Impact of Lower Price of Power Battery on New Energy Vehicles

By 2030, the economy of new energy vehicles will gradually become more prominent. The replacement of oil will continue to expand, but it will not be subversive. It will mainly focus on road gasoline, which accounts for 20 % of oil consumption.

On November 8, 2017, the China Petroleum Economic and Technological Research Institute and the Japan Energy Economic Research Institute jointly organized the 11th China-Japan Oil and Gas Market Research Results Exchange. The meeting discussed the opportunities and challenges of the Asian oil and gas market. The Chinese side mainly focused on the development of new energy vehicles in China to replace traditional energy sources.

“When new energy vehicles have the strength to compete with fuel vehicles, the era of peak oil will come.” Dai Jiaquan, director of the Petroleum Research Institute of China Petroleum Institute of Economics and Technology, told the interface reporters that the average unit of power batteries for new energy vehicles When the cost drops to 775 yuan / kWh, its economy will be roughly the same as the fuel car. According to the forecast of the China Petroleum Economic and Technological Research Institute, the cost of China's new energy vehicle power battery in 2017 is 1700 yuan / kWh.

"Around 2030, the cost of new energy vehicles is economically competitive relative to fuel vehicles. Mr. Dai Jiaquan told the meeting that new energy car power cells were expected to fall to 700 yuan/kWh by 2030, due to four main reasons: lower material costs, higher energy density, reduced battery PACK(battery components) and economies of scale. "Given that the car's life span is 10-15 years, China needs to ban the sale of fuel trucks after 2040. By 2050, he says, the proportion of all cars in China will not exceed 15 per cent.

"Comprehensive trends such as mileage and ownership are expected to replace 4.03 million tons of oil equivalent in new energy vehicles in 2020, accounting for 1 % of the total domestic oil product in that year; In 2030, 24.84 million tons of oil equivalent were replaced, accounting for 6.7 % of the total oil produced in that year. The Petro China Institute of Economics and Technology issued a report at the meeting.

Growth in new-energy vehicles has slowed this year, despite falling costs.

Accumulated sales of new energy vehicles in China in the first nine months of this year were 398,000 vehicles, up 37.7 per cent from a year earlier, according to the China Automobile Industry Association. Sales of 28.03 million vehicles and 507,000 new energy vehicles were up 53 per cent from a year earlier, accounting for 1.81 per cent of total car sales. In the same year, the proportion of new energy vehicles in the world was 0.8 %.

The market structure of new energy vehicles is also constantly being adjusted. Domestic new energy vehicles are mainly divided into two categories: pure electric vehicles and hybrid vehicles. In terms of market structure, plug-in hybrids have shrunk significantly, accounting for about 82 % of total electric vehicle sales in the first nine months of this year, and about 18 % of plug-in hybrid vehicles, compared with 40 % in 2014.

"This is a sensitive response to policy changes in new-energy vehicles. Mr. Dai Jiaquan said the market had not played a decisive role in the impact of the new energy car development policy.

In the first half of this year, demand for new energy car batteries was negative year on year, as subsidies receded and regulatory access standards were reassessed. At the same time, the new energy commercial vehicle subsidy, which accounts for nearly 30 % of new energy vehicles, has dropped by more than 50 %, and requires non-individual users to purchase new energy vehicles to apply for subsidies, and the cumulative mileage must reach 30,000 kilometers.

"The mileage problem is also a cost problem in essence, and you can solve it by adding more batteries. "Dai Jiaquan said that the high relative cost is still the most important factor that restricts the development of new energy vehicles. According to the pure electric passenger car, it consumes 15 kWh of 100 kilometers of electricity, and the battery ratio is 150 Wh/kg after the group, and the 200kg battery can be renewed. 20,000 kilometers, Adding the same battery can achieve the best mileage of 40,000 kilometers, but this will also increase the cost. "In the future, new energy vehicles will be mainly passenger vehicles(private cars). " he said.

Overall, policy is still vigorously driving the development of new energy vehicles. On September 28, the Ministry of Industry and Information Technology, the Ministry of Commerce, and other departments jointly issued the "Measures for the Management of Average Fuel Consumption and New Energy Vehicle Points in Passenger Vehicle Enterprises". According to the document, passenger vehicle companies with annual production or imports of less than 30,000 passenger vehicles for traditional energy vehicles do not set the requirements for the proportion of new energy vehicles; If more than 30,000 vehicles are reached, the proportion of new energy car points will be set from 2019, including fuel consumption points and new energy car points. Among them, the ratio requirements for new energy vehicles in 2019 and 2020 are 10 % and 12 %, respectively, and the annual ratio will be announced separately by the Ministry of Industry and Information Technology.

"The positive and negative points trading funds between car companies will replace the state subsidy funds and will be used to stimulate the development of car companies. Mr. Dai Jiaquan said fuel consumption points could be carried forward in the context of the dual-point system, new energy car points could be traded, and new energy vehicles could become a major task indicator for the development of car companies.

"The alternative focus for new energy vehicles is on road gasoline, which accounts for about 20 per cent of total oil consumption. Mr. Dai Jiaquan told an interface journalist that China's transport sector used about 290 million tons of oil last year, accounting for 51 per cent of total domestic oil consumption; Among them, 117 million tons of gasoline are used for roads, accounting for about 20 % of the total oil consumption.

In addition to road gasoline, the Petro China Institute of Economics and Technology reported that new energy vehicles are not strong substitutes for other common oils, among which the power of diesel power,special coal and water fuel oil for road use is difficult to replace, and railway diesel is gradually reduced with the increase in railway electrification. "The substitution of new energy vehicles for oil products gradually expanded before 2030, but it is not subversive. "

"The key to the development of new energy vehicles is whether to optimize the National Energy structure, that is, not to increase the consumption of coal, resulting in the reverse substitution of coal for oil. Mr. Dai Jiaquan said the full life cycle of new energy vehicles meant more to protect the environment.

According to relevant data, from the perspective of the whole life cycle, the carbon dioxide emissions of new energy vehicles are 70% of that of conventional fuel vehicles, but the PM emissions are twice that of conventional fuel vehicles, and the emissions of sulfides are slightly higher than conventional fuels car.

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