China kicks off the clean energy competition, who will be the guiding light?

As the curtain of traditional fuel vehicles being delisted has just been raised, China's new energy vehicle market has entered a new stage of competition.

On September 13, the "Implementation Plan on Expanding the Production of Biofuel Ethanol and Promoting the Use of Ethanol Gasoline for Vehicles" (hereinafter referred to as the "Plan"), jointly issued by 15 departments including the National Development and Reform Commission and the National Energy Administration, was officially announced, setting the national popularization time for ethanol gasoline in 2020.

Just one week after the announcement of the "Plan", on September 20, Shanghai took the lead in releasing the "Shanghai Fuel Cell Vehicle Development Plan", which clarified the development tasks of Shanghai fuel cell vehicles, including building an application-driven development model, planning the construction of hydrogen refueling stations, building a public service platform, creating industrial parks, implementing major projects, and establishing industrial funds.

This should be good news for Toyota, which will conduct hydrogen fuel power demonstration in China next month. It is also formulating a priority timetable for its entry into China for its hydrogen fuel cell battery car, "Mirai", which is positioned as the pillar of the next generation of environmentally friendly vehicles.

In fact, the term "clean energy vehicle" has already appeared in the 2017 Government Work Report. This has appeared in the work report of this government since 2013. Some analysts pointed out that this is partly due to the government's more comprehensive and scientific understanding of the concept of "new energy vehicles", and partly because it hopes that domestic consumers can have a further understanding of this.

Abroad, the meaning of new energy vehicles is "clean energy vehicles", which include electric vehicles, hybrid vehicles, diesel vehicles, natural gas vehicles, hydrogen fuel vehicles, methanol vehicles and other aspects. Especially in today's global energy consumption is too dependent on fossil energy, further increasing the proportion of new clean energy has become a consensus among countries.

As the largest market for new energy vehicles in the world, China has long been responsible for reducing automobile dependence on oil and improving fuel economy.

Behind the promotion of ethanol gasoline

On September 13, "ethanol gasoline" suddenly became a hot keyword for people to search. On the same day, a "Plan" jointly issued by 15 departments including the National Development and Reform Commission and the National Energy Administration clearly stated that the use of ethanol gasoline for vehicles will be promoted nationwide in 2020. As soon as the news came out, "ethanol gasoline" quickly and frequently came into people's eyes.

It is understood that ethanol gasoline for vehicles refers to the addition of a certain proportion of biofuel ethanol (commonly known as fuel alcohol) to gasoline. According to my country's regulations, the figure is 10%. At present, 11 provinces and regions across the country (including the entire territory of Heilongjiang, Henan, Jilin, Liaoning, Anhui, and Guangxi, and 31 cities in Hebei, Shandong, Jiangsu, Inner Mongolia, and Hubei) have piloted the promotion of ethanol gasoline, and the consumption of ethanol gasoline has accounted for 1/5 of the total gasoline consumption in the country during the same period.

According to the statement of the head of the National Energy Administration, the logic behind the introduction of this plan is to use expired and over-standard corn, waste straw, etc. as raw materials to produce clean gasoline to help solve the problems of smog and other problems. At the same time, more importantly, the development of biofuel ethanol can improve my country's ability to regulate grain production, inventory and prices, and establish a long-term, stable and controllable processing and transformation regulation channel for bulk agricultural products.

Relevant data show that as of now, my country's annual consumption of biofuel ethanol is nearly 2.6 million tons, and the industry scale ranks third in the world. But compared with the United States, which currently has an annual ethanol consumption of 45.54 million tons, there is still a huge gap.

To this end, the Plan also clearly outlines the development plan for the next ten years: "By 2020, the use of ethanol gasoline for vehicles will be promoted nationwide, basically achieving full coverage, a market-oriented operation mechanism will be initially established, an advanced bio-liquid fuel innovation system will be initially constructed, a 50,000-ton cellulosic fuel ethanol unit will be put into demonstration operation, and the overall development of the bio-fuel ethanol industry will reach the international advanced level. By 2025, we will strive to achieve large-scale production of cellulosic ethanol, and the advanced bio-liquid fuel technology, equipment and industry will reach international standards as a whole, forming a more complete market-oriented operation mechanism. ”

“Ethanol has a relatively high oxygen content. Compared with gasoline, it can burn more fully and emit fewer pollutants. Moreover, adding 10% ethanol can reduce emissions by more than 10%, and the fuel consumption of the car will also be reduced. From the perspective of energy conservation and emission reduction, it is definitely beneficial.” Yin Chengliang, deputy director of the Automotive Engineering Research Institute of Shanghai Jiaotong University, affirmed the advantages of ethanol gasoline and expressed some concerns to the reporter of Time Weekly: “What the country will use to make ethanol in the future and how to learn from historical experiences and lessons will be the key.”

On the other hand, consumers are more concerned about whether the performance and fuel consumption of vehicles will be affected after the full popularization of ethanol gasoline.

“Ethanol is water-soluble. After long-term use, metal parts of the engine and other parts are prone to rust, and non-metallic parts are prone to aging and damage due to expansion, which will also increase the cost of using the vehicle. In addition, ethanol is also relatively volatile. After adding it, the power of the vehicle will also decrease.” Yin Chengliang analyzed to the reporter of Time Weekly.

"Regarding ethanol gasoline, some provinces have already implemented it. Based on past experience, our gasoline models can also use ethanol gasoline. At the same time, considering the better performance of the car, we are also conducting further discussions with Toyota." GAC Toyota told the Times Weekly reporter.

BYD also expressed a similar view: "First, many provinces and cities in China are already using ethanol gasoline; second, the vehicles we are currently selling in these cities are still in relatively good operating condition."

According to the goals given in the "Medium- and Long-Term Development Plan for Renewable Energy" of the National Development and Reform Commission, the annual utilization of biofuel ethanol in my country will reach 10 million tons by 2020. In the foreseeable future, to achieve this goal, in addition to price issues, a series of related supporting measures such as market mechanisms and supervision need to be further improved.

Competition in the field of fuel cells begins

Relevant data show that from January to July 2017, China's dependence on foreign crude oil reached 69.39%. Behind the country's active promotion of ethanol gasoline, it is actually working hard to improve China's energy structure and reduce its dependence on crude oil.

BYD Chairman Chuan Fu recently said in an interview with the media that China is a country with more coal and less oil. Currently, Chinese consumers use two tons of oil a year to buy a car, and 62% of these two tons of oil are imported. Reducing dependence on oil is actually beneficial to China's oil security and energy security. Therefore, he boldly predicted that 2030 will be the time node for China to fully popularize electric vehicles.

Of course, this speculation is based on the statement made by Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology on September 9 that China has started the study of the timetable for the suspension of production and sales of traditional energy vehicles. Although China has not given a specific timetable for the delisting of traditional fuel vehicles, one fact that can be confirmed is that China's support for the development of new energy vehicles is increasing. At the same time, for the extension of "new energy vehicles", the government is also working hard to break the inherent impression that consumers only have "electric vehicles and hybrid vehicles" in their minds.

At this year's "Two Sessions", the government specifically proposed the promotion of "clean energy vehicles" in its work report, rather than "new energy vehicles". This shows that the government has a more comprehensive and scientific understanding of the concept of "new energy vehicles". In fact, the meaning of new energy vehicles abroad is "clean energy vehicles", including electric vehicles, hybrid vehicles, diesel vehicles, natural gas vehicles, hydrogen fuel vehicles, methanol vehicles and other aspects.

In fact, with the new energy "double points" policy about to be implemented and China's ambitious new energy vehicle production and sales plan, major automakers are accelerating the launch of various new energy vehicle projects. According to a recent research report released by McKinsey, Chinese automakers produced a total of 375,000 electric vehicles (EVs) in 2016, accounting for 43% of the global electric vehicle production, surpassing the global share of 40% in 2015.

Some analysts pointed out that after the hot sales of electric vehicles, fuel cell vehicles may become an arena for various automakers to compete in the Chinese new energy vehicle market.

At the 2017 TEDA Auto Forum held on September 8, Xu Chaoqian, deputy director of the High-tech Development and Industrialization Department of the Ministry of Science and Technology, mentioned that the international environment attaches great importance to hydrogen fuel, and China will continue to promote its hydrogen energy strategic goals: "In 2017, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the National Development and Reform Commission jointly issued a medium- and long-term development plan for the automobile industry, proposing to gradually expand the scope of pilot demonstration of fuel cell vehicles (FCEV). In terms of standard and regulatory construction, my country's hydrogen fuel regulations and testing platforms are gradually improving."

Ye Shengji, deputy secretary-general of the China Association of Automobile Manufacturers, also publicly stated: "We are actively exploring fuel diversification. We not only hope that energy will replace traditional energy through electric energy, but also hope to develop other alternative fuels."

According to the plan in the "Energy-saving and New Energy Vehicle Technology Roadmap" released by the country last year, by 2030, the sales scale of fuel vehicles will reach the level of one million vehicles.

Under policy encouragement, the enthusiasm of major automobile manufacturers is slowly being ignited. Since the beginning of this year, China's hydrogen fuel cells have entered the industrialization layout. SAIC, FAW and Dongfeng have begun planning and producing hundreds of fuel cell special vehicles to be put on the market. At the same time, Toyota, which has successfully developed a model for the private market two years ago, is also planning to build a professional hydrogen refueling station in China in October to start power verification tests.

However, it is foreseeable that although hydrogen fuel has natural advantages, the construction of hydrogen refueling stations, the improvement of technology and cost, the shortage of core suppliers of fuel cells and hydrogen supply systems, and the lack of specific industry standards will hinder the popularization and promotion of hydrogen fuel cells in China.

On September 20, the "Shanghai Fuel Cell Vehicle Development Plan" was first issued, clarifying the development tasks of Shanghai fuel cell vehicles, including building an application-driven development model, planning the construction of hydrogen refueling stations, building a public service platform, creating an industrial park, implementing major projects, and establishing an industrial fund.

"If Shanghai does not issue such a plan, once the industry starts in 2020, we will become 'getting up early and catching up late.'" Gan Pin, deputy director of the Shanghai Science and Technology Commission, said in an interview with the media that my country is an important potential market for fuel cell vehicles in the world. If it lags behind in this field, the advantages accumulated in the fields of pure electric and plug-in hybrid vehicles will be unsustainable.

Who can outperform?

We can see that the international community has always adopted a multi-route coexistence approach to the development of future power. For example, hydrogen fuel and hybrid power in the Japanese automobile industry are already relatively mature, while in South America there are methanol vehicles, and French cars are also developing air hybrid power. In the face of increasingly severe environmental governance, China's automobile industry is also exploring the possibility of multiple routes.

Under the new wave of new energy vehicles in China, for enterprises, mastering the reserves of multiple technical routes may be the key to being able to outperform in the future.

This is particularly evident in Geely Auto, led by "technical madman" Li Shufu. Geely Auto, which has now mastered the three technical routes of EV, PHEV and HEV, is intending to rely on the mid-to-high-end pure electric vehicle FE platform, small exclusive pure electric vehicle PE and CMA mid-range car basic modular architecture to vigorously promote the rapid implementation of the new energy strategy.

In the 8th batch of "Recommended Model Catalog for the Promotion and Application of New Energy Vehicles" released by the Ministry of Industry and Information Technology on September 1, 2017, Geely Auto ranked first with 47 models in terms of passenger car enterprise product layout. This has obviously laid a solid foundation for Geely Auto, which is striving to achieve a 90% share of new energy vehicle sales by 2020.

In addition, for Li Shufu, who strongly called for the promotion of methanol vehicles at the National People's Congress, Geely will also achieve success in the field of methanol vehicles in the future.

"We have developed 4 methanol-powered and 14 complete vehicle products, breaking through the bottlenecks of core technologies and key components of the fuel supply system, and overcoming technical problems such as cold start, fuel supply and high temperature resistance and corrosion resistance of key components. We are currently developing high compression ratio methanol power and exploring turbocharging and direct injection methanol power, which will make the products more efficient and environmentally friendly." Geely told the Times Weekly reporter that Geely, which has 12 years of experience in methanol research and development, has now launched mature products to the market, and has surpassed traditional gasoline vehicles in terms of safety, economy, power, environmental protection and reliability, and won the top place in the evaluation of the Ministry of Science and Technology's 863 project.

Today, the continuous innovation and application of technology has made Geely clearly state in its "Blue Geely" strategy released in 2015 that by 2020, Geely's new energy vehicles will save 4.2 million tons of oil and reduce carbon dioxide emissions by 3 million tons each year.

At the same time, passenger car companies that also focus on the development of clean energy like Geely include SAIC, Chery and BAIC. Among them, the e950 fuel cell sedan launched by SAIC Roewe can use "power battery + hydrogen fuel cell system" as a dual power source, and the vehicle's uniform speed range can reach 400 kilometers.

In addition, major bus and special vehicle manufacturers, such as Yutong, Foton, King Long, CRRC, Youngman Automobile, FAW, etc., have already intensively deployed fuel cell vehicles.