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China leads the way in e-mobility. Nowhere else will you find so many electric cars on the road. However, batteries are not the only new technology shaping the future within the world’s biggest vehicle market. The fuel cell is also emerging as a strong contender, and lightweight construction plays a crucial role in both technologies. Having established an early foothold in China, ElringKlinger is now striving to increase its market share in the alternative drive sector.

– Chongqing, China
500k Renminbi

The Chinese government subsidizes purchases of new hydrogen-­powered buses to the tune of around 500,000 renminbi per vehicle. That’s around EUR 60,000. The equivalent subsidy for a new hydrogen car is EUR 25,000. As production numbers increase over the coming years, experts are predicting that the cost of a fuel cell system will fall significantly.

Forecast costs for fuel cell systems per kW
(indexed, 2015 = 100%)
Global production of hy­drogen-powered ve­hicles worldwide (cars and light commercial vehicles)
Source: PWC Autofacts, The International Council on Clean Transportation (ICCT)

Hardly any other country in the world has developed as rapidly as China. Today, the People’s Republic has a population of more than 1.4 billion. Its total economic output for 2018 is likely to exceed USD 14 trillion. In megacities such as Chongqing, Shanghai, and Tianjin, mighty skyscrapers point heavenwards and neon-lit billboards line endlessly congested streets. Those who can afford to drive, do so – despite the fact that city traffic regularly comes to a standstill during rush hour. As well as the biggest automobile market in the world, China is now also the leading market for alter­native drive systems. When it comes to e-mobility, the country has its foot right down on the throttle, driven not only by a determination to establish itself at the forefront of new technology but also by the pressing need to cut air pollution. Over 40 % of all the electric vehicles produced around the world are destined for China. Worldwide, 17 of the 25 cities with the highest concentration of electric cars are in China. In Shanghai alone, there are more than 160,000 – over 5 % of the entire global fleet of electric vehicles.

The figures are no coincidence. China was one of the first countries to recognize the potential of electrification to shape the future of mobility. The Chinese government wants to transform the country – once viewed as the workshop of the world – into a high-tech superpower. To this end, it has launched a new indus­trial strategy under the slogan “Made in China 2025,” with the goal of leading the world in ten key sectors of the “future economy.” The strategy defines auto­motive systems as a core technology. The focus of attention here is on low-emission drives.

“The Chinese government is investing massively in efforts to promote alternative drive technologies,” explains Humphrey Chen, General Manager at ElringKlinger in China. “Generous incentives are available to encourage people to buy electric vehicles.” If you buy a car with an alternative drive, you are eligible for a subsidy, depending on the car’s range, of between 22,000 Chinese renminbi (CNY) for plug-in hybrids (around EUR 2,700) and CNY 50,000 (around EUR 6,000) for pure electrics. New cars with fuel cell drives qualify for an even bigger subsidy – up to CNY 200,000 (around EUR 25,000). The incentive for commercial vehicles is higher still because they are more expensive – CNY 100,000 (around EUR 12,000) for battery-electric trucks and an impressive CNY 500,000 (around EUR 60,000) for hydrogen-powered trucks. In addition to providing a subsidy to new buyers, the administration offers a host of other benefits for electric vehicle drivers. In many cities, they are granted an immediate registration certificate. In some cases, you might have to wait months to register a car with a standard combustion engine. What’s more, in many places, you can park your electric car free of charge, and the recharging infrastructure is being expanded rapidly.

Forecast market share of electric vehicles as a percentage of all new registrations
Source: Center of Auto­motive Management

The government is setting an example, too. In many cities, public officials are required to use an electric vehicle. In Shanghai, for example, 50 % of all new official vehicles must be equipped with an electric drive. The requirement in Beijing is even higher at 100 %. In the capital, all new taxis and car-sharing vehicles must be pure electrics, the goal being to convert the entire fleet by 2022. But the government is not stopping there. It recently set a legal minimum quota for electric cars. Manufacturers will have to meet a minimum target for the proportion of alternative drive vehicles they produce and sell. The quota for 2019 is 10 %, rising to 12 % from 2020.

386k
electric buses are on China’s roads.

China is clearly the biggest e-mobility market in the world and is likely to remain so for some time to come. The country’s own vehicle manufacturers – in a dominant position with a market share of around 90 % – are gearing up to meet the demand for new forms of mobility.

ElringKlinger established its first operations in China over 25 years ago, and since then the company has forged good relationships with local producers. Around a quarter of its EUR 170 million revenue in the country comes from Chinese customers alone. Dirk Schneider is VP Sales Asia-Pacific at ElringKlinger: “Some of the major Chinese producers such as BAIC and Chang’an have said they intend to stop making combustion engines in 2025 and from then on sell only electric cars. The government has openly con­sidered an official ban on combustion engines, although as yet there are no specific plans to do so.” The e-mobility boom has thrown up some new names in the industry and is changing the entire landscape in which competitors operate. In China alone, there are over fifty start-ups keen to penetrate the market with new electric models.

From a supplier perspective, if you want to survive in this new world of electric mobility, you need to position yourself now with a global profile. As a leading innovator and technology provider, ElringKlinger understands that perfectly. The company began series production of cell contact systems for the lithium-ion batteries used in electric cars as long ago as 2012. The first customer was a German premium car maker with a pure electric vehicle. “Since then, our client base has grown and now includes other vehicle manufacturers and suppliers,” explains Armin Diez, who holds the position of Vice President E-Mobility and New Business Areas for battery and fuel cell applications.

is the average range of a battery-powered electric car. The capacity of the battery to store energy efficiently is a crucial factor in determining the vehicle’s range. For lithium-ion batteries, ElringKlinger supplies a range of products such as cell connectors and housings as well as complete battery systems.

»As far as the e-mobility market is concerned, China is where the action is. The determination and government commitment here are simply out­standing.«

Armin Diez, Vice President E-Mobility and New Business Areas

For those applications where battery drive systems cannot deliver the necessary range or specified recharging times, China, similar to its neighbor Japan, is keen to adopt fuel cell technology. Large-scale production of fuel cell systems is to be achieved by 2020. At present, the focus is on commercial vehicles, such as buses, where the infrastructure is relatively simple. Although fuel cell production costs remain very high, experts are predicting a significant fall over the coming years. There are plans to run hydrogen-powered buses as part of a high-impact promotional campaign during the 2022 Winter Olympics in Beijing. The government also wants to see no fewer than one million fuel cell vehicles on the country’s roads by 2030. In early 2018, the Chinese Minister for Industry and Information Technology, Miao Wei, former head of the country’s second-biggest car maker Dongfeng before entering politics, announced his intention to provide further incentives for fuel cell vehicles and in­frastructure. One example of government investment in this field is the construction of a “hydrogen city” in Jinan in eastern China to accelerate the development of fuel cell vehicles.

is the range achieved by vehicles equipped with a fuel cell drive. ElringKlinger’s portfolio includes market-ready components such as bipolar plates and complete fuel cell systems.

An employee at the new ElringKlinger plant in Chongqing checks a door module. Lightweight construction has a major role to play in the field of e-mobility.

As such, China – once an emergingmarket itself – is now playing a key role in defining the future shape of mobility. Armin Diez believes the country offers out­­­standing prospects for ElringKlinger’s fuel cell business: “More than two-thirds of our current fuel cell development projects involve Chinese partners.” The company began research and development work in this field nearly twenty years ago and since then has built up an extensive portfolio of products. “Our value chain is very deep-rooted, and we make some key components such as bipolar plates and plastic media modules ourselves,” he explains. “That means we can supply complete fuel cell stacks, modules, and systems.” Demand is very strong, especially from China, and to meet it, ElringKlinger recently set up an applications and engineering center at its existing Chinese plant in Suzhou. The first fuel cell application testing stations are expected to begin operation here very soon.

30 million
the population of Chongqing, a megacity in Western China

Besides batteries and fuel cells, one other techno­l­ogy has a crucial role to play in shaping the future of mobility – lightweight construction. Logically, a lighter vehicle will use less fuel and have a greater range. For this reason, lightweight engineering methods are seen as paving the way for electromobility and are consequently an important strategic factor in the development of ElringKlinger’s portfolio. The company made its first venture into the structural lightweighting market in 2015 with its hybrid-technology cockpit cross-car beams and frontend carriers. Compared with traditional all-metal components, ElringKlinger’s aluminum-plastic solution offers weight savings of up to 40 %. The first major order was soon followed by a second. Today, cock­pit cross-car beams roll off the series production line in Canada, the USA, and China.

Klaus Bendl, Vice President Lightweighting/Elastomer Technology, is responsible among other things for the lightweight solutions business. He believes the new hybrid technology can be used for many other applications in addition to the cockpit cross-car beam. “The number of development projects we are work-ing on in the field of lightweighting has shot up over the last few years,” he observes. “We think there is a lot of potential there – even among those new automobile manufacturers that are not yet part of our customer base.” In this context, the Chinese market is naturally a key target.

To harness the full potential of that market, ElringKlinger has built up an extensive production network in the country spanning three sites – Changchun in the north, Suzhou in the east, and (very recently) Chongqing in the south-west.

Located in the country’s interior, roughly 1,600 km from Shanghai, Chongqing is western China’s main industrial hub. Several well-known car makers are based there. In 2017, over three million vehicles were produced in Chongqing alone. ElringKlinger began operating its own factory there in 2018. The new site was established to produce lightweight structural components, especially door module carriers made of organo sheets for use in the compact class vehicle of a global car maker. Once the organo sheets have been formed, the next step in the process is to injection-mold a series of plastic elements onto the structure to provide additional component functions. Organo sheets are quite unlike traditional metal sheets. Very light yet extremely sturdy, these fiber-reinforced compos­ites are much more durable and rigid than conventional plastics. As in the case of hybrid technology, this technique can potentially be adapted to other applications such as seat pans, battery mountings, and trunk recesses. It is also possible that ElringKlinger will set up a new factory in Asia in the near future to produce lightweight structural components for one of its new generation customers in China.

2,500m2

ElringKlinger’s new 2,500+ m2 plant in Chongqing produces door module carriers made from organo sheets. At the moment, ElringKlinger has around 30 employees at the site, which is currently being set up. It has an annual capacity of over one million components.

»The potential for us to grow our lightweight construction business in China – with innovative components such as the cockpit cross-car beam and door module carrier, for example – is enormous.«
Klaus Bendl, Vice President Lightweighting/Elastomer Technology

There can be no doubt that lightweight construction methods and alternative drive technologies are now well established in the Chinese market, and the country is setting the pace in these areas all over the world. Both also play a key role in ElringKlinger’s strategic planning. In 2018, they contributed around 7 % of the Group’s total revenue. By 2030, that figure is expected to rise to over 25 %. While this is clearly an ambitious target, it is one that the company is in a good position to achieve – not only in China but all over the world.

The door module carrier is used to attach components such as the window regulator and the locking system.