China Dead Serious: Dominate Electrical Vehicles/Renewable Revolution

September 12, 2017

 

 

 

China is enacting a price on Carbon. Now they will be banning Combustion engines.

Don’t ever let anyone pull the “..but China” nonsense anymore.

Los Angeles Times:

China plans to ban new vehicles powered by gasoline and diesel engines. The implications for the global auto industry run deep.

The move is spun as an environmental story. But it’s a major economic story as well.

China will set a deadline for carmakers to stop selling cars that run exclusively on gasoline or diesel fuel. The news was announced over the weekend by Xin Guobin, the country’s industry and information technology vice minister.

No date was given, but earlier this year Britain and France each vowed to implement such a ban by 2040. Several other European countries and India have announced their own versions, pressured in part to reduce greenhouse gases under the international Paris accord on climate.

 

China, which is still the world’s largest emitter of greenhouse gases, is trying to recast itself as a global leader of environmental initiatives. Its president, Xi Jinping, has become one of the Paris accord’s most vocal advocates.

The country has another aim too. In 2010, it made clear its long-term intent to become the No. 1 nation in electric vehicle sales.

“The China market itself is pretty gigantic,” said Bill Hampton, AutoBeat Daily publisher. “This will push the China market along very quickly and certainly could create a powerhouse for exports and propel China into the global electric vehicle market.”

“Chinese regulators see the success of Tesla and other Californian companies, and want to promote the same success amongst Chinese car manufacturers,” said Sophie Lu, Beijing-based China research head for Bloomberg New Energy Finance, which analyzes energy markets.

The move could affect automakers’ corporate strategy, capital spending, trade policy and intellectual property sharing. Some analysts say the plan could further inflame trade tensions between China and the Trump administration.

In an opinion piece in Automotive News China, Michael Dunne of Dunne Automotive in Hong Kong said Monday that new regulations probably will be “designed to give China a decisive upper hand in the market for electric vehicles.”

The Chinese government requires foreign automakers to enter into 50/50 joint ventures with Chinese companies to make and sell cars and trucks in the China market, which is huge. Last year, total vehicle sales in China reached 28 million, up 13.7% from the previous year, according to IHS Markit. In the U.S., 17.5 million vehicles were sold and growth remained nearly flat. Electric car sales in both countries were tiny: 359,000 in China compared with 159,000 in the U.S., with half of those in California.

To tap into China in a big way, U.S. automakers will need electric and “electrified” vehicles in their lineups, said Michelle Krebs, executive analyst at AutoTrader. Electrified vehicles include plug-in hybrids, which typically can run a few dozen miles on electric power alone.

“Regardless of what we do here in the U.S. on a federal level, U.S. automakers will continue to develop those vehicles because they can’t ignore the China market,” she said. “It’s huge, and it’s where their future growth and future profits will come from.”

 

 

Automotive News China:

China will set a deadline for automakers to end sales of fossil-fuel-powered vehicles, a move aimed at pushing companies to speed efforts to help reduce oil consumption and pollution while developing electric vehicles for the world’s biggest auto market.

Xin Guobin, the vice minister of industry and information technology, did not say when the ban would be implemented but said the government is working with other regulators on a timetable to end production and sales.

The move will have a profound impact on the environment and growth of China’s auto industry, Xin said at an auto forum in Tianjin on Saturday.

“Some countries have made a timeline for when to stop the production and sales of traditional fuel cars,” Xin said. “The ministry has also started relevant research and will make such a timeline with relevant departments. Those measures will certainly bring profound changes for our car industry’s development.”

Citing “turbulent times” ahead, Xin called on the country’s carmakers to adapt to the challenge and adjust strategies accordingly.

A ban on combustion-engine vehicles will help push both local and global automakers to shift toward EVs, a carrot-and-stick approach that could boost sales of energy-efficient cars and trucks and reduce air pollution while serving the strategic goal of cutting oil imports.

To combat air pollution and close a competitive gap between its newer domestic automakers and their global rivals, China has set goals for EV and plug-in hybrid cars to make up at least a fifth of the country’s light-vehicle sales by 2025.

The government offers generous subsidies to makers of new-energy vehicles. It also plans to require automakers to earn enough credits or buy them from competitors with a surplus under a new cap-and-trade program to boost fuel economy and lower emissions.

Reuters:

European car bosses are beginning to address the realities of mass vehicle electrification, and its consequences for jobs and profit, their minds focused by government pledges to outlaw the combustion engine.

As the latest such announcement on Monday by China added momentum to a push for zero-emissions motoring, Daimler (DAIGn.DE), Volkswagen (VOWG_p.DE) and PSA Group (PEUP.PA) gave details about their electric programs that could give policymakers some pause.

Planned electric Mercedes models will initially be just half as profitable as conventional alternatives, Daimler warned – forcing the group to find savings by outsourcing more component manufacturing, which may in turn threaten German jobs.

“In-house production is almost irrelevant to the consumer,” Daimler boss Dieter Zetsche told reporters on the eve of the Frankfurt auto show, in the midst of a German election campaign in which automotive jobs have loomed large.

The company set a target of saving 4 billion euros ($4.8 billion) by 2025 to help fund the cost of its electric cars.

“Daimler is the first company to state explicitly how much electric vehicles are going to hurt margins,” said Bernstein analyst Max Warburton. “It was brave to go first – but of course it won’t be the last.”

Volkswagen (VW), for its part, said it was seeking new global supplier contracts to source 50 billion euros ($60 billion) of electric car content including batteries, which are not yet manufactured competitively in Europe.

“A company like Volkswagen must lead, not follow,” Chief Executive Matthias Mueller told reporters.

 

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4 Responses to “China Dead Serious: Dominate Electrical Vehicles/Renewable Revolution”

  1. ubrew12 Says:

    This is a shot heard round the world.

    • Gingerbaker Says:

      Ummm…

      not sure the trigger has been pulled yet – they have not announced a date. But, I dare say you hit the nail on the head. China may well preempt Europe, and we may see a date of, say, 2030 come from them.

      GM has been twiddling its thumbs, dabbling, perhaps flexing its muscles with the Volt and Bolt. It seems like they, and the other major ICE manufacturers are playing a waiting game while Tesla et all spend the R&D bucks to ultimately lower the manufacturing costs to make EVs.

      GM has been selling a lot of cars lately. Not so much in the USA, but in China. They are going to take notice of this. There is gonna be a whole lotta meetin’ and talkin’ and plannin’ and fightin’ going on in auto boardrooms around the world.

      Everyone but Tesla is very good about talking about EVs, drawing up EV concepts. Tesla is in the process of actually building and selling them.

      Funny note:

      VW just announced a $84 billion commitment to EVs or electrification or something. Once again, they ‘announced’ the VW microbus EV concept would be rolling off assembly lines in FIVE years – 2022.

      What is funny is that in 2015 they made the same ‘announcement’, saying the VW bus EV would be rolling off assembly lines in 2017 (!)

      Evidently, their big, really exciting EV commitment means concept EV’s will now take 2.5 times longer to reach reality. :>D

  2. J4Zonian Says:

    Meet the new China excuse, same as the old China excuse.
    The new version is a conspiracy theory loop: China’s lying about emissions so they must be lying about everything and we can go back to using the old China excuse: we don’t have to do it because they’re not. Nyah nyah.

    The one thing I’ve never seen included in the costs of transitioning to a sustainable society is the cost of building all the mental hospitals we need to house the entire corporate duopoly right wing for the many years of treatment they will all need to recover from the deadly combination of horrible childhoods and adulthoods in an emotionally broken country.

  3. ubrew12 Says:

    The hybrid engine has a fascinating history, which I’m only somewhat aware of (so: grain of salt). It was apparently the second car Dr Porsche made himself, in 1898 or so, and could go 30 miles just on its battery if you ran out of gas. During the oil crisis of the 1970s, American auto enthusiasts designed methods to take your 20 mpg car and convert it to 70 mpg, sold plans, and Practical Mechanics bought one of these and did, indeed, successfully perform the conversion. In the 1990s, the Clinton folks were working on a plan to encourage/pay for/force the American auto-industry to ‘go hybrid’. Everything was finally in place to move this forward when Bush won the 2000 election and nixed the entire project. It’s estimated that the extra gasoline expense, just in getting from A to B, borne by Americans since Bush nixed that project amounts to trillions of dollars. Put that together with the cost of the Iraq War, and the cost of studiously ‘not looking’ as a deregulated Wallstreet gambled its way into the Crash of 2008, and the Bush Presidency must surely have been one of the most expensive in history.


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