After the cultural revolution of the 60-ies and 70-ies, which caused damage to China’s economy, the country began to open its markets to the outside world. The goal was to bring technological know-how from abroad, which then could be tapped by domestic companies. By the early 80-ies of the foreign automakers were allowed to work in China only on the condition that will create a joint venture with a Chinese partner. These Chinese companies working with foreign companies eventually had to get enough knowledge to function independently.
Anyway, that was the plan. The cars of Chinese production subsequently flooded the market, but was mostly cheap fakes — they were like foreign cars, but filling them was not that good. Automakers in the U.S. and Europe have gone far ahead from the Chinese.
China never misses an opportunity
The only way to outperform the rest of the world, in this case, meant to bet on a completely new technology. And here appears on the scene, electric cars are less complex mechanically and relying mainly on the wonders of electronics. The Chevrolet Bolt electric motor contains a total of 24 moving segments. For comparison, the combustion engine of the Volkswagen Golf includes as many as 149 of these. Meanwhile, China has already formed a production chain of suppliers of electronics over the years, the production of batteries, phones and devices all over the world.
Now the Chinese government actively welcomed the shift from combustion engines to electric motors, and in such extent, no country can. Electric transport has become one of the ten pillars “Made in China 2025” — a government plan for the country, which is obliged to become a leader in high-technology industries and held a policy to create demand. In 2013, almost 500 companies for the production of electric vehicles started in China to meet the request of the government and cash in on the subsidies meant to supply.
But clients the government has promised one of the most difficult to obtain in the major cities of China detail: license plate. For pollution control a number of rooms produced each year is strictly limited. Beijing distributes them in the lottery, but the chance to get the number is 0.2%. Shanghai sells them at auction at prices higher than the cost of domestic cars. But the numbers for electric cars are completely free.
“The world needs another way to stimulate the economy,” said bill Russo, General Manager of Shanghai consulting firm Automobility. “China recognizes that it cannot depend on fossil fuels — he’ll choke in their own fumes”.
Breakneck speed of China changed the strategy of the traditional brands. Many of them now consider their global strategy of electrification on the basis of the industrial policy of China, but the rapid Raj Chinese companies is difficult to match — and this is a threat for nearly all automakers, including Ford, General Motors and European.
And the answer is no. What do you suggest? Tell us in our chat in Telegram.