China reduce poco a poco su dependencia tecnológica de Occidente y ha dado a conocer toda una serie de modelos propios.
Aprovechando la crisis, China está dispuesta a comprar en Occidente y, por ejemplo, ha mostrado interés en Volvo Car, filial de la estadounidense Ford.
El proveedor chino de baterías eléctricas BYD se encuentra inmerso en negociaciones con fabricantes de automóviles de Estados Unidos y Europa para el suministro de sistemas de propulsión para vehículos eléctricos, informó el jefe de Exportaciones BYD, Henry Li, en el Salón del Automóvil de Shanghai.
La compañía asiática ha desarrollado un nuevo modelo de vehículo eléctrico recargable que podría competir con los desarrollados por fabricantes como General Motors o Toyota. ‘Estamos en conversaciones con fabricantes europeos y estadounidenses para suministrar sistemas de propulsión, incluidas baterías’, añadió.
Además, Li afirmó que el objetivo de estas conversaciones es establecer acuerdos con compartir su tecnología de baterías con una marca de automóviles en Estados Unidos y con dos en Europa.
La firma china, que lanzó su primer vehículo híbrido recargable con la corriente eléctrica el pasado mes de diciembre, ha firmado acuerdos con 10 distribuidores en Europa y está buscando acuerdos con concesionarios en Estados Unidos para vender un nuevo vehículo híbrido conectable a la red eléctrica en 2011.
A nivel mundial la industria automotriz está en crisis, pero en China las ventas están floreciendo, convirtiendo a ese país en el primer mercado mundial del sector.
Gracias a este fenómeno, la exhibición de Shanghai, que era hasta ahora un primo pobre en este tipo de eventos, ha cobrado una extraordinaria importancia.
En marzo, China superó por tercer mes consecutivo a Estados Unidos en ventas desplazándolo de un lugar que parecía garantizado para un país que por tradición, historia y modelo de consumo era el rey indiscutido del sector.
El gobierno chino atribuye este éxito a los planes de estímulo del consumo lanzados el año pasado, que incluyen importantes reducciones impositivas para coches de alto ahorro de combustible e incentivos para la adquisición de vehículos en las zonas rurales, en las que todavía vive más de la mitad de la población nacional.
En la feria automotriz de Shanghai se lanzarán al mercado 13 nuevos modelos de coches.
Los modelos profundizan una nueva tendencia que, en medio de la crisis, se está inclinando por un auto más pequeño y de menor uso de combustible.
Con una población de 1.200 millones de personas y la demanda insatisfecha de amplios sectores excluidos del consumo, este mercado interno será el futuro de los vehículos eléctricos.
El vehículo eléctrico es una de las principales estrategias de los fabricantes a nivel mundial, en un intento por fortalecer sus marcas en el mercado chino. Cientos de unidades se exhibieron en la exposición bianual de automóviles que se inauguró el lunes en Shanghai. Se incluyen modelos de gigantes de la industria automotriz como Toyota y General Motors.
Aún se siente un pequeño pesimismo que impera en alguna parte de la industria, pero los autos de fabricación china atrajeron la atención de las multitudes más grandes.
El más acogido por el público local fue el auto del fabricante de baterias BYD. El compacto F3 de BYD fue el décimo auto mejor vendido en el país el año pasado. La compañía indica que la investigación y desarrollo en tecnología son la clave. Y añade que China está liderando en el ámbito de la tecnología de vehículos eléctricos.
Li ZhuhuangCde Corporación BYD Auto, dice que "comparado al vehículo tradicional, la investigación y desarrollo del sistema de batería y control es la tecnología esencial para los autos eléctricos. Y algunos fabricantes de automóviles chinos, especialmente BYD, tienen el liderazgo en el mundo. Estamos avanzando en la tecnología en vez de quedarnos atrás. Así que, esta es la nueva esperanza para la industria de autos de China y podemos empezar en casi el mismo punto de partida que los fabricantes extranjeros."
La mayoría de los consumidores chinos están comprando un auto por primera vez. Y están relativamente abiertos a la idea de adquirir vehículos eléctricos ya que algunos poseían anteriormente algún monopatín eléctrico o motocicletas.
Un analista de la industria indica que la estrategia china parece ser muy exitosa. Thomas Schiller, administrador de Arthur D. Little, China, dice que "vemos por las inversiones hechas por parte de compañías chinas que éstas podrían ser muy exitosas, ya que pueden lanzar inmediátamente sus modelos en el marcado nacional, ganar experiencia con el apoyo del gobierno, y luego transferir sus conocimientos a otros mercados y exportar este modelo a Europa y Estados Unidos. Pienso que eso podría ser definitivamente un modelo exitoso, y retará a las compañías occidentales."
El fabricante más grande de China, Chery Automobile, también mostró un vehículo eléctrico durante la Expo Auto Shanghai. Chery manifestó que su nuevo híbrido S18 puede recorrer más de 150 kilómetros por cada carga eléctrica. Por el momento no hay ningún vehículo enteramente eléctrico en las carreteras chinas, aparte de unos pocos buses experimentales. Esto se debe a que los fabricantes están trabajando en el desarrollo de productos con precios y rendimiento competitivo con autos convencionales.
Un dato importante es que la alianza automovilística Renault-Nissan ha alcanzado un acuerdo con el Ministerio de Industria y Tecnología de la Información de China para la puesta en marcha de un programa piloto de movilidad con cero emisiones de CO2, a través del que la compañía introducirá en 2011 vehículos eléctricos en este mercado.
Mediante este convenio, Renault-Nissan trabajará conjuntamente con el Gobierno chino en un programa piloto lanzado en 13 ciudades del país en el que se trata de investigar sobre energías alternativas en el transporte público.
De esta forma, Nissan suministrará información relacionada con vehículos eléctricos y presentará un plan sobre su lanzamiento comercial en masa, en el que se recojan las infraestructuras necesarias para su implementación.
El director general de Nissan, Toshiyuki Shiga, aseguró que su empresa cree que la movilidad con emisiones cero es la meta que deben tener todos los nuevos vehículos impulsados con energías alternativas.
"Estamos estableciendo colaboraciones innovadoras con gobiernos, ciudades y agencias para promover los vehículos eléctricos en todo el mundo, y en China trabajaremos de cerca con nuevos socios locales para desarrollar el mercado de coches eléctricos", añadió.
Esta iniciativa se enmarca dentro de la estrategia de la alianza Renault-Nissan de convertirse en el líder mundial de movilidad con cero emisiones, a través de la que introducirá en 2011 coches eléctricos en el mercado chino y en 2012 hará su lanzamiento a masivo en todo el mundo.
Renault-Nissan comenzó sus iniciativas de introducción de la movilidad con cero emisiones a través de acuerdos en Israel, Dinamarca y Portugal, aunque recientemente ha firmado pactos de colaboración con el Principado de Mónaco, así como con los estados de Tennessee y Oregon en Estados Unidos y con la prefectura de Kanagawa en Japón y la ciudad nipona de Yokohama.
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Electric cars at Shanghai Auto Show-China and the Electric Car
Chinese companies, such as BYD, have been lauded for developing advanced batteries that could power a revolution in motoring.
BYD, a former battery maker, was the first company in the world to start selling a heavily-electrified hybrid car last December, easily beating larger rivals such as Toyota to the market.
As a result, Warren Buffett, the US investment manager who runs Berkshire Hathaway, bought 10pc of BYD last December for $230m (£158m).
The Chinese government has also committed to funding new technologies, such as BYD’s iron-phosphate-based lithium ion batteries, with £1bn of research subsidies.
In a bid to demonstrate the safety of his batteries to the environment, Wang Chuan-Fu, BYD’s chief executive, has actually drunk a vial of his own battery fluid.
Henry Li, the company’s export manager, said BYD is currently in talks with "American and European automakers to supply powertrain systems, including batteries".
Chinese automakers may be ramping up their research, development and production of electric vehicles just in time to challenge U.S. automakers in their own market.
Although thundering trucks and SUVs still crowd U.S. highways and parking lots, Americans are gradually turning to smaller, often hybrid, cars for fuel efficiency and lower environmental emissions. Even billionaire investor Warren Buffett is betting on the market for more fuel efficient and electric vehicles, including those made in China.
China announced new efforts early this month to become one of the world’s top manufacturers of hybrid and electric cars within the next three years, which could mean a significant challenge to the electric car efforts undertaken by struggling U.S. automakers such as Ford (Stock Quote: F) and General Motors (Stock Quote: GM).
BYD Electronic, a Chinese cell phone battery maker which supplies batteries to cell phone producer Nokia (Stock Quote: NOK), plans to be one of the top electric car producers. This has caught Buffett’s attention—and his money.
Last fall, Buffett’s MidAmerican Energy Holdings unit of Berkshire Hathaway (Stock Quote: BRK.A) paid $230 million for a 10% stake in BYD Auto (short for “build your dreams”), based in Shenzhen, China.
BYD’s all-electric E6 automobile debuted at the Detroit Auto Show in January and it’s expected to enter the U.S. market in 2011, along with a plug-in hybrid model, the F6DM.
In addition, Nissan (Stock Quote: NSANY) and its French partner Renault signed an agreement with the Chinese government to develop electric cars and a network of battery charging stations in Wuhan, China. A lack of recharging infrastructure, combined with easy access to gas stations, is one of the major factors preventing widespread use of electric vehicles.
The Chinese-made two-person Flybo XFD-6000ZK closely resembles the Smart Fortwo developed by Smart, a unit of Daimler AG (Stock Quote: DAI), and is already being sold in the United States.
BYD’s all-electric E6 mid-sized vehicle can run for 250 miles on a single charge and tops out at 100 miles per hour. The company’s F3DM model, which can travel up to 60 miles on its lithium ion battery alone, is a gas-electric hybrid which runs on electricity to 37 miles per hour, then switches to a gas engine when you accelerate beyond that.
Unlike the more popular gas-electric hybrids like the Toyota Prius (Stock Quote: TM) currently on the market, you can charge the F3’s battery from an ordinary wall socket, so you won’t need to find a charging station or set one up at home, which was the case in the mid- to late-1990s with GM’s EV1 electric vehicle.
A major downside to the electric cars in the works is the number of hours it takes to charge the cars. According to BYD, which says that charging its F3’s battery costs 75% less than filling up a gasoline-powered car, charging the vehicle could take about nine hours.
Even worse, the two-person Flybo XFD-6000ZK from Jinan Flybo Motor in Jinan, China, would take about ten hours to charge.
Although it might be possible to charge the car as soon as you get home and have it finished when you leave the house in the morning, charging time may be a major deterrent for consumers looking for an environmentally-friendly car that’s convenient as well.
Although the price of electric and hybrid electric vehicles in the works are yet to be determined, the cost of production plus the cost of batteries themselves could be signifigantly more expensive than a small gasoline-powered car.
But as with computers and cell phones, as the technology develops and batteries improve, electric cars will have more of a chance in the U.S., regardless of where they come from.
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Is the Future of Electric Cars in China?
Like drowning men grasping the only piece of buoyant driftwood in sight, top executives from the world’s beleaguered auto industry arrived in Shanghai this week for the city’s 2009 auto show, unveiling their newest brands in the only car market in the world that continues to grow. Some of the show’s stars are predictable, drawing crowds of reporters and photographers on Monday, media day: a stunning new Lexus convertible, the reborn Chevy Camaro from General Motors (Chinese journalists took turns lining up to be photographed in front of it) and the worldwide debut of Porsche’s new luxury sedan, the Panamera.
But not all the buzz is being generated by muscle cars or luxury of the "if you have to ask, you can’t afford it" variety. Crowds also gathered around cars made by a company largely unknown outside of China, the Shenzhen-based firm BYD (Build Your Dreams). Started as a rechargeable-battery maker, BYD is making a headlong push to become a world leader in what some analysts believe could be the industry’s post–internal combustion engine future: electric cars. (See the 50 worst cars of all time.)
In fact, from Toyota on down, nearly every major automaker and a host of minor ones are exhibiting this week not just hybrids, but also pure battery-powered vehicles. No fewer than eight electric cars in various stages of development were put on display by Chinese companies. The reason is straightforward enough: China is the world’s fastest-growing auto market. So far this year, it is also the world’s biggest auto market, with sales through the first quarter running at an annualized rate of 11 million units, compared with 10 million in the U.S. That kind of scale is why some executives believe that China could be the country in which electric vehicles move from the concept stage to mass production. "It may become the country that leads the switch to electric vehicles," says Nick Reilly, who heads Asia Pacific for General Motors.
Why is BYD, a company with little history in the auto industry, viewed as potential leader of that shift? One answer is that last September, Berkshire Hathaway chairman Warren Buffett, the Oracle of Omaha, paid $230 million to buy a 9.8% stake in BYD. At a press conference at the time, David Sokol, chairman of MidAmerican Energy Holdings, the Berkshire Hathaway–owned company that made the investment, said he believed that BYD’s technology was a "potential game changer if we’re serious about reducing carbon-dioxide emissions." BYD has nearly 11,000 engineers and technicians working on battery technology at the company’s headquarters in southeastern China. (See the history of the electric car.)
China’s government is backing the industry’s push toward electric cars. Large fleet owners — in China, that’s mainly regional governments and taxi companies — now get subsidies worth up to $8,800 per vehicle if they buy electric. Beijing has also announced that it will spend $1.5 billion in grants to help its auto industry innovate. Because most Chinese car owners don’t travel long distances, but rather commute in smoggy, traffic-clogged cities, a switch to plug-in electric vehicles is more plausible in China than in other countries.
That said, there are many auto-industry executives who maintain that the hype has gotten well ahead of reality. There is no infrastructure, in the form of battery-charging stations, to support pure electric models. Electric cars now coming to market are also expensive, costing more than $20,000 even with the subsidy, a stiff price in a country where the annual average income is less than $10,000. That’s part of the reason that BYD, since introducing a hybrid electric in December, has sold just 80 of them. CEO Wang Chuanfu expects that BYD will lower the price to about $16,000 as the company scales up production. BYD also makes small gasoline-powered cars and is having no trouble selling them. In March alone, 20,000 units of the most popular model, the F5, were sold.
Even with government backing, skeptics say Chinese electric cars are not ready for prime time. "From what we’ve seen so far, the technology is not that advanced in terms of battery life, range and in terms of recharging," says GM’s Reilly. "If you look at the details, they don’t necessarily perform as well [as GM’s electric-car entry, the Volt] in those measures." GM plans to introduce the Volt in China late next year or early in 2011.
A senior executive for one of Japan’s biggest automakers says he believes it will be 2012 or 2013 before electric cars gain a foothold on the mainland. Much depends on gasoline prices, which are partially controlled by the government. Will China’s leaders increase gas taxes to make expensive alternatives like plug-in electric cars more acceptable to consumers? "That is going to be the tough decision," the executive says. "It will make the higher cost of electric models more justifiable in the eyes of the buyers, and it will help the auto industry be more sustainable in China."
While governments elsewhere tend to shrink from legislating higher fuel costs, Beijing may not be as reluctant. "I actually think it’s more likely to happen here than in the United States," says the Japanese executive. China’s car companies are at a technological disadvantage when it comes to making internal-combustion engines, but the playing field for all-electric vehicles is very nearly level. With a concerted push, the Chinese could leap ahead of the rest of the world. Reilly agrees that Beijing means what it says about boosting the technology. For that reason, he says, "we ought to be very serious about our competitors here in China."
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China looking to plug into electric car market
SHANGHAI – The car is a pretty ordinary looking sedan, which is not an altogether bad thing for an electric car. The weird, boxy "green-look» of so many of the pioneer models had limited appeal.
But it’s the battery in BYD Auto’s new E6 fully electric car, not the design, that is currently causing the buzz in the decidedly dejected auto industry.
Instead of being made with lithium ion, which is expensive, increasingly hard to come by, environmentally unfriendly, and potentially dangerous in a crash, BYD has devised a battery that uses ferrous ion, which is cheap, plentiful and green. If it turns out to be as functional as the Chinese company claims, it could be the breakthrough needed to finally bring electric cars into the mainstream.
Warren Buffett obviously thinks it is. The American financier invested $230 million in BYD last year.
At the time, David Sokol, chairman of MidAmerican, a subsidiary of Buffett’s Berkshire Hathaway, called the BYD battery «a technology that can really be a game changer» when it comes to reducing emission from automobiles.
The E6 can go 400 kilometres on a charge, but it’s actually designed for quick 10-minute, 50 per cent charges, that will last 200 km. The problem is, an ordinary wall socket won’t do the job, the E6 needs a dedicated, high voltage charging station.
BYD is working on that with Chinese electrical companies, the government and large fleet owners, like taxis companies, and hoping for a breakthrough by the time it launches the E6 at the end of 2009. Meanwhile, it is expending its promotional energy on its DM, dual mode electric-gas cars.
BYD – they are actually the Pinyin initials for its Chinese name, but now the company says they also stand for its motto, Build Your Dreams – already boasts the bestselling gas-guzzling sedan in the China market and is making inroads with the DM version of it that is now in showrooms. The F3-DM goes 100 km on a single nine-hour charge from a household socket and costs about $22,000 US. It’s cheaper, goes further and is available a year ahead of the expected launch of its potential rival, the hybrid Chevy Volt that is slated for a 2010 debut.
So far, the F3-DM is only being marketed to fleet owners like the government, big companies and taxi firms, according to Paul Lin, marketing manager for BYD’s export division. The reason is simple and uniquely Chinese, he says. «In China people live in dormitories (apartment buildings) instead of houses, so they don’t have garages. They don’t have anywhere to plug their cars in.»
He sees that as a «technical difficulty,» however, that is bound to be overcome or superseded soon, given the Beijing government’s recently announced plan to turn China into the world’s largest manufacturer of electric cars.
China’s strategy is to invest heavily in research while at the same time offering sizable consumer subsidies to electric cars buyers. It is already helping fleet owners who purchase dual-mode vehicles to the tune of $8,800 US per car, but soon individuals will be eligible for rebates, too.
«The fiscal subsidy gives voting rights to the consumers,» Zhang Shaochun, vice-minister of finance said at a conference early this month.
Plans for electric charging stations for both E6s and F3-DMs can’t be too far behind.
In many ways, China is the perfect launch pad for the worldwide drive to push electric cars into the mainstream. It doesn’t yet have a fully developed infrastructure to support a nationwide addiction to long distance driving, so there is not a generation lusting for speed and fuel capacity in their automobiles, like there is in North America. Instead, when a Chinese consumer finally reaches the financial position to consider buying a car, he or she will be looking for the best model for short city commutes in gridlocked traffic. That’s the reality of life in places like Shanghai, Beijing and Chongqing.
Moreover, a potential Chinese car-buyer is likely to be fairly pollution conscious. Traffic fumes are already a choking issue in many Chinese cities and they are getting worse every day.
In an interview at the Shanghai Auto Show this week, Lin said BYD hopes to follow the fully electric E-6’s China debut with a European and North American launch in 2011. But, he also mentioned that the company was looking at a range of options besides opening up its own assembly plants, distribution systems and dealerships.
«We have several choices. We will analyze and try to find the best way to go. We are trying to find very good partners to enter the market with,» he said.
Lin and several other BYD employees have been test-driving the E6 since last December and, while obviously biased, he claims it feels very much like an ordinary gas-fuelled car. «The acceleration for the E6, the big car, is less than seven seconds. From one to 60 km/h it’s fast, even like the BMW,» he boasts.
And it is very, very quiet, he says.
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Electric cars in the limelight at Shanghai expo
With concern of a green future and in answer to the Chinese government’s appeal for energy-efficiency, global and domestic automobile manufacturers are showcasing their electric car models at the ongoing Shanghai Auto Show.
Troubled carmaker General Motors is displaying the production version of its Chevrolet Volt – a vehicle that delivers up to 64 km of gasoline and emission-free electric driving.
The Volt, expected to be introduced in China by 2011, uses electricity stored in its 16-kWh, lithium-ion battery to move the wheels at all times and speeds.
"Bringing the Volt to China shortly after its debut in the United States in 2010 is part of GM’s commitment to sharing our latest achievements in energy diversity with our second-largest market," said Kevin Wale, president and managing director of GM China. "It will take China one step closer to its goals of clean transportation and energy freedom."
Battery and car supplier BYD Auto, backed by US billionaire investor Warren Buffett, has three electric models – F3DM, F6DM and e6 on display at the show.
The company has sold more than 80 F3DM electric cars, the first mass-produced model in the world, priced at around $22,000 each, to the Shenzhen government for tests before public use.
"We have cooperated with local government to set up around twenty 220V-charger pillars in parking lots around offices and residential areas," said Yang.
"The next step is to establish a charging station with 380V input. This will provide quick charging in 10 minutes and make the battery 70 percent full, enabling driving the car up to 70 km."
Hebei-based Great Wall Motor unveiled its GWKulla all-electric car, with plans to enter the market next year, while Chery debuted its concept battery car – the Riichi M1.
China relies on imports for nearly half of its oil. "If China continues current growth rates it will almost double oil imports by 2030," said a McKinsey report released at the end of last year. "But greater use of electric cars would cut this growth by around a quarter."
Considering the huge green potential in China, German luxury carmaker Mercedes-Benz is showcasing its electric concept car BlueZERO, which can run on batteries or fuel cells.
"The flexible BlueZERO concept allows electro-mobility for every requirement, and highlights the fact that Mercedes-Benz is the world’s only car manufacturer to already have in place all the key technologies for electric cars offering full everyday practicality," said Dieter Zetsche, chairman of Daimler AG and head of Mercedes-Benz.
Another German carmaker BMW is exhibiting its near-zero emission electric car Mini Cooper E at the show, slated for mass-production in 2010.
Japanese automaker Nissan and Toyota are also displaying their electric concept cars at the Shanghai auto show.
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My money’s on China to produce world-changing electric car
Headshot of Avner Mandelman
AVNER MANDELMAN
Once in a while an invention comes along that changes the world: Gunpowder. Printing press. Steam engine. Telegraph. Telephone. Model T Ford. Television. Computers – first mainframes, then PCs. The Internet. And now – maybe – the electric car.
I’m not talking hybrids here. I am talking a pure electric that runs on batteries, travels 200 kilometres on one charge, drives fast, consumes electricity equivalent to the cost of a gasoline engine getting 240 mpg, needs a one-hour charge for each travel hour – yet costs less than $25,000 and can be fixed by the local electrician and bicycle repairman.
Such a car, if it existed, would change the world: There’d be less pollution, less noise, less power wielded by evil madmen selling oil, less wars, less global warming, more capital for good uses … Or am I off base? If I am, Warren Buffett is off, too. Last fall, he plunked down $230-million (U.S.) for 10 per cent of BYD, a Chinese private company making pure electrics. Some are soon to be tested in a regular corporate fleet in Portland, Ore., allegedly before being marketed and sold in North America.
Why did Mr. Buffett do it? Yes, BYD Auto’s founder and chief, Wang Chuanfu, is dynamic, but the world-changing potential of the electric car is more so. And why China – are there no cheap electrics in the West? Not really. The Canadian Zenn car costs too much for the little it does; the Volt is made by the UAW (enough said); and the American Tesla has made big claims but has mostly taken deposits. Yes, you could order a Tesla today; it would cost you $100,000, run smoothly and fast, and could be charged off your home socket. But of the $100,000 price tag, $60,000 covers the battery – which lasts only three to four years, and the company makes fewer than a hundred Teslas a year. So not only is it not cheap, it’s also not available.
The Tesla’s problems reflect the three common problems of most Western electric cars: the need for a cheap battery that lasts; the need to produce lots of cars; and the need for a big company to back it all up. Let’s take these in order.
To make an inexpensive battery ($10,000, say), you need really cheap lithium deposits, billions of dollars for a huge production line of Model T-like proportions, and super know-how. In all these the West is deficient. Yes, lithium is everywhere, but the cheapest deposits are in Australia (small), Chile (okay), and Tibet – best and large, and controlled by China (one reason Tibet will likely never be free). As for billions of dollars needed for a production line, China is among the world leaders in batteries. (BYD is also the world’s biggest maker of cellphone batteries.)
As to know-how: A dirty little tech secret is that the West is a relative slouch in chemistry; few bright students study it since environmentalists gave it a bad name. In China, though, many bright people study chemistry, so most innovative batteries today are Chinese-made. One day we might see a big production line of lithium batteries close to Tibet, to power all those BYD electric cars. (Incidentally, could electric motor production be why China has been buying copper massively?)
Now, for the final reason why pure electrics can’t be produced in the West. Aside from the labour-cost disparity, no big company in the West really wants to do it. China doesn’t have a major stake in traditional car manufacturing, but the Japanese, South Koreans, Americans and Canadians have lots of jobs and pensions (and car dealerships) tied to existing cars, so politically things can’t change quickly. (Witness Detroit and Windsor.) In particular, car companies have little interest in pure electrics. This isn’t a question of a conspiracy, but of commerce. If they made a really inexpensive electric car, it would drive down the value of all their used (gasoline) cars, and would dissuade buyers of new (gasoline) cars. The Chinese don’t mind wrecking the old automotive system – matter of fact, the Chinese government is 100 per cent behind the pure-electric effort. So a $20,000 to $25,000 Chinese pure electric car is likely to be sold here in three to five years, in my opinion.
And Warren Buffett will make a heap of money on it.
What would the world look like then? First off, over time, oil could become somewhat less of a factor in civilian economies. Since there would be alternatives, its competitive price would hinge on marginal cost of production. Yes, in war times oil price will zoom, but afterward electrics would put a cap on it. (FYI, oil’s marginal production cost is $20 [U.S.] to $25 a barrel on average – half its current price.)
As well, the environment would look very different, with less pollution as nuclear power makes electricity smog-less. The electric grid would have to be expanded, but not immediately, because the North American grid is not fully used at night (when most cars would be charged). And yes, planes would still need petroleum, as would the machines of war, and the petrochemical industry (that’s polyester for you). But cars could use electricity, so repair and spare parts would be a smaller business (aside from battery handling – lithium can be tricky stuff), so more of the manufacturing base could move offshore. And the car you’d be driving 10 years hence would likely be Chinese, with BYD nearly as big as Toyota.
Am I off base? I don’t think so. As BYD’s Mr. Wang said: I cannot compete with Toyota in cars whose engines have 1,500 moving parts. But my electric engines have only 45 moving parts. There I can compete.
What are the investment implications? Stocks to do with the electrical grid, nuclear power, or car electronics, yes. Investment in oil producing dictatorships, no. And closer to home: With cheap and reliable electric cars, could large suburban houses be good investments yet again?
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Roland Berger Study Predicts China’s Goal of Becoming Leader in E-Mobility as Realistic
A study entitled "Powertrain 2020 – China’s ambition to become market leader in e-vehicles" that has been conducted by the German strategy consultancy Roland Berger describes the actions being taken by the Chinese government and outlines scenarios for the future e-mobility markets. By 2020, the global market share for Electric Vehicles (EVs) and Hybrid Vehicles (PHEVs) will be between 9 percent and 10 percent; in countries such as China, it could be as high as over 50 percent. The study predicts that the markets for batteries, motors and other components will experience similar outstanding growth: by 2020 they will expand to 20 billion euros to 50 billion euros annually, and in the following decades to more than 100 billion euros. According to the study, at the same time the competition will become more and more cutthroat. The consultancy advises therefore manufacturers to take the necessary steps now to succeed. They have to cut costs, secure market share, expand business models and form strategic partnerships.
"When it comes to electric and hybrid cars, China is challenging the automotive industries in the Western industrial countries," says Wolfgang Bernhart, Partner in the Automotive Competence Center at Roland Berger Strategy Consultants. "The technological head start that Western manufacturers have with conventional powertrains is tough to overcome – and the Chinese realise this. But the race for electric mobility is just getting underway." China’s automotive industry is bypassing further refinement of the combustion engine and is instead aiming to blaze the trail for electric and hybrid vehicle technology. The share of electric or partly electric vehicles will increase in all automotive markets. This means a corresponding increase in the market for powertrain components. To help the Chinese manufacturers tap this market, the Chinese government is providing subsidies and tax incentives to stimulate the development and marketing of the so-called "new energy vehicles". Their goal is to make the Chinese automotive industry a technology pioneer of future electric powertrain systems.
The study attests the Chinese manufacturers a good start, thanks to certain advantages: A majority of the raw materials needed, such as lithium, is processed in China and is therefore available at low cost. In addition, cheaper labour provides Chinese manufacturers of lithium-ion batteries with cost benefits of about 30 percent. This means that the prices of the batteries themselves are distinctly lower. Because this market is becoming a volume market, economies of scale and scope are critical. China already has considerable production capacity for li-ion batteries and is investing heavily in expanding its production as well as research and development for new battery technologies. For example, Chinese manufacturers have developed a new lithium-iron battery, which is more reliable, lasts longer and is better for the environment.
Besides battery technology, the study states that Chinese manufacturers are also well positioned for motors. They have already developed successful, high quality permanent magnet synchronous motors. Because China has 80 percent of the world’s available neodymium – a raw material needed for permanent magnets – these motors cost significantly less than those produced by non-Chinese competitors. "When you take all these facts into account, China’s goal of becoming the technology leader in e-mobility seems absolutely realistic," says Bernhart. "This is a wake-up call for the traditional automotive powers. They have to act fast: car makers and suppliers need new business models; they have to reduce costs and form strategic partnerships to achieve a competitive size. Western governments are being called upon to actively support new technologies and production methods.
