Saturday, September 21, 2019

Electric Vehicle Market So Far Belongs to China [feedly]

Electric Vehicle Market So Far Belongs to China

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This week, General Motors Co. Chief Executive Officer Mary Barra spoke to the future of her company, the U.S.'s biggest automaker. "Once you start to believe in the science of global warming and look at the regulatory environment around the world, it becomes pretty clear that to win the future, you've got to win" electric and driverless personal transportation, she told Bloomberg Businessweek. If we look at today's data in key markets — and from some of Barra's biggest competitors — it also looks like an observation of the industry right now.

First things first: The global auto market is not only not growing, but it is also shrinking. Sales peaked in 2017 at nearly 86 million on a trailing-12-months basis; right now in 2019, sales are closer to 76 million.

Past the Peak

Global passenger vehicle sales, trailing 12 months

Source: Bloomberg

But electric vehicles are a growth market. Take Germany and the contrast between EV sales and all auto sales:

A Tale of Two Trends

Germany's EV sales vs. all automobile sales, trailing 12 months

Source: Bloomberg

The growth of EV sales combined with the decline in overall auto sales means electric vehicles now make up almost 5% of total sales.

Hard to Ignore

Germany's electric passenger vehicle sales as a percentage of total auto sales, trailing 12 months

Source: Bloomberg

Or take China, the world's largest auto market (and one where, incidentally, GM is a major player). China's sales of "alternative energy vehicles" — mostly electric, with some hybrids and a small number of natural gas combustion engines — are nearly 1.5 million. Meanwhile, sales of all passenger vehicles peaked at close to 25 million in the middle of 2018, and are now below 22 million.

Meanwhile, in China ...

Alternative energy vehicle sales vs. all passenger vehicle sales, trailing 12 months

Source: Bloomberg

That change in buying cars also means a change in fuel consumption. China's gasoline demand, after almost doubling between 2010 and July 2019, is now essentially flat. China diesel demand, meanwhile, peaked several years ago.

One Flattening, the Other Falling

China gasoline and diesel apparent demand, trailing 12 months

Source: Bloomberg

Electric vehicles certainly do look like a significant part of the future in these key markets, given their trajectories. A recent analysis by my BloombergNEF colleagues Nick Albanese and Josh Landess delineates that future by company using a new Automaker EV Exposure Score. For those used to seeing global auto giants at the head of any league table, it's striking.

Related: BloombergNEF's outlook for road transport fuels

Bayerische Motoren Werke AG leads all major automakers in revenue from electric passenger vehicle sales. 1  Its fellow Germans Volkswagen AG and Daimler AG are third and eighth, respectively. Nissan Motor Co. is seventh; GM is ninth. The rest of the top 10 automakers by revenue from electric vehicles are Chinese.

A German and Chinese Game

Estimated 2018 revenue from electric passenger vehicle sales

Source: BloombergNEF

Note: Excludes Tesla. Includes joint venture activity.

Look at the data from the perspective of EV revenue as a percentage of the total, and it's even more of a Chinese game. There is only one company in the top 10 by percent of electric passenger vehicle revenue that isn't Chinese: Japan's Mitsubishi Corp. Two Chinese automakers get more than 40% of revenue from electric vehicle sales; a third gets nearly a quarter of its revenue from EVs.

Chinese Domination

Estimated 2018 revenue from passenger EV sales, percentage of total

Source: BloombergNEF

Note: Excludes Tesla. Includes joint venture activity.

Albanese and Landess conclude their analysis with a score, which weights electric passenger vehicle sales volumes, revenue, and current and future model count, then assigns greater value to pure electric as opposed to plug-in sales. Of the top 10 automakers, nine are Chinese. BMW is the only international automaker in the top 10 today.

China Runs the Table

Top 10 automakers by BloombergNEF electric passenger vehicle exposure score

Source: BloombergNEF


But GM isn't the only global auto major with significant plans for electric vehicles. Each one sees not just a future in EVs, but also their company's place in that future. And lots of other major companies see electric vehicles as integral to the future of their businesses, too, even if their business isn't automobiles. It'll be every large automaker's challenge to see which companies can electrify their offerings on a global scale.  

Weekend reading

More than 630 companies from 43 countries have pegged their corporate emissions targets to the Science-Based Targets Initiative.
The University of California's $13.4 billion endowment will be "fossil free" by the end of September, according to university officials.
Harvard University's $38 billon endowment is joining Climate Action 100+ in order to directly engage with more than 100 "systematically important emitters" that account for two-thirds of global emissions.  
Tim Harford on why climate change economist Martin Weitzman "rocked my world."
Wealthy families are putting environmental, social and governance charters into the founding principles of their private investment firms.
An explainer on repo, the Federal Reserve repurchase agreements that allow banks to meet their short-term funding needs (and sprung back into action this week).
An examination of another kind of repo — repossession agents — and the private surveillance network they use to track automobile movements across the U.S.
Shira Ovide looks at Big Tech and the hunt for the "magic number."
Andreessen Horowitz general partner Alex Rampell has a fascinating history of the most valuable network of all time: the credit card.
Ford Motor Co. unveils a master plan to transform its Research & Engineering Center in Dearborn, Michigan.
A former Tesla engineer has set out to re-invent the humble home electrical panel.
Vikings probably hunted Iceland's walruses to extinction for their ivory.
YouTube is a revolutionary and hugely effective medium for transferring complex tacit knowledge.
"The Terraforming," an experimental postgraduate program at the Strelka Institute for Media, Architecture and Design.

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This analysis excludes Tesla Inc., as its 2018 production volume is not sufficient to qualify it as a major automaker. Being a wholly electric automaker, Tesla naturally has the highest revenue from EV sales of any automaker of any size.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Nathaniel Bullard at

To contact the editor responsible for this story:
Brooke Sample at
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