Electric Vehicle (EV) and Plug-in Electric Vehicle (PHEV) stocks are publicly traded companies which produce EVs or PHEVs, their components, or charging infrastructure.

This list was last updated on 6/3/22.

AeroVironment, Inc. (AVAV)
Blink Charging Co. (BLNK)
BYD Company, Ltd. (BYDDY)
Enova Systems, Inc. (ENVS)
EEStor Corporation (ZNNMF)
Electrameccanica Vehicles Corp. (SOLO)
Envision Solar International (EVSI)
EVgo, Inc. (EVGO)
Fisker (FSR)
GreenPower Motor Co. (GPV.V)
iShares Self-Driving EV and Tech ETF (IDRV)
Kandi Technologies Corp. (KNDI)
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS)
Leo Motors (LEOM)
Lordstown Motors Corp. (RIDE)
Navitas Semiconductor Corporation (NVTS)
Nio Inc. (NIO)
Nikola Corporation (NKLA)
Proterra Inc. (PTRA)
Tesla Motors, Inc. (TSLA)
UQM Technologies (UQM)
Valeo SA (FR.PA, VLEEF, VLEEY)
Vision Marine Technologies Inc. (VMAR)
VMoto Limited (VMT.AX)
Wallbox N.V. (NYSE: WBX)
Workhorse Group Inc. (WKHS)
XL Fleet Corp. (XL)
XPeng, Inc. (XPEV)
ZAP (ZAAP)

If you know of any EV or PHEV stock that is not listed here, but which should be, please let us know in the comments. Also for stocks in the list that you think should be removed.

The post List of Electric Vehicle and Plug-In Hybrid Electric Vehicle Stocks appeared first on Alternative Energy Stocks.

by Daryl Roberts

DC Fast Chargers (DCFCs) and Tesla superchargers are a key element in electric vehicle (EV) charging infrastructure that could facilitate wider adoption of EVs by enabling recharging that comes to resemble the time currently taken for gas station stops, and thereby reducing “range anxiety” for drivers.

However, the pricing structure for electrical costs incurred at commercial DC fast chargers is currently prohibitive, because it includes a special fee called a “demand charge”. Rate design in a number of states includes this additional charge, based on the “peak rate” on electric power consumed in kW. In New York, demand charges are determined from max instantaneous demand, the amount used in any 15-30min segment in a monthly billing cycle (not from coincident peak demand which is user demand that coincides with peak system demand). This is a separate factor, distinct from the volume of electricity actually consumed, which as priced in kWhs and referred to as the “volumetric charges”.

Demand charges were originally conceived to apply to small to medium commercial enterprises with high utilization, to incentivize reduction of demand during periods of demand congestion. As long as such businesses have peak instantaneous demand that coincides with periods of demand congestion, then these businesses can be said to be paying a fair rate for their cost of service.

DCFCs by contrast are “low utilization” enterprises, with low monthly load factor at current low levels of EV penetration, despite high capacity factors. DCFC load profiles are intermittent and random, as compared to the load profile for typical commercial entities driving demand. Consequently, peak instantaneous demand only rarely coincides with periods of demand congestion. Demand charges for DCFCs not only fail to align with the cost of delivering power, they are so disproportionate as a percentage of costs that even the NY Power Authority recognizes that the business proposition is rendered infeasible, precluding a viable case for DCFC investments.

Two examples of the calculations demonstrate the problem – one included in a recent NY Power Authority petition to the Public Service Commission, the other in a Mckinsey consulting analysis (How battery storage can help charge the EV market) as shown in the graphic below. 

Comparing the two examples in the table below, the NYPA version shows that demand charges constitute almost 80% of costs, which are roughly confirmed by the 90% shown in the McKinsey version.  The ratio is not improved by 3x scaling as shown in the graphic, because the increased utilization also raises the total instantaneous demand.

As currently structured, in NY as well as in other states facing similar considerations, it is increasingly recognized that demand charges applied to low utilization, intermittent DCFC stations do little to mitigate impacts to peak load, but rather result in disincentives to development that are inconsistent with other state goals. In New York, a goal of 800,000 electric vehicles by 2025 was set under the Multi-State Memo of Understanding, and since there are less than 30,000 on the road in 2108, in order to add 110,000 EVs per year for the next 7 years, some dramatic  incentives will be needed to accelerate infrastructure penetration and EV adoption.

A Rocky Mountain Institute study from Oct ‘17 contended that eliminating demand charges for DCFCs is consistent with societal objectives of vehicle electrification. Creating a business opportunity for companies that provide public EV charging is a societal objective and hence these companies should be able to earn a reasonable profit providing a valuable service & maintaining publically available charging equipment. Even if volumetric tariffs for public DCFCs does not recover all system costs incurred, some costs could be justifiably recovered from general customer base, because DCFC’s provide a public benefit in air pollution reduction & other local economic benefits.

Rather than designing a tariff by building up from cost basis of the utilities, RMI proposes instead to work down from a cost that would be attractive to EV drivers. Find a consumer cost target, deduct a reasonable profit margin, & set that as the rate ceiling for public DCFC owners. Any shortfall in utility revenue for actual costs of service could be recovered from the general customer base on a cost basis only, which would also recognize numerous EV-grid value streams, including benefits to the grid from “smart charging” EVSE’s and the value of enabling greater renewable energy penetration. As emerging EV telematics technologies evolve, a more precise quantification of the value streams in the EV-grid interaction can result in a more sophisticated & granular tariff design. NYSERDA offered a 2015 report with similar contentions Electricity Rate Tariff Options for Minimizing DCFC Demand Charges

In New York, the issue is before the Public Service Commission, NYPA Joint Petition of New York Power Authority, New York State … – NY.gov filed 4/13/18 by five agencies NY Power Authority, NYS Dept of Environmental Conservation (DEC), NYS DOT, and NYS Thruway Authority, to request immediate and long-term rate relief to encourage statewide deployment of DCFC facilities. The Petition argues that:

• Demand charges render DCFC business case infeasible, are not cost-based
• Shifting to non-demand metered rate is fully justified, would spur deployment
• Other states have taken similar action on demand charges for DCFCs, and offer various strategies for immediate elimination followed by incrementally adding them back in as utilization rates increase, such that incentives are structured to synergize with Time of Use rates to encourage charging at off peak periods.
• Immediate elimination of demand charges would reconcile the tariff to be consistent with other policy initiatives:
  • Multi-state MOU for 800K vehicles by 2025
  • GHG 40% reduction targets for 2030 in State Energy Plan, & exec Order 166
  • Renewable Energy Vision goals (REV)
• 1500 DCFCs are calculated to be necessary to me the ZEV mandate, which if achieved would result in utility revenue arising from EV use of $234 million (net the loss of avoided delivery charges $58.8 million to $124.6 million), yielding net positive value to utility ratepayers at approximately $175 million to $109 million due to the increased EV adoption, made possible by increased penetration of DCFC, and increased throughput from EV charging by 2025
• CO2 reductions due to EV adoption would be valued at $64 million by 2025.

Supporting comments were filed 7/23/18 by the Sierra Club and Natural Resources Defense Counsel.   Readers can view other comments that have been filed under the case number 18-E-0138 by numerous other industry participants, including by companies producing charging equipment, vehicles and charging networks [Tesla (TSLA), Greenlots, ChargePoint, EVgo, Siemens (SIE.DE, SIEGY), BYD (BYDDY, a Chinese electric bus manufacturer)], non-profit public interest organizations [RMI, NY Battery & Energy storage Tech Consortium, Advanced Energy Economy Institute, City of NY], and utilities [Orange & Rockland, PSEG (PEG), Niagara Mohawk, National Grid (NGG)] and others.

If this regulatory shift can be achieved, an accelerated transition to electrification of transportation is being envisioned in some interesting media.   NYPA offers a vision for DCFC corridors that can provide 200 miles of range in 10 minutes of charge.  Tesla has the most evolved vision for DCFC infrastructure, with over 1200 supercharger stations and 10,000 superchargers globally, and is promoting 3^rd party development of charging convenience stops.  

Other extensive DCFC charging networks are being developed with similar visions for providing sufficient charging services to accommodate massive adoption, including:

•  Electrify America is administering, in collaboration with Greenlots, the VW (VOW.DE) settlement fund which is mandated to distribute $2B in infrastructure development as part of the fine in its emissions fraud case;
•  Ionity, the European charging network [Porsche (PAH3.DE), Audi (NSU.DE), VW, Daimler (DAI.DE), BMW (BMW.DE) and Ford (F)],
• Fastned in the Netherlands
• ChargePoint & EVgo are the next largest charging network and EVSE providers in the US
• Projects linking remote renewable supply to DCFCs are also emerging.  One such example was the remote net metering proposal from an independent renewable generator (small hydro) providing dedicated supply to an independent gas station chain in NY (Stewarts).

For charging station developers, the battle is being waged on two fronts: 1) to change the Demand Charge regulatory environment and 2) to develop charging facilities that integrate battery storage to benefit from time of use charging, and peak shaving discharge to smooth the load profiles and thereby avoid or reduce Demand Charge pricing, supplemented by PV generation on solar carports.  Peak smoothing has the potential to significantly reduce the burden of demand charges, even if there is no regulatory relief, as shown in the calculations below, in this estimate by 73%. 

Perhaps the most forward looking is the vision of tech firm ZapGo, which is developing carbon ion supercapacitors that will be integrated with batteries to enable very short charging times, both for end user vehicles and for supply trucks envisioned be able to deliver fast recharging of bulk storage in filling station environments.

Both technology and regulatory solutions need to be aggressively pursued in order to achieve the goals being set forth, for reduction of GHG’s and dramatically increased electrification of transportation.

Bio

Daryl Roberts has been following renewable energy technology & policy for 20 years, recently most interested in EV charging infrastructure, community solar development and net metering policy, utility scale solar development, project financing, and renewable energy asset management. He has participated in Sierra Club electric vehicle policy initiatives, and offered consulting for grant applications to install municipal EV charging stations. He has been involved with business plan development for commercial projects in diverse technologies, municipal solid waste gasification, PV fabrication on architectural glass, and LENR research. Previously he worked for almost 20 years in litigated medical malpractice claims. 

The post EV Fast Charging Disincentives appeared first on Alternative Energy Stocks.

Efficient vehicle stocks are publicly traded companies that produce technologies allow cars, trucks, aircraft and ships to travel the same distance and carry the same loads using less fuel.  Includes electric and hybrid electric vehicles, as well as other improvements that reduce fuel use.  Similar to Alternative Transportation stocks, which reduce overall fuel use by shifting passengers or freight to more efficient types of vehicles.

This list was last updated on 8/24/21.

AeroVironment, Inc. (AVAV)
Aptiv PLC (APTV)
BorgWarner (BWA)
Blink Charging Co. (BLNK)
BYD Company, Ltd. (BYDDY)
CDTI Advanced Materials, Inc. (CDTI)
CPS Technologies Corp. (CPSH)
Enova Systems, Inc. (ENVS)
EEStor Corporation (ZNNMF)
Elio Motors, Inc. (ELIO)
Evolve Funds Automobile Innovation Index ETF (CARS.TO)
Envision Solar International (EVSI)
Gentherm, Inc. (THRM)
GreenPower Motor Co. (GPV.V)
iShares Self-Driving EV and Tech ETF (IDRV)
Kandi Technologies Corp. (KNDI)
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS)
Leo Motors (LEOM)
Linamar (LIMAF)
Magna International (MGA)
Power Solutions International (PSIX)
Ricardo PLC (RCDO.L)
Sensata Technologies (ST)
Tesla Motors, Inc. (TSLA)
The Timken Company (TKR)
UQM Technologies (UQM)
Valeo SA (FR.PA, VLEEF, VLEEY)
VMoto Limited (VMT.AX)
Workhorse Group Inc. (WKHS)
ZAP (ZAAP)
Zotye Automobile Co., Ltd (000980.SZ)

If you know of any efficient vehicle stock that is not listed here, but which should be, please let us know in the comments. Also for stocks in the list that you think should be removed.

The post List of Efficient Vehicle Stocks appeared first on Alternative Energy Stocks.

Battery stocks are publicly traded companies whose business involves the manufacture of batteries, battery components, or battery management systems used to store electricity through electrochemical means.

This list was last updated on 3/21/2022.

If you know of any battery stock that is not listed here and should be, please let us know by leaving a comment. Also for stocks in the list that you think should be removed.

The post List of Battery Stocks appeared first on Alternative Energy Stocks.

Doug Young

Bottom line: Beijing should take a more holistic approach to developing green cars in China, which should include education of owners and creation of owner communities in addition to financial incentives and infrastructure building.

China made the latest new move to boost its sputtering electric vehicle (EV) program over the holiday, disclosing an ambitious plan to sharply accelerate installation of charging stations across the country. The plan was aimed at countering one of the biggest obstacles to EV development, namely concerns from potential owners about difficulties they might face recharging their vehicles.

The new move comes after Beijing announced new financial incentives for EV buyers in May, and could provide some more momentum to a national program that has fallen far short of expectations. These kinds of piecemeal measures look good in theory, but often seem to fall flat due to lack of national coordination and supporting education and other publicity.
Instead of relying on these kinds of one-off measures, Beijing should take a more holistic approach that includes development of an ecosystem to support broader development of the green vehicle industry.

Such a system should include not only subsidies and tax incentives for buyers and builders of charging stations, but also building of other infrastructure like service centers for car maintenance. A central element of such an approach should also include a stronger focus on consumer education, which could include holding of local workshops and creation of online social networking groups. It should also include more media coverage of issues related to EV ownership.

China has set ambitious plans for new energy vehicles, in a drive to reduce the country’s polluted air and foster development of a cutting-edge sector with big potential not only at home but also in the global market. The country aims to have 5 million green energy vehicles on its roads by 2020, equaling about a fifth of the 23 million total cars sold nationwide last year.

And yet EV sales have remained painfully low, despite tax incentives that were introduced last year, and were further boosted in May. Total sales of electric, hybrid and natural gas powered vehicles roughly doubled in the first half of the year, but even then the figure was only a modest 60,000 vehicles. Among those EVs, one area with the biggest potential, grew at a slower rate of about 40 percent to just 5,114 vehicles.

Accelerating Charging Stations

In a move to boost the slow growth of EVs, a top official at the National Energy Administration said last week that guidelines would soon be issued aimed at accelerating the roll-out of infrastructure for such vehicles. (English article) Those guidelines would aim to see charging facilities installed at one-tenth of the nation’s public car parks over an unspecified period.

The official conceded that lack of national coordination has been one of the major obstacles to EV development to date, resulting in widely varying standards for various brands of cars, batteries and charging stations. He added the government is now taking steps to improve the situation by creating a set of unified national standards.

The sector’s fragmented nature has dampened sales at big names like homegrown EV maker BYD (HKEx: 1211; Shenzhen: 002594; OTC:BYDDF), as well as US high-flyer Tesla (Nasdaq: TSLA), both of which had big hopes for the market. BYD has struggled to find a big consumer market for its vehicles, pressuring the company’s profits, while Tesla’s disappointing progress prompted the company to launch a major overhaul of its China operations earlier this year.

The National Energy Administration’s latest moves could help to jump-start EV sales, especially the drive to standardize charging technology. But the agency should take this more broad-based approach a step further and use its influence to create other standards and networks that would become part of a national ecosystem to promote the technology.

Bringing consumers more intimately into the process should be a central part of that effort, since such people will ultimately drive sales that could help Beijing meet its ambitious targets. Such efforts could include creation of online and offline EV communities, and other forums where potential owners could easily learn about the technology and get quick answers to their questions. That kind of educational campaign would provide consumers with the information they need to ease their concerns about adopting such a new technology that is still poorly understood by most.

Even such a coordinated approach may not be enough to overcome other obstacles, most notably the relative immaturity of some related technologies that still make EV ownership less attractive than driving traditional gasoline-powered cars. But creation of such an ecosystem would greatly improve the chances for success by giving consumers not only financial support but also the confidence they need before making the major decision to buy an electric car.

Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.

The post Holistic Approach Needed to Charge Up China EVs appeared first on Alternative Energy Stocks.

Doug Young

Bottom line: Tesla’s China reboot appears to be complete, paving the way for it to gain some traction in the market by year end if it can effectively target the nation’s wealthy, image-conscious trend setters.

Nearly a year after driving into China on a wave of fanfare and big hopes, electric vehicle (EV) superstar Tesla (Nasdaq: TSLA) is pressing the reset button on a market that has huge potential but also some major obstacles. This particular reset has been in the works for the last few months, but appears to be near completion with indications that the company has discarded its previous short-term aggressive sales targets for the market.

The reboot to Tesla’s China business is discussed in a series of interviews by Zhao Kuiming, its head of China sales, who was on a PR offensive following the recent overhaul. (Chinese article) It’s unclear from the reports if Zhao is new to Tesla, but he appears to be the company’s new public face after previous China President Veronica Wu resigned in December after just 9 months on the job. (previous post)

In one of the interviews, Zhao points to China’s lack of infrastructure as a major obstacle for the company in the first year since it entered the market. Previous reports had indicated Tesla believed that China could quickly become one of its top global markets, with annual sales of 4,000 to as many as 8,000 EVs possible as quickly as this year. But the most recent reports have said the company only sold 120 cars in China in January, showing just how difficult those lofty targets would be to attain.

The headline on Zhao’s latest interview says the company has temporarily put aside any short-term sales targets, and instead is focusing on building up the foundation it will need to support customers over the longer term. Zhao never actually addresses the issue of specific sales targets in the body of the article, though the tone does seem to indicate that Tesla is focusing on other matters for now.

The fact that Tesla is now going on a PR offensive appears to show that its China overhaul may be complete. The lack of figures in Zhao’s first interviews is also striking, and seems like a smart tack even though it will inevitably leave investors hungry for a clearer picture of how the company sees the market. Tesla’s shares surged last year, partly on unrealistic expectations for China, and have lost about a third of their value since last September as reality has set in.

I can’t comment on Tesla’s situation in the US, but China is clearly a market that isn’t quite ready for EV prime time. Billionaire Warren Buffett has made a similar discovery with his investment in the sputtering BYD (OTC:BYDDF; HKEx: 1211; Shenzhen: 002594), which has also struggled after its big bet on the China EV market failed to materialize as quickly as the company had expected.

Tesla zoomed into China with big hopes last year, and its charismatic chief Elon Musk personally presided over the company’s first high-profile local sale last April. (previous post) But since then Tesla has struggled to meet the high expectations it set for itself. It has blamed the problems on lack of infrastructure, though that’s probably only part of the problem. After all, the company was never targeting a mainstream audience with its high-end cars, and anyone who could afford a Tesla was probably more interested in being a trend-setter without too much worries of where to find a charging station.

Instead, Tesla’s problems are probably due to a combination of factors, including management and marketing teams that failed to understand the complexities and unique features of the China market for luxury cars. As a result of those stumbles, Tesla has cut about a third of its China workforce, with media reporting earlier this month that the company had laid off about 180 of its 600 locally based workers.

It’s good to see that the overhaul appears to be in the rear view mirror, and also that Tesla is tamping down expectations to avoid a similar disappointment with its relaunch. The company’s previous moves to develop infrastructure look like a good start to building up a solid platform for long-term growth in China. But Tesla will also have to show it can manage in the tough market, which will only become clearer in the year ahead as we get a better glimpse of the new team that will lead its reboot into China.

Doug Young has lived and worked in China for 16 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.

The post Tesla’s Chinese Reboot Complete, But Questions Remain appeared first on Alternative Energy Stocks.

Doug Young

Bottom line: Tesla’s weak China performance owes mostly to its lackluster marketing to wealthy, status-conscious Chinese car fanatics, but its situation could quickly improve if it finds a new marketing-savvy country head.

After roaring into China last year on a wave of hugely positive publicity, electric car superstar Tesla (Nasdaq: TSLA) has rapidly lost momentum and now appears on the cusp of a major overhaul in a bid to jump-start its prospects. This kind of development isn’t hard to understand, as Tesla’s charismatic CEO Elon Musk set the bar incredibly high when he sold his company’s first electric vehicle (EV) in China last April.

One of Musk’s and Tesla’s obstacles has been Chinese consumer reluctance to buy EVs, despite Beijing’s strong desire to promote the clean technology. But Tesla’s target market was never really the mainstream consumer anyhow, and instead Musk was pursuing wealthy, status-conscious people who like to be first adopters of trendy new technologies. In that regard, Tesla’s marketing efforts have also sputtered despite Musk’s strong launch for his brand in China last year. (previous post)

I wasn’t surprised by the latest reports saying Musk is preparing to fire some of his key international managers, since Tesla’s China chief left the company in December after just 9 months on the job. (previous post) But what did surprise me was just how weak Tesla’s China sales were. According to the latest reports, the company sold just 120 cars in China in January, translating to an annual sales rate of 1,440 this year. (English article) That’s a far cry from previous reports that said the company was targeting 2015 sales ranging anywhere from 4,000 to as many as 8,000 vehicles.

Musk isn’t used to failure, and the latest reports say he’s sent out an email threatening to fire or demote more country managers unless they can demonstrate a “clear path to long-term positive cash flow”. It’s a bit unclear who exactly received the e-mails, though it seems unlikely they would have been directed at anyone in China. That’s because any country managers there would be quite new, and it’s also quite possible Tesla hasn’t even hired anyone yet to replace outgoing country chief Veronica Wu.

Tesla was holding out big hopes for China a year ago, saying its sales there could quickly grow to levels comparable in its main US market. But the market has been much slower to take off than expected, and Musk previously said that China sales were unexpectedly weak in the fourth quarter. He promised to fix the problem and be back on track with his aggressive growth targets by the middle of this year.

People like Musk tend to be very marketing savvy and in control of their companies, and I suspect this latest email threatening firings was leaked to the media with his direct knowledge, or at least the understanding that he wouldn’t object. Some may blame China’s broader sputtering EV initiative on lack of infrastructure and consumer confidence, which has hurt the prospects of companies like BYD (HKEx: 1211; Shenzhen: 002594; OTC:BYDDF) that are targeting more mainstream Chinese car owners.

But as I’ve said above, Tesla’s problems in China owe more to a lack of savvy marketing and perhaps weak customer support. Musk gave his company a huge boost by generating non-stop publicity during his trip to China last spring for its first sales, creating plenty of buzz and positioning Tesla as a top-tier brand. But the executives who ran the show after his departure clearly couldn’t maintain the momentum, and Tesla has largely disappeared from the headlines since then.

All of that said, the big question is: What’s next for Tesla in China? The answer is that the company’s local operations are clearly broken, and Tesla badly needs a marketing-savvy person who understands Chinese thinking to fix the situation. Such people certainly exist, and the key will be for Musk to find one such person who can build a strong marketing team. If he does, which seems likely, I could envision a turnaround for the company around the middle of the year, which would start with a new campaign launched by by Musk himself.

Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.

The post Tesla Hopes To Electrify Weak Chinese Sales appeared first on Alternative Energy Stocks.

Bottom line: Traditional car makers will suffer from weak sales growth and plunging margins in China in 2015 and into 2016, while EV makers will start the new year slow but could see improvement by the end of 2015.

A flurry of headlines this week are sending ominous signals for the car industry in the year ahead, with both traditional and new energy vehicle makers likely to face an uphill road as China’s economy slows. The problem could be compounded as big new capacity comes online from many major automakers that have invested billions of dollars on expansion over the last 3 years. Other headwinds could come as major cities take steps to ease traffic congestion, with the southern boomtown of Shenzhen becoming the latest to implement a new program to control the number of cars on the road.

Things were already looking tough for the new energy vehicle industry, following recent reports of slower-than-expected sales for electric vehicles (EVs) from domestic leader BYD (HKEx: 1211; Shenzhen: 002594; OTC:BYDDF) and US high-flyer Tesla (Nasdaq: TSLA). (previous post) Most of the sector’s problems owe to wariness among Chinese consumers, who worry about the lack of infrastructure to support the new energy vehicle industry.

Sensing the lack of progress, Beijing is now signaling that government incentives for people who buy so-called “green” vehicles will be extended to 2020. (English article) The incentives were originally set to expire at the end of 2015, so this latest move could reassure some people who are still waiting to see whether infrastructure will improve. Such improvement is likely to come around the middle of next year, when many recent infrastructure initiatives start come on stream, helping sales of these new-technology vehicles to gain some momentum by the end of the year.

But improvement for EVs won’t come as much consolation to makers of traditional cars, which are probably looking at a much longer downturn that will put a chill on sales for 2015 and into 2016. In the latest signal of that accelerating slowdown, Toyota (Tokyo: 7203) has just said that it’s likely to miss its target of selling more than 1.1 million cars in China this year. (English article)

Toyota cited a faster-than-expected acceleration in the slowdown for China’s auto market for its latest forecast, and said growth next year will also be sluggish. China’s car market zoomed in the years after the global economic crisis on government buying incentives as part of a broader economic stimulus package. But it slowed sharply this year as China’s broader economy undergoes a major adjustment, and forecasters are now predicting relatively anemic sales gains in the 5-10 percent range for next year.

In another sign of headwinds the industry is facing, another media report is detailing complaints that many car dealers are making about aggressive sales targets set for them by the big automakers. (English article) The bottom line is that many dealers have ordered more cars than they can sell in order to please the car manufacturers, and as a result now have large inventories of unsold vehicles in their showrooms. That means they’re likely to sharply slow their new orders in 2015 as they sell off existing inventory, putting a further damper on car shipments from manufacturers.

As all these storm clouds build, another report is detailing one more of the industry’s problems in the form of looming overcapacity. That particular report says Korean automaker Hyundai (Seoul: 005380) is planning a major expansion of its Chinese capacity with plans for 2 new factories. (English article) Hyundai is the latest company joining a trend that has seen most of the world’s top car makers announce multibillion-dollar expansions of their China operations over the last 3 years.

Just how bad the automakers will suffer next year won’t become clear until the spring, as business returns to more normal levels after the Chinese New Year period. But I do expect that profit margins and sales growth will drop sharply for most major traditional car makers. New energy car makers will also suffer in the first half of they year, though their prospects could pick up towards the end of 2015.

Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.

The post Electic Vehicle Subsidies May Clear A Lane In Chinese Traffic Jam appeared first on Alternative Energy Stocks.

Doug Young

Tesla launches trade-in program.

Bottom line: Tesla and other EV makers is likely to face an uphill road in China for the next year, but prospects could start to improve in mid 2015 as new initiatives gain momentum.

Reports on a new trade-in promotion from Tesla (Nasdaq: TSLA) are recharging talk earlier this month that the high-flying electric vehicle (EV) maker isn’t doing as well as hoped in China, where sales have gotten off to a slow start. This kind of a sluggish start isn’t too unexpected, since EVs are rare in China and face many obstacles despite a strong push by Beijing to boost the sector. Tesla should be commended for its numerous efforts to promote EV development in China through a wide range of initiatives, but is also largely to blame for the building disappointment after it built up huge expectations for itself in the market.

Tesla drove into China with huge fanfare back in April, when charismatic chief Elon Musk came to the country to deliver his company’s first car in a widely covered event that coincided with the nation’s largest annual auto show. (previous post) After that Tesla announced a series of initiatives to promote its EVs, mostly aimed at building the necessary infrastructure to make car ownership more attractive.

But then the glitter started to peel off of Tesla’s slick veneer when media reported earlier this month that its China chief Veronica Wu had left just 9 months after joining the company. (previous post) That led to widespread speculation that Tesla was facing more headwinds in a market where it had previously indicated it could sell as many as 8,000 vehicles per year, second only to the US.

Now in the latest signal of the company’s uphill struggle, media are reporting Tesla has rolled out a new program allowing car owners to trade in their old vehicles towards the purchase of one of Tesla’s Model S sedans. (English article) Tesla announced the program in a statement, and said buyers in Beijing, Hangzhou and Shanghai can use the value of their old cars to help pay for a new Model S, which is currently priced at 648,000 yuan in China. ($104,000).

The reports say Tesla has exported about 3,500 cars to China since launching sales there in April, but its registered car park has only added about 2,000 vehicles during that period. That would imply that the company’s actual sales and pending orders awaiting delivery are probably in the 2,500-3,000 vehicle range far less than the 5,000 vehicles per year that it hopes to sell in the market. Of course the company hasn’t been in China for a full year yet; but its current sales would still only translate to about 3,700 units sold on an annualized basis.

Of course, Tesla isn’t the only EV maker that’s had a tough time in China. The other notable case is domestic industry cheerleader BYD (HKEx: 1211; Shenzhen: 002594; OTC:BYDDF), whose shares went on a roller coaster ride earlier this month when a report came out spotlighting many of the company’s troubles.

BYD’s shares tumbled nearly 30 percent in a single day after the report came out, prompting the company issue a statement refuting some of the claims, including one that billionaire backer Warren Buffett was preparing to sell down his 10 percent stake. (company announcement) Since then the shares have bounced back somewhat, but they’re still at about half their 2014 high hit back in September.

All of this shows that both domestic and international EV makers will continue to face an uphill road in China, which isn’t too surprising due to the high degree of skepticism towards the sector by local car buyers. I personally think we could see a subtle shift around the middle of next year, as many of the new infrastructure initiatives come on stream and local governments boost their buying to support Beijing’s policy objectives. When that happens, look for prospects of companies like Tesla and BYD to finally start improving, though the shift could come slowly.

Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.

The post Tesla Tries To Jump-Start China Sales appeared first on Alternative Energy Stocks.

Doug Young

Bottom line: Bureaucracy at the homeowner level is providing a major obstacle to China’s ambitious new energy vehicle build-up plan, with new government directives unlikely to fix the problem.

A new report is showing just why new energy vehicles are failing to gain any traction among Chinese consumers, despite huge government efforts to promote the technology. The main culprit in this case is the country’s huge bureaucracy, which affects everything from the largest government programs all the way down to something as simple as installing a vehicle charger in an apartment building.

In most western cities, the installation of an electric vehicle (EV) charger at a person’s home would be a simple matter, involving a visit from a specialist to hook up the proper equipment. Apartments could be slightly more complex though still manageable, since they would involve modifications at collectively owned buildings. But in China, where most people live in apartments, the bureaucracy of installing chargers in such buildings rises to a whole new level, creating a major obstacle that’s unlikely to go away anytime soon.

The new report in the English-language China Daily starts with some sobering figures involving license plates for electric vehicles (EVs). (English article) Unlike the west, license plates in major Chinese cities like Beijing and Shanghai are quite expensive and often cost $10,000 or more, due to auction and lottery systems used to control the number of new plates entering the market. In a bid to encourage EV ownership, big cities have begun awarding new license plates for those cars at much lower prices.

Beijing launched its system in February and named an initial batch of 1,424 license winners. And yet some 980 of those or 70 percent of the total ultimately forfeited their rights to those licenses after failing to actually purchase an EV by an October 26 deadline. Of the people who gave up their licenses, more than half said they did so because there was no realistic place for them to charge their vehicles.

Welcome to the world of Chinese bureaucracy, where something as simple as installing a vehicle charger takes on new meaning in terms of complexity. Anyone who lives in China knows that most buildings have neighborhood committees that tightly control what can and cannot be done on the premises. Added to that are an additional layer of management companies at most newer buildings, which are often reluctant to do anything that could upset the status quo and draw attention from nearby police or neighborhood committees.

The result of all this bureaucracy is a state of gridlock at most buildings, whose managers suddenly become paralyzed when confronted by a resident who wants to do something revolutionary like install a vehicle charger in their parking space. Adding to the issues are the complexity of fees for electricity, since separate metering systems would have to be set up to charge individual residents for the large amounts of power their EVs consume.

In its usual authoritarian style, the Beijing city government is trying to fix the problem by ordering all new buildings in the city to install charging outlets in 18 percent of their parking spaces. That kind of target-oriented approach is typically Chinese, and leads companies and individuals to look for creative loopholes to officially meet the targets without actually advancing the real objective of the goals.

None of this bodes well for China’s EV program, and looks especially troublesome for most domestic names like BYD (HKEx: 1211; Shenzhen: 002594; OTC:BYDDF), SAIC (Shanghai: 600104) and Geely (HKEx: 175), which were pinning their new energy hopes on eventual demand from mainstream consumers. Even high-end producer Tesla (Nasdaq: TSLA) is showing some strains, as reflected by its recent program to build more charging stations. But at the end of the day a niche player like Tesla should feel less impact, since many of its affluent customers have the resources to make sure chargers get installed in their homes.

Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.

The post Bureaucratic Roadblocks To China’s EV Plans appeared first on Alternative Energy Stocks.