EV Growth: Challenges and Opportunities

This article was published simultaneously on sinograduate.com,a website promoting education in and about China, providing an interface to learn more, and be more involved and collaborative on China.

Since China entered the WTO in 2001, the automotive industry has grown exponentially. From two million vehicles sold in 2001, against nearly 19 million in the US, sales in China grew to 18.5 million units in 2011, more than vehicle sales in the US, making China the largest automotive market in the world. The Innovation Center for Energy and Transportation estimates that if growth continues at current rates of 10-11% per year, China could be selling 30 million vehicles annually by 2015. Providing energy for those vehicles may prove a challenge even greater than that of providing food for the nation’s 1.6 billion residents.

No conversation on the auto industry in China is complete without a discussion of electric vehicles (EV), whether they are pure electric or hybridized vehicles that utilize electricity from the grid.. Indeed, the world is watching as China’s automotive industry transforms from a backward, technical laggard into a world-leading battery-powered, grid-enabled juggernaut. Chinese officials are brimming with confidence that China can take this technical challenge as a way to leap past the rest of the world’s auto industry into a clean, next-generation mode of transportation for its own people, indeed for all people around the world.

There are different views on how China might progress with such an ambition. A survey by Pike Research in 2011 presents the positive scenario. Among 55 automotive vendors developing electric-enabled vehicles of some form surveyed, China was expected to be the leader in this technology by 2015. The National Development and Reform Commission has already set the target that China should be producing one million new energy vehicles by 2015. These include battery electric vehicles, plug-in hybrids, range extended EVs, mild hybrids (such as the first generation of the Toyota Prius) and natural gas vehicles.

The second scenario paints China as a follower of the successful technologies of frontier innovators. This is based on the idea that China has a limited recent history of innovation, and will fall into the same trap with EVs as it has fallen into in the rest of the automotive sector, in turn, failing to achieve its goals.

In favour of the positive scenario is that China is creating a huge incubator for international cooperation on innovation in EV technology and a test bed for implementation that no other country is likely able to rival. Researchers, companies, countries and international institutions from around the world are coming to China to build partnerships. In parallel, China’s government is imposing stricter requirements for localization of production that is expected to result in sharing, transfer and innovation of new technology and commercialization in the long run.

An example of an international partnership is the Shanghai Auto-General Motors joint battery research center, which brings together US and Chinese industrial research talent in one place to produce batteries and other EV technologies. This has the two-way benefits of bringing international expertise to China, as well as integrating Chinese EV suppliers with the global market served by this global company.

A second example is the US-China Clean Energy Research Center – Clean Vehicle Consortium (CERC-CVC). This is an international research center aimed not just at revolutionizing the way people travel, but also the way academics and industry collaborate internationally. Unlike conventional international academic exchange, this partnership is seeing the development of joint work plans, international work on the same projects, jointly written papers, guaranteed rights to international property in each others’ territories, and an overall emphasis on collaboration and complementary research. The collaboration, led by the Ministry of Science and Technology and China’s Tsinghua University on the China side and the Department of Energy and University of Michigan in the US, is planning to bring collaboration between governments, companies and governments on related new technologies to unprecedented levels.

Likewise, the Sino-German Partnership on EV development, like the CERC-CVC, is bringing together companies, government and academics from China and Europe. The focus of regular conferences and the sharing and implementation of academic and pilot research projects is on standardization and implementation of EV technology.

With institutions of all types from around the world coming to China to compete for space in China’s huge automotive market, China is increasingly positioned at the center of innovation on electric vehicle technology. The combination of the arrival of new ideas from around the world together with the scale of China’s future transport energy requirements under the optimistic scenario could bring the conversion of new ideas into reality. China’s pilot city format, whereby a small group of cities is chosen to experiment with new ideas, provides to reveal potential for what works – and does not work – for China, relatively quickly. From this eventually the industrial structure including energy supply structure to provide clean and convenient transportation to the masses in China could arise, and in turn be transferred to other parts of the world.

The electric vehicle industry is not the only industry where these collaborative relationships are coalescing in China. Indeed, it is merely one example of the many industries where such international coalescence is occurring. Nanotechnology, wireless communication, biotechnology, clean coal and carbon capture and sequestration (CCS) technology and other industries are seeing key collaborations forming in China that in many ways can not occur elsewhere around the world. This does not isolate former more exclusive research leaders. Rather it changes the pattern of research clustering, adding momentum to the need for breakthroughs.

Those interested in energy sustainability for future generations should hope that these research partnerships produce breakthroughs that honorably benefit not just all the immediate partners involved, but which also improve sustainable mobility people everywhere.

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