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5、g,2020Analysis of the Chinese Truck Market and Assessment of Future Power TechnologiesAbbreviations.51.Introduction.62.The Chinese Truck Market Structure,Key Players and Policy Impact.7 2.1.Structure and Important Players.8 2.2.Role of Current Policies.113.Alternative Power Sources and their Role in

6、 the Chinese Market.14 3.1.Natural Gas Applications Liquefied and Compressed.14 3.2.Electric Powered Trucks An Analysis of Several Options.16 3.3.Fuel Cell Trucks-Hydrogen as Promising Option.194.Conclusion and Policy Recommendations.245.References.26Table of ContentsAbbreviationsBAIC BAIC Motor Cor

7、porationBEV Battery Electric VehicleBRI Belt and Road InitiativeCNG Compressed Natural GasCNHTC China National Heavy Duty Truck GroupCO Carbon MonoxideFAW First Automotive WorksFCEV Fuel Cell Electric VehicleHC HydrocarbonHDV Heavy-Duty VehicleICV Intelligent and Connected VehicleJAC Anhui Jianghuai

8、 AutomobileJing-Jin-Ji Beijing-Tianjin-HebeiJV Joint VentureLNG Liquified Natural GasMEE Ministry of Ecology and EnvironmentMoST Ministry of Science and TechnologyMoT Ministry of TransportNOx Nitrogen OxideOEM Original Equipment ManufacturerPHEV Plug-in Hybrid Electric VehiclesPM Particulate MatterP

9、M2.5 Particulate Matter with a maximum diameter of 2.5 mRMB RenminbiSAIC SAIC MotorSOx Oxides of SulphurSTNE Shanghai Sinotran New Energy Automobile OperationTCO Total Cost of Ownership61.IntroductionIn Chinese cities,the average concentration of PM2.5 fine particulate matter with a maximum diameter

10、 of 2.5 m is about 48 micrograms per cubic meter of air(g/m3).That is more than double the world average of 19 g/m3 1.In particularly highly populated areas such as the Beijing-Tianjin-Hebei region(also known as the Jing-Jin-Ji region),the PM2.5 concentra-tion far exceeds the recommended standard of

11、 10 g/m3 of the World Health Organization(WHO)2.While the reasons for the notori-ously poor air quality in China are manifold,road transportation is considered to be one key culprit behind air pollution.In fact,ex-perts estimate this sector,which accounts for more than 75%of the entire Chinese trans

12、-port volume,to be the second largest driver of air pollution in China 1.What merits further attention is the negative impact of commercial vehicles and,more spe-cifically,trucks upon air quality.As demonstra-ted by Figure 1,while trucks in China account for 11%of the total vehicle stock in 2017,the

13、y release far higher emissions of PM and Nitrogen Oxide(NOx)1.Specifically,10%of overall Carbon Monoxide(CO)emissions are caused by trucks,with the share of Hydrocar-bon(HC)(19%),NOx(57%)as well as PM(78%)being even higher.3In light of these findings,the Chinese gover-nment is paying increasing atte

14、ntion to the truck sector in its fight to mitigate air pollu-tion.In addition to critical influence in the environmental sphere,Chinas truck sector is also worth studying due to its special role in technological developments:Since total costs of ownership(TCO)have gained increasing relevance for Chi

15、nese truck customers 4,the sector holds great potential for autonomous driving technologies.This is mainly due to the fact that alongside the cost for fuel the expenditures for human drivers account for 0%20%40%60%80%100%COHCNOxPMPollutant emission contribution in China in 2018truckspassenger carsFi

16、gure 1:Share of pollution by passenger cars and trucks compared with their total stock in China.Own graphs,based on data derived from Chinas Ministry of Ecology and Environment(MEE)311.2%88.8%Car ownership in China in 2018trucks in totalpassenger cars in total1 In addition to PM2.5 and the bigger PM

17、10 particles,Carbon Monoxide(CO),Hydrocarbon(HC)and Nitrogen Oxide(NOx)are considered as components of air pollution.7the lions share of TCO for Chinas trucks 5.This share could be significantly reduced with further progress in autonomous driving,espe-cially in regards to specific applications such

18、as inter-city transportation.Given the central role of the truck industry within Chinas economy and the countrys en-vironmental efforts,this report seeks to pro-vide a comprehensive overview of the truck market in China(first part of the report)and analyze potential future trends in the Chinese truc

19、k industry,especially with regard to the use of alternative power resources(second part of the report).The market overview will en-compass a survey of the market structure,the key manufacturers as well as the main policy developments and their effect on the market.The outlook on future trends will e

20、ntail an as-sessment of various alternative power modes,particularly with regard to the options for dif-ferent usage scenarios(inner-city distribution,inter-city transportation or specific construc-tion).Finally,the conclusion will provide a critical summary of the research findings and highlight re

21、spective policy recommendations.8To provide a comprehensive overview of the Chinese truck market,one must first actually define what types of vehicles the term“truck”encompasses.Most importantly,there is no universal definition,especially since trucks themselves are often again classified into furth

22、er categories.While the European Uni-on(EU)uses the categories of N2(vehicles weighing more than 3.5 tons)and N3(vehicles weighing more than 16 tons),the description of light-(3.5-7.5 tons),medium-(7.5-12 tons)and heavy-duty(more than 12 tons)2 vehicles are commonly used in China.6 7Since this repor

23、t particularly focuses on the use of new energy sources,the term“trucks”here will refer to all motor vehicles with(1)at least four wheels,(2)a minimum weight of 3.5 tons which are(3)used for the transportati-on of goods.This definition allows to capture new developments that typically evolve from ni

24、che markets or special applications(e.g.elec-tric-based urban delivery).2.1.Structure and Important PlayersIn China,truck sales reached a new peak in 2017,with more than 1.1 million vehicles sold(see Figure 2).In stark contrast,truck sales in Europe were less than half(slightly above 300,000 units)i

25、n the same year 8.Compared to 2016,this represents an increase of more than 50%,following a clear upward trend from 2015 onwards.This pattern is also likely to con-tinue,with sales again expected to have exceeded one million trucks throughout 2018.9According to HSBC Global Research,this growth can b

26、e mainly traced back to new re-gulations and policies.First,over recent years the Chinese government passed stricter regu-lations on overloading as well as on emission limits that together led to a higher demand for vehicles 10.Those new regulations logically make companies use a greater number of v

27、e-hicles for transporting their freight.As a result,the average size of trucks per company or fleet 2 All weights are based on gross vehicle weight that includes the weight of the vehicle itself plus the weight of the passengers and cargo.3 The respective years are 2009,2011,2012 and 2013.Figure 2:N

28、umber of trucks sold in China between 2008 and 2017.Own graph,based on data derived from HSBC Global Research,2018 9-200,000 400,000 600,000 800,000 1,000,000 1,200,0002008200920001620172.The Chinese Truck Market Structure,Key Players and Policy Impact9sprang from two vehicles

29、in 2008 to nearly six vehicles in 2016 and is expected to grow up to seven vehicles in 2019.Further reasons for the industrys growth are both the high demand for construction and urban logistics and also the relatively short life spans of trucks.This span ranges between five and ten years.Hence,the

30、vehicles sold in the peak year of 2010 are starting to be replaced.10When looking more closely at the truck types sold in the Chinese market,one observes an increased share of tractor-trailer combinations(52%),while the shares of chassis(27%)often used for construction purposes and the combined chas

31、sis trucks(21%)decreased.When comparing this with the data gathered over the past ten years,where the share of sold tractor-trailer combinations was the lowest in several years3,this development signals a shift towards the logistic sector,since these types of trucks are often used for logistical pur

32、poses.9Similar to the European truck market,where more than 86%of all vehicles were produced by the five largest manufacturers in 2017(Daimler,MAN,Volvo,Scania and DAF)4,the structure of the Chinese manufacturers is highly concentrated 11.More precisely,in China,the five largest truck manufacturers

33、ac-count for 83%of the total truck market(see Figure 3).The main reasons for the global concentration of the truck industry include the high fixed costs for production facilities,the need for large scale manufacturing to en-sure profitability and the requirement of an extensive skilled workforce.10T

34、he top five Chinese truck manufacturers in-clude three state-owned companies,that also play a central role in the car sector(ranked top ten in sales numbers),namely:First Automo-tive Works(FAW),the Dongfeng Motor Cor-poration and the BAIC Motor Corporation(BAIC),with its subsidiary FOTON.4 If counti

35、ng MAN and Scania as one brand(both belong to Volkswagen),the number of manufacturers would be even less.Figure 3:Market share of Chinese truck manufacturers.Own graphic,based on data derived from HSBC Global Research,2018 910Furthermore,SAIC Motor(SAIC),with its subsidiary Hongyan,and Anhui Jianghu

36、ai Au-tomobile(JAC)are also manufacturing trucks.Both companies also produce passenger cars,highlighting the close link between the car and truck businesses in China(see Figure 4).Exception to this trend is presented by Weichei Power and China National Heavy Duty Truck Group(CNHTC),with its subsidia

37、ry Sinotruk,which are the only two Original Equipment Manufacturers(OEMs)that are currently ac-tive in the truck business and do not manufac-ture passenger cars.The firms BYD Automo-bile and Brilliance Auto China are shown as special cases,since according to sales numbers they do not hold a leading

38、role in neither the car nor truck markets,but are well-known in the business as the worlds largest manufac-turer of electric cars,buses,trucks as well as machninery and strategic Joint Venture(JV)partners with BMW respectively5.Similar to the passenger car industry,many Chinese OEMs in the truck sec

39、tor cooperate with foreign companies via Joint Ventures to develop and produce their vehicles.Figure 4 presents the foreign JV partners,which are fra-med with a blue square and positioned right next to their Chinese partners.As Figure 4 il-lustrates,with Dongfeng and Volvo,BAIC and Daimler,SAIC and

40、Iveco,JAC and Navistar as well as CNHTC and MAN,five out of the top seven truck manufacturers according to sales figures(see Figure 3)work in cooperation with non-domestic partners.The only exceptions are Weichai Power and FAW,that,thus far,have not entered into partnerships with for-eign companies

41、in the truck industry 13 14.When analyzing the Chinese truck market,one also needs to consider the export capability of Chinese firms.In 2017,around 200,000 trucks were exported from China an increase of 10%compared with 2016 15.In comparison to Figure 4:Overview of the car and truck OEMs in China.O

42、wn illustration,based on data from Statista,2017 12 and South China Morning Post,2017 13Car&trucks OEMsCar OEMsTruck OEMsSpecial cases5 First automotive joint venture that is no longer relying on the 50%rule for foreign companies and therefore allows shares in a Joint Venture with more than 50%(BMW

43、75%).11the overall sales statistics,these relatively small numbers show that Chinas OEMs rely heavily on domestic demand.In terms of industry players,CNHTC,with its subsidiary Sinotruk,is Chinas leading truck export company.In 2017,the company had a market share of overseas sales of 13%,whereof cent

44、ral Asian countries account for the largest share.9In previous years,Chinese truck exports have proven to be highly volatile with a relatively small overall growth rate of 2%since 2009.16 This is mainly due to the fact that given Chinas weakness in highly motorized engines the country mainly exports

45、 smaller trucks to regions such as Latin America,Russia,the Middle East and North Africa.Since countries in these regions crucially depend on oil ear-nings,the demand for Chinese trucks varies according to the fluctuations of the global oil price.However,under Chinas Belt and Road Initiative(BRI)a g

46、lobal strategic infrastruc-ture project initiated by the Chinese govern-ment in 2015 Chinese trucks have recently gained improved market access to Australia,New Zealand,Russia,Kazakhstan,Singapore and other relatively developed countries.The-refore,Chinese truck companies are currently expanding the

47、ir production capacity overseas and aim to raise their export numbers.For in-stance,Weichai Power has set up a spare part centers in Algeria,Dongfeng and CNHTC operate assembly lines in both Iran and Mo-rocco.162.2.Role of Current PoliciesAs demonstrated by the example of the BRI,government policies

48、 play a crucial role in shaping the developments of Chinas truck market.This chapter will,therefore,grant an overview of the most important regulatory in-struments for diesel trucks.Policies targeting the development of alternative power sources for trucks will be discussed in the next section.Simil

49、ar to the EU and the United States,China uses national standards to control and reduce emissions,such as NOx or Oxides of Sulphur(SOx).In January 2017,the latest national stan-dard,China V,came into effect.In compari-son to the former China IV standards,China V mainly strives to limit sulfur content

50、 in fuel to 10 parts per million one fifth of the Chi-na IVs 50 ppm requirement.9 According to an announcement by the MEE in June 2018,the latest emission standard,China VI,will be implemented between 2019 and 2021 for all heavy-duty vehicles6.This new piece of regula-tion that is said to be more st

51、ringent than the Euro VI emission standard aims to reduce the NOx emissions by more than 77%and PM emissions by more than 67%compared with the previous regulation China V 17.In a next step(China VIb),China plans to reduce emis-sions even further by 2030(see Figure 5).Hen-ce,this move is expected to

52、cut annual PM2.5 emissions by 5%in China.186 Heavy-duty vehicles refer to buses as well as trucks.12In addition to new regulations concerning emission standards,different levels of the Chinese government(local,municipal,nati-onal)use various instruments to regulate the production and use of trucks.I

53、mportant and recent examples are outlined below:1.By 2020,China plans to remove one mil-lion diesel trucks,which fall below the na-tional standard China III7 within the Jing-Jin-Ji region.This measure was announced in July 2018 by the Ministry of Transport(MoT)and the State Council.The appa-rent goa

54、l is to shift cargo from road to rail transportation as well as to enhance en-vironmental well-being,specifically in re-gard to urban roads.192.In June 2018,several specific targets for 2020 were set by the State Council with the goal of protecting the environment and mitigating air pollution.In com

55、bina-tion with cleaner ports and an increased share of railway transportation,the truck sector is supposed to play a crucial role in reaching targets regarding pollution reduc-tion:Improvement in these three fields are expected to decrease the amount of cities that fail to meet PM2.5 standards by 18

56、%and to reach 80%more days with good air quality in cities.However,similar to vari-ous other announcements,specific details on how to implement such measures have not been offered.203.In 2017,the Tianjin Port as well as several other ports in the province of Shandong banned diesel trucks from transp

57、orting coal.21 Due to the fact that port areas also account for a high share of air polluti-on,these regions are of particular political interest when it comes to new regulation from the Chinese government.7 China III was implemented in 2008.Figure 5:China VI Proposed mid-and long-term emission redu

58、ctions.Climate&Clean Air Coalition,2018 18138 The province Hebei is part of the highly populated Jing-Jin-Ji region.4.In order to comply with port regulations and manage diesel truck bans in winter times,many Chinese provinces are increa-singly focusing on railway transportation.For instance,the res

59、ponsible transportati-on office of the province of Hebei8 in Au-gust 2018 announced its decision to shift deliveries of coal and steel to rail trans-portation instead of relying on trucks.The goal is to shift all major deliveries of such goods to rail transport by 2020.22Although one would expect th

60、ese policies to reduce the demand for trucks,historical data shows that,paradoxically,new regulations ac-tually have often strengthened the demand for trucks.9 In general,new regulations of-ten complicate the use of older vehicles while also generating several advantages for vehicles using new techn

61、ology.Therefore,it is often the case that increased investments in new ve-hicles are made when new policies are imple-mented.For instance,it is expected that due to the upcoming national standards China VI for heavy-duty vehicles,the relatively high sa-les figures for trucks from 2017 will continue

62、to also be stable in the upcoming years.Lastly,in light of increasing restrictions for diesel engines,the sales numbers of trucks relying on new power sources like Liquefied Natural Gas(LNG)or Compressed Natural Gas(CNG),electric powered engines like in Battery Electric Vehicles(BEV)or Fuel Cell Ele

63、ctric Vehicles(FCEV),can be expected to further increase.143.Alternative Power Sources and their Role in the Chinese MarketAs previously mentioned,one million trucks in the Jing-Jin-Ji region that do not fulfill the National III Standard,will be decommissioned by 2020 and will be largely replaced by

64、 new or clean energy vehicles.Therefore,this raises the question on how these new developments in the truck sector will look like.Importantly,when analyzing the options for alternative power sources in the truck sector,one has to bear in mind the sectors specific characteristics:1.Since the annual d

65、riven mileage of trucks is five to seven times higher9 23 than that of regular cars,the maintenance costs are often more important than the initial sales price.Therefore,changes regarding the ongoing costs have a higher impact on the buyers decision.2.Furthermore,the reliability of vehicles is of pr

66、ofound importance in the truck business as inoperative vehicles often lead to high costs and less flexibility for firms.3.Freight transportation via trucks common-ly adheres to planned and fixed routes,time pressure and depending on a countrys le-gal framework regulated driving schedules.4.Truck-bas

67、ed transportation companies typi-cally expect a high capacity efficiency,which in turn requires minimum driving ranges in order to avoid nonproductive recharg-ing or fueling time 23.3.1.Natural Gas Applications LiquefiedandCompressedChina is the worlds main source of increa-sed demand for natural ga

68、s,being responsible for one third of the global demand growth in 2017.While natural gas is used as an energy source in many different sectors and indust-ries,transportation so far holds a minor role(8,3%)24.However,over the last years,na-tural gas has become the most commonly used alternative energy

69、 source to diesel,especially in Chinas road transport sector.In 2017,Chinas OEMs produced 96,000 trucks that were pow-ered by LNG,which represents a share of ne-arly 10%in the Chinese truck sector.In com-parison to 2016,when merely a total of 19,600 LNG trucks 25 were produced,this constitu-tes a st

70、rong increase in demand for this power source and highlights the strong need for alter-natives to traditional diesel engines.LNG is produced by cooling down the pri-mary gas,which mainly consists of methane,to-162 C where it gets liquefied.Therefo-re,the density can be increased 600-fold in comparis

71、on to the standard conditions of the gas 26.The alternative compressed version(CNG)is another option to increase the ener-gy density of gas,whereby the primary gas is compressed with a maximum of 250 bar 26,and therefore provides an increased energy density.However,neither can reach the energy densi

72、ty of diesel.While the energy density of 9 Data is based on the German truck use.15LNG compared to diesel is about 58%,the energy density of CNG is half compared to LNG,which further increases the demand of storage to reach an acceptable driving distance for trucks 27.Given this disadvantage,CNG has

73、 lagged behind in Chinas recent develop-ment compared with LNG.One of the main advantages of LNG is its price and therefore the operating costs compa-red with diesel vehicles.The costs of diesel at Chinese service stations are estimated 10-30%higher than the costs of gas and therefore,the higher pur

74、chase prices10 of LNG trucks can be compensated in the best case after one year of operation.28 This advantage is widely seen as central driver for the increasing demand of LNG vehicles in China over the last years.In light of the increasingly stringent regulations regarding diesel(e.g.China VI)and

75、a further expected rise in prices,the price advantage of LNG is likely to grow even further in the co-ming years.Such an event might,in turn,in-duce a further growth of LNG demand.In addition,new regulations such as China VI will also lead to the tightening of the emission standards for NOx as well

76、as PM.Since,similar to CO2 emissions,gas engines are less pollu-ting,the usability of LNG is further strengt-hened with such stricter emission standards.Figure 6 compares LNG trucks with diesel trucks based on the sector key requirements mentioned above(1-4).In general,the key Chinese truck manufact

77、u-rers are active in deploying LNG technolo-gies.Chinas leading manufacturers of LNG trucks are FAW and Weichai Power,with ne-arly 20,000 produced vehicles in 2017 each.Together,they accounted for over 40%of the Chinese production in the same year.CNHTC(14.1%)and Dongfeng(13.2%)have lost market shar

78、es compared with 2016 when sha-res were more equally distributed with Dong-feng in a leading position(4,200 vehicles)29.FAW and Weichai Power will therefore most li-kely be the main beneficiaries of an upcoming increase in LNG sales.10 The purchase price of LNG trucks around 6,000 EUR higher,dependi

79、ng on the specific model.Figure 6:LNG comparison(+/=/-)with diesel trucks on the sectors key requirements(1-4).Own graph,based on previous analysesOngoing costReliablefunctionalityFlexibilityDriving rangeLNG1611 As the fuel cell technology is of particular relevance for this report,it will be analyz

80、ed in detail in the next section,although it is officially classified as electric power.Overall,the LNG truck market is less concen-trated compared with the overall truck market,indicating that natural gas is widely seen as an important upcoming alternative to diesel.Furthermore,the purchase of LNG

81、trucks is supported by government promotions up to 10,000 RMB(Renminbi,around 1,300 EUR)and additional local or municipal subsidies of up to 20,000 RMB(around 2,600 EUR)30 combined with direct subsidies for LNG fue-ling.3.2.Electric Powered Trucks An Analysis of Several OptionsEspecially in the Chin

82、ese passenger car sector,electric powered vehicles have grown more important over the last years,with China as leading market for electric vehicles worldwi-de.As previously highlighted,the reduction of emissions from trucks is of particular interest,especially in urban areas.In such urban en-vironme

83、nts,there are several applications,like trash collection 31,which rely on relatively short driving ranges,predictable driving rou-tes and mainly daytime use,making them more applicable for electric powered engines.When analyzing the market of electric pow-ered trucks11,one has to distinguish between

84、 several technical solutions:On the one hand,there is the option of infrastructure-bound power supply.Figure 7 below visualizes the three respective technical options of over-head contact line,contact rail and contactless inductive charging.All of these variants require an adequate infra-structure.T

85、o make them more flexible,trucks could also be equipped with an additional die-sel or electric engine to ensure short-term po-wer supply for infrastructure gaps.The more commonly known way of power provision is through lithium-ion batteries.Due to the high energy consumption of heavier trucks in par

86、ticular,the limited driving range combined with the weight of the vehicle is the main challenge for this technology.To put this in perspective,providing a driving range of 200 to 300 km for a truck with a gross vehic-le weight of 18 tons,requires a total battery weight of 2 to 3 tons 32.This challen

87、ge ma-nifests itself even further if a certain scenario,for instance inter-city transport,requires lon-ger driving ranges or if the energy consumpti-Figure 7:Overview of infrastructure charging options during operation.Wietschel,et al.,2017overhead contact linecontact rail contactless inductive char

88、ging17on rises due to higher gross weights.There are several options to tackle these chal-lenges.First,the development of solid-state batteries is an innovation that aims to improve driving ranges as well as the safety level of lit-hium-ion batteries.With the use of solid elec-trolytes instead of li

89、quid ones,those batteries have the potential to provide a two-to three-fold higher energy density and therefore longer driving ranges.However,this has been a highly controversial topic,especially in China.In par-ticular,manufacturing these types of batteries at a large scale and at an attractive pri

90、ce,has not yet been accomplished 33.Therefore,this development needs to be observed,but so far,its potential is difficult to assess.Another option to compensate the limited dri-ving range is the use of Plug-in Hybrid Electric Vehicles(PHEVs),which rely on an additional diesel engine.Since this techn

91、ology requires the use of two power trains,it however increa-ses weights and costs 32 and is therefore not very common in the truck sector.On the po-sitive side,electric powered vehicles in gene-ral provide a far more efficient use of energy since the electric engine reaches an efficiency factor of

92、up to 95%,while a combustion en-gine only reaches between 30%and 40%32.Figure 8 compares BEV/PHEV trucks with diesel trucks based on the sector key require-ments mentioned above(1-4).Additionally,electric engines do not directly contribute to emissions,but since the neces-sary energy supply,for now,

93、mainly relies on fossil fuels,this technology should neither be considered entirely clean.While the ongoing costs of electric powered trucks in general are lower compared with those of trucks running on diesel,especially with the often applied financial support for charging,the main barrier for elec

94、tric powered trucks appears to be the limited driving ran-ge and the consequential lack of flexibility.In addition,the reliability of lithium-ion batteries is also a critical issue depending on different OEMs.Figure 8:BEV/PHEV comparison(+/=/-)with diesel trucks on the sectors key requirements(1-4).

95、Own graph,based on previous analysesOngoing costReliablefunctionalityFlexibilityDriving rangeBEV/PHEV1812 Estimates assume around 2%of the overall market(360BYYLZ,2018)35.In the first six months of 2018,China pro-duced around 50,000 commercial vehicles that are powered by electric motors.This equate

96、s to the entire total commercial sales of the last year 34 35.However,most of those ve-hicles either are buses or belong to the catego-ry of light commercial vehicles serving for last mile distribution purposes(e.g.vans).Only a negligible share12 of trucks produced in China that are in line with thi

97、s reports definition on trucks are electric-powered.While several companies such as Dongfeng,FAW or Dayun are currently working on solu-tions for electric powered trucks and investing in research and development,BYD is the only OEM that is already selling electrified models on the market.The firms t

98、ractor-trailer com-bination BYD Q1 has entered the market and its lithium-ion based power train enables a dri-ving range up to 210 km with full loads.Due to the vehicles maximum speed of 95 km/h and its relatively strong engine with more than 350 kW 36,it is also suitable for longer-di-stance transp

99、ort.In contrast to BYDs serial development,Dongfengs electric dump truck prototype is mainly developed for construc-tion sites and short distance transportation.Accordingly,the electric range is between 150 and 200 km 36.Another prototype was de-veloped by Dayun,yet the vehicles net weight reaches 1

100、4 tons with its batteries accounting for almost half of the total weight.The fact that the truck is not able to provide more than 120 km of driving range 36 illustrates the main barrier regarding the demand of those trucks.The Chinese government is promoting elec-tric powered vehicles in general and

101、 tries to strategically strengthen its industry through Five-Year Plans and the initiative“Made in China 2025”a long-term plan to upgrade ten key industrial sectors in China,with elec-tric vehicles being one of them.37 Purchase incentives,charging facilities as well as techno-logy upgrades particula

102、rly on battery quality are simultaneously promoted.However,while the Chinese market for electric-powered pas-senger vehicles experienced a steep growth over the past years,battery electric trucks are at their initial stage.Besides BYD,Chinese ma-nufacturers are currently focusing on research and dev

103、elopment activities.3.3.Fuel Cell Trucks-Hydrogen as Promising OptionBesides the widespread trend towards BEVs and PHEVs in the sectors of passenger cars,buses and light commercial vehicles,the tech-nology of hydrogen powered fuel cells conti-nuously gains more importance,especially for cargo transp

104、ort.As of November 2018,the sales of hydrogen powered vehicles in China reached around 1913 Refueling processes take three to five minutes with to reach a driving range of maximum 400 km,as latest demonstration vehicles in Shanghai show(fcvechina,2019)40.14 Vehicles with more than 12 tons gross vehi

105、cle weight.1,700 units,of which trucks accounted for 61%38 while passenger cars held a less signifi-cant share with the SAIC ROEWE 950 being the only available model in the sector of cars.Similar to the year 2017 39,the two main manufacturers in this field are Dongfeng and Youngman Auto.Fuel Cell El

106、ectric Vehicles(FCEVs)generally also belong to the category of New Energy Vehicles(NEVs).However,instead of relying on a large battery as power source,FCEVs are based on electricity generated by fuel cells.These cells generate the required energy th-rough the chemical reaction between oxygen and hyd

107、rogen with water being a side product after the process.The main challenge here is the ongoing necessity of hydrogen that needs to be fueled in a compressed but gaseous form.One of the main advantages of the technolo-gy lies in the short refueling time13 especially compared with battery-based cars,d

108、ue to the fact that hydrogen is fueled in a gaseous form.Another benefit is the high efficiency of fuel cells that currently ranges around 60%with experts expecting further potentials for im-provement 23.Particularly trucks with high yearly mileages,such as tractor-trailer combi-nations for long-dis

109、tance cargo transport,have the potential to strongly decrease the ongoing TCO if the production of hydrogen can be realized in an economical way.However,this simultaneously brings us to one of the techno-logys central problems:To prevent CO2 emis-sions the main driver for the use of hydro-gen it is

110、necessary to produce hydrogen from renewable energies.This production process is currently lacking a competitive level of energy efficiency and,therefore,raises a central task for further research.Although even heavier14 hydrogen-powered trucks reach a far higher driving range compared with BEVs,the

111、 limi-ted range of 300 to 400 km with equal fueling capacity 23 limits the flexibility.An increase of the pressure for hydrogen storage from 350 to 700 bar is one of several solutions to im-prove driving ranges and the energy density of the technology.In general,it can be said Figure 9:FCEV comparis

112、on(+/=/-)with diesel trucks on the sectors key requirements(1-4).Own graph,based on previous analysesOngoing costReliablefunctionalityFlexibilityDriving rangeFCV20that due to the premature stage of technical development,combined with high costs for enabling an appropriate infrastructure,the technolo

113、gy relies on the economics of scale improvements.Figure 9 compares FCEV trucks with diesel trucks based on the sector key requirements mentioned above(1-4).While China is aiming to continuously reduce its subsidies on BEVs 41 over the next ye-ars,financial support for hydrogen-based ve-hicles remain

114、s unchanged 23 a develop-ment that emphasizes the expected potential of this technology combined with a lack of knowledge,especially in research.Besides the United States,Germany and Japan,China is already seizing a leading role in research and development activities in the sector of fuel cell truck

115、s:Concerning the amount of scientific publications as well as the amount of decla-red patents,Chinas worldwide role strongly increased over the last years.23 According to Wan Gang,former Minister of the Minis-try of Science and Technology(MoST),the truck industry is particularly supposed to be one o

116、f the key target sectors for research and development in the upcoming future.Due to the special requirements in this sector,such as long driving ranges and fast refueling to maxi-mize service time,Wan Wang sees important potential to compensate the shortcomings of BEVs.42However,China faces several

117、serious challen-ges concerning the technologies deployment.The countrys missing gas pipeline infrastruc-ture will require truck transportation of the compressed hydrogen,limited hydrogen pro-duction methods are restraining sufficient and efficient supply and high capital investments for the construc

118、tion of hydrogen fueling sta-tions depict a crucial barrier for setting a base for widespread commercial use.In order to overcome such challenges,it is expected that China will also rely on overseas support for scaling-up and commercializing hydrogen technologies.Several foreign manu-facturers have

119、already been attracted by Chi-nas noteworthy market potential in the fuel cell technology.One of the key actors regarding foreign in-vestments in the field of hydrogen is the Ca-nadian fuel cell pioneer Ballard,which has participated in Chinese hybrid battery/fuel cell platforms for heavy-duty trans

120、port(bu-ses,trucks and light rail).The company signed several cooperation agreements with Chinese enterprises to deploy their fuel cell technolo-gy in various projects in the bus as well as the truck industry.Currently they are introducing a fleet of 500 trucks in Shanghai,mainly for inner-city deli

121、veries.43 U.S.Hybrid Corp.,the California-based developer of electric po-wertrains for commercial vehicles,is another North American specialist for hydrogen-based 21powertrains starting to invest into the Chine-se market.The company is co-developing fuel cell trucks with Dongfeng 44.Moreover,the Fre

122、nch company Air Liquide,a specialist in the field of industrial gases,has recently invested 10 million EUR in a cooperation with the Chi-nese start-up Shanghai Sinotran New Energy Automobile Operation Co.,Ltd.(STNE)with the goal to run a fleet of up to 7,500 trucks and to operate a network of around

123、 25 hydrogen refueling stations by 2020 in China 45.These increasing activities of key western companies in the hydrogen sector furthermore illustrates the growing importance of the technology gains.The developments in the FCEV sector have been impacted by recent incentive policies.The very first st

124、ep was Chinas participation in the UN Development Program and Global Environment Facility,whereby several pilot demonstration zones like Beijing and Shang-hai were established in order to commercialize hydrogen technology.As the fuel cell indust-ry matures,China has adopted more concrete policies on

125、 fuel cells and hydrogen.In Chinas 13th Five-Year Plan(2016-2020)as well as in the strategic plan“Made in China 2025”,hy-drogen power plays an important role in the development of strategic emerging industries.For example,fuel cell technology is a central target for technological breakthroughs as we

126、ll as further industrial promotion in order to en-sure leading industrial innovations in this field.Therefore,the Energy Technology Revolution Innovation Action Plan(2016-2030)was pu-blished to provide a detailed overview of the long-term targets for both passenger cars and commercial vehicles as we

127、ll as the amount of hydrogen refueling stations.46 In addition,to this set of long-term targets,the Chinese government offers substantial financial sup-port for purchasing fuel cell vehicles,ranging from 200,000 RMB(around 26,000 EUR)for passenger cars to 500,000 RMB(around 65,000 EUR)for large truc

128、ks and buses 23.The dimensions of these numbers,which ap-ply to the first strategic period(2016-2020),lead to the following conclusions:On the one hand,fuel cell vehicles are presently unecono-mic.On the other hand,the government tries to firmly promote the application of the tech-nology among domes

129、tic industries.Currently,most of the existing fuel cell ve-hicles are used in various pilot projects all over the country:These pilots seem to be cluste-red in provinces such as Guangdong,Hebei,Hubei and Jiangsu and,to a lesser extent,in Beijing and Shanghai.Significant events such as the Winter Oly

130、mpic Games in 2022 seem to have a positive effect on hydrogen develop-ment in some cities.22The city of Zhangjiakou in the province of Hebei is a well-known example for this effect:As important location for the Winter Olympic Games 2022 and selected by President Xi Jin-ping to be a pilot city for en

131、ergy and transpor-tation,Zhangjiakou is holding a leading role in the development of hydrogen infrastructure.The city accounts for the most prominent pi-lots where hydrogen appears to be a potential solution for wind curtailment.Furthermore,the city of Wuhan in the province of Hubei is another key p

132、layer in developing its fuel cell vehicle manufacturing industry.Rugao,in the province of Jiangsu,is another city with am-bitious plans to become Chinas first hydrogen demonstration city.Overall,these projects and the current techni-cal circumstances show that,on the one hand,hydrogen-powered fuel c

133、ells are at a very early stage of commercial deployment with some key challenges to overcome.On the other hand,Chinese decision makers expect the technology to hold an important role,especial-ly in the sector of cargo transport,to mitigate pollution and climate change.The demand for FCEVs will not o

134、nly rely on its own technical development and research achievements,but also on the rating of other competitive power sources.The future weighting of CO2 emissi-ons is especially decisive for the development of fuel cells.Indeed,while fuel cell technolo-gies seemingly offer noteworthy advantages con

135、cerning refueling time and driving range compared with BEVs,it cannot be assumed that FCEV technologies are competitive com-pared to LNG and diesel,before CO2 emissi-ons are not taken into account.However,the need to cut CO2 emissions becomes ever more urgent,one can expect that fuel cell technolo-g

136、ies will suit wider applications,especially for longer distance transport.Figure 10:Overview of long-term targets for FCEVs in China.International Energy Agency,2018 47YearRefueling stationsVehicle stock2020Over 100 stations5,000 FCEVs in demonstration(60%commercial vehicles,40%passenger cars)2025Ov

137、er 300 stations50,000 FCEVs in service(20%commercial vehicles,80%passenger cars)2030Over 1,000 stations(more than 50%of hydrogen production from renewable resources)Over 1,000,000 FCVs in service 234.Conclusion and Policy RecommendationsThe aim of this report is to provide an over-view of the Chines

138、e truck market and to ana-lyze the role and the future potential of alter-native power sources for this sector.From the first part of the report,the following key take-aways can be deduced:More than 1.1 million trucks were sold in the Chinese market in 2017.This shows a steep growth since 2015 and a

139、mounts to a sales volume that is close to fourfold that of the total European truck market.The central sources of growth stem from government regulations on overloading and emissions.Due to their disproportionate effect(57%NOx and 78%PM)on emissions in relation to the total stock of vehicles(11%),tr

140、ucks are of special political inte-rest when it comes to the mitigation of air pollution problems.In recent years,the political attention can be seen in several truck specific regula-tions and policies such as the upcoming ban of one million high polluting trucks in the Jing-Jin-Ji region.The introd

141、uction of China VI,which is widely viewed as even more stringent than Euro VI,sets ambitious targets(NOx re-duction of 77%and PM reduction of 67%)for the reduction of emissions caused by heavy-duty commercial vehicles.Similar to the European market,the Chine-se truck market is highly concentrated wi

142、th the largest five companies accounting for 83%of total production volume.Many Chinese OEMs are active both in the truck sector as well as the passenger car sector,indicating a close interconnection between the two industries.While a large share of Chinese truck manufacturers cooperate with western

143、 OEMs,the export capability of the sec-tor is weak,with a share of merely 13%being exported.However,political initiati-ves such as the BRI aim to increase Chine-se export figures.With regards to the future potential of alter-native power sources,the following key results need to be considered:Ongoin

144、g costs,reliability,flexibility and dri-ving ranges can be considered as central deter-minants for the acceptance of pos-sible future technologies.While electric powered trucks(BEVs,PHEVs and FCEVs)are at an early stage of commercial deployment,LNG has al-ready gained importance over the recent year

145、s.At present,LNG-based powertrains are the main alternative to diesel trucks,especi-ally due to their lower emissions,the com-24petitive pricing of natural gas as well as the acceptable driving ranges.Limited driving ranges and long battery charging times are the main barriers for battery-powered so

146、lutions in the truck sector.BYD is the only Chinese OEM offering battery-based trucks in the market(in China and international).While the NEV technolo-gy can partly be applied for urban short-dis-tance applications such as buses or delivery vans in a promising way,particularly the re-duced driving r

147、ange limits the technologys potential for the truck sector.Policy and financial support from the gover-nment currently exert a strong focus on the promotion of hydrogen fuel cell tech-nology.In comparison to battery-powered trucks,the main advantages here can be seen in re-duced fueling times and hi

148、gher driving ranges.At the same time,the limited ef-ficiency of hydrogen production and the costly infrastructure so far hinder the tech-nologys breakthrough.Overall,the development of alternative po-wer solutions is heavily reliant on how sta-keholders prioritize transport emission reductions.None

149、of the available technolo-gies are currently competitive to diesel tech-nologies when it comes to fulfilling the key requirements in the truck sector.To support the political path towards emission reduction,several proposals for further investi-gations can be inferred from the results of this report

150、.Firstly,the main barrier for the wides-pread acceptance of alternative power sour-ces the limited driving range of BEVs and FCEVs requires support such as investments in research and development.Only through an increase in energy density,for example th-rough new battery generations,low-emission tec

151、hnologies can become competitive.Se-condly,well-defined pilot areas need to be es-tablished in order to develop specific concepts that combine the use of several technologies for definable applications.Finally,it is essential to conduct research on the feasibility of the coexistence and co-developme

152、nt of several energy sources to combine and complement each of the technologies advantages.The central question is whether these technologi-cal adaptions can be achieved without losing a necessary amount of scaling effects in the truck industry so that the economic viability of the industry can be e

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