China’s Upcoming 5-year Plan Set to Fuel More Electric Bus Market Growth
The market for “New Energy Buses” – as they are called in China – not only continues to grow but is poised to experience an accelerating growth with the upcoming 13th 5-year plan. In 2015, it is estimated that as many as 300,000 electrified buses were built in China. Over 90% of these have some electrified component such as auxiliary power to reduce load and/or boost/idle hybridization. These power requirements vary widely in performance needs with many being low voltage and relatively low peak kW power. However, the fully electric passenger bus market is also becoming substantial in China.
There is no market study that we could find that specifically quantifies the market of fully electrified powertrain for 8- to 12-meter-long passenger buses requiring high torque powertrains of 150 – 300kW. But based on our dialogs with most of the major powertrain suppliers (SBE is a major supplier of DC Link components to this bus market in China), we estimate that in 2015, there were over 10,000 fully electric 8 – 12 meter passenger buses built in China and that in 2016 that number will be at least 20,000 buses and possibly more. By our estimates, as many as 40,000 is possible over the next 12 – 18 months.
The bus market in China is highly regionalized with each of the provinces having their own full bus manufacturing infrastructure. Buying decisions are highly political and favor local economic impacts. One of the exceptions to the regional supply base is electrified powertrains and batteries. Unlike what is seen in the low power auxiliary and boost market, for full power – high torque systems, there is still a more limited number of regional players, even though this is changing quickly. One of the most significant players in this market is Shenzhen-based company Broad Ocean or “Da Yang” as it is named in China. They recently purchased E-Drive in Shanghai and Prestolite Electronic Propulsion in Beijing making it, as far as we know, the only high peak power inverter supplier with manufacturing in each of these three most important urban centers in China. Interestingly, SBE is a key supplier to this Chinese market leader.
China’s 5-year Plan
China’s 12th 5-year plan, introduced in March of 2011, called for rapid expansion of electrification. While the vehicle count continues to grow, the current challenge is charging stations and localized infrastructure capability. It is estimated that over 75% of the plug-in electric cars in China never run on electricity for a variety of reasons most notably the lack of charging access where it is needed and infrastructure limitations. In fact, many Chinese buy these vehicles for tax credits and for access to the urban areas closed off to normal combustion vehicles on a rotating basis. Any recent visitor to China can attest that this is a strongly enforced policy in the last year or so.
China’s 13th 5-year plan is due out this month. The expectation is for an actual ramp up of fully electric buses from the current demonstrated volumes, which are already the highest in the world. As pollution continues to plague the major urban centers of China – Beijing, Shanghai, Shenzhen, Guanzhou, etc. the population is increasingly demanding that the government take steps to improve the worsening situation. In addition to overall health concerns, there is also the upcoming Bejing 2022 Winter Olympic Games. It is widely expected that the upcoming 5-year plan will bridge the current urban situation, especially in Beijing, to a much cleaner urban environment than what is seen today. The fully electric 8 – 12 meter passenger bus is not only a visible example and reinforcement of this policy but is a practical need for the world’s most populous urban centers. Growth opportunity is therefore high.
If you have more interest in China’s Powertrain markets and/or information on the type of powertrains we develop at SBE, please feel free to contact our President & CEO, Ed Sawyer at [email protected] or 1-802-476-4146.