs need to be more flexible so as not to be left by the wayside. Traditional seven-year product cycles are long gone. Companies need to be faster, more flexible and more innovative in what they offer consumers."

News