China is placing big bets on a plan to reshape the global auto industry by replacing gas-guzzling cars on its streets with new-energy vehicles. China’s industrial goal is to leapfrog over foreign car makers in the domestic market and become an export powerhouse.
Beijing has said it is studying a move to ban gas cars, without giving a date. It has, though, been specific about who it expects will win the new battle for China’s eager car buyers: The “Made in China 2025” blueprint on how to dominate cutting-edge industries calls for at least 70% market share for homegrown plug-in vehicles by 2020.
Ironically, this strategy is likely to involve what at first looks like a breakthrough for foreign auto makers in China. There will be expectations of an announcement on 100% foreign-owned electric car plants in special economic zones, possibly during Mr Trump’s visit to China in November. Chinese leaders will trumpet this as a major concession to Tesla, among others.
China’s real aim is to accelerate technology imports to boost what it calls a “strategic emerging industry” and attract global supply chains, says Michael Laske, China Chief Executive of Austrian auto consultancy AVL List GmbH.
Success is by no means assured. Although electric-car sales in China are booming – the country already has more charging stations than the United States – skeptics note that so far hefty subsidies are in place to persuade consumers to buy.
Environmental concerns are also part of China’s overall calculations. Smog is a hot-button political issue for the Chinese leadership; regular “airpocalypses” in Beijing make life there near-intolerable on certain days. City streets everywhere are also clogged. The government is radically rethinking mass mobility.
This means electric. Since China already account for one third of global car sales, its domestic market could double from here.
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Source: Dow Jones Newswires Chinese, 11 October 2017