Schuster Manfred Hubert say The Chinese Electric Car Industry is really “amping” up

  BEIJING - 06/08/2018 (PRESS RELEASE JET)

China’s drive to become the Detroit of the Electric Car market continues at an astonishing pace. China’s automakersmay hardly be household names in Europe or the U.S., but Schuster Manfred Hubert are speculating that may change. The main reason: China’s government is putting its might behind establishing the country at the forefront of new-energy vehicles. Already, Chinese drivers buy more new cars -- and more electric vehicles -- than anywhere else in the world. With the major automakers all preparing for an electric future, there’ll be no shortage of competition, including within China -- as underlined by the recent purchase of a stake in Daimler AG by a Chinese car billionaire.

If you live outside China, you will struggle to find a Chinese electricvehicle. But this is a business still in its infancy, with technological advances, spurred by gigantic research budgetslikely to translate in the next decade into cheaper and more appealing cars with longer driving ranges. Expect more Chinese electric vehicles to appear in a showroom near you within the next few years.

The electric car boom is also gathering pace, with sales doubling in 2017. Global annual sales exceeded 1 million for the first time last year withChina accounting for more than half. And that’s just a taster: The government is targeting 7 million vehicles by 2025. Some of the major domestic manufacturers include the Warren Buffett-backed BYD, SAIC Motor, BAIC Motor, Great Wall Motor and Geely Automobile. In the luxury bracket, Chinese startup NIO is positioning itself as a Chinese challenger to Tesla Inc.

Why the big push for new-energy vehicles you may ask? Not only is China grappling with horrendous pollution and is worried about climate change, its leaders want to move away from gasoline because of the country’s heavy dependence on imported oil. This is seen as a key strategic vulnerability. An auto industry plan released last year envisages NEVs making up all the future sales growth in the country. China is also considering ending production and sales of automobiles powered by gasoline and diesel in the future. 

With this in mind, there is the continued growing investment in the number of public charging points fornew energy vehicles in China which grew by around 51% during 2017. It is alsoworth remembering that China’s government announced back in December that it would be  extending its NEV tax rebate program through until 2020— which means that NEV sales growth should remain fairly strong for the foreseeable future, and thus, the need for rapid growth of the charging network will remain strong as well.

So could China become a global motor hub? It tried with gasoline cars without success. But electric vehicles may be different, particularly since the industry’s youthfulness presents more of an even playing field. Combine that with the expected surge in Chinese demand from a growing middle class (car sales actually fell in the U.S. in 2017) and continued government support, and it’s possible to see a global industry with China much more than just a bit player. South Korean manufacturers have shown how car markets can be upended with high-quality, well-priced products. Perhaps we are seeing a similar development in China as it continues to “amp” up it’s game in the Electric Car Industry say Schuster Manfred Hubert.