I’ve said it before, and after seeing more news about China’s electric car ambitions, I’ll say it again. For better or worse, China is going to be king of car makers over the coming decades.
Everyone else appears to be on the back foot compared to China. Not only did the country mariculously emerge stronger after the recession, but to make sure they grow-grow-grow even more, the Chinese Ministry of Finance announced a trial plan in five cities to pay an EV and hybrid subsidy up to 60,000 yuan ($8,784) directly to the carmakers – rather than car buyers.
This encourages car makers to build them without worry of selling them. “But that sounds silly – where’s the incentive for Chinese citizens to buy them?” you ask? Well it’s not silly, because China’s car makers are openly planning massive export operations in the very near future. A massive slice of all produced vehicles are intended to go overseas.
This means you’ll have cut-price, decent-quality, 100% electric vehicles – all made in China – at dealerships near you this decade. The “usual” car makers from America and Europe will have an incredible challenge tying to match the low Chinese labour & manufacturing costs.
Private Chinese buyers of EVs will still get a (smaller) 3,000 yuan ($440) payment from dealers but the real target is on increasing manufacturing.
Initially EVs in China have been manufactured in trials with small fleet tests with car makers begging governments for subsidies to make these normally expensive vehicles much more cost-competitive in the marketplace.
These new subsidies of up to 60,000 yuan ($8000) – a heck of a lot of money in the Chinese marketplace – for plug-in hybrids & electric cars will be paid out in five cities.
And what a coincidence – those five cities happen to be the homes of five major Chinese automakers.
My advice to Western car makers is to keep a close eye on China and try to copy (and beat) what they do. China can actually make some quality stuff when forced to, so there’s no reason why they can’t be selling cheap, yet quality 5-Star safety rated vehicles at local dealers.
The Japanese did it despite our initial criticism – as did the Koreans, so watch out world!