Dr. Jonathan Weinert

1. Electric 2-wheelers in China:
Impact on Future Vehicle Electrification
Presentation to the CaFCP Working Group
Sept 11, 2007
Jonathan Weinert, PhD Candidate, ITS-Davis

2. Motivation & Purpose

3. Motivation & Purpose
1. China’s 2-wheeler market: unprecedented
case of electric drive competing successfully
against gasoline/ICEs

4. Motivation & Purpose
1. China’s 2-wheeler market: unprecedented
case of electric drive competing successfully
against gasoline/ICEs
2. Important to understand why and whether
this trend will continue

5. Motivation & Purpose
1. China’s 2-wheeler market: unprecedented
case of electric drive competing successfully
against gasoline/ICEs
2. Important to understand why and whether
this trend will continue
3. Could this adoption lead to EVs in China?

6. Table of Contents
1. Introduction to electric 2-wheelers
(E2Ws)
2. Forces driving and resisting E2W
growth in China
3. Impact on vehicle electrification

7. Part 1:
Introduction to E2Ws

8. FAQs of E2Ws
Cost $150-300
Speed 25-40 km/hr
Power 240-500 W
Range 30-70 km
Fuel Efficiency 70-80 km/kWh

9. Motorized Vehicle Sales in China
15M
Motorcycles
Electric 2-wheelers
personal cars
10M
Vehicles
/yr
5M
0M
‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06
Source: E-bikes: Jamerson and Benjamin “Electric Bike World Report (2007 edition)”, Personal car & autos: China
Bureau of Statistics 2006, Motorcycles: Ohara (2006), Honda Annual Report (2003 and 2006)

10. Observed 2-wheel Vehicle Proportions in Chinese Cities
2006-2007
E-bike Motorcycle or scooter Bicycle
100%
50%
0%
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- Sample Size: Total 7,933. Chengdu 487, Nanjing 224, Jinan 356, , Xian 193, Shanghai-city 3,226, Shanghai-outer
suburbs 1,270, Tai An 219, Weifang 41, Tianjin 976, Shijiazhuang 600,Beijing 341
- Data was obtained by measuring vehicle flow at various intersections throughout each city.

11. Why E2Ws so
successful in China?
Timely convergence of 3 factors:
• Many cities banned gasoline scooters/
motorcycles in late 90s
• Incomes rising
• majority of E2W users shifting from
bicycle and public transit
• E2Ws became cheaper as technology
improved

13. Well to Wheels Energy Consumption
15 Tank-to-
Well-to-Tank
Wheels
12
MJ/ 9 Motorcycle (50cc)
100km 6
3 Electric 2-wheeler
0
Efficiency Raw Fuel Fuel Transmission Charging Vehicle
Assumptions Extraction Production / Distribution
Motorcycle 93% 83% 96% n/a 29 km/litre
E-bike 90% 33% 93% 82% 75 km/kWh
Sources: Wang (2002), Cherry (2007), GM European Well-to-wheels Study (2002), Burke et al (2000). For
reference, car consumes 330 MJ/100km WTW

14. Vehicle Ownership in China
(Based on Annual Sales Data)
200M
Motorcycles
Electric 2-wheelers
160M
personal cars
Vehicles
120M
80M
40M
0M
‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06
Assumptions: Average vehicle lifetime: E2W=5yrs, MC=10yrs, Car=12yrs. Annual Sales data from China Bureau of Statistics 2006,
Motorcycles: Ohara (2006), Honda Annual Report (2003 and 2006)

15. Vehicle Well-to-Wheel Energy Demand
8.5B Vehicles
Motorcycle (gasoline) (2006)
E2W (Electricity, 75% coal based)
6.8B
Personal Car (gasoline) 15M
33M
5.1B
GJ
3.4B
120M
1.7B
0B
‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06
Assumptions: WTW Fuel Use (MJ/km): MC=12, E2W=1.9, car=33.2. Average VMT (km/yr):
MC=4,300, E2W=3,000, car=14,000

16. Levelized Cost of Common Private Transport Modes
15
Vehicle Purchase
Fuel (or bus fare)
Maintenance
10 Battery Replacement
License Fee
$/
100km
5
0
Bicycle E-bike Motorcycle Compact car
Source: Interviews with Shanghai e-bike and scooter retailers, Annual mileage from Cherry and Cervero 2006
Assumptions: fuel economy: e-bike=15Wh/km, scooter=25km/l, compact car 10km/l. Fuel cost: gasoline cost=4.5RMB/l, electricity
cost=8.6RMB/kWh, bus fare=2RMB/trip.Vehicle lifetime: bicycle and e-bike=7yr, scooter and motorcycle=10yr, car=15yrs.

17. Air Emissions of E2Ws vs. Motorcycles
Motorcycle E-bike
60
45
g/km
30
15
0
CO2 CO VOC PM NOx SO2
(x10^-2 g/km) (x10^-2 g/km) (x10^-2 g/km)
Source: Cherry (2007), Zhang et al (2001), and Meszler (2007)

18. 2006 Worldwide E2W Sales
China
India
Japan
Europe
SE Asia
USA
14 million 0.7 million
Jamerson and Benjamin “Electric Bike World Report” (2007) www.ebwr.com ”

19. Batteries for E2Ws
• 90% use valve regulated
lead-acid (VRLA)
• 7% Li-ion, 3% Ni-MH/Cad
VRLA Li-ion
Specific Energy (Wh/kg) 35 110
Energy Density (Wh/L) 86 170
Power Density (W/L) 240 350
Cost ($/kWh) 125 505
Cycle Life 300 800

20. Part 2:
Driving and Resisting
Forces for E2W Growth

21. Methodology:
Force Field Analysis
A tool for analyzing the forces pushing a system toward
change and the forces resisting it
Steps
1. Identify system of focus and boundaries
2. List driving and restraining “forces”
3. Determine inter-relatedness of forces
4. Chart force field diagram

22. Forces Driving E2W Market Growth
Root Cause Secondary Causes Resulting Force
Modular Product
Architecture Open-Modular E2W &
Battery Performance &
Industry Cost Improvement
Module Technology
Structure Innovation
Options
Module
Standardization
High Demand for
Weak IPR
“Low-end” Private Local E2W
Protection
Motorized Transport Policy Support
Large lower class
of bicycle/transit
users Increased
Travel Strained Public
Demand Transit
Rising Income
Traffic
Urbanization Local
Congestion
Motorcycle Bans
Housing
Restrictions Lifted
Poor Air
Quality
National Energy Nat’l E2W
Efficiency Goals Policy Support
Note: = inverse relationship

23. E2W Cost and Performance:
Signs of Innovation
1. Battery & motor technology improved:
1. energy density (30%), battery lifetime
(160%), motor efficiency (60%)
2. E2W costs fell 30% from 1999 to 2006
3. Increased use of advanced battery
technology in E2W (~0 to 10% by 2006)

26. The E2W Industry
Structure
Closed-Integral Open-Modular
A B Assemblers A B C
X Y Suppliers X Y Z
J K
“vertical” “horizontal”
Ge, D. and T. Fujimoto, Quasi-open Product Architecture and Technological Lock-in: An Exploratory Study on
the Chinese Motorcycle Industry, 2004

27. Comparison of Industry
Structures
Closed-integral Open-Modular
Steady accumulation of “Creative destruction”
tacit knowledge within of many smaller firms,
Driver of Innovation long-lived corporation simultaneous
competition and
cross-pollination
Product development Top-down Bottom-up
R&D capability high low
Costs high low
Compatibility of parts between
low high
different brands and models
Assembler barriers to entry high low
Ohara, M., Interfirm relations under late industrialization in China : the supplier system in the
motorcycle industry 2006
Steinfeld, E.S., Chinese Enterprise Development and the Challenge of Global Integration. 2002

28. E-bike Industry Structure
1,680 E2W Assemblers
Key
Modules
Battery Electric Motor Controller
~300 VRLA Brushless 100s MOSFET
100s
Brush
10s Li-ion
10s Ni-MH

29. Highly Modular
Product Architecture
• Major components “stand alone”
structurally and functionally
• Simple electrical information exchange
between components
• Flexible interfaces
• wires, connectors
Baldwin, C. and K. Clark, Managing in the Age of Modularity. Harvard Business Review, 1997
Ulrich, K., The role of product architecture in the manufacturing firm. Research Policy, 1995

31. Advantages of Modularity
in Manufacturing
• Standardization of components
➡ cost reduced through mass production
• Assemblers and suppliers independently
design and produce components
➡ Rate of innovation increases because of
enhanced competitive dynamics

32. Forces Resisting E2W Market Growth
Root Cause Secondary Causes Resulting Force
Innovation in
Motorcycle
Poor Air Quality Exhaust After-
treatment
High Power Superior Motorcycle Strong Demand
Engines Performance for Motorcycles
Gasoline: widely
available, quick refuel Regulation
Limiting E2W
Lead Pollution Speed, Power
VRLA Battery Life
Limitations
Low-quality
E2Ws
Reduced
Loose Regulation
of E2W Standard Higher
Traffic Safety/ E2W Bans
Efficiency
Power E2Ws
Growth in Traffic conflict Local
Support for Improved Public
Rising Incomes Automobile between auto Transit Service
Ownership and 2-wheeler Public Transit
National Automotive
Industry Support
Note: = inverse relationship

33. Force-Field Analysis
Driving Forces Chinese 2-Wheeler Market Restraining Forces
Local Motorcycle Bans
Strong Demand for
Motorcycles
Performance &
Cost Improvement
E2W
Bans
Local E2W
Policy Support
Better Public Transit
Strained Public Transit
Limited E2W Growth Strong E2W Growth

34. Part 3:
Impact on Vehicle
Electrification

35. Transition to EVs
Depends on...
1. Continued battery cost and performance
improvement
2. Switch from VRLA to Li-ion
3. Development of bigger, more powerful, more
sophisticated vehicles.

36. Technology Innovation
• E2W application: serves as Li-ion battery
technology “incubator”.
• Cost, performance improvements

37. VRLA vs. Li-ion Battery
Comparison for E2W
Assumptions:
• 48V
• 60km range (0.9 kWh)
• 350W motor
VRLA Li-ion
Cost ($) 113 424
Mass (kg) 26 8
Lifetime (yrs) 3 9
Volume (l) 10 5
Recharging Safety high low
Temperature Effects moderate high

38. E2W vs EVs:
Power System Comparison
Battery pack capacity ( kWh) 0.8-1.0 5-10
Max Current (A) 20-30 270
Voltage (V) 48-60 48
Modules/pack (typical) 4-5 8
Cells in series 24
Peak motor power (kW) 0.5-1.0 13
Weight 70-90 700

41. Product Line Expansion
• Expansion into more powerful,
sophisticated, higher-margin product lines

42. Obstacles
• Fundamental differences between E2W and
EV battery systems
1. Size (Cost)
2. Safety (high voltage system, Li-ion battery
recharging)
3. Cell Variability affects lifetime
• Recharging Infrastructure

44. Conclusions:
• A modular product (with right political &
market conditions) led to an open, decentralized
industry
• Intense competition: cost and performance
improve
• E2W industry expanding into bigger product
lines.
• increasingly competitive with motorcycles
• Key is shift to Li-ion battery technology

45. Acknowledgements
• ITS-Davis, China Center for Energy and Transportation
• Advisors: Prof. Joan Ogden, Prof. Dan Sperling, Dr. Andy
Burke,
• Collaborators: Chris Cherry, Chaktan Ma