At this rate, China will leapfrog the West in adopting electric transportation
China’s urban transport giant, DiDi, has announced a joint venture with a subsidiary of BAIC, the country’s state-owned car company, to speed up the integration of electric vehicles and rapid battery change technologies into its vehicles. DiDi’s clout, together with increasingly lower costs in transitioning to electric vehicles, along with lower running costs than traditional cars, signals a major change in a market that has seen a decline in sales for the first time in 20 years,.
The advances being made in China’s electric vehicle market reflect the speed with which people are adopting autonomous and electric automotive technologies compared to the rest of the world: startups are launching and operating fleets of autonomous vehicles, while traditional automobile companies are leaving their US, German and Japanese counterparts behind as they formulate ambitious production plans with the goal of selling more than half of the world’s electric vehicles, while there are already rumors of possible oversupply.
Companies such as Tesla, which is building a plant in Shanghai with an expected production capacity of half a million vehicles a year, or Volkswagen, which expects to reach 300,000 annually, have been drawn by the potential of China’s vast market. As electric vehicles leave behind their niche status and attract a wider public, China is positioning itself to be a leading markets, with all that this entails in terms of indirect benefits such as smart highways (energy generation through solar panels, integration with autonomous vehicles and maintenance monitoring systems) dedicated specifically to this technology.
Meanwhile the West is still living in the 20th century. With the exception of Waymo’s planned autonomous vehicle manufacturing factory in Michigan, most traditional manufacturers are hamstrung by the problems arising from their sales and distribution networks: dealers do not want customers to purchase low maintenance electric vehicles and seem to be doing everything to put them off.
We now have an interesting paradox: as adoption of electric vehicles speeds up, it looks like the world’s largest automobile market and the one that has traditionally been the largest emitter of carbon dioxide in absolute terms will eventually evolve before many others as it drops the use of fossil fuels throughout its economy. Transportation represents around 14% of emissions compared to electricity production’s 25% or manufacturing’s 21%.
China still has a long way to go, but is emerging as a leader in a sector where change depends more on adoption processes at the individual level and less on centralized governmental or corporate decisions. This is definitely a market to watch.
(En español, aquí)
