China Leads the Way on Electric Vehicle Production
by John Lawrence, September 19, 2020
A Chinese company has developed an electric car that can go 438 miles without recharging. They have developed an infrastructure of charging stations. 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. China leads the world in deployment of electric vehicles. At the end of June 2019, almost half the electric cars and 99% of the electric buses in the world were in China. China reached its goal of 5 million electric vehicles on the road by 2020. China is both the largest manufacturer and consumer market for electric vehicles in the world, accounting for more than half of all electric cars made and sold in the world in 2018. China also makes 99% of the world's electric buses. 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 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.
You see, dear reader, the US needs to play catch up. That's exactly what Joe Biden wants to do. China subsidizes its electric vehicle industry and subsidizes the purchase of electric vehicles by the public which can be purchased for $30 to $40 thousand US before subsidies of $8000 or so making them very cost competitive with gas guzzling vehicles. So China has an industrial policy which is so far anathema in the US. For the US government to have an industrial policy or to subsidize certain industries smacks of socialism. But without Joe Biden's plan or some other plan, the US will fall far behind China in electric vehicle production and for the necessary R&D and infrastructure. China's EV production is also part of their plan for reducing greenhouse gas emissions. They also need to replace their numerous coal fired electricity generating plants with renewables.
The number of EV charging stations in China is growing rapidly. In January 2019, the Chinese Electric Vehicle Charging Infrastructure Promotion Agency (EVCIPA) reported 808,000 EV chargers in China (an 80% increase in one year). Of these, roughly 330,000 were public chargers, and 480,000 were home chargers. China has hundreds of auto manufacturers, many of which are owned in whole or in part by provincial or local governments. According to some reports, as many as 200 Chinese auto manufacturers have produced electric vehicles. In 2018, 1527 fuel cell electric vehicles also were sold in China, bringing the country’s total fuel cell electric vehicle fleet to 3428.
But it's not only China's government or SOEs (State Owned Enterprises) that are investing in China's EV market. It's China's private sector as well. In 2019 Evergrande, a Chinese firm believed to be the biggest real estate company in the world and backers of electric vehicle startups like Faraday Future and NEVS, announced a massive $23 billion investment in the production of 1 million electric cars and 500 GWh of batteries per year. With a valuation at more than $100 billion and revenues of over $40 billion, Evergrande is now looking to expand into electric vehicles. After acquiring large stakes in two electric vehicle companies, Evergrande claims to have “acquired key technologies in the sector” and now plans to launch its own production of electric vehicles in China in a big way. So why aren't American corporations making investments like these? They still seem committed to producing gas guzzlers. The Trump administration even has challenged California's attempts to set higher emissions standards. Trump revoked a longstanding waiver that allows California to set higher fuel emission standards than the federal government. The US is going backwards on greenhouse gas emissions. Meanwhile, the earth burns and floods.
The waiver revocation is also part of the Trump administration’s longstanding attempt to roll back federal fuel economy standards for cars and light trucks. Californians buy more cars than people in any other state, which means the emissions standards it sets for itself have big repercussions on the US economy as a whole. Thirteen states and the District of Columbia have also adopted California’s vehicle emissions rules. So the California waiver was a big impediment to the Trump administration’s larger goal of rolling back regulations that were implemented to combat climate change. As a global warming denier, Trump is committed to dumping more rather than less greenhouses gasses into the atmosphere.
China's economy is a fusion of a socialist and free market economy so it's somewhat unique in the world. Like the US Federal Reserve, the Chinese central bank, the People's Bank of China, can print yuan, the Chinese currency. The Chinese market is more devoted to manufacturing for both internal sales and export while the US economy is now focused more on financialization which means making money off of money or betting in the Wall Street casino. The US is devoted to making money by any means necessary which has led to increasing inequality. The Chinese market is more devoted to making money from sales of actual goods and services and is less financialized. So US capital doesn't go so much into manufacturing as it goes into financial markets. China is more dedicated to decreasing greenhouse gas emissions while the Trump administration doesn't even believe in global warming and is a full steam ahead fossil fuel supporter.