Published on November 23rd, 2017 | by Michael Barnard0
6 of 10 Big Electric Car Companies Are in China
November 23rd, 2017 by Michael Barnard
Six of the 10 major car companies that appear committed to electrification of their vehicle lines are Chinese. Most of them have international partners, but the international partners are mostly the four that have equivalent commitments.
Part of this is that China is the fastest growing market for new cars and there is a cultural disposition to buying the most expensive things that they can afford. But another large part of it is that China has three major strategic challenges that overlap to make the electric vehicle space one that it wants to have significant global market share in.
Global warming: China is both seriously at risk due to global warming with its coastal megacities, especially Shanghai, and has an international reputation as one of the worst two contributors to global warming. China has taken a global leadership stance over the past 18 months, stepping into the US void. In part, this is because of rational decision making, but in part it’s because they are buying global goodwill as they crack down on dissidents and commit ongoing human rights violations. Electric vehicles are a major wedge in the global warming fight.
Air pollution: China’s cities have notoriously bad air. The air is equivalent to typical air in New York or London 50 to 70 years ago, so this is far from unprecedented. But China’s government, as all governments do, rules at the will of the people, and the people were sick of not being able to breath. Electric vehicles are a major wedge in the air pollution fight.
Global new technology leadership strategy: China was, and still often is, better known for its copyright- and patent-infringing knockoffs of western technology. But it’s committed to having Chinese firms be leaders in the emerging low-carbon economy. They already own the lion’s share of the solar panel market. Envision, Ming Yang, Guodian, and Goldwind are 3 of the 10 largest wind turbine manufacturers in the world. And as this list of electric car companies shows, China is committed to having its firms at the forefront of the future of transportation too.
Here are the major car companies that can be said to be embracing the future.
BYD: It has been selling fully electric and hybrid cars in China for years. It’s mostly off of the radar for European and North Americans, but with China’s push to lead in the EV space, expect this brand and others to potentially start appearing on roads in the West. It already have a US presence for fleet and utility vehicles, but it’s early days. (Of course, CleanTechnica readers know this company very well.)
SAIC: This company has several pure and hybrid electric vehicles in its lineup already. It’s also partnered with the VW and GM brands in China. At 6.9 million units sold in 2016, this is a non-trivial contender.
FAW Group: It’s the oldest car manufacturer in China and one of the four big legacy manufacturers. It is targeting 15% Chinese market share. It gas Audi (a VW brand) and Toyota as alliance partners in the EV and hybrid space. GM is joint ventured in one of its brands too, and as that JV is focused on light-duty commercial vehicles, electric drive trains are likely there.
Geely: This firm owns the Volvo brand, which has committed to having only electric and hybrid cars starting in 2019. Geely itself has a fully electric car as well as plug-in electric hybrid vehicles in its lineup.
BAIC: BAIC’s Chairman predicts EV sales in China will hit the one million mark in 2018. It has opened up an EV R&D center in California. It is the Chinese partner for Daimler and the companies are jointly investing $735 million on EVs in China.
Dongfeng: Formed in 2001, this company is on the Forbes Growth Champion list and has aggressive plans globally and in EVs. It has set up a joint venture with the Renault-Nissan Alliance to sell electric cars in China.
Outside of China
Tesla: It’s the world leader in this space, in large part because it doesn’t build anything except fully electric cars. However, it’s more influence than numbers. Tesla is by far the smallest manufacturer in terms of units sold on this list. Although, it outsold most in the pure EV space. It has reached a deal to build a factory in the free trade zone of Shanghai. As it doesn’t have a local partner, it will be subject to the 25% duty on non-Chinese vehicles, but it’s obviously betting on those rules being relaxed.
Nissan: It still has the best selling electric car globally with the LEAF. Although, it didn’t hit the mark with its next-generation version compared to the Tesla Model 3 and Chevy Bolt, so will undoubtedly be suffering. It’s been struggling with its dealership problem longer than anyone, so likely has the best idea how to overcome that particular inertia. It has partnered with Chinese manufacturer Dongfeng for the Chinese market.
GM: CEO Mary Barra has committed to three more cars on the Chevy Bolt fully electric platform. The Bolt has sold 17,000 cars in the USA in 2017 so far, making it #3 in electric car sales, but of course the Model 3 isn’t shipping yet. Barra also committed to another 20+ models on a new modular electric platform starting in 2021. If it holds to those numbers and deals with its dealership problem, it could easily surpass Tesla‘s global number of cars on the road. They have Chinese partnerships with SAIC and FAW.
Volkswagen: The diesel scandal lit a fire under VW. It’s committing $40 billion in investment in electric vehicle and mobility tech over the next 5 years and has put out $60 billion worth of tenders to procure batteries. The VW brand encompasses a lot of other brands, so expect to see VW electric technology show up in other brands such as Audi — although, perhaps to a lesser extent. VW has Chinese partnerships with SAIC and FAW.
There are many legacy and startup manufacturers conspicuously absent from this list.
Toyota continues to bet on hydrogen. Although, there is some evidence it’s starting to come around on that point. Honda has limited EV expansion plans at this point. Mercedes just stopped selling its only US EV, although it’s still on sale internationally. BMW’s strategy of offering internal combustion, hybrid, and electric versions of every car is doomed to failure, so it’ll be catching up again in a decade or so. Fiat Chrysler is doing nothing in electric vehicles except the absolute bare minimum California compliance and its CEO continues to make anti-electric pronouncements in defence of the company’s do-nothing track record. Ford is making some moves, but not at the scale of GM or VW and seems to be more responding to GM than anything else. All of these legacy manufacturers could turn the corner and start committing to electric, but at present they don’t reach the level of commitment necessary to be included above.
Startups such as Lucid, Faraday, Rimac, Dyson, and others have either no commercial products or are boutique, limited volume affairs. There is no scale there yet. In my opinion, however, they or other startups are more likely to be dominating the automotive space in 30 years than many of the current legacy manufacturers. Like Tesla, they can dodge the bullet of the dealerships and have no corporate love-affair with internal combustion engines that leads to a two-steps forward, one-step back shuffle as we’ve seen from BMW and others.
Over the next decade, we’ll both see more of these Chinese companies with cars on the road outside of China. And we’ll also see more clearly which of the legacy manufacturers outside of China will be able to survive the transition that’s in progress. This prediction comes for free, however: Fiat Chrysler is in serious trouble.
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