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Electric Vehicle Industry in China

China is both the largest manufacturer and buyer of electric vehicles in the world, accounting for more than half of all electric cars made and sold in the world in 2018. Now in 2021, "automakers plan to build eight million electric cars a year in China, more than Europe and North America combined" (NY Times). China is still the largest manufacturer and buyer of electric vehicles in the world and they are continuing to put emphasis on making and utilizing electric vehicles. Not only does China focus on expanding electric cars, it also is big on electric buses as "China has more than 400,000 electric buses which makes 99% of the world's total." Although China makes up 99% of electric buses, the U.S. is starting to catch on as "the number of electric transit buses are in the hundreds" (The World). China is clearly in the lead when it comes to EVs and the question is, is it reliable and could it be maintained throughout the years.

Electric Bike and Motorcycle Development in the 90s

The two principal types of two-wheeled vehicles in China: two-wheel bicycles propelled by human pedaling supplemented by electrical power from a storage battery (bicycle-style), and low-speed scooters propelled almost solely by electricity (scooter style). The technology of both types is similar. China's two-wheeled electric vehicle industry started under the planned economy of the Maoist 1960s. However, early efforts to develop and commercialize these electric vehicles failed. A group of entrepreneurs gathered during the 1980s to revive the fledgling industry but their ambitions were thwarted by poor technology and limited government support. However, "in 1991, the Chinese government made developing e - bikes an official technology goal."

By the 1990s, China witnessed the world's most spectacular growth in two-wheeled electric vehicles and annual sales of bicycles and scooters grew from fifty six thousand in 1998 to over twenty one million in 2008. In 2008 only, Chinese bought 21 million electric-bikes, compared with 9.4 million autos.

This growth of electric-bicycles in China was less technology-driven and more policy-driven, facilitated by favorable local regulatory practices in the form of gasoline powered motorcycle bans and loose enforcement of electric bicycle standards. The alleged justifications for these bans included relieving traffic congestion, improving safety and reducing air pollution. Many Chinese cities started to ban or restrict motorcycles and scooters using a variety of measures: some cities suspended the issuance of new motorcycle licenses, others banned the entrance of motorcycles and scooters into certain downtown regions or major roads, and some capped the number of licenses and then auctioned the license plates that were available. These bans were imposed on all motorcycles, regardless of their power sources, and since electric-bikes are categorized as non-motor vehicles they were exempt from the bans. According to the motorcycle committee of the Society of Automotive Engineers of China, the use of motorcycles is now banned or restricted in over ninety major Chinese cities. Although one of the big aspects of electric - bikes was to reduce pollution, a problem with it is that "they are mostly powered from lead acid batteries, which emit lead into the environment at every stage of the mining, smelting, manufacturing, and recycling process."

In fact, the government further supported the use of electric-bicycles by including them as one of 10 key scientific-development priority projects in the country's ninth Five-Year Plan. Some insiders claim that their development had the personal endorsement of former Premier Li Peng. In addition, improved technology, low barriers to entry, decreasing purchase price, and urban living were factors that furthered the popularity of electric-bicycles as a transportation mode. First, bicycle technology - specifically for motors and batteries - improved significantly during the late 1990s and this, coupled with a vast supplier base and weak intellectual property protection, increased competition. An increase in competition drove down the price of electric-bicycles and at the same time, a rise in gasoline prices made them more competitive economically with alternatives like gasoline-powered scooters or cars. An increased influx of workers to urban areas further increased demand for an affordable, motorized, and convenient form of private mobility since traveling by bicycle or bus in congested areas or across long distances was no longer viable.

Recently, restrictions on electric-bicycles in China have been gradually spreading and there is a growing concern amongst consumers that the government may impose an outright ban. Some reasons for bans on the electric - bicycles is that it zips around in every direction, dominates the bike lanes and sidewalks, runs down pedestrians, and waves in and out of traffic with little heed to road rules or personal safety. Nevertheless, since they are an important mode of electric transportation, the experience found with electric-bicycles offers important lessons for the launch of other types of electric vehicles and could also potentially provide possible alternatives to different batteries for the electric - bike.

Electric Car Development After 2000

Political background and government support

BYD e6 battery electric taxi in Shenzhen, China

According to the China Association of Automobile Manufacturers, China surpassed the United States to become the world's largest automobile market in 2009 with a record 13.9 million vehicles sold in the country, compared to 10.43 million cars and light trucks sold in the United States. There is a quickly growing demand for transport in China as more people can afford to buy cars. To support its commitment to encourage electric-vehicle development the government planned to provide US$15 billion to the industry. Their intention, in addition to creating a world-leading industry that will produce jobs and exports, was to reduce urban pollution and decrease its dependence on oil. As such, government's goal was to have five million battery-electric and plug-in hybrid electric cars on the road by 2020, while also producing one million such vehicles annually by 2020.

The government established a policy framework to accelerate electric-vehicle technology development, while encouraging market transformation that will support research and development, regulate the industry and encourage consumption. Furthermore, there are state policies that help push people into electric - vehicles. The state policies include, "EV quotas for vehicle manufacturers and importers, manufacturing subsidies, tax exemptions in which the Chinese government exempts EVS from consumption and sales taxes which can save buyers tens of thousands of renminbi, government procurement policies, state discouragement of any new factories producing internal combustion engine cars, and support for the construction of electric vehicle charging stations" (Professor Karl Gerth). With Research and development, will ultimately bring a lot more attention to the EV sector. Bringing these policies to fruition will make people adapt to a better, clean, alternative for transportation. Furthermore, four ways Chinese cities promote electric - cars is "regulating license plates. It is much faster and cheaper to get a license for electric - vehicles rather than conventional vehicles. In Beijing, plates can be obtained in a few months, while plates for conventional vehicles can take years. In Shanghai, plates for electric vehicles are free while plates for conventional vehicles cost more than $12,000. A second way they promote electric - vehicles is restricting driving days for non - electric cars. Third Beijing and Shenzhen have both announced that their entire taxi fleets are transitioning to electric vehicles over the next few years and lastly, in a city called Hangzhou, the government provides subsidies for not only consumers who purchase electric vehicles but also users of vehicle renting. Financial subsidies are also provided for infrastructure construction and maintenance service.". China is in the lead when it comes to electric - vehicles because the government heavily supports it and believes in the industry. Not only do they invest in citizens cars, but they invest into other electric transportation such as buses, electric bikes, and taxis. Reducing pollution isn't the only benefit electric - vehicles provide as there are many others. It is a lot easier and cheaper to obtain a license and turning to electric vehicles can provide an immense amount of benefits rather than conventional vehicles. Furthermore, to persuade consumers to adopt to electric - vehicles, they will also need to satisfy customer needs in which they are aiming to do.

Early developments

In 2001 China started the "863 EV Project" The National Development and Reform Commission published the Auto Industry Development Policy in 2004. That year, sixteen Chinese state-owned companies formed an electric vehicle industry association in Beijing called CEVA. The goal of the association was to integrate technological standards and create a mechanism through which stakeholders share information in order to develop a top of the market e-vehicle. The companies were anticipated to invest a total of US$14.7 billion on the growing electric vehicles market by 2012.

In 2007 China invested over RMB2 billion (US$300 million) in new energy vehicle development.

2008

• Sales volume of Chinese new energy vehicles surges to 366 units in the first half of 2008, reaching a year-on-year increase of 107.9%. Chinese automakers provide around 500 independently developed new energy and fuel efficiency vehicles to serve Beijing Olympics. • 13 cities (Beijing, Shanghai, Chongqing, Changchun, Dalian, Hangzhou, Jinan, Wuhan, Shenzhen, Hefei, Changsha, Kunming, and Nanchang) are chosen as pilot cities for new EV usage in 2009.

2009

• The State Council approves the Auto Industry Restructuring and Revitalization Plan to invest RMB10 billion (US$1.50 billion) for new e-vehicle industrialization. • The State Council invests RMB20 billion (US$3 billion) in technique development. • To improve air quality and reduce reliance on fossil fuels, the government announces a two-year pilot program of subsidizing buyers of alternative energy cars in five cities (Shanghai, Changchun, Shenzhen, Hangzhou and Hefei). The subsidy for EV customers is RMB60,000 for battery electric vehicles (BEV) and RMB50,000 for plug-in hybrid vehicles (PHEV).

2010

• An auto industry (including new energy) development plan for 2011 to 2020 was drafted to include a plan to transform the domestic auto industry. Approval has been delayed. • China plans to expand a project of encouraging the use of energy-efficient and alternative-energy vehicles in public transport to 20 cities from 13. EV).

2011

• There are several major electric vehicle R&D and manufacturer company in Chinese market. The company including: SAIC, FAW, Dongfeng, Chana, BAIC, GAC, Chery, BYD and Geely. Additionally, there are several R&D institutes has been built up such as Tsinghua University, Beijing Institute of Technology, and Tongji University. They all have their own centers focusing NEV research.

2018

China manufactured and sold about 1.2 million plug-in electric vehicles in 2018, which was more than three times the sales in the US. China has become the fastest and largest growing market for electric vehicles in the world. New electric cars (EV) had a market share of 4.2% of new cars sold in China for the entire year of 2018. Big cities like Shenzhen and Beijing are rapidly adopting electric vehicles -- for example, all of Shenzhen's 16,000 public buses are now electric, and soon all of its 22,000 taxis will be electric cars as well.

2020

"A record 1.3 million electric vehicles (EVs) were sold in China in 2020 with a year - on year growth of 8%, comparing with 39% worldwide sales growth," according to research from Canalys. From 2011 to 202, the companies that became the largest electric car manufacturers were BYD motor, WM motor, Nio motor, and Xpeng motor. In 2020, however, "Severely cut government subsidies and the Corona crisis with temporary plant and dealer closures left their mark, especially in the first quarter of 2020: registrations shrank by 56.4% to 114,000 during this period. As the year progressed, the industry slowly recovered. Researchers also projected the breakdown in sales between ICE vehicles and battery EVs at three points in time. According to that analysis, in 2020. EVs make up just 7 percent of the total (1.6 million vehicles). By 2025, that share is up to 21 percent (5.4 million). And by 2030, it's up to 37 percent (11.2 million) - close to the government's 40 percent target. Altogether, 66 million EVs are sold between 2020 and 2030."

2021

"Although the global market is still affected by the pandemic, in the first quarter of 2021, China's market for new vehicles has grown substantially. From January to March 2021, car sales rose 76% to 6.484 million vehicles compares to the same period in the previous year. The China Association of Automobile Manufacturers (CAAM) predicts that total vehicles sales in 2021 will increase by 4% year - on - year to 26.3 million units. The growth rate of new energy vehicles is expected to reach 40%, with total sales climbing to 1.8 million units."

Environment concerns and Chinese oil demand

With more desire to grow, China has been looking for solutions to solve the climate crisis. However, the more they grow, the more they pollute. One way China aims to solve the climate crisis is to "impose a mandate on automakers requiring that electric vehicles (EVs) make up 40% of all sales by 2030," according to Nancy Stauffer, who wrote "China's transition to electric vehicles." By having a mandate to require mostly electric vehicles, will have a positive affect on the climate. Now although emissions will still be produced from the electricity to fuel the electric vehicles, it will greatly reduce the emissions when compared to a gas powered vehicle. According to Luke Tonachel, "about 60% of carbon pollution from the transportation sector comes from passenger vehicles. If we electrify all of them with renewably generated, zero - carbon electricity by 2050, we will address a huge part of the climate challenge for transportation."

Developing electric-vehicles will assist energy conservation and security in China since energy efficiency is 46% higher than that of internal combustion engines (ICEs). Electric-vehicles also have the potential to reduce carbon dioxide emissions by 13-68%: directly, through advanced V2G (vehicle-to-grid) technology and indirectly, through peak shaving.

Change in China's oil products demand (year - on year)

Developing electric-vehicles will also reduce China's reliance on oil imports. China became a net oil importer in 1993, the world's second-largest petroleum consumer after the United States in 2004, and imported 52% of its oil by 2009. The International Energy Agency projects that Chinese oil consumption will more than double from 7.7 million barrels per day (1,220,000 m³/d) in 2008 to 16.3 million barrels per day (2,590,000 m³/d) by 2030. Now in 2021, Bloomberg writers Aaron Clark and Sharon Cho report that "China's crude imports averaged 10.9 million barrels a day last year, and are suggesting current stockpile levels of around 1.09 billion barrels." It seems like China is on track to hit 16.3 million barrels per day by 2030, however, with the development of electric vehicles will greatly reduce the amount of barrels. At the same time, it became the largest automobile market in the world by the end of 2009 and McKinsey estimates that China's vehicle fleet will increase tenfold between 2005 and 2030.

As the demand for cars continues to grow in China, the associated demand for gasoline will put continual pressure on China's energy security. China is building its own Strategic Petroleum Reserve (SPR) that can hold 100 million barrels (16,000,000 m³), about enough to supply its oil needs for 20 days, and also plans to build eight additional coastal oil reserves by 2011 to increase its total emergency supply to 281 million barrels (44,700,000 m³). At the same time, China is encouraging and supporting the development of alternative energy options, especially in terms of electric-vehicle development, because they anticipate the rise of new fuel technologies and greater fuel efficiency will give them greater energy independence. According to Wan Gang, Minister of Science and Technology, "green vehicles are key for the development of China's auto industry as auto exhaust emissions already account for 70% of the country's air pollution in major Chinese cities."

Value chain

The Chinese government had developed a plan to make China one of the leading producers of electric and hybrid vehicles by 2012. Fast forward to 2021, China now leads production in electric vehicles. The goal meets two basic needs: to improve the environment and save energy at home, and to transform Chinese automakers into major players in the global automobile industry. Although China already has one of the largest automotive industries in the world, one of its biggest shortcomings is its outdated gasoline engine technology. Transitioning to large-scale electric-vehicle activity could give China a competitive advantage over the West. China is ahead of the game now because they are willing to "invest $300 billion over the next five to ten years on EV development and production."

Capitalizing on the low barriers to entry in the industry, stakeholders are establishing credibility in the manufacturing of electric-vehicles. However, there has also been a recent push in China to complement manufacturing with defined segments across the value chain including energy storage, energy infrastructure, distribution, and value added services.

Energy storage

Main article: Energy storage

E-vehicles use only electric motors and gearboxes, and have few parts requiring maintenance. Compared to traditional vehicles and excluding the battery, they are cheaper and easier to build. However, building battery with sufficient capacity and discharge-cycles is a challenge. Although it has been a challenge, battery makers in China are developing innovative batteries that can benefit the EV sector as a whole. According to a statement made by Xin Guobin, vice minister of China's Ministry of Industry and Information Technology, mentions why China is interested in making EV battery swaps a thing and a few reasons why is because "it reduces cost to vehicle buyers, cheaper charging by charging during off - peak hours and customers being able to choose the size of battery they need on a given day."

BYD Company is a Chinese company that builds rechargeable batteries using a new technology that, according to the company, makes them safer than other lithium-ion models. In 2005, it became the world's leading small battery company and is one of the world's largest manufacturers of rechargeable batteries. It is emerging as a leader in the technology sector. Contemporary Amperex Technology, a Chinese battery manufacturer and technology, has declared that they have a "battery pack ready for electric vehicles that will last as much as 1.2 million miles." The progress Chinese battery makers have made in the past to now has positively impacted the overall EV sector. With the amount of money invested into EVs, China is more inclined to do more research and development on aspects such as batteries, transportation, and policies.

File:China-EV-subsidy-05-01-2021.jpg

Subsidies for plug - in hybrid vehicles will be lowered to 6,800 yuan per vehicle in 2021, from 8,500 yuan in 2020

Tianjin Lishen Battery Joint-Stock Co. Ltd. is another China based battery manufacturer. The company has a partnership with Coda Automotive, a California based company, to develop a Coda electric vehicle and ultimately, batteries for use in electricity generation. The focus of the latter will be to provide energy storage for wind and solar energy generation.

In 2017, the government battery subsidies fell by 30% and Chinese EV sales dropped. Now in 2021, "China's finance ministry has reduced the subsidies for electric vehicles for 2021 by 20%, a move most market participants say they had expected. The country's government took the decision to extend the EV subsidy and slow the reduction of support to offset the adverse effects of the pandemic, boost EV consumption and support healthy and sustainable development of the industry." Although they reduced battery subsidies, a reduction of the subsidies for electric vehicles offset the situation and benefited from it.

Energy infrastructure

While the shape of this industry is still emerging, electricity generation and the infrastructure to deliver energy appear to be the areas with the highest potential and relevancy to manage future energy use. According to consulting group Oliver Wyman, "some utilities are already engaging a specific area of the value chain, setting priorities for near-term, medium-term, and long-term initiatives. They have begun to model different market and business impact scenarios, with the goal of identifying the biggest upsides and pitfalls."

Utilities have begun to develop focused strategies in areas where they are well positioned to serve the electric-vehicle value chain. At the moment, a variety of business design ideas are competing to shape the new marketplace. China has invested a great deal into this fundamental component of the value chain, and some of the principal facilitators are as follows:

• State Grid Corporation of China
• Jiangxi Ganneng. Co

Multibrand and multimaker distribution and value added services

China is implementing policies that advocate diversified energy sources for use across industries. In a parallel effort, private companies are introducing innovative ways that support the use of clean energy. To bridge the gap between the customers and suppliers, Shanghai based company TZGEV has introduced distribution and value added services that integrate and streamline resources from electric-vehicle carmakers and related equipment suppliers in the private and public sectors. Recognizing a need for activity across the electric-vehicle value chain, they are offering EV's for sale and for rent, technical repair and maintenance, and value added services inclusive of fleet management.

Climate Crisis

History on Chinas Climate

CO2 emissions from fossil fuels

China aims to grow in power and a way they supplement their power is through pollution. Back in 2018, "China led the world in emissions of heat - trapping gases and China's CO2 emissions were roughly 11 gigatons- approximately 28% of the global total. Roughly 9.5 Gt were from combustion of fossil fuels" (Sandalow 11). With China leading the world in emissions of heat trapping gasses not only damages their own country, but the rest of the world as well. Fossil fuels were roughly 9.5 Gt because it plays a big role in Chinas economy and the government has been allowing corporations to freely pollute. Chinas capitalistic practices leads to an immense amount of pollution and is speeding up the process of global warming. Furthermore, "While power plants may be the greatest emitter overall, the internal combustion engine (ICE) is a major source of air pollution in urban areas and a large contributor to overall GHG emissions" (Wilson). However, China is taking preventative measures to address the climate crisis. We are currently in the country's Fourteenth Plan of the Five-Year Plans of the People's Republic of China and aspects the Fourteenth plan cover are "anticipating to have aggressive goals on sustainable energy in order to reach China's announced goals of carbon neutrality by no later than 2060, develop a plan to achieve peak carbon emissions by the end of the 2020s and increase the proportion of non - fossil fuel energy use to 20% by 2025, compared to 15% at the end of 2019. Furthermore, Xi Jinping has announced that new energy technologies such as car batteries from state owned enterprises will make it so that half of the vehicles in China be electric or fuel - cell powered, and half hybrid by 2035."

EV Impact on the Climate in China

EVs are becoming more popular and are in high demand. Popular Chinese EV companies such as NIO (car company), Li Auto, Xiaopeng Automobiles, and BYD Auto have been reporting record number deliveries each quarter. China's Internal combustion engine (ICE) has majorly impacted China's climate and the Chinese government seek to turn to electric vehicles because of the benefits they offer. A few benefits EVs offer are "The zero tail - pipe emissions and ability to build on basic existing power grids and infrastructure have made EVs a very attractive choice for replacing the ICE, reduce China's dependence on imported oil, and to establish a profitable low emissions vehicle industry in China that would reduce significant pollution problems in urban areas" (Wilson). With the infrastructure and technology EVs use, prevents any emissions that come from exhaust pipes that usually come with gas powered vehicles. This is beneficial because people can still transport to places while also reducing emissions which helps solve the climate crisis. In addition to benefits that EVs provide, it reduces China's dependence on imported oil which means less gas powered cars. (ICE) is responsible for a great amount of pollution all over China, but mainly in urban areas and with EVs, prevents such problems because of the power grid and infrastructure it provides.

EV Brands

One of the most popular EV companies in China, NIO. NIO'S ES8 SUV

See also: List of automobile manufacturers of China

• Aiways
• Alibaba (Roewe)
• Aoxin
• BAIC
• Baidu Apollo
• Baojun
• BMW Brilliance, including Zinoro
• Bordrin
• Borgward
• BYD
• Byton Auto
• Chang'an Automobile Group
• ChangJiang
• Chery
• Cowin
• Denza
• DEARCC
• Detroit Electric
• Dial EV
• Enovate
• Everus
• Faraday Future
• FAW
• Fisker Inc
• Changan Ford
• Guangzhou Automobile GroupCo, Ltd. (GAC / GAC Motor)
• Geely, including London Taxi Company and Geely Zhidou
• Great Wall Motors (GWM) and WEY
• GreenWheel EV (Shenzhen Greenwheel Electric Vehicle Group Co., Ltd)
• Guangzhou Toyota (GAC)
• Gyon
• Haima
• Han Teng Automobile Co., Ltd.
• Hawtai
• Hongqi
• Horki (Dongfeng-Yueda-Kia joint venture).
• Hozon Auto (Zhejiang Hezhong New Energy Vehicles)/ NETA
• HiPhi (Human Horizons)
• JAC Motors
• Jiangling Motors (JMC)
• Kandi Technologies
• Karma
• Kawei
• Leapmotor
• Leopaard
• Levdeo
• Li Auto (Chehejia)
• Lifan Group
• Lucid Motors
• Luxgen
• Lynk & Co
• SAIC Maxus
• Min'an Electric Automobile Co (Minan Auto EV)
• MG Motor
• NEVS (SAAB)
• Nikola Corporation
• NIO
• ORA (GWM ORA)
• Polestar
• Qiantu
• Qingyuan Auto
• Qoros
• Noble Automotive
• Roewe
• RAYTLE
• Seres (SF Motors)
• Singulato Auto (Zhiche Youxing Technology Co., Ltd.)
• Sinogold
• SiTech
• Sokon Industry Group.
• Soueast
• Suda (Henan Suda)
• Techrules
• Thunder Power
• Traum
• Dongfeng Venucia
• Weichai Enranger
• WM Motors (Weltmeister )
• WindBooster
• Xiaopeng Automobiles, Internet car company.
• Yema Auto, Sichuan Mustang Automobile Co (a Fulin Group company).
• Yudo Auto
• Yu Lu (Dongfeng Luxgen JV)
• Youxia (Kitt)
• Zotye Auto (Zotye International Automobile Trading Co., Ltd)