US China Briefings at GTS 03-07-13

US-China Clean Truck & Bus Forum & Summit Briefing on China Business Opportunities Green Truck Summit Update March 7, 2013 Bill Van Amburg/Kevin Beaty/Susan Romeo CALSTART

Agenda » CALSTART Background » Forum and Summit Overview

» China Overview » China Truck & Bus Market Overview » New Energy Vehicles » Summit Activities & Takeaways » Advanced Technology Insights

» Joining the Forum 2

CALSTART is a national, non-profit, clean transportation technology organization.

Mission:

Support and expand clean transportation industry

Goals: • Create high-quality jobs; • Clean the air; • Reduce dependence on foreign oil; and • Reduce global warming emissions

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Title is here

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What CALSTART Does Activities:

Role: Mission: Support and expand clean transportation industry

Speed development, validation and use of clean transportation systems

TECH: Help partners structure, manage and validate technology projects POLICY: Develop policies supporting clean transportation development and use USE: Help fleets and others choose and use clean transportation SUPPORT: Provide members access to opportunities, connections, info, trends

• Partnership with the US Department of Commerce • Goal: Help drive exports and business growth for US truck and bus technology companies with prime potential Chinese partners

www.chinacleantruck.org 6

Forum’s Main Activities to Date » Webinars and Workshops on key China business and market issues » » » »

Business Practices, IP – April 26 Intellectual Property – May 31 Briefing at HTUF – Sept 18 Local Content Rules, SUMMIT opportunities – Oct 2

» China Business and Opportunities Guide targeting M/HD tech market » Clean Truck and Bus SUMMIT in Beijing » Oct 30-Nov 1 7

Top 20 Motor Vehicle Producing Countries 2011

Source: Production Statistics, Organisation Internationale des Constructeurs d’Automobile; http://oica.net/category/production-statistics/

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Growing Impacts - Pollution Beijing, 1/14/13 From: Energy Digital

» Beijing pollution reaches record levels in January 2013 » PM 2.5 levels > 700 ppm (> 500 considered “off the inde » Government acknowledging issues for first time

China Market – Why “New Energy”? » Roughly 50% of China’s transportation fuel goes to commercial trucks and buses – as opposed to less than a third in the US » New Energy means using new energy technologies (electric, hybrid) and has sometimes been expanded to include using less fuel or using new fuels (natural gas) » China plans to subsidize new energy vehicles $12B Yuan ($1.76B) by 2012

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Business Guide: Advanced Tech for M/HD Vehicles in China » Produced for Forum » ONLY document focused on M/HD truck and bus market » Developed to assist US companies to understand shape of market, opportunities, barriers » Executive Summary available to all » Full report available free to all companies participating in Forum

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Commercial Vehicle Volumes in China » Total sales of commercial vehicles in 2011 were approximately 6.93 million (mini, light, medium, and heavy-duty trucks and buses) » Big portion of the overall totals are mini and light trucks.

» Medium and heavy-duty commercial vehicles sales in 2011 (weight classes 3-8 in the US) together total more than 1.4 million. More than two times the US production.

» Bus sales over 400,000 in 2011. The bus market is many times larger than US production, particularly of urban transit buses.

CV Market by End Use

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China Commercial Truck Sales 2005-2010

China Bus Market

Quick Overview: Fuel Usage » There is a disparity between how trucks and buses use fuel » The majority of all trucks and buses in China are powered by diesel (97%). » The city bus is an exception: 12% are powered by CNG, 5% by gasoline. » Government NEV support has definitely favored public sector bus fleets versus any truck fleets. » However – we are privately tracking a rapidly growing natural gas truck & bus market; at least 60,000 M/HD CNG & LNG vehicles last year.

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Top China MD Truck Makers

2011 Volumes in Thousands Source: iCET, chinatrucks.org

Top China HD Truck Makers

2011 Volumes in Thousands Source: iCET, chinatrucks.org

Chinese versus non-Chinese Commercial Vehicles Average Truck and Bus Power in China

Type

Design Horsepower (hp) – China HDT 207-433 MDT 138-217 City Bus 145 Joint Venture Bus 364

Design Horsepower (hp) - US 306-592 158-286 250-400

Percentage of New Energy Buses in 2011 Large (12 meter) buses dominate NEV deployment Total sales of buses

Approximate sales of New Energy Bus*

Approximate New Energy Bus as % of Total market (%)

Large

73,800

3,525

4.77

Medium

69,128

1,794

2.59

Small

322,500

189

0.05

Total

403,400

5,508

1.37

Source: iCET, China Association of Auto Manufacturers Annual Report 2012

China’s Aggressive NEV Deployment & Development Program » Driven by latest 5 Year Plan » Original “10 Cities, 1,000” Vehicles activity expanded to 25 cities » Funds for EV/HEV deployment and development of core technologies » Transit buses and taxis have been biggest activity areas » However, despite goals city regions are missing targets (technical, manufacturing challenges) 21

CALSTART Companies Have a Range of Key Technologies Valuable for China Export Advanced Combustion, Alt Fuel Systems and Control Advanced Transmissions Electric Drive systems and components

Power management and control Energy Storage and management

Hybrid Drive systems and components

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US-China Clean Truck & Bus Summit Sponsors:

Chinese Company Attendees: Aowei Technology; BYD Overseas Group; China Star Technology; CITIC Guoan MGL; CSR Zhuzhou Institute Co.; DLG Power Battery Company; Dongfeng; E.ON; Fawer Automotive Parts; Foton; Green Power Co.; Hengtong E-Bus; Huayu E-Drive; JAC; Jingjin Electric; Quingling Motors; SAIC-Iveco US Company Attendees: Hongyan; Shanghai Dajun Technologies; Achates Systems; Caterpillar; ShanghaiPower; DianbaBAE New Energy Technology; Cummins; Eaton; Emerson; Shanghai E-Drive; Shanghai Fauricia; Fuel Cell Gentherm; Hydrogenics; Navistar;Power; Nidec; Vehicle Powertrain Co.; Sinotruck Remy: Electric; Sturman Industries; WeichaiSmith Power; Weichai Westport; XJ Wells Group;Fargo Yutong

» Summit is key component of Forum –supported important face-to-face meetings » 120 attendees from nearly 50 different US and Chinese companies » 13 government agencies included MIIT, MOST, MEP, DOC, DOS, EPA, DOE » 3 transit districts 23

Unique Value

"The Summit is a useful resource no matter if you are first exploring the Chinese market, already engaged there, or looking for new opportunities. With a balanced structure between presentation and networking, participants will come away with both new ideas and new conversations. It's a bargain for the investment of time and costs."

- Tim Weaver, Senior Director Global Government Affairs , Smith Electric Vehicles

» Commercial vehicle agenda » Interactive » Key leaders from US and Chinese government and industry » Included users in discussion » Focus on commercialization

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Networking Center

Âť Separate room used between sessions to help companies connect Âť Multiple leads developed, follow on meetings set

"I am glad I participated in the CALSTART US-China Summit, it was a great event and opportunity to meet Chinese bus and truck OEMs in one place. For those who would like to explore the possibilities of doing business in China, it will be one of the events that one won't want to miss."

- Rob Del Core, Business Development Director, Hydrogenics USA 25

China Transit Panel

» Heard real field experiences, needs from major China transit districts » Not common in China » Moderated by Mike Reilly, BAE Systems

"An excellent conference, well organized with a wide range of attendance from both policy makers and business and high quality presentations contributing to free and open discussion between all participants. One of the best I've ever attended."

- Michael Reilly, Chief Representative, China, BAE Systems

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Tech Site Visits

Âť Day three included field trip to Foton electric and alt fuel bus factory, Beijng transit battery swap facility 27

Key Takeaways » China committed to making New Energy Vehicles (NEVs) work » Example: Beijing transit has stopped buying diesel buses; buying 3,000 LNG buses by 2015 plus more electrics!

» Chinese companies very interested in connecting with US technology firms » Government recently further loosened rules on NEV tech imports 28

2nd US-China Clean Truck & Bus SUMMIT Shanghai 2013!

• October 2013 • Build off success of first event in Beijing with Summit in center of transportation tech development in China • Targeted, exclusive meetings of US and Chinese tech leaders, early tech users and key government agencies • Goals: Expand/create exports via targeted meetings and introductions for US tech companies with potential Chinese customers 29

Battery Swap System

Âť 100 buses operating in Beijing since 2008; similar system also in Shanghai Âť Automated system provided by Dianba Technology, funded by State Grid

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Battery Swap System

Âť Battery pack swap out in 8-10 minutes per bus 31

Battery Swap System

Âť Buses swap packs several times per day Âť 240 9kw charging units Âť When not needed for buses, batteries also provide grid support 32

Fast Charge Buses

Âť 30 buses operating in Chongqing Transit Âť State Grid facility refueling Hengtong buses with Microvast batteries Âť 10 minute fast charge gives ~50 kwh of storage

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Fast Charge Buses

» Facility can recharge 6 buses at a time; 400kw – 750V » Buses recharge 5 times/day » Operating in revenue service 34

Hengtong

» Opened new electric, hybrid bus manufacturing line » Also largest producer of NG buses, NG hybrid buses » Chongqing region has 7500 NG buses operating

» Producing 450 hybrid/PHEV buses (15% of production), 50 all electric in 2012

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Questions?

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Joining the Forum » Open to US M/HD tech, component, engine and vehicle companies » Receive full copy of China Business Opportunity Guide for M/HD Market » What’s the catch? Simply agree to confidentially track export successes » Not a commitment to attend China Summit, just take part in Forum (US webinars, info)

» Contact CALSTART staff – Susan Romeo, Kevin Beaty » www.chinacleantruck.org

Upcoming Forum Activities » Webinars on key topics » Tech exports to China– practical tips » Opportunities in natural gas

» Opportunity to tap US Foreign Commercial Service Experts in China – custom research, connections » Updated market information » Summit II in Shanghai – join the tech delegation

US-China Clean Truck and Bus Summit 2013: Shanghai

» Plan Now: Summit 2013 in Shanghai - October » Great opportunity for connections with M/HD industry leaders in, users of fuel efficient technology » Opportunity to sponsor, network, speak, build out custom meetings

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Conclusions – Next Steps » China M/HD market much bigger than US » Tremendous innovation because of NEV commitment – natural gas, hybrid, electric » Real, large scale EV deployments underway – China is ahead of US » Also facing some tech challenges US companies can address » Growing openness to collaboration » Opportune timing for joint activities, learning, leveraging joint relationships » How can we help you in China?

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CALSTART Clean Transportation Technologies and Solutions

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