Roland Berger Strategy Consultants and Forschungsgesellschaft Kraftfahrwesen mbH Aachen present quarterly electromobility index

• This new index makes it possible to compare how the top seven car nations compete (Germany, France, Italy, the US, Japan, China and South Korea) in terms of e-mobility
• Comparing three key indicators: technology, industry and markets
• China: the country leads in subsidizing research and development
• South Korea: local OEMs demonstrate high level of technology
• Germany: good on technology, but insufficient market preparation

All the main automotive markets in the world are focusing more and more on electromobility. Which car nation comes out on top depends on three key indicators: first, on technology, that is how far local national car makers have developed their cars and how good local subsidy programs are. Second, on their industry: regional development of vehicle systems and component production. And, finally, on its e-vehicle market. Roland Berger Strategy Consultants and Forschungsgesellschaft Kraftfahrwesen mbH Aachen (fka) have now joined forces to bring these indicators together in a new index. The quarterly electromobility index can be used to see how the top seven car nations – Germany, France, Italy, the US, Japan, China and South Korea – line up against one another. The first index published focuses on China, South Korea and Germany.

"The quarterly electromobility index lets us compare how the main markets are performing against one another, using some uniform indicators," says Wolfgang Bernhart, Partner at Roland Berger Strategy Consultants. "It shows that the importance of electromobility in a car market is unrelated to how large that market is."

China: hot on research and development

The quarterly electromobility index shows China is poorly positioned when it comes to adding value regionally. The country is expected to make around 150,000 electric and hybrid vehicles by 2015 – well behind Japan (490,000), the USA (330,000) and Germany (170,000). The Chinese are also behind on making battery cells: predictions are, they will make battery cells to a total capacity of around 1,500 MWh by 2015. "Making far less battery cells compared with, say, Japan or Korea, shows Chinese manufacturers are producing for their own market, and not for export," explains Thomas Schlick, Partner at Roland Berger Strategy Consultants.

Where China is strong, however, is in how much it puts into subsidizing research and development: the Chinese government is set to put over EUR 7 billion into continuing to develop electromobility by 2015. "With this major investment, we expect vehicle technology to improve in the long term," is how Markus Thoennes, Consultant at Forschungsgesellschaft Kraftfahrwesen mbH Aachen (fka), sees it. "On the other hand, demand for electric cars in the Chinese market is still very low right now, and is mainly for vehicles in government fleets." The Chinese government's state development plans in past years had focused on changing course towards hybrid technology – and the automotive experts at Roland Berger and fka do not expect this to change much any time soon.

South Korea leads on technology

The current quarterly electromobility index shows South Korea is in pole position in technology: the level of technology Korean OEMs display in electric vehicles presented but not launched on the market is high and the cost-benefit ratio good. At the same time, the country performs well in terms of research and development in proportion to its total economic output: South Korea will be investing 0.1% of its gross domestic product (GDP) in R&D, equivalent to EUR 734 million by 2015.

The picture looks quite different if we look at national value creation, though: South Korea's electric vehicle output is on the modest side, at just 20,000 electric cars by 2015. They are much better at making Li-ion battery cells, however: by 2015, South Korean experts expect their country to be making more (3,041 MWh) than the US (2,662 MWh). "The South Korean market still offers major potential as a whole," says Wolfgang Bernhart. "Incentivizing people to buy cars and having Korean electric cars in dealers' showrooms will boost the still weak sales figures considerably in the future."

Germany needs to prepare its market better

German OEMs are good at technology compared with the rest of the world, even if not many electric vehicles are available as of yet. By 2015, there will be around 170,000 electric cars in Germany, well behind the leaders Japan and the USA. "That's mainly because other international manufacturers, from France, Japan and Korea, for example, also offer attractive concepts and better value for the money," says Markus Thoennes of fka.

High levels of public subsidy for developing e-mobility, at just under EUR 2.5 billion by 2015, provide an outstanding basis for continuing to develop technology in Germany, however. "What we're missing here is a better prepared market," says Schlick. "Germany needs to subsidize its industry more, adding more value regionally and putting more electric vehicles on the road by providing incentives to buy them."