Author: Michelin

In 2022, the automotive industry is finally going to have a major event – the Chengdu Auto Show – since missing the Beijing Motor Show. Our colleague who arrived in Chengdu a week early had a “sauna dinner” as a reward:

Countless people in Sichuan and Chongqing, as well as people in other parts of the country experiencing power shortages, had similar experiences. With temperatures exceeding 40 degrees Celsius, shopping malls and office buildings closed their air conditioning due to power shortages. It is not surprising that the daily reading of the hashtag “Sichuan and Chongqing people want to cry” on Weibo reached 320 million.

The electric cars, as well as their owners, which are always criticized when there are power shortages, also wept with the people of Sichuan and Chongqing during power shortages.

Power rationing level one: car use, purchase, and production all “weep”

At 1:30 in the morning, the streets of Chengdu were lined with long queues of ride-hail drivers who charged their electric cars overnight. Not only the ride-hail drivers, but private car owners who enjoy “self-built charging stations” also have similar experiences: “queue for two hours, charge for one hour”, “ran three charging stations to charge…”.

The long queues of electric car charging on the streets of Chengdu in recent days may be as spectacular as the queues for refueling before the oil price broke “10”.

The reason behind this is the “power rationing” strategy implemented in Sichuan and Chongqing since August 15.

Since this summer, there has been extremely hot weather that occurs only once every 60 years, resulting in a surge in electricity demand for refrigeration. However, precipitation has decreased significantly this year. According to statistics from the meteorological department, the average precipitation has decreased by 51%. The Sichuan and Chongqing region mentioned earlier is a major hydroelectric power producer, accounting for more than 80% of the electricity generated by hydropower, and only 15% by thermal power.

When the “water” that is crucial to hydropower is insufficient, power shortages are an inevitable result. Eventually, it is passed on to the people, either by charging stations being only partially open or opening only during certain times.

On August 17th, Tesla announced that 12 Supercharger stations in Chengdu had temporarily suspended operation and all Supercharger stations in Chongqing had closed. 5 Xpeng Supercharger stations were in temporary closed status. Except for a small number of battery swapping stations, other swapping stations for NIO adopted staggered nighttime swapping.

Some charging stations and piles of e charging and Teld are still closed on the 23rd. In order to guide people to charge their cars at off-peak hours, these public charging piles offer night charging discounts.

So there was a scene of queuing for charging in the middle of the night at the beginning of the article, which lasted at least until the 25th.

Not only charging, but also because of the mall’s restrictions on closing some air conditioning, Nio’s experience store located in the mall is also difficult to escape. As shown in a leaked chat record on the Internet, due to the air conditioning, the Nio experience store in the mall “may be a bit hot in the cow house,” which really discouraged potential car owners who wanted to go to the mall to blow air conditioning and take a look at the cars.

If it is said that the productive limitation policy of “letting power be enjoyed by the people” has made consumers who buy and use electric vehicles cry recently due to the opening of limited-time and limited-quantity charging and battery swapping stations and the limitation of air conditioning in brand experience stores, then it has also directly affected the automobile manufacturing industry.

As one of China’s six major automobile industry clusters, Chongqing-Chengdu accounts for 10.3% of the domestic automobile production capacity. At present, affected by the power limitation, Toyota’s Chengdu factory has been shut down since the 15th, Changan Automobile’s factory located in Chongqing, FAW-Volkswagen, Dongfeng Citroen, and a series of automotive parts companies located in Sichuan have all been affected.

Taking the Ningde era Yibin factory as an example, the world’s first zero-carbon battery factory with a hydropower ratio of 80%, currently has an annual production capacity of 75GWh. In the 11 days of production suspension due to the power limitation, the battery capacity reduction is 2.26GWh, which can meet the needs of 20,000 to 50,000 pure electric vehicles.

The lithium ore production capacity upstream of power batteries is even more evident. According to the Guotai Junan research report, the lithium salt production capacity in Sichuan accounts for nearly 30% of the national capacity and 20% of the global capacity. This power limitation will reduce the output of lithium carbonate in Sichuan by about 2053 tons, accounting for 5.5% of the industry proportion.

…

For the automotive industry, 2022 has certainly been a year of twists and turns, from the chip shortage at the beginning of the year, the skyrocketing prices of raw materials starting in March, to the epidemic-induced production suspension in many areas in April and May, and now it has just recovered.

It’s no wonder that Sichuan implemented a power restriction policy named “Make electricity available to the people” from the 15th of this month. The next day, Shanghai Economic and Information Committee sent an official letter to the Sichuan Economic and Information Department to request local support for power guarantee to key enterprises in the automobile industry chain.

It is precisely this document that has brought back the “power restriction” responsibility to electric vehicles.

Level 2 Power Restriction Hammer: “If there is not enough electricity, why use electric vehicles?”

On August 15th, Sichuan began to implement the power restriction measures for “Industrial enterprises to make electricity available to the people”. The next day, a document from Shanghai Economic and Information Commission to Sichuan Economic and Information Department was exposed online. The official letter mentioned that SAIC Motor and Tesla had reported to Shanghai Economic and Information Commission that due to power restrictions in Sichuan, parts suppliers were unable to provide sufficient parts, and therefore requested a tilt in power resources to meet production needs.

Once the document was exposed, public opinion on “electric vehicles competing with people’s livelihood for electricity” immediately angered netizens who remained “calm as water” in 40-degree heat. Some even questioned, “If there is not enough electricity, why use electric vehicles?”

When arguing about whether electric vehicles are environmentally friendly, there is often an argument that “the electricity charged by electric vehicles is also produced by burning coal, where is the environmental protection?”

One of the reasons for the power restriction in Sichuan and Chongqing this time is precisely the hydropower that people often talk about as being “environmentally friendly.”

As renewable hydropower accounts for more than 80% of the region’s power supply, while thermal power accounts for only 15%, the emergency increase in thermal power supply is limited due to high temperature and water shortage.

Thermal power generation is not environmentally friendly, which renders the use of electric vehicles meaningless as far as environmental protection is concerned. On the other hand, hydropower and photovoltaic power generation make electric vehicles truly environmentally friendly, but they rely on natural events and produce limited stability.

Taking Sichuan’s hydropower as an example, the hydropower generation in 2021 reached 353.1 billion kilowatt-hours. Due to the surplus water that hydropower stations cannot store, the average abandoned hydropower in Sichuan between 2016 and 2020 exceeded 10 billion kilowatt-hours per annum. Even under the “once in 60 years” scorching heat, only 25% to 50% of the electricity could be produced as usual.

If it is said that electric vehicles charging causes power shortages, then electric vehicles have indeed been overestimated.

In the first half of this year, the domestic stock of new energy vehicles finally exceeded 10 million. Even if all of these 10 million vehicles are pure electric vehicles, we can estimate that the actual electricity consumption for one year is about 22.5 billion kilowatt-hours, and the annual power consumption is about 30 billion kilowatt-hours. According to research by Bloomberg New Energy Finance (BNEF), global residential and commercial air conditioning electricity consumption reached 193.2 billion kilowatt-hours in 2018, of which China’s air conditioning electricity consumption accounted for 34%, or about 65.7 billion kilowatt-hours.

At least for now, the consumption of electric energy by new energy vehicles is still not comparable to the power consumption of air conditioning.

Of course, as the number of electric vehicles increases, their electricity consumption will also correspondingly increase. However, compared with the consumption of electricity, people are more concerned about the peak load on the power grid caused by a large number of electric vehicles charging.

Taking the slow charging power of private charging piles at 7 kW as an example, the burden on the power grid caused by electric vehicle charging in the slow charging mode is similar to that of energy-saving light bulbs. But how to guide and ensure that everyone uses slow charging piles as much as possible is currently an issue that cannot be addressed by public charging piles or even various brands of self-operated charging piles; the coverage of charging piles is the key to solving the problem of electric vehicles.

Of course, with the popularity of 800V high-voltage technology and ultra-fast charging functions, more and more situations where 250 kW, 350 kW or even 400 kW ultra-fast charging is available, it is still unknown how the power grid will adapt to the needs of electric vehicles.

Finally

Looking at the weather forecast on my phone, it seems that rain is finally forecasted in the Sichuan-Chongqing region this weekend when everyone is about to head to Chengdu. The double blow of high temperature and water shortage has caused power outages, which will probably be over soon. However, the “electricity guilt” on electric vehicles may be brought up again every time there is a shortage of electricity.

In the past, we would queue up for gasoline overnight and deal with higher vehicle costs due to rising oil prices. Now, due to power outage policies, electric vehicles are facing difficulties in charging and production.

It is said that the battle between electric and fuel cars is a battle of energy. Look, the problems caused by energy scarcity have also been transferred to electric vehicles.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.