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Insights into the new energy vehicle market of 2030

12 August 2020
  • Angela Zheng

Seizing development opportunities during the next 10 years

The speed of new energy vehicle development is moving quickly. Here are several excerpts from news articles, released July 2020, to help you to learn about the speed of new energy vehicle development.

More DC fast chargers are being built across the United States. Electrify America expects to install or have under development approximately 800 total charging station with about 3,500 chargers by December 2021. 

 

The evolution of the most mature sector of the manufacturing industry

With the outbreak of Covid-19 and dramatic changes in the world trade war, we have profoundly understood the significance and meaning of “speed” in this era of VUCA (volatility, uncertainty, complexity and ambiguity). At the same time, the automobile industry is also undergoing fundamental and even disruptive changes in the fields, which are far beyond the confirmed engineering technologies or business models.

The engineering technologies and quality and supply chain systems in the automobile industry have accumulated for 130 years, as the most mature and complete core sector of the manufacturing industry. As what we have foreseen, the inner working mechanism of automobiles will undergo tremendous changes in the coming 10 to 15 years. Electrification, digitization, autonomous driving and sharing mobility will change and reshape the entire industry in an unprecedented way.

Therefore, creating sustainable value, mastering the most cutting-edge technology, and exploring the new business models become the only way in which the automotive industry can respond to this fundamental change. It has been predicted by IHS data that, by 2032, the global new energy vehicle output will account for 62% of the total vehicle output, including about 44% of the hybrid vehicle output and about 18% of the pure electric vehicle output—electrification represents the general trend.

In terms of development, ADAS (advanced driving assistance system) and vehicle-mounted PCs are clear manifestations of the intelligence trend. Japan has accumulated strong technologies as the pioneer of new energy vehicles while China and Europe, as the core engine of the world’s new mobility market, are in the leading positions within the industry.

During the past 10 years, the Chinese government has been promoting new energy vehicle technologies through its policies to achieve the national strategy of overtaking. The Fuel-efficient and New Energy Vehicle Industry Development Plan (2012-2020) issued by the State Council in 2012 proposed the specific industrial goals for the new energy vehicle industry. Both the subsidies for new energy vehicle purchases and the dual-credit policy that was implemented in 2019 are guiding and supporting the new energy vehicle industry.

With the growth of this industry, huge potential is hidden in cities not subject to purchase restrictions, and the market driving force for electric vehicle consumption will become increasingly prominent. It is estimated that, by 2027, the generations born in the 2000s, 1990s and 1980s will account for 7.2%, 41.8% and 35.4% respectively among Chinese users purchasing new cars. These individuals have grown up in an Internet environment and this is a main driving force behind vehicles evolving towards advanced intelligent mobile terminals.

In the past two years, European governments have also started to promote new energy vehicle development and learned from China to release the policy of granting subsidies to new energy vehicle purchases. European governments have even launched stricter policies of removing internal combustion engine vehicles from the market.

European governments’ policies and laws on carbon dioxide emissions and strong growth of SUV models are the main forces driving electrification. In terms of policies, the Netherlands and Norway will ban the sales of new gasoline vehicles and diesel vehicles starting in 2025; Germany will start the ban starting in 2030; England and France will start the ban in 2040.

OEMs that fail to meet the EU emission standards will be fined billions of euros starting in 2020. In terms of the market, the explosive demand for SUVs in the EU market has caused higher emissions, intensifying the pressure on OEMs.

The new energy development in the United States is relatively lagging behind because of the different oil policies adopted by the U.S. government, plus, the habits of U.S. consumers. However, the new energy vehicle technology boom and business model led by Tesla is the catalyst of  disruptive innovation. Tesla has overturned and threatened the dominant position and technical barriers of traditional vehicle enterprises. The Model3 has brought a catfish effect in China’s new energy vehicle market after its successful localized production in China, as well as rapidly braking the original structure and landscape of China’s, and even the world’s, new energy vehicle markets.

IHS Markit Powertrain Production Forecast shows 2032 global propulsion design islands. 

Challenges faced by the new energy vehicle industry

The industry chain of the global automobile industry is also undergoing transformation and restructuring. There are many questions to answer, such as:

  • How can traditional automobile enterprises control the transformation pace to maintain the profit of the stock market of internal combustion engine vehicles and create new growth points in the fields of new energy vehicle power and intelligent networking?
  • How can electronic and electrical enterprises, which are new players (cross-industry operators) in the automobile field, move their products to the new application scenarios of vehicles while meeting the system specifications and development cycles of the automobile industry?

All these issues, and others, are new pain points and challenges faced by the new energy vehicle industry.

Material innovation is the foundation of all industrial products

DSM, a global engineering materials supplier, has developed materials solutions in the automobile, electronic and electrical industries for many years, and has accumulated market application experience and product mix advantages. Particularly, DSM has overseen a huge amount of research and experiments in selecting materials for new energy vehicle parts to conclude a set of its own material selection solutions. This is in hopes of removing some of customer confusion regarding materials and solving the problems they encounter in the actual work.

We believe that material innovation is the foundation of all industrial products. As a materials supplier, DSM is deeply aware of its responsibilities and obligations. We hope to bring value to the new energy industry through our efforts and make contributions in our power to promote sound development of the entire industry.

The drive system, charging system and fuel cell are the three major sectors in new energy vehicle development. How can we accurately use engineering materials for new energy vehicles? How can we make engineering materials play their maximum value? DSM material experts have experience in the complex design of the galvanic pile of hydrogen reaction and its accessories for fuel cells, as well as the avoidance of potential risks, such as ion precipitation.

As for the application and technical requirements of charging guns and high-voltage connectors, since the power system of electric vehicles usually operates under the high voltage of several hundred volts, and the current may be as high as several hundred amperes, electrical safety and reliability have become more important than before. Engineering materials for electrical insulation or structural housing parts will have higher requirements for thermal aging, fire resistance and insulation performance. DSM offers material solutions for all these applications. 

In terms of new energy powertrain applications, with the transformation of the power system from the internal combustion engine system to the electric drive system, high-performance plastics used for electrical insulation and structural parts are also changing. For electric vehicles, dielectric strength, volume resistivity, comparative tracking index (CTI), thermal conductivity, electromagnetic interference shielding and other properties are becoming the core concerns for selecting materials. DSM can help you find the suitable materials to use for these applications.

For additional questions, please contact your DSM Engineering Materials account manager or visit dsm.com/contactdep.

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