This article was published in The Beam #6 — Subscribe now for more on the topic.
I consider myself a very lucky person as I have had the opportunity to spend two to three months in China every year since 2008. I have always been interested in the Chinese electric vehicle market and I was really impressed by their market development rates. It is expected that EV sales for personal use will reach 2.11 million units in 2020 with EV ownership exceeding five million units. There is no exact information available concerning electric buses and trucks, but Chinese government policy is encouraging the delivery industry to turn to electric vehicles in most big cities such as Beijing, Shanghai, Guangzhou and Shenzhen. Since 2017, 40% of city bus orders were electric buses.
I met with Mr. Huang Hongsheng, the Chairman of Skywell New Energy Vehicle Group, and asked him about the reason behind this shift towards electric buses. Skywell New Energy Vehicle Group is one of the 5th biggest producers of EV buses in China and our interview took place in the Nanjing Golden Dragon Bus Co., Ltd. where we had the chance to see the full production line of Skywell buses.
Nanjing Golden Dragon Bus Company previously produced fuel buses. When and why did you decide to start producing electric buses?
Nanjing Golden Dragon Bus Company was originally a state-owned enterprise producing traditional fuel buses. But in 2010, the business faced the dilemma of continuing to produce fuel buses, or to start developing less-popular EV buses [which required private investments]. At the time, I was thinking of starting a business in this brand new field of electric vehicles so in 2011, I invested in the transformation of production and began to produce not only traditional diesel buses, but also electric ones.
How did you get started?
Getting into the new energy automotive industry was my dream. When you see a Mercedes Benz, you recognize the brand, and you know that it’s a very good car. I want to make the electric buses of Skywell as well-known as Mercedes Benz. I want to give people access to zero-emission and noise-free vehicles to make the world a better place.
However, this is a difficult transition. Going from being a home appliance industry expert, to a producer of electric buses, I basically had to start all over again. The technology, the production and the marketing are so different. Working with home appliances products, we used a marketing strategy aimed at the end user, the B2C model. Getting into electric buses, it was necessary to develop a completely different marketing strategy, aiming at businesses and municipal transportation companies instead of people. As our company is going through an adjustment process, we are seizing a good opportunity for development.
Do you feel like you chose the right technology from the beginning?
The choice of technology was done by experts. From the very beginning, I turned to industry experienced managers and developers such as former Chrysler design director Mengyang Zhang, to become President of our research institute, leading our research and development team together with around 700 professional and technical research and development staff.
What stages of the process has the Chinese government been supporting?
Our electric car production has been supported by the government from the very beginning. This support was reflected in the allocation of land for construction sites. In China, land use control is strict but the government set a priority for new industries and advanced manufacturing industries, including the electric automotive industry, which allowed us to set up new production bases and expand our production capacity in the shortest possible time. National and local governments also give different financial subsidies to the production and sales of new energy vehicles. This greatly reduces the costs of research and development, production and sales. Both the government and enterprises share the high costs of the new energy industry. With the gradual maturation of the new energy industry, especially the reduction of the battery cost, the subsidies of the government have obviously receded and the ways of cashing out have also changed significantly. To obtain government subsidies really requires tremendous efforts.
Does the government share its plans for the EV market with producers? What is the electric bus development plan for 2030?
The Chinese government has a clear plan for the development of new energy vehicles, and the government of Taiwan’s ‘Made in China 2025’ plan has clearly stated that by 2020, the annual sales volume of China’s own brand new electric vehicles will exceed one million and reach three million by 2025. It is also estimated to reach more than six million by 2030. There is no clear plan for electric bus sales yet, but in 2016 and 2017, respectively, there was an annual output of more than 100,000 vehicles sold. The sales of electric buses should reach 200,000 units by 2020; 250,000 units by 2025 and 300,000 units by 2030.
How many electric buses have you produced in 2015, 2016, and 2017? What is your plan for 2018?
Nanjing Golden Dragon produced 8,796 big electric buses in 2015; 7,921 in 2016; and 5,000 in 2017. Due to market and policy reasons, the figures have decreased but the quality and performance of the product is steadily improving. In 2018, we plan to sell 8,000 buses.
Do you also supply EVs to other countries?
The electric buses we produce have already been supplied to Thailand, Vietnam, Malaysia, Canada, Ukraine, Singapore, South Korea, Hong Kong, and Macau. We are also currently negotiating with our Ukrainian partners, BIO Company, to represent and sell our electric buses in Europe.
How do you plan to develop your technology?
We are currently developing an intelligent driving system, relying on our strong vehicle design and development capabilities, as well as analysis of driver driving patterns, road characteristics and environmental characteristics to achieve a three-level automatic driving function. We use the multi-channel information acquisition and sensor information fusion technology, integration of car networking, internet urban transport network, and multi-network integration of information and data to achieve a high degree of exploration and research of driverless technology.
Chinese EV company BYD began construction in Hungary. What is your plan there?
BYD electric buses started earlier than us, but we believe in ourselves. We have our advantages and competitive strength, and believe we will do better. Skyworth Group actually started an electrical manufacturing plant in Germany, and I believe once the time is right, we will also seek to invest and build factories to produce electric vehicles in Ukraine or Europe. We already have an experienced partner in Ukraine, which support us for big and important projects. Ukraine has world famous engineering schools, and are therefore a frontrunner in developing high-performance motors for the EV industry.
Which electric bus market do you think is the most promising?
The market prospect of electric vehicles is very broad. In the rapidly growing European market, some countries have formulated a schedule for the withdrawal of fuel buses. As Asia is gradually becoming a mature market, some countries in Southeast Asia already have the conditions for the development of electric vehicles. The market in South America has just started and is worth paying attention to.
How do you intend to achieve market growth for passenger car products?
In addition to passenger buses, we also produce small electric logistics vehicles, and already have an annual output of 50,000 vehicles. The development of passenger vehicles has been completed and has passed the acceptance test of the country and obtained the qualification of production. In the next five years, we will achieve an annual output of 200,000 vehicles.
Where do you see Nanjing Golden Dragon positioned in the market?
Our goal is to become China’s number one new energy commercial vehicle producer. Tesla occupies a leading position in the new energy automotive industry, and ranks among the world’s advanced clusters in the new energy automobile manufacturing industry. We want to achieve the same for the EV buses market. We want to produce the most comfortable electric buses for passengers that can’t buy their own electric car and the best buses for drivers that spend all their working time behind the wheel. We have to consider each person that uses public transport.
Interview by Hanna Yanchuk.
This interview was published in The Beam #6 — Subscribe now for more.