FRIDAY, March 29, 2024
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China’s electric cars light up Beijing show

China’s electric cars light up Beijing show

Auto executives from across the globe are plugging their plans for an electric car future in China at the Beijing auto show, but they will find their Chinese counterparts are already motoring ahead.

Local carmakers and upstarts flaunted their latest plug-in models at the industry extravaganza this week, from sedans to SUVs and futuristic supercars fitted with the latest gadgets.
While American, Japanese and European auto giants dominate sales of combustion engine vehicles, Chinese firms are in the driver’s seat when it comes to electric cars.
Policymakers in Beijing have been pushing the market to go electric, using a carrot and stick to drag along consumers and automakers through a quota system for manufacturers and subsidies to car buyers.
China hopes to reduce its dependence on imported oil and cut pollution, both strategic priorities for Beijing, and it has announced plans to phase out fossil fuel vehicles at a yet-to-be-decided date.
Unable to seed a company capable of competing on the global stage, the shift conveniently provides China a new opportunity to foster local champions in world’s largest car market.
Unencumbered by history and the billions sunk into refining gasoline engines, electric presents a clean competitive slate for home-grown automakers.
“The entry hurdle is lower with an electric drive train than it has been with a combustion engine, which requires experience or where at least the contenders have experience of 130 years,” Dieter Zetsche, head of Mercedes-Benz cars, said at the auto show. Zetsche welcomed the Chinese newcomers: “The moment you don’t have competition you get lazy.”
    
Xi’s market goals 
But it is unclear if the competition will play out on a level playing field.
“The government is supporting the development of EVs,” said Li Zhuihui, marketing manager at newcomer Hanteng Auto, which is pushing into the electric vehicle market.
“There are financial incentives to research and build electric,” he said.
One key industrial policy wielded by Chinese President Xi Jinping called “Made in China 2025” aims for domestic automakers to control 70 per cent of the electric vehicle market by 2020 and 80 per cent by 2025. Elon Musk, CEO of Tesla Motors, compared the environment to “competing in an Olympic race wearing lead shoes”, in a tweet to US President Donald Trump last month. 
Still, China is one of Tesla’s largest markets.
Roughly three-quarters of the gleaming electric car models on display in Beijing are homegrown, reflecting domestic firms’ dominance in their home turf. 
Last year new energy vehicles sales exploded 53 per cent to 780,000 units in China, though they still constitute only 2.7 per cent of the market – international behemoths like Volkswagen and General Motors sold most of the 28.9 million unit that changed hands here last year.
Despite both companies – and a heap of other foreign automakers – announcing huge investments in electric projects recently, Chinese companies have beaten them to the road.
China’s BAIC ranked among the world’s largest EV sellers on the globe last year, turning over roughly 92,000 units, according to data from industry site EV Obsession.
Other Chinese firms such as ZD, Geely, BYD, Zotye and JAC racked up sales comparable with their well-known peers.
In Beijing, car company Nio backed by IT giants Tencent and Lenovo, sported a line of electric SUVs and supercars at its booth.
Another blossoming company is local brand Lynk & Co – a joint venture between Geely and Volvo – which plans to launch a plug-in SUV for Europe in 2020.
“Lynk is looking toward the young of global metropolises and will be sold in major European cities,” said its vice chairman Wei Silan.
    
Battery technology 
Batteries remain a critical piece of every electric car and Beijing’s protective embrace of the technology may ensure China becomes the world’s battery lab.
Fujian-based CATL is one major supplier benefiting from the policies.
“The technology you’ll see in a CATL factory is as good as you’ll see anywhere else in the world,” said Trevor Worthington of Ford’s product development division, which will use the firm’s batteries in its Chinese electric models.
Hubertus Troska, head of Daimler’s China business, said he too expected state policy to lead Mercedes-Benz to local suppliers.
“We will work with Chinese cell suppliers to anticipate and be in line with future regulation,” Troska said.
The electric uptake has brought along prices for commodities like cobalt, a metal critical for light and durable batteries.
The price of cobalt has risen to $91,000 per tonne on the London Metal Exchange, roughly tripling in value since the beginning of 2016.
China has not yet figured out how to corner the supply chain for the crucial component, with CATL listing its rising price as a risk in its recent initial public offering prospectus. And international mining giant Glencore has become one of CATL’s largest suppliers, providing the firm with cobalt hydroxide.

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