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Chinaplas 2019
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The wind of change is blowing! The Chinese automotive industry israpidly turning electric, and is leading the world's boom in the electric vehicle(EV) market. In fact, the Chinese government targets EVs to account for 12% ofoverall vehicle sales by 2020. Opportunities are therefore enormous. 

China is leading the way in the electric vehicle (EV) market.
China is leading the way in the electric vehicle (EV) market.

According to China Association Of Automobile Manufacturers (CAAM), 777,000 EVs were sold in China in 2017, up 53% when compared to 2016. It represents that about 2.7% of overall sales of 28,879,000 automobiles sold were EVs in last year.

Meanwhile, Southern China's tech hub Shenzhen completed the conversion of its entire bus fleet to battery electric vehicles. It is expected that other cities in the county will follow suit.

The Chinese government has been at the forefront driving the switch to new energy vehicles. To accelerate this transition in the country, the Ministry of Finance of the People’s Republic of China announced that the tax exemption, which was set to expire at the end of last year, would be running until Dec 31, 2020 for electric, plug-in petrol-electric hybrid and fuel-cell powered vehicles.

The domination of China in the EV market is obvious. While the growth rate of sales of EVs was significant in China last year, EVs still remain a niche market in the US with a declined growth rate.
A BYD electric bus in Shenzhen.
In last year, nearly 200,000 EVs were sold in the US, or about 1.2% of the 17 million vehicles sold over the course of the year, according to ev-volumes.com. The growth rate thus slowed down to 24% from 37% the previous year.

Domestic automakers having the upper hand

At this year’s Beijing Auto Show 2018 held earlier this year, a total of 1,022 models were on display. Of that number, 174 were new energy vehicles including 124 made by Chinese domestic automakers.

As a result of the strong growth in EVs, China has seen a surge of startups focusing on manufacturing new energy vehicles. Singulato Motor is one of these companies that come into spotlight.

Singulato is one of many Chinese startups that have rushed into the burgeoning new energy vehicle market in recent years, spurred on by central and local governments offering huge subsidies to put industry development on the fast track.

The company announced at the Beijing Auto Show that it has received a new round of funding worth RMB 3 billion, and has established a RMB 10 billion fund with the Suzhou municipal government for investing in related areas of EVs, such as battery, engineering, motors and artificial intelligence.
Singulato brought the production version of the iS6 electric SUV to the 2018 Beijing Auto Show.
Among an estimated 20 such startups have launched since 2014, the 10 largest had secured more than RMB 50 billion in investment by the end of 2017, according to  Caixin Media.

Meanwhile, many foreign automakers are collaborating with Chinese domestic enterprises in order to grasp a bigger pie in the Chinese EV market. Foreign automakers like Daimler, Toyota, GM, BMW, VW, Ford and the Renault-Nissan alliance, all announced joint-ventures to produce EVs in China over the last year.

Plastic industry eyeing novel opportunities

The mega trend of EV in China creates novel opportunities for various industries, including the plastic industry. In addition to the lightweight materials and corresponding processing technologies, the production of lithium battery separator films is particularly hot. China is the largest producer of lithium batteries in the world.

At CHINAPLAS 2018 recently held in Shanghai, some exhibitors shared the same view that business related to lithium battery separator films will be their growth engine in the near future.

SML is an Austria-based machinery manufacturer specialized in building high-performance extrusion equipment. “In the past few years, we had very good projects in China,” DI Martin Kaltenecker, head of Sales Department of SML, told CPRJ.

He mentioned that as the lithium batteries are widely used in China for E&E applications like mobiles, laptops and EVs, cast film machines which can be used for producing lithium battery films become the best-seller of SML.
Lithium battery production for EVs. (Photo: Nissan)
The Chinese market for lithium batteries is growing significantly. The electric-mobility is becoming more and more important in China due to the strict environmental regulations. Some big cities in Southern China like Shenzhen or Guangzhou are taking electric buses instead of conventional motor buses,” DI Martin Kaltenecker explained.

The leading extrusion line manufacturer Breyer has had fantastic business years in China, in particular when the leading extrusion lines manufacturer sold many lines for the production of backlight sheets for display monitors and flex screens.

However, the backlight sheets market is now saturated and corresponding technology has been changed. Therefore, Breyer has been strategically developing machines to meet the latest demand in the Chinese market, and EV is one of the focuses.

Now, a very hot and interesting product for us and for the Chinese market is the battery film, for example, films used in the lithium ion batteries for electric cars,” explained Rainer Hespeler, Director Strategic Sales, Breyer GmbH Maschinenfabrik.

In order to unlock the potential, the manufacturer introduced special calendering equipment for such films. With the equipment, more compression power can be put on the films so that the batteries can have more capacity.

In addition to the machine builders, some chemical suppliers are also targeting the lithium battery market of EVs. One of them is Braskem, the Brazilian based and the world’s leading thermoplastics resins and biopolymer producer.
The State Grid Corporation of China plans to establish an EV network of 120,000 public stations by 2020.
Braskem produces PE, PP and PVC resins, as well as basic petrochemicals such as ethylene, propylene, butadiene, chlorine, benzene, toluene, etc. The company has production units in Brazil, the US, Mexico and Germany.

For the company, CHINAPLAS 2018 was a show held at a unique time to promote its unique plastic and polymer solution.

It is a unique time as we have a unique plastic and polymer solution for some of the current growth in China,” explained Mark Nikolich, CEO, Braskem America. “China is experiencing a revolution and is leading the world in some unique areas like EV.”

The Chinese government and the industry are working together to accelerate the global adoption of EV. A big component is how to manage the energy in the EV, and therefore how to enhance the manufacturing of battery is a huge focus for special materials, he remarked.

Braskem’s UTEC polymer can be used to produce separators in lithium batteries that are produced in China. It has a very high growth rate which is over 25% per year of growth in this application. “UTEC has the unique properties that can produce efficient separators to increase the efficiencies of batteries,” said Mark Nikolich.

UTEC is Braskem's brand of Ultra High Molecular Weight Polyethylene (UHMWPE) with outstanding properties, such as high abrasion wear resistance and high impact resistance. The combined annual production capacity of UHMWPE of its facilities in the US and Brazil is 70 kilotons.

Mark Nikolich also commented that Chinese manufacturing industry has been upgrading technologies very quickly, and it was energizing and amazing to discuss the evolving EV technology trends in China.

Christopher Gee, UTEC Business Unit President, Braskem America, added: “When I went to visit Chinese customers’ plants, I was impressed with the level of sophistication of the productions and operations. I was also impressed with the dedication they have to high quality. They have clear specifications to meet the requirement of the industry.”


Why are the sales of electric vehicles rising fast in China?


Why is China leading the way in embracing EV technologies? There are several main reasons for that.

China is already the largest auto market in the world, but the number of vehicles per individual is still far less than developed countries such as the US. The country has over one billion population with rising per capita incomes, which means that there is a high demand for personal transportation. Automotive penetration will surely continue to grow, and the demand will not be met in an environmentally sustainable way using conventional vehicles.

Extensive government subsidy and charging grid empowering growth


With China keen to reduce carbon emissions, the government has been offering subsidies to buyers of EVs. Recently, some revisions were made to its policy: subsidies were ceased for vehicles with a driving range of under 150 kilometres, while vehicles with 300km of driving range will continue to receive the current level of subsidies. Meanwhile, those with driving ranges of over 400km are entitled to even higher subsidies.

Without the support of an extensive charging infrastructure, the sales of EVs cannot grow. With regards to this, the state-owned electric utility company The State Grid Corporation of China announced earlier this year that it had planned to build 120,000 public charging stations for EVs throughout major regions in China by 2020. Most importantly, when the charging infrastructure is built, there’s no reason to go back to conventional transportation.

Lower EV price appealing consumers

Since most EVs sold in China are manufactured by domestic automakers which have been able to keep their production costs low, their prices are competitively lower compared to petrol driven cars.

The most popular range of EVs sold in China is priced between RMB 80,000 to 100,000, making it appealing to the country’s cost conscious buyers.

On the other hand, US buyers tend to prefer sport utility vehicles and trucks which cost less than EVs. And lower petrol prices might put off drivers wanting switch to EVs.

Accelerating the EV transition is one of the most effective ways that enable Chinese citizens to have their cars without jeopardizing air quality in its cities. With the aforementioned reasons, there is no sign for the sales of EVs to slow down in China.



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