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1、As our premier thought leadership product,Citi GPS is designed to help readers navigate the most demanding challenges and greatest opportunities of the 21st century.We access the best elements of our global conversations with senior Citi professionals,academics,and corporate leaders to anticipate th
2、emes and trends in todays fast-changing and interconnected world.This is not a research report and does not constitute advice on investments or a solicitations to buy or sell any financial instruments.For more information on Citi GPS,please visit our website at OF GLOBAL ELECTRIC VEHICLE ADOPTIONA T
3、rip Around the WorldWhat is the current state of global electric vehicle adoption?Citis Global Auto team updates their electric vehicle(EV)forecasts to account for more robust factors including macroeconomic and inflationary pressures,new policies and subsidies,near-and long-term supply chain pressu
4、res,and the latest capacity and product announcements from automakers.We also dive deeper into the U.S.EV outlook with our latest survey measuring EV purchase consideration and price elasticity.2023 CitigroupPrimary AuthorsItay Michaeli Global Head of Autos&Mobility ResearchCiti Research+1-212-816-4
5、557|Uzair Alam,CFA Europe Autos&Auto Parts AnalystCiti Research+44-20-7986-8563|Justin Barell U.S.Autos&Mobility AnalystCiti Research+1-212-816-7815|Sanjay Bhagwani,CFA Europe Autos&Auto Parts AnalystCiti Research+44-20-7986-8561|Jeff Chung China Autos AnalystCiti Research+852-2501-2787|Bradley Eyst
6、er U.S.Autos&Mobility TeamCiti Research+1-212-816-3661|Paul Hwang Korea Autos&Consumer AnalystCiti Research+82-2-3705-0748|Arvind Sharma India Autos&Transportation AnalystCiti Research+91-22-6175-9852|Martin Wilkie Head of European Capital Goods ResearchCiti Research+44-207-986-4077|Arifumi Yoshida
7、Head of Pan-Asia Autos ResearchCiti Research+81-3-6776-4610| 2023 Citigroup3Heading into 2023,Citis Global Auto Team reviewed its latest forecasts for global,light vehicle electric vehicle(EV)penetration.Unlike past forecasts,todays forecasting process entails taking into account complex and evolvin
8、g factors from near-term macroeconomic and inflationary pressures to new policies and subsidies(some of which have yet to be fully defined,such as the U.S.Inflation Reduction Act),near-term and long-term supply-chain pressures and uncertainties,and the latest capacity and product announcements from
9、automakers.To gain a better understanding of some of these factors in the U.S.,we conducted a survey of U.S.consumers on EVs,focusing on areas such as purchase considerations and price elasticity.Comparing these results with those of a similar survey we ran in July 2022 yielded overall encouraging r
10、esults for U.S.EV adoption.Separately,and on a global scale,our latest EV penetration assessment yields a number of takeaways,including:(1)a significantly higher plug-in hybrid(PHEV)penetration outlook in China,(2)slightly lower U.S.EV penetration assumed through 2030;(3)a stronger EV adoption outlo
11、ok in Europe;and(4)a modestly higher EV penetration outlook in China,Europe,and the U.S.in 2025.Figure 1.Global New Energy Vehicle(NEV)PenetrationNote:The forecasts above reflect Citi NEV forecasts but for certain regions and timeframes(*),we augment these estimates with third-party production forec
12、asts.Source:Citi GPSNEV Penetration(BEV+PHEV)2015 2016 2017 2018 2019 20202021 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030EGlobal0.6%0.8%1.3%2.1%2.5%4.0%7.9%14.7%20.1%26.0%32.4%34.7%37.4%39.7%42.2%44.8%Europe*0.8%1.0%1.3%1.9%2.7%7.6%11.8%15.3%22.2%28.6%35.8%41.2%48.7%54.8%60.9%67.3%China*0.
13、9%1.3%2.2%4.3%5.1%5.9%15.7%28.0%39.0%50.5%62.7%63.5%64.2%65.0%65.8%66.6%U.S.0.7%0.9%1.2%2.0%1.9%2.2%3.3%6.1%9.6%11.7%15.9%22.1%27.1%31.4%36.8%45.8%Japan0.5%0.4%0.9%0.9%0.7%0.5%1.0%1.7%2.4%3.4%4.7%6.0%8.0%10.0%13.0%16.0%South Korea0.5%0.7%1.8%1.9%2.2%3.0%6.7%10.7%15.4%21.2%28.3%37.2%44.6%50.8%56.1%60
14、.5%India0.0%0.0%0.0%0.0%0.0%0.8%0.6%0.9%1.4%1.8%2.2%3.0%3.5%4.5%5.5%7.0%RoW*0.1%0.2%0.3%0.5%0.5%0.8%1.2%2.0%3.1%4.0%5.9%7.7%9.2%10.5%12.2%14.4%Other APAC0.0%0.1%0.1%0.1%0.2%1.0%0.9%1.3%2.8%3.8%7.0%8.7%9.9%11.1%12.2%13.2%Canada0.7%0.9%1.2%2.0%1.9%2.2%3.3%6.1%9.6%11.7%15.9%22.1%27.1%31.4%36.8%45.8%Mex
15、ico0.7%0.9%1.2%2.0%1.9%2.2%3.3%6.1%9.6%11.7%15.9%22.1%27.1%31.4%36.8%45.8%South America0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.2%0.4%1.4%2.0%3.4%4.7%6.2%8.0%Mid-East&Africa0.0%0.1%0.1%0.2%0.2%0.4%1.3%2.0%2.0%2.5%2.4%2.5%2.5%2.5%2.7%2.7%2023:State of Global EV Markets 2023 Citigroup4U.S.By all accounts,202
16、2 was a good year for U.S.EV adoption,with new vehicle sales penetration growing throughout the year to over 5%of total light vehicle sales.However,within this trajectory there was a combination of encouraging and less encouraging trends.On the encouraging side,2022 U.S.EV adoption continued to grow
17、 despite significant price increases implemented by automakers to offset rising input costs.Further,we estimate EV penetration in the premium and luxury segments exceeded 20%.On the less encouraging side,regional growth remained mixed,with two-thirds of total EV sales coming from just eight states.T
18、hose same eight states collectively make up roughly half of the total market for new passenger vehicles(ICE and EV),so EV sales continue to have a significant regional skew.In fact,data through the third quarter of 2022 indicates the year-to-date concentration of EV share in these eight states incre
19、ased versus 2021,suggesting that EV penetration has yet to meaningfully disperse across U.S.regions.Though U.S.EV penetration continues to lag other geographies,we continue to believe that the structure of the U.S.auto market lends itself well for a potential sharp and sudden inflection in EV demand
20、.This is because vehicle density in the U.S.the ratio of vehicles per household ranks highest in the world at greater than 2x,with around 285 million light vehicles on the road.EVs have gained in popularity not only for being electric,but also for containing state-of-the-art connectivity and over-th
21、e-air(OTA)software updates often with next-generation advanced driver assistance systems(ADAS/L2+)features.As the supply of available EVs grows and as EV charging infrastructure continues to expand,it is conceivable that an increasing number of U.S.households will rapidly decide to migrate to a one
22、internal combustion engine(ICE)and one EV household essentially retaining the best of both worlds.In theory,such a transition alone would yield a significant amount of EV demand that could feel like it materialized“overnight.”However,near-term affordability constraints are likely to limit the scope
23、of such a transition to the premium and luxury vehicle segments.Still,even if we limit our analysis to just the luxury segments(excluding pickup trucks)and assume that 50%of their installed base began to rapidly shift to EVs,that necessitates an addition of almost 10 million EVs to U.S.roads by our
24、estimates.This increase would support demand for perhaps 1.5 million to 2 million EVs annually versus the less than 1 million estimated in 2022.Incidentally,the first sign of such an“overnight”transition would likely be lower ICE sales not necessarily higher EV sales.Despite not yet seeing such sign
25、s,we are also yet to see how the U.S.EV market reacts to the flood of new products hitting the market in 2023-24,expanded EV charging infrastructure,and potential benefits from the Inflation Reduction Act.These trends will be important to track in 2023.Ultimately,the key point is that high U.S.vehic
26、le density is a unique trait that could conceivably catalyze much higher U.S.EV adoption as conditions for adoption continue to improve.How will EVs fare in 2023 amid the current economic downturn?We see several positive and negative factors to consider.On the positive side,we expect continued EV ad
27、option gains(supported by the results of our latest U.S.EV survey),a growing supply of available EVs,and benefits from the Inflation Reduction Act.At a minimum,we think these factors should drive higher premium and luxury EV adoption,particularly given the high baseline of vehicle density in the U.S
28、.,as discussed above.A Trip Around the World The Six Levels of Driving Automation(L0-L6)L0:No AutomationL1:Driver AssistanceL2:Partial AutomationL3:Conditional AutomationL4:High AutomationL5:Full Automation 2023 Citigroup5On the negative side,macroeconomic headwinds remain a risk,and for EVs this ri
29、sk is magnified by the significant over-indexing of EVs in distinct U.S.regions(i.e.,along the East and West coasts).Additionally,EV demand to date has been supported by a greater mix of younger buyers,and it is unclear how this buying cohort responds to an economic downturn.For example,with 35%of U
30、.S.EV sales coming from California,one could argue that EVs might prove more susceptible to tech industry layoffs and the resulting loss in broader consumer confidence.Even with rising underlying EV adoption,this could present something of a temporary“shock”to the EV adoption curve.Could U.S.EV dema
31、nd suffer in 2023?Quite possibly yes.Will that negatively affect EV penetration as measured by vehicle volume?Quite possibly no.Rather,we see a more likely scenario that the industry responds to macroeconomic pressures through a greater degree of price and mix actions(within reason)than production c
32、uts,for the following reasons:1.The EV/Car of the Future(automated vehicle)market share pie chart is still being formed:For virtually every player outside of Tesla(which still commands a 65%share of the U.S.EV market),establishing EV brand credentials and share of volume is arguably a more critical
33、objective than maximizing short-term profits.Automakers that have profitable ICE businesses and/or strong cash positions are likely to lean on these cushions to protect EV market share and brand-building objectives.For these companies,a downturn might even come to be viewed as an opportunity to stre
34、ngthen long-term EV positions to the extent less-capitalized companies become more vulnerable.If price and mix actions are conducted within reason,management teams might even come to conclude that their stock prices would excuse short-term profit pain if it meant emerging from the downturn with a me
35、asurably stronger EV brand and share position.The pushback to this line of thinking is that the auto industry might end up repeating the mistakes of the past building too much capacity on lofty sales and share goals that result in mediocre margins and low valuation multiples.Such pushback is valid,b
36、ut at this still early stage of U.S.EV adoption we think establishing brand and share positions is quite important,especially given our view of that connected EVs and automated vehicles(AVs)can unlock new revenue pools.2.Tight supply chains:Some automakers could become more reluctant to curtail prod
37、uction for fear of losing supply allocations in the future.3.Make money later:Most if not all newer EVs are equipped with advanced electrical architectures that enable far-reaching OTA software updates for enhancements such as new ADAS/L2+features,incremental driving features,and infotainment upgrad
38、es.Some of these enhancements are provided free of charge,but others are being sold as subscriptions or through one-time payments over the life of the vehicle.The resulting new revenue streams allow automakers to expand revenue pools beyond a vehicles initial sale and ownership period.It is early da
39、ys for such installed-base business models,but it is something that might also play a role in automakers calculus when weighing production cuts versus price cuts.2023 Citigroup6An“EV volume first”scenario would favor:(1)automakers whose valuations hinge more on proving out their EV share and brand c
40、redentials than meeting some near-term EV gross margin metric;(2)suppliers of EV components,as they would enjoy volume gains without facing as much exposure on the pricing side,though adverse mix could affect suppliers too;and(3)to the extent automakers maintain production on the view that profits c
41、an be recouped later through future OTA sales(e.g.,L2+features),then suppliers that enable such technologies/features could also benefit.With all of this in mind,our latest U.S.EV adoption outlook sees penetration rising to just over 9%in 2023(down from about 11%prior)and nearly 12%in 2024(down from
42、 about 13%prior).Our 2023-24 outlook assumes continued adoption gains across the premium and luxury segments driven primarily by higher EV purchase consideration and new product launches.The supply side of the equation is just as important as the demand side given supply chains are expected to remai
43、n tight throughout 2023.While our latest outlook is impacted by macroeconomic and pricing considerations,it also reflects the slower EV production ramps announced in recent months.This will of course remain a source of volatility throughout 2023.By 2025,we still see U.S.EV penetration reaching almos
44、t 15%,and by 2030 we now pencil in over 45%penetration versus 50%prior.Industry views on 2030 vary widely depending on ones view of future EV supply-chain constraints and the likelihood of automakers meeting prior targets.For example,one Tier-1 supplier we spoke with recently opined that 2030 U.S.EV
45、 penetration might only reach 25%-30%based on known automaker plans.Clearly,adoption in the latter part of the decade will depend on newer battery technologies and the ability to launch high-volume EVs at mass market prices.2023 Citigroup7Figure 2.U.S.EVs:Premium Consumer SegmentsFigure 3.U.S.EVs:Pi
46、ckup TrucksSource:Citi GPSSource:Citi GPSFigure 4.U.S.EVs:Luxury/High-Priced EV OfferingsFigure 5.U.S.EVs:Mass Market EVsSource:Citi GPSSource:Citi GPSThird-party production forecasts(e.g.,S&P Global)show 2025 North American EV production penetration of 17%with 2030 rising to 40%,broadly consistent
47、with our trajectory for U.S.EV sales penetration.Penetration for plug-in hybrids(PHEVs)is forecast to reach the mid-single digits by 2030,above our forecasts for continued low(1%)penetration through 2030.Figure 6.North America:BEV Penetration of ProductionFigure 7.North America:PHEV Penetration of P
48、roductionSource:S&P Global Mobility,Citi GPSSource:S&P Gobal Mobility,Citi GPS 2023 Citigroup8New U.S.EV Demand Survey To better understand consumer sentiment for EVs in the U.S.,we surveyed a panel of over 3,000 consumers,in November/December 2022,asking multiple questions pertaining to demand and
49、elasticity of demand with rising prices at very granular demographic levels.We then compared the results of this survey to a similar one we ran in July 2022.The key takeaways were as follows:EV consideration is on the rise for existing new vehicle owners with 65%considering an EV versus 59%in our pr
50、ior survey.Lessee consideration increased versus our prior survey and remains the cohort most likely to consider an EV.However,loan or cash buyer consideration also increased and grew at a faster rate.For non-owners,we noticed a slight decline versus our prior survey,but consideration remained quite
51、 high(73%).Demand remains fairly elastic,i.e.,sensitive to pricing,but we did observe some firming-up in the retention of potential demand versus our prior survey.We define the retention of potential demand as the percentage of respondents that would still consider purchasing an EV,on a sliding scal
52、e,at progressively higher price points than their current vehicle.Within this analysis,we also look to assess the potential revenue pool,defined as the retained demand(at individual price points)multiplied by the adjusted price.This metric also strengthened versus our prior survey.About EV Owners Su
53、rveyedOf the over 3,000 participants in the U.S.we surveyed,around 16%were existing EV owners(n=527).Notable observations from this EV owner cohort include:Average age is 36;median age is 34.Average household income level is$105,000.40%of owners live in the South,30%live in the West.Northeast and Mi
54、dwest ownership is split fairly evenly.At the state level,for the top five single states of ownership,California had 14%distribution,Florida 9%,New York 7%,Texas 7%,and Georgia 5%.Within the geographic landscape,around 50%of owners lived in an urban or metropolitan area while almost 41%lived in the
55、suburbs.Only around 9%lived in rural locations.60%are college graduates or have completed post-graduate degrees.70%of owners have more than three people living in their household.2023 Citigroup9EV Consideration and Price Elasticity When gauging EV purchase consideration and price elasticity,we group
56、ed survey participants into three buckets:(1)new vehicle lessees,(2)new vehicle loan or cash buyers,and(3)current non-vehicle owners(those that do not currently own or lease a vehicle).The purpose of these buckets was to better understand trends across different types of new vehicle buyers as well a
57、s the opportunity for market expansion from non-vehicle owners.We highlight these in two vectors:(1)EV consideration;(2)demand elasticity.EV ConsiderationIn general,our survey highlighted favorable EV consideration trends.In aggregate,among all new vehicle owners,EV consideration increased to 65%fro
58、m 59%in the July 2022 survey.We saw the greatest uptick compared with our prior survey in the$35,000-44,999,$25,000-34,999,and$65,000 and above price ranges.While the new vehicle owner cohort exhibited favorable trends,the cohort of non-vehicle owners did experience a minor decline in consideration
59、though total consideration remained high at 73%(versus 76%in our prior survey).Figure 8.U.S:EV Consideration Trends Total New BuyersFigure 9.U.S.:EV Consideration Trends Non-Owners,Lessees,Cash/Loan BuyersSource:Citi GPSSource:Citi GPSDemographic Spotlight:Largest Drivers of Increased ConsiderationW
60、hile the aforementioned three price ranges were responsible for the largest increases in EV consideration,we chose to focus on two of them in particular:1)owners with vehicles priced$35,000-44,999;and 2)owners with vehicles priced at$65,000 or above.We focused on these price bands due to current EV
61、offerings,availability,and associated price tags.Said differently,it would be very difficult to purchase an EV priced at approximately$30,000 today,so despite the favorable increase in consideration,it may be more challenging in the near term to fill demand at that price point(+/-15%).Total New Buye
62、rsBy Current Vehicle Price BandLess than$25,000$25,000-$34,999$35,000-$44,999$45,000-$54,999$55,000-$64,999$65,000 or more50%52%EV Consideration1st SurveyCurrent Survey59%65%56%62%59%69%70%72%73%74%76%82%Non-OwnersNew Buyers:LesseesBy Current Vehicle Price BandLess than$25,000$25,000-$34,999$35,000-
63、$44,999$45,000-$54,999$55,000-$64,999$65,000 or moreNew Buyers:Cash/Loan BuyersBy Current Vehicle Price BandLess than$25,000$25,000-$34,999$35,000-$44,999$45,000-$54,999$55,000-$64,999$65,000 or moreEV Consideration1st SurveyCurrent Survey76%73%75%78%64%61%76%73%67%83%79%83%90%91%96%100%51%58%41%46%
64、57%61%52%68%48%57%55%62%65%62%2023 Citigroup10For the two baskets in focus($35,000-44,999 and$65,000 and above),unsurprisingly,average income levels exceeded the average income of our survey by approximately$20,000 and$56,000,respectively.The average age of ownership for the$35,000-44,999 bucket was
65、 47.8 years and in line with the survey average age of ownership of 47.5 years,while the average age of ownership for the$65,000 and above bucket at 40.8 years was dramatically lower than the average.Perhaps the most interesting takeaway for the spotlight basket demographics was the state and region
66、al concentrations.For the$35,000-44,999 bucket the basket with the largest increase in consideration the regional and state level distribution was very much in line with the survey average.To us,this suggests that the incremental demand from this particular basket could prove more geographically bal
67、anced versus the current EV demand environment,which is concentrated in a handful of states.For the$65,000 and above bucket,the state and regional profile is very much overweight the same states in which EV demand is currently concentrated.Net-net,in terms of potential total addressable market expan
68、sion,the geographical footprint of the cohort of owners with vehicles priced at$35,000-44,999 is quite encouraging.Figure 10.U.S.EV Survey:Demographics by AgeFigure 11.U.S.EV Survey:Demographics by Income and RegionSource:Citi GPSSource:Citi GPSNew Vehicle Loan/Cash Buyers:Comparing EV purchase cons
69、ideration versus our prior survey,new vehicle loan/cash buyers had the largest increase at 58%versus just 51%in our prior survey.The weighted average consideration price increased slightly to$46,700 from$46,400 in our prior survey.New Vehicle Lessees:Lessees remain the cohort with the highest EV pur
70、chase consideration.Our survey showed that 78%of lessees were likely to consider an EV,up from 75%in our prior survey.Additionally,price point consideration amongst lessees also increased in our recent survey,driving the weighted average consideration price to$47,500 from$47,300 in our prior survey.
71、TotalTotal$35-$45k=$65kMale47%50%53%Female53%50%47%Age18-2410%8%10%25-3418%20%33%35-4418%17%21%45-5417%19%19%55-6417%13%6%65+20%23%11%Average Age47.547.840.8Median34Ownership PricebandTotalTotal$35-$45k=$65kHousehold IncomeUnder$25,00015%5%1%$25,000 to$49,99919%12%1%$50,000 to$74,99915%15%7%$75,000
72、to$99,99912%15%14%$100,000 to$199,99929%44%40%$200,000 or more9%10%35%Average Income$92,910$113,539$148,980Geographic RegionNortheast18%18%14%South40%41%40%Midwest21%19%18%West21%21%27%City/Suburbs/RuralUrban/metropolitan28%27%55%Suburban51%57%31%Rural21%16%14%Ownership Priceband 2023 Citigroup11Non
73、-Vehicle Owners:Despite EV consideration among this cohort declining slightly versus our prior survey,the percentage of those willing to consider purchasing an EV remained above 70%and is roughly in line with EV consideration rates of the new vehicle lessee cohort.Concurrent with this came a slight
74、decline in the average price of consideration,which registered$31,600 versus$32,000 in the prior survey.Demand ElasticityIn general,our survey suggests that demand remains fairly elastic relative to EV consideration.However,we observed some firming-up in the retention of potential demand.A quick exa
75、mple of how we express our findings:For owners of vehicles that cost$35,000-44,999:With a 5%price hike,demand was 91%of the initial sample;the potential revenue pool was 95%of the pre-price hike pool.With a 15%price hike,demand was 78%of the initial sample;the potential revenue pool was 89%of the pr
76、e-price hike pool.With a 30%price hike,demand was 57%of the initial sample;the potential revenue pool was 75%of the pre-price hike pool.For the aggregate of all new vehicle owners,we observed the following,by price bands.Figure 12.U.S:Demand Retention After Simulated Price Hike ScenariosSource:Citi
77、GPSOf the 30 total data points for demand retention,we observed that 83%improved versus our prior survey.This suggests that relative to our first survey,demand trends have become slightly more inelastic.Said differently,consumers are somewhat more willing to tolerate modestly higher prices in the cu
78、rrent macroeconomic environment.In fact,on average there has been around 5 percentage points and 7 percentage points of incremental consumer acceptance when the price increase was less than$5,000 and less than$10,000,respectively.Overall,we view this as an encouraging finding for EV adoption.Less th
79、an$25,000$21,000$23,000$26,000$30,000$36,000$21,000$23,000$26,000$30,000$36,000$21,000$23,000$26,000$30,000$36,000%of initial demand retained91%90%78%60%37%92%90%81%53%32%1%-1%3%-7%-4%$25,000-$34,999$31,500$34,500$39,000$45,000$54,000$31,500$34,500$39,000$45,000$54,000$31,500$34,500$39,000$45,000$54
80、,000%of initial demand retained89%78%50%29%22%90%81%53%27%21%1%3%2%-1%0%$35,000-$44,999$42,000$46,000$52,000$60,000$72,000$42,000$46,000$52,000$60,000$72,000$42,000$46,000$52,000$60,000$72,000%of initial demand retained92%72%47%30%20%87%72%50%45%25%-6%1%4%15%5%$45,000-$54,999$52,500$57,500$65,000$75
81、,000$90,000$52,500$57,500$65,000$75,000$90,000$52,500$57,500$65,000$75,000$90,000%of initial demand retained85%73%44%29%27%94%83%64%46%47%8%10%20%16%20%$55,000-$64,999$63,000$69,000$78,000$90,000$108,000$63,000$69,000$78,000$90,000$108,000$63,000$69,000$78,000$90,000$108,000%of initial demand retain
82、ed82%65%50%32%35%85%82%51%56%33%2%17%1%24%-2%$65,000 or more$73,500$80,500$91,000$105,000$126,000$73,500$80,500$91,000$105,000$126,000$73,500$80,500$91,000$105,000$126,000%of initial demand retained64%40%44%28%40%88%68%60%40%38%24%28%16%12%-3%Price Point of Existing VehicleDemand Retention:Price Hik
83、e ScenariosDemand Retention:Price Hike ScenariosDemand Retention Improvement(Decline)1st SurveyCurrent SurveyCurrent Survey vs.Prior SurveyWe define the retention of potential demand as the percentage of respondents that would still consider purchasing an EV,on a sliding scale,at progressively highe
84、r price points than their current vehicle.In addition to the retention of potential demand,we also assess the implied revenue pool at various price points.2023 Citigroup12Figure 13.U.S.:Revenue Pool Retention After Simulated Price Hike ScenariosSource:Citi GPSWhen looking at the aggregate revenue po
85、ol opportunity versus the baseline,for both our current and prior survey,we observed an average improvement of about 2 percentage points.Interestingly this benefit was largely driven by owners of vehicles priced less than$55,000 and their general willingness to incrementally tolerate all levels of p
86、roposed price hikes.For owners of vehicles over$55,000,there was little change in the total average implied revenue pool versus the baseline,though we did notice some improvement in revenue pool retention at the lower bands of price hikes($15,000 increase).Less than$25,000$21,000$23,000$26,000$30,00
87、0$36,000$21,000$23,000$26,000$30,000$36,000$21,000$23,000$26,000$30,000$36,000%of initial demand retained96%104%101%89%66%97%103%105%79%58%1%-1%4%-11%-8%$25,000-$34,999$31,500$34,500$39,000$45,000$54,000$31,500$34,500$39,000$45,000$54,000$31,500$34,500$39,000$45,000$54,000%of initial demand retained
88、93%90%65%43%39%94%93%68%41%39%1%3%3%-2%0%$35,000-$44,999$42,000$46,000$52,000$60,000$72,000$42,000$46,000$52,000$60,000$72,000$42,000$46,000$52,000$60,000$72,000%of initial demand retained97%82%61%45%36%91%83%66%67%45%-6%1%5%23%10%$45,000-$54,999$52,500$57,500$65,000$75,000$90,000$52,500$57,500$65,0
89、00$75,000$90,000$52,500$57,500$65,000$75,000$90,000%of initial demand retained90%84%57%44%49%99%95%83%69%84%9%11%26%25%36%$55,000-$64,999$63,000$69,000$78,000$90,000$108,000$63,000$69,000$78,000$90,000$108,000$63,000$69,000$78,000$90,000$108,000%of initial demand retained86%74%65%49%64%89%94%67%85%6
90、0%2%20%2%36%-4%$65,000 or more$73,500$80,500$91,000$105,000$126,000$73,500$80,500$91,000$105,000$126,000$73,500$80,500$91,000$105,000$126,000%of initial demand retained67%46%57%42%72%92%78%78%60%68%25%32%21%18%-4%Price Point of Existing VehicleRevenue Pool Retention:Price Hike Scenarios Revenue Pool
91、 Retention:Price Hike ScenariosRevenue Pool Retention Improvement(Decline)1st SurveyCurrent SurveyCurrent Survey vs.Prior Survey 2023 Citigroup13EuropeEmissions regulation kick-started the electrification of the automotive industry in Europe,although consumer preferences and original equipment manuf
92、acturer(OEM)product strategies suggest that targets will be surpassed.By 2025,auto OEMs will need to reduce the average carbon dioxide(CO2)emissions of their fleets by 15%.The EU“Fit for 55”targets announced in 2021 cover a broad range of decarbonization goals,including the tightening of 2030 automo
93、tive CO2 emission targets from a 37.5%target reduction to a more ambitious 55%reduction in 2030(versus a 2021 base),which represents a significant step up relative to prior goals.The automotive sector alone accounts for almost 20%of EU carbon emissions and therefore will play a key role in reaching
94、the 2030 55%emission reduction target.To achieve this target reduction,we estimate Europe battery electric vehicle(BEV)share will need to reach approximately 50%in 2030.In October 2022,an agreement was reached by the European Parliament and European Council ensuring all new cars and vans registered
95、in Europe will be zero-emissions by 2035.As an intermediary step towards zero emissions,the new standards will also require average emissions of new cars to come down by 55%by 2030,and new vans by 50%by 2030.Reaching zero-emissions by 2035 raises questions around the long-term relevance of hybrid te
96、chnology in Europe and implies an outright ban on combustion engine technology within 15 years.Given that several European OEMs have announced their own targets well ahead of 50%BEV by 2030 as high as 90%in some cases we expect the 50%threshold to be surpassed.To this point,current S&P Global Mobili
97、ty production forecasts call for BEV penetration of 64%in 2030,well ahead of the 50%threshold.Figure 14.Europe:BEV Penetration of ProductionFigure 15.Europe:PHEV Penetration of ProductionSource:S&P Global Mobility,Citi GPSSource:S&P Global Mobility,Citi GPSWhile OEMs viewed electrification as just a
98、 tool to meet CO2 targets a couple of years ago,it has now become an integral part of many of their strategies.The uptake from end consumers has also been encouraging as evidenced in the strong BEV sales outperformance since 2020.2023 Citigroup14Figure 16.Europe:BEV and PEV Sales(Units)and Penetrati
99、on(%)Source:Citi GPS 2023 Citigroup15ChinaCitis View on DemandWe believe that adoption of new energy vehicles(NEVs)BEVs and PHEVs in China is driven by an increasing consumer preference for the technology,strong product and model cycles from various OEMs,and government incentives.We estimate NEV pen
100、etration of passenger vehicles in China in 2022 was around 28%(6.3 million units)and will grow to around 63%(14.7 million units)by 2025.We believe BEV penetration was 21%in 2022 and will grow to 30%by 2025.Meanwhile,PHEV penetration will finish 2022 at around 7%penetration and grow to 33%by 2025.Fig
101、ure 17.China:NEV Wholesale Volume and PenetrationSource:CPCA,ThinkerCar,Citi GPSGiven the large NEV demand inflection in our forecast,an understanding of pricing dynamics is critically important.Across the price stack we expect the number of distinct NEVs available for sale to increase from 235 mode
102、ls in 2022 to 399 models in 2025.On average,we expect 70%of NEVs to transact at prices below RMB200,000($28,700)and only 5%-7%of NEVs to transact at prices above RMB300,000($43,000),during that forecast horizon.1 1 Currency conversion as of December 28,2022.2023 Citigroup16Figure 18.China:NEV Sales
103、Forecast by Average Selling Price SegmentNEV-Sales Forecast(units)20212022E2023E2024E2025EBelow Rmb200k 2,181,851 4,525,797 6,077,100 8,334,558 10,700,001 Rmb200k-300k 856,053 1,358,300 1,840,500 2,371,859 3,080,903 Above Rmb300k 275,090 449,843 556,100 693,546 864,758 Total 3,312,994 6,333,940 8,47
104、3,700 11,399,963 14,645,661#of Distinct Models Available202120222023E2024E2025EBelow Rmb200k5179Rmb200k-300k 405781100121Above Rmb300k2147688199BEV-Sales Forecast(units)20212022E2023E2024E2025EBelow Rmb200k 1,914,875 3,638,377 4,029,600 4,376,058 4,853,601 Rmb200k-300k 690,506 1,001,746 1
105、,249,500 1,481,025 1,714,645 Above Rmb300k 131,187 211,193 272,600 333,906 436,187 Total 2,736,568 4,851,316 5,551,700 6,190,989 7,004,432#of Distinct Models Available202120222023E2024E2025EBelow Rmb200k19Rmb200k-300k 2231516274Above Rmb300k1331475773PHEV-Sales Forecast(units)20212022E202
106、3E2024E2025EBelow Rmb200k 266,976 887,420 2,047,500 3,958,500 5,846,400 Rmb200k-300k 165,547 356,554 591,000 890,834 1,366,258 Above Rmb300k 143,903 238,650 283,500 359,640 428,571 Total 576,426 1,482,624 2,922,000 5,208,974 7,641,229#of Distinct Models Available202120222023E2024E2025EBelow Rmb200k2
107、832395260Rmb200k-300k 1826303847Above Rmb300k816212426Source:CPCA,Citi GPSProduction OutlookThird-party industry forecasts(e.g.,S&P Global Mobility)expect Chinas NEV penetration to reach 50%by 2025 with nearly 80%coming from BEVs.Looking out to 2030,the same third-party forecasts call for 70%NEV pen
108、etration,of which nearly 90%could come from BEVs.If we focus on the NEV aggregate as there may be some differences in the definitions of BEV and PHEV our view and work on the demand side would imply that third-party supply forecasts will need to move higher to keep pace with demand.As previously men
109、tioned,we believe that consumer pull,OEM product cycles,and government incentives will help lay the groundwork for incremental investment and the supply of NEV technologies.Figure 19.China:BEV Penetration of ProductionFigure 20.China:PHEV Penetration of ProductionSource:S&P Global Mobility,Citi GPSS
110、ource:S&P Global Mobility,Citi GPS 2023 Citigroup17IndiaThe transition to EVs in India has been faster in the two-wheeler(2W)market than in the four-wheel(4W)passenger vehicle market due to greater government subsidies for two-wheel versus four-wheel vehicles.Thus,while EV penetration has already re
111、ached 4%in 2Ws and will likely reach around 10%by financial year(FY)2025,EV penetration in 4Ws is less than 1%.We believe FY2025 could be the watershed year for electric passenger vehicles in India.Multiple OEMs are expected to start production of domestic BEV platforms and we believe additional OEM
112、s will aim to increase their presence in the EV segment.One of the key enablers of higher electrification is government incentives.The government has already started the Production Linked Incentive(PLI)scheme for electric vehicles,components,and advanced chemistry cells.This should result in a more
113、localized suppler base and one that is more cost efficient.The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles(FAME)phase II subsidy by the central government,as well as additional subsidies by state governments,could further the pace of electrification in India.Figure 21.India:BEV
114、 Penetration for Four Wheel Passenger Vehicles(PVs)Source:Citi GPSJapanThe electrification strategy of the Japanese government is notable for the inclusion of hybrid electric vehicles(HEVs)in EVs.Moreover,considering the edge that Japanese automakers have in HEV technologies and Japans energy breakd
115、own,we think the shift to BEVs in the Japanese market will be more leisurely than in other countries.Japans long-term electrification strategy is set out in the Green Growth Strategy Through Achieving Carbon Neutrality in 2050,as proclaimed by the Japanese government on December 25,2020.The auto-rel
116、ated policies of the strategy are detailed below,including some partial subsequent updates.1 Vehicle electrification is to proceed toward a goal of EVs accounting for 100%of new passenger vehicle sales by the mid-2030s.Included in this are BEVs,2023 Citigroup18PHEVs,fuel cell electric vehicles(FCEVs
117、),and HEVs.Specific initiatives include leveraging fuel-economy regulations,promoting public-sector procurement of EVs,building out the charging infrastructure,and offering government assistance and subsidies for EV adoption and replacement of ICE vehicles.2 For commercial vehicles,the goal for 2030
118、 is for 20%-30%EV ratios in light-duty vehicles and 100%by 2040(including synthetic fuel vehicles).Targets for the uptake rate of heavy-duty vehicles for 2040 will be set by 2030.3 BEV adoption is to be strengthened over the next 10 years,with Japan building a world-leading supply chain for batterie
119、s and other components.Special focus is being given to electrification of mini-vehicles and commercial vehicles.4 Automotive production,usage,and disposal is to be carbon zero by 2050.5 Synthetic fuels that contribute to fuel carbon neutrality are to be priced lower than gasoline by 2050.2023 Citigr
120、oup196 The cost of an automotive battery pack is to be cut to 10,000 per kilowatt-hour($75/kWh)as soon as possible before 2030 to make EVs as economical as gas-powered vehicles.Next-generation batteries are also to be developed from 2030,beginning with full-scale commercialization of solid lithium-i
121、on batteries followed by commercialization of innovative batteries(e.g.,fluoride and zinc anode)from around 2035.In addition to the details above,the Ministry of Economy,Trade and Industry(METI)announced new fuel economy standards in March 2020 requiring a minimum of 25.4 km/liter in the year to Mar
122、ch 2030,marking a 32.4%improvement on 2016s 19.2 km/liter requirement.Fuel economy for BEVs and PHEVs is to be assessed using the“well-to-wheel”approach,which goes beyond the power supplied to the vehicle by gas or electricity to include energy consumption efficiency further upstream.In view of thes
123、e rules,we expect Japans powertrain mix to remain tilted toward HEVs for now.HEVs are included in the Green Growth Strategys EV definition and are also a technology where Japanese auto OEMs have the expertise to easily meet the governments new 2030 fuel-economy standards.Toyotas Yaris HEV,for exampl
124、e,gets 36 km/liter(in Worldwide Harmonized Light Vehicles Test Procedure mode)far above the 2030 minimum.Japans use of the well-to-wheel concept will also make it difficult for BEVs or PHEVs to gain an edge in Japans current power supply mix.BEVs thus look likely to see slower take-up in Japan than
125、in other developed markets,but the fact that Japan accounts for just 20%of Japanese auto OEMs overall sales volume suggests they will follow overseas peers in shifting to BEVs in other markets as regulations there are tightened.BEVs could also eventually become more popular in Japan premised on incr
126、eased use of renewable energy that would mean they fare better in the well-to-wheel assessment.Figure 22.Japan:BEV and PHEV Sales ForecastsFigure 23.Japan:BEV and PHEV Penetration Rates Source:Citi GPSSource:Citi GPSSouth KoreaWe expect continuous active new BEV model launches by South Korean OEMs b
127、acked by the various government support for the EV market growth.The South Korean government announced cumulative BEV sales targets of 1,130,000 by 2025 and 3,620,000 by 2030.Considering the total number of registered cars in South Korea was around 25 million as of August 2022,cumulative BEV sales t
128、argets for 2025 and 2030 imply 4%and 14%penetration,respectively.2023 Citigroup20The increasing EV penetration rate is also expected to grow in line with expanding EV charging infrastructure.As of August 2022,the total number of charging stations in South Korea was 149,000,which represents an adjust
129、ed three-year compound annual growth rate of about 49%.The South Korean government also announced measures to further accelerate electric vehicle infrastructure nationwide,targeting 517,000 charging stations by 2025 and 1,360,000 stations by 2030,includes 500 E-pit(ultra-fast charging)stations by 20
130、25,up from 120 in 2021.Our estimate for BEV penetration for South Korea in 2022 is 9.9%,up from 2.5%and 5.6%in 2020 and 2021,respectively.We expect a further increase moving forward,with BEV penetration rising to 35%by 2026 and 57%by 2030.The increase in penetration will be driven by:(1)continuous a
131、ctive new BEV model launches by South Korean OEMs,and(2)expanding charging infrastructure.As for PHEVs,we forecast the penetration rate in South Korea to be 2%by 2026 and 4%by 2030.Figure 24.South Korea:BEV Penetration ForecastFigure 25.South Korea:PHEV Penetration ForecastSource:Korea Automobile Ma
132、nufacturers Association(KAMA),Citi GPSSource:Korea Automobile Manufacturers Association(KAMA),Citi GPS 2023 Citigroup2121If you are visually impaired and would like to speak to a Citi representative regarding the details of the graphics in this document,please call USA 1-888-800-5008(TTY:711),from o
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