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Shanghai show reinforces my belief China is not ahead of the U.S. in electric vehicle development

May 6, 2011

I just returned from Shanghai, where two of the days I was there had  the highest  air pollution levels ever recorded. I have that China cold, or maybe its just a China pollution/respiratory thing. Anyway, I digress and I haven’t even started yet. I’m was there to attend the Shanghai auto show and to meet with a zillion sources and friends (often one and the same). It was a great visit. My visit to Wanxiang EV Co., where I met with the executive director,  was a highlight. More on that later. First, the Shanghai auto show. I wrote a blog about the show for plugincars.com; I’m pasting it in below because A. I think it is pretty good and B. I don’t have time to write a new entry.  Expect a string of interesting blogs from this trip in the next few weeks.

Meanwhile, here are my thoughts on the Shanghai show, and my thinking about China’s electric vehicle industry. I met  a lot of suppliers here in Shanghai, which also influenced my thinking. One thing has increasingly become apparent to me; China’s EV industry and the EV industry in the U.S. are not so different. The U.S. has a growing number of programs to encourage EV development. It also has superior technology in many areas. Chinese companies are turning to U.S. (and European) suppliers for crucial EV technology. So the U.S. electric vehicle sector might not be steamrolled by China after all. (Though I never thought it would be.)

At the Shanghai show, I was surprised by what I found. It was as much about internal combustion engine vehicles as it was about electric vehicles.  The Chinese government is pushing electric vehicles, and just about all of China’s automakers are developing one or more new energy vehicles, as they are called here. But China’s electric vehicle market faces the same barriers as the U.S., namely low consumer acceptance and immature and thus pricey technology.

So while Chinese automakers are developing electric vehicles, they seem to be doing so by, as the Chinese saying goes, crossing the river by feeling for the stones. Since some of the stones aren’t even laid yet, they are incrementally working on EVs while concurrently developing fuel-saving technologies for their internal combustion engine vehicles. And making cars that consumers can buy now. 

Sound familiar? A lot like what automakers in other markets are doing, right? So maybe all that angst about China taking over the electric vehicle market is a bit premature.

The Chinese automakers themselves aren’t thrilled about having to put resources into developing vehicles for which there isn’t a market, the top executive at a major multinational supplier told me. Of course, suppliers are the ones who stand to benefit from this electric vehicle push. Both that exec and another, Tom Tan, president of Borg Warner China, www.borgwarner.com  me that however big the EV market turns out to be in China, and whatever the Chinese want to do, they will be there for them. 

At the Shanghai show, NEV models dominated a few automakers’ stands, and seemed to be a sideshow at others.  But the Shanghai show is huge. It covers more than a dozen halls and suppliers are included in the show. So I may have missed some new energy vehicle models while walking the show floor.  Some automakers displayed models in multiple locations. Dongfeng Motor Co., www.dfmc.com.cn example, seemed to be in multiple halls.   In one of its displays, there were few or no NEVs. But, I found another Dongfeng display that was all NEVs.

And, it was hard to distinguish the new energy vehicles from the regular gas-powered vehicles at many stands. SAIC Motor www.saicmotor.com had a special section touting green technology, and it also had new energy vehicles at its stand at the show. Same with FAW.  www.faw.com.cn Additionally, many Chinese automakers now have multiple brands, and perhaps the NEVs were mixed up among the different brands. Nonetheless, electric vehicles were not the main theme of the show, they were only one theme.

Brilliance was showing this prototype EV. Does it have an engine inside?

Some domestic automakers seem to be looking to NEVs to expand a small model portfolio.  At the Brilliance Auto www.brillianceauto.com stand, for example, it seemed like some 80% of the models it was showing were new energy vehicles.  Brilliance is leaning heavily on its partner BMW for alternative powertrain technology, and the two debuted a concept plug-in hybrid model of the long wheelbase BMW 5-series sedan at the Shanghai show.  http://www.just-auto.com/news/brilliance-bmw-5-hybrid-gets-production-green-light_id110491.aspx While the model was developed in China for the China market, BMW’s expertise in alternative energy drivetrains was a crucial contribution.

Chery Automobile www.cheryinternational.com ranked third—far behind BYD and Toyota– in the list of automakers Chinese consumers most associated with battery electric technology, according to a recent study by market research firm Synovate. http://www.synovate.com/news/article/2011/04/consumer-product-experience-critical-to-market-success-for-battery-electric-vehicle-technology-in-mainland-china-reveals-new-study-by-synovate.html

But Chery wasn’t showing many new energy vehicles. Instead, it was showing off its models with continously variable transmission, which is a fuel-saving technology. 

The new energy vehicle component of BYD’s www.byd.com stand at the show was surprisingly low-key. The automaker recently announced results of a test fleet of taxis in Shenzhen showing that the capacity of BYD’s batteries did not diminish after the fleet racked up 2.77 million kilometers (1.73 million miles). http://www.byd.com/press.php?index=0  BYD has been slow to prove the technology of its F3DM hybrid and e6 electric vehicle, after much bragging about it.  So perhaps it was wise not to make too big a deal about new energy vehicles at the Shanghai show. (The license plate had fallen off the e6 EV on display at the show, not a big confidence booster in the car’s technology….)

BYD's e6 electric vehicle had license plate problems.

Actually, fleets are where the electric vehicle action will be in China, probably for the next decade or longer. That will be a bonanza for suppliers. And consumers can get more comfortable with the technology.  But this visit to China has reinforced my belief that we aren’t going to see EVs take over any significant market share in China’s passenger car market for a very long time.  And that predictions that China will lead the way in electric vehicle technology and adoption are unlikely to come true.

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11 Comments leave one →
  1. May 6, 2011 7:14 pm

    Interesting. Do you know if Chery’s CVT technology is purchased from someone else or home grown?

    • May 6, 2011 7:25 pm

      I believe it is purchased, maybe from Borg Warner. Can find out.

      • May 7, 2011 4:58 am

        Appears it is home-grown, but not ready for prime-time, according to people who have visited Chery. So the models were sort of prototypes, not production. At least that’s what these sources figure….

      • Lawrence permalink
        May 12, 2011 2:58 pm

        Hi Alysha,
        I believe that ZF is providing the CVT technology.

  2. May 7, 2011 4:53 am

    I found much the same thing during my visit to Shanghai. Several foreign component suppliers also suggested that the Chinese companies do not yet have the sophisticated battery management technology to optimise the charge/discharge cycle, which plays a crucial role in terms of range and safety. The technology at the manufacturers’ stands was in many cases not much more complex than that of a golf cart.

  3. warren brown permalink
    May 9, 2011 11:28 am

    Thanks for the insightful and informative China EV feed, Alysha.-Warren

  4. May 16, 2011 10:54 pm

    (Delayed) Reply to Lawrence: Thanks. If that is the case, maybe the issue is integration. Anyway, we need to find out the truth! Is Chery’s CVT technology home-grown or purchased? Inquiring minds need to know.

  5. October 11, 2011 12:34 pm

    nice article!

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