Will the Great Electric Car Boom Come Out of China?

China’s big bear down on vehicle pollution could be the headway the rest of the world needs to follow suit as the world’s largest auto market starts to make a massive shift towards low emissions vehicles. Indeed, China is starting to work towards developing its own native companies in this industry, preferring to buy from home than get electric vehicle technologies from Europe and the United States.

As such, China has issued many localized proposals aimed at promoting cleaner driving and encouraging more research in China. This could, then, turn the country into the biggest clean energy/driving country in the world; perhaps even the [near] future leader of the industry.

As a matter of fact, Volkswagen brand chief Herbert Diess recently said that he is convinced “China will become the leading market for electromobility.”

Diess goes on to say, “There is a clear (Chinese) government policy in favor of electromobility – high subsidies and an industrial framework in the form of joint venture companies which are being encouraged to invest in this technology,” adding also that it looks like Beijing could be trying to replicate the success Germany with diesel vehicles and Japan has had with hybrid vehicles.

Management consulting firm McKinsey notes that 43 percent of the roughly 870,000 electric cars made in 2016 came out of China. German autos accounted for 23 percent of that market, that year; the United States only accounted for 17 percent.

Accordingly, Diess continues. “This is a challenge but also an opportunity because we will quickly gain large volumes and gain sufficient scale to make electromobility cost effective enough so that it will also be a success in Germany and the United States.”

Diess also comments, “Here in China the transformation is almost quicker. Our joint venture partners, in particular SAIC, are even more committed to transformation. They are already thinking about next steps which go beyond things like software and semiconductors,” adding no further details about the status of the industry today.

The struggle for car companies to appease demand for electric vehicles has been tough, particularly in the United States, as scaling costs to make the products more affordable has been complicated. It is likely this will get more complicated in the years to follow as the new President has a very different view on regulation and eco-friendly industries as the previous one did.

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David Glass

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