China, EV Superpower?
A recent report cast an interesting light on the worldwide electric vehicle market amid suggestions that China is now the EV superpower ahead of the USA. By the end of 2016, China accounted for more than 645,000 light duty plug-in vehicle sales since 2010. This is 30,000 more than Europe and an impressive 70,000 more than the USA amid concerns that political wrangling within America could hurt the industry going forward.
Why is China so strong?
The facts are simple, the Chinese government has taken the electric vehicle market to heart and is pushing it very hard to government offices, businesses, and the general public. It is also well known that the Chinese government has been backing an array of "public companies" with both cold hard cash and influence. Some reports suggest that Chinese electric vehicle sales in 2016 have increased by 50% from the previous year which is a massive rise.
While the US government has also been funding the electric vehicle market, both regarding development and tax incentives, for some time now, some experts believe that more could have been done. Perhaps it is the way that electric vehicles are treated from state to state which is confusing and possibly discouraging some companies from investing in some states?
For some time now Chinese companies have been very adapt that "copying" successful technologies and products from other countries. Tesla is just one of many electric car companies which have been targeted by the Chinese EV manufacturers, and due to the protection afforded to Chinese companies, there is very little legal redress for the Tesla. The use of new technology together with a whole different labor market environment often means that Chinese companies can manufacture equivalent quality electric vehicles at a fraction of the price of their overseas counterparts. In a world where price is everything, money does talk!
It is also interesting to see that some US companies, including Tesla, have put in place official Chinese partnerships with local companies to push their electric vehicles across the Chinese market. Many overseas companies have found the Chinese market very difficult to crack due to significant protection for local companies and the often volatile moves by the Chinese government. However, Tesla seems to have access to the higher echelons of the Chinese government which must bode well for the future?
On the one hand, Donald Trump would seem to be positive for the domestic US electric car market, but his lack of diplomacy could impact US company EV sales in the likes of China. Historically the US has been very powerful when it comes to new technologies and new products, but it will certainly be a battle royal with China over the EV market. This is the time for Elon Musk to flex his entrepreneurial muscles and ensure Tesla's venture into the Chinese market is successful. It would be foolish to ignore Tesla, and other US EV manufacturers, but protectionism in the Chinese market is rife, and they will need to tread carefully.