ICCT research and models + a model bill on combustion vehicle phase-out at the bottom…
In China, ICCT research shows that cities have often leveraged their vehicle registration policies to encourage EVs and have used electrification programs focused on the local fleet, but Liuzhou’s success does not rely on that. There is no vehicle registration quota policy in Liuzhou and the majority of electric cars sold in Liuzhou were purchased by individuals instead of fleets.
Wednesday, 18 December 2019, ICCT Hongyang Cui and Hui He
For anyone seeking to understand the secrets behind China’s success in electric vehicle (EV) deployment, the Liuzhou case is a can’t-miss. In just two years, this little-known industrial city in southwestern China rose to become one of the leading EV markets in the world. It’s not quite one of the EV capitals, but it punches above its weight in several ways that are worth examining.
First, the numbers. In 2018, the market share of electric cars in Liuzhou reached 20%, and this was second in all of China—only Shenzhen ranked higher. By the end of June 2019, Liuzhou’s total electric car sales had exceeded 47,000, and more than 90% of those sold were Baojun E100 and E200 micro two-seaters. These are pictured below and are produced by local manufacturer SAIC-GM-Wuling.
Liuzhou’s success is distinctive and intriguing. In China, our research shows that cities have often leveraged their vehicle registration quota policies to privilege EVs and have used electrification programs focused on the local fleet (e.g., taxi fleet and car-sharing vehicles) to stand out in the EV race. However, there is no vehicle registration quota policy in Liuzhou. Moreover, the majority of electric cars sold in Liuzhou were purchased by individuals instead of fleets. Given this, what on earth did Liuzhou do to achieve such impressive success? When we look closely, we see the efforts fall into two broad categories:
Engage consumers from the very beginning. In February 2017, Liuzhou initiated a 10-month Baojun E100 test drive campaign. This was five months before the new model was available on the market. In all, 2,111 Baojun E100 cars were offered for free test drive and more than 15,000 citizens participated in this campaign. This significantly increased consumer awareness about EVs in Liuzhou. According to official data, around 70% of the participants chose to purchase a Baojun E100 afterward.
Perhaps even more important than the test drive campaign was that SAIC-GM-Wuling and the Liuzhou municipal government invited test drive participants to make recommendations about improving both the vehicle and the convenience of using it in the city. More than 13,000 recommendations were received in all, and these helped the manufacturer to improve the vehicle’s performance and policymakers to design effective EV promotion policies.
Another innovative example of consumer engagement in Liuzhou is the Looking for New Parking Spaces campaign. Since Baojun E100s and E200s are very small, they can easily be parked in spaces that were not regarded as potential parking spaces before. A sidewalk, as pictured below, is one example. Beginning in September 2017, local policymakers invited all citizens to look for potential parking spaces for Baojun E100 and E200 cars in the city. Anyone who found a potential parking space could take a picture and send it to the campaign organizer; this individual would get a reward of 200 Chinese yuan. If a new parking space was ultimately created in the suggested space, the individual who found it would receive an additional reward of 500 Chinese yuan. There were only 678 EV-reserved parking spaces in Liuzhou as of September 18, 2017. This short campaign, which ran from September 24 to October 31, 2017, helped identify an additional 983 spaces, more than doubling the number of EV-reserved parking spaces in Liuzhou.
Leverage policy tools to serve consumers. Based on the responses to the survey of test drive participants, the Liuzhou municipal government developed a comprehensive set of incentives and policies. These include a vehicle purchase subsidy, a reserved parking space, free parking, the development of public, workplace, and residential area charging infrastructure, free charging, bus lane access, and a simplified procedure for vehicle purchase and registration. Specifically, most of the charging infrastructure in Liuzhou is in the form of three-way charging sockets with 2.2 kilowatts of power. Compared with typical AC chargers, these charging sockets are cheaper, add less burden to the grid, and fit the low-battery-capacity Baojun E100 and E200 cars very well.
Taken as a whole, Liuzhou’s success from these efforts has the potential to be a new model for the transition to EVs. Still, other cities will have to investigate ways to spur EV market development that are right for them, and Liuzhou’s case will not fit all. To learn about how other leading cities globally have paved the way for the transition to EVs, take a look at our latest paper about electric vehicle capitals.
Electric vehicle capitals: Showing the path to a mainstream market
This briefing assesses metropolitan area-level data on electric vehicle registrations and identifies the 25 largest electric vehicle markets, which together represent 42% of new passenger electric vehicle sales globally through 2018. To provide a blueprint for other governments, this briefing analyzes the incentives, charging infrastructure, and city promotion actions in these areas that are spurring electric vehicles into the mainstream.
From this research, we make the following three conclusions.
Cities in China continue to be the largest markets globally. Cities in China represent 5 of the 6 largest electric vehicle markets by cumulative electric vehicle sales. The top 13 markets in China have accounted for one quarter of all the electric vehicles sold globally through 2018—and more than in all of Europe or the United States during that period. In particular, Shanghai, with the most cumulative electric vehicle registrations, Shenzhen, with the most electric vehicle registrations in 2018, and Beijing, with the most cumulative and 2018 battery electric vehicle registrations, have implemented novel policies, developed massive charging infrastructure networks, and provided generous incentives to accelerate electric vehicle uptake. Other cities in China have followed with similar promotion actions to achieve high electric shares, such as Tianjin, Weifang, and Liuzhou (each with over 15% sales share in 2018).
Cities adapt as electric vehicles enter the mainstream. The top electric markets are quickly moving from early adopters to the mainstream consumer. Twelve of these 25 cities had an electric vehicle sales share of over 10% in 2018. The cities are adjusting their policies to reflect this market growth, with several taking steps to phase out cost-intensive policies like purchase incentives and toll exemptions. At the same time, cities are developing strong policies to assure the continued shift to electric vehicles, such as licensing restrictions on internal-combustion vehicles, zero-emission areas, and electrification requirements for public and private fleets. Cities are also continuing to expand charging infrastructure to keep pace with the electric vehicle market, including adopting EV-ready building codes to reduce the long-term costs.
As the global market grows, the role of the top cities remains crucial. As the global market has grown from under 1 million electric vehicles sold in 2015, to over 5 million through 2018, and over 7 million through late 2019, the top 25 metropolitan areas have consistently accounted for over 40% of the global electric vehicle stock. However, there are signs that the market is becoming less concentrated. The top 10 cities identified in this year’s study represented a lower share of the global stock in 2018 than in previous years. As battery costs fall, electric vehicle production expands to more markets, and more governments set electric vehicle targets, the policies from electric vehicle capitals are increasingly being adopted by more, and by smaller, cities looking to emulate leading markets. As electric vehicle sales grow worldwide, the lessons from these leaders will continue to be vital for governments to smoothly orchestrate the transition to the mainstream market.
The ICCT’s electric vehicle program aims to understand and describe what policies and incentives are most effective in the early growth stages for the global electric vehicle market. We analyze trends in electric-vehicle technologies and in vehicle markets; evaluate how regulation, tax incentives, non-fiscal promotional policies, and infrastructure are helping to drive the electric vehicle market; and compare the different policy approaches across countries and cities around the world to better understand the emerging best practices to accelerate the transition to electric drive. In addition to our research, we work directly with governments, particularly through the Zero-Emission Vehicle Alliance, to inform and support practical policy making that can facilitate the necessary technological transition to a zero-emission transportation sector.
The surge of electric vehicles in United States cities in 2018
This briefing paper analyzes 2018 electric vehicle uptake in the United States and the policy factors that are driving it. The paper catalogs 43 unique city, state, and utility electric vehicle promotion actions and their implementation across the 50 most populous U.S. metropolitan areas in 2018. The work identifies exemplary practices across various state and local policies, public and workplace charging infrastructure, consumer incentives, model availability, and the share of new vehicles that are plug-in electric.
The figure illustrates the share of new vehicle registrations that are plug-in electric (both fully electric and plug-in hybrid) across U.S. metropolitan areas in 2018, with the 50 most populous areas labeled. The San Jose area had the highest electric vehicle market share at 21%, followed by other California cities, Seattle, and Portland at 4% to 13%. Overall, the share of new vehicles that are plug-in electric in these 50 areas was 2.7%, compared to 1.0% elsewhere.
Based on the analysis, the authors offer four main observations:
States, cities, and utilities continue to develop comprehensive electric vehicle policy packages. Various state and local authorities are reducing consumer purchase barriers with policy, incentives, infrastructure buildout, and awareness campaigns. States adopting California’s ZEV regulations catalyze the market, expand model availability, and provide assurance for charging infrastructure investments. In 2018 and 2019, Colorado is adopting similar ZEV regulations, and New Jersey and Washington State have signaled their commitment to electric vehicles by joining the International Zero Emission Vehicle Alliance. Markets like Atlanta, Austin, Columbus, Denver, New York, Portland, Seattle, Washington, DC, and those in California continue to construct and implement their own electric vehicle promotion policies to help reach their emission-reduction goals.
Greater diversity and availability of electric vehicle options is essential to continued growth. The top five electric vehicle markets by volume, representing over 40% of all U.S. 2018 electric vehicle sales, each had at least 33 electric vehicle models available. However, across major U.S. markets, about half of the population has access to 14 or fewer electric models. According to the analysis, expanded model availability in more vehicle segments is key to continued market development. For example, the newly-available long-range Tesla Model 3 had approximately 130,000 sales in 2018, or half of all 2018 BEVs sales and greater than all U.S. electric vehicles sales in 2015.
Consumer incentives remain important. Electric vehicle prices have greatly decreased even as their electric ranges have increased. Yet, incentives remain important to reduce electric vehicles’ upfront cost. Consumer incentives, typically worth $2,000 to $5,000, were available through 2018 in nine of the 11 major metropolitan areas with the highest uptake. The exceptions are Seattle, where the state incentive expired in May 2018, and Washington, DC, where some drivers benefit from nearby Maryland’s state incentive. Incentives like carpool lane access and preferential parking policies benefit electric vehicle drivers in Nashville, Phoenix, Raleigh, Salt Lake City, and many areas in California. As the federal $7,500 electric vehicle tax credit begins to phase out for some manufacturers, continued state, city, and utility incentives will remain important.
Electric vehicles and the charging infrastructure network grow in tandem. Even though most charging occurs at home, electric vehicle market shares are typically larger where there is greater availability of public regular, public fast, and workplace charging infrastructure. Markets with high electric vehicle uptake have at least 400 public charge points per million people. By contrast, half of the U.S. population lives in markets with charging infrastructure at least 60% below this benchmark. In the top electric vehicle markets, about 10 to 25% of the available public charging is fast charging. The top electric vehicle markets also typically have at least 150 workplace charge points per million people, and San Jose, with the highest electric vehicle share in 2018, had about 9-times this value.
“Figure ES-1 illustrates the deployment of public and workplace charging infrastructure through 2017 as a percentage of what will be needed by 2025 across the 100 most populous U.S. metropolitan areas (the 50 most populous are labeled). Shades of red indicate that less than 50% of the needed charging has been installed through the end of 2017, while blues indicate that more than 50% of charging needed in 2025 was in place by 2017. Of the 100 areas, 88 had less than half of the total needed charging infrastructure in place, based on their expected electric vehicle growth.”