Wanxiang EV shows restraint where China electric vehicle market is concerned
I visited Wanxiang Electric Vehicle Co. http://www.wanxiang.com/Wanxiang%20EV_general.pdf in Hangzhou a few weeks ago and met with the executive director, Li Pingyi. Seems BYD isn’t the only Chinese company aiming to supply a whole range of things electric. But, I came away from our meeting thinking that Wanxiang has a more measured, and likely more successful, approach to the whole electrification trend.
First, a bit of background. Wanxiang www.wanxiang.co is China’s (and probably the world’s) largest producer of universal joints. The founder, Lu Guanqiu, got his start repairing bicycles, then agricultural machinery. In 1969, he opened the Ningwei People’s Commune Agricultural Machinery Repair Factory. That became Wanxiang Group. (I visited Wanxiang back in 2005 and interviewed Lu Guanqiu. http://www.autonews.com/apps/pbcs.dll/article?AID=/20051219/SUB/51219009; http://www.autonews.com/apps/pbcs.dll/article?AID=/20051219/SUB/51216061)
Wanxiang Group’s main source of revenue is still selling auto parts such as universal joints, bearings, and CV joints. But in 10 years it
aims for EV components to be its most important source of revenue.
Wanxiang is not gaga over the potential market for electric passenger cars in China, however. Li, the executive director of Wanxiang EV, consistently sounded a note of caution about the size of the market.
Consumer acceptance, and thus demand was uncertain, he said. And, the technology was not mature, he added. It would take up to 10 years for electric passenger cars to be accepted, he figured. So, Wanxiang has no plans to jump into the electric passenger car market right now. It will evaluate the market in 2015 and think about it then, Li said. “We have no experience developing and manufacturing passenger cars,” he said.
Wanxiang is investing heavily in electrification, however. “We are now putting our efforts into battery development,” said Li. “We should make sure we have the leading position in the battery field before we go into cars.”
Yes, you heard correctly. Wanxiang is actually getting really good at the most important part of the whole EV equation—the battery—before it jumps into a market it has no experience with. It is also expanding its production of motor and motor controls for electric vehicles, but the battery is the most important component, Li said.
Those batteries, motors, and motor controls are aimed at the electric vehicle market in China that Wanxiang is enthusiastic about—buses and
service fleet vehicles.
It’s hard not to miss that point—an electric bus chassis loaded with Wanxiang batteries is prominently displayed in the lobby of
Wanxiang EV’s main building in Hangzhou.
Li said Wanxiang is cooperating with a number of bus companies in China. Among them: Zhengzhou Yutong Bus Co. http://www.yutong.com/english/aboutyutong/introduction/index.shtml, China’s largest bus manufacturer; SAIC www.saicgroup.com ; and Guangzhou Automobile Industry Group www.gaig.com.cn . A big portion of the buses it will produce with these companies are pure electric buses, said Li. A few will be hybrids.
Wanxiang is also working with Zhengzhou Nissan Automobile Co., a commercial vehicle joint venture between Japan’s Nissan Motor Corp. and Dongfeng Motor Co., http://www.zznissan.com.cn/english/about/Company_Profile.htm to produce a fleet of electric service vehicles for the State Grid, one of China’s two electric utilities, he added.
Of course, Wanxiang is pretty new at this electrification stuff, having only gotten into it around 1999. Wanxiang EV was founded in 2002
to focus on producing key EV components. So it wanted to find a partner with more experience. That’s where New York-based battery maker Ener1 www.ener1.com comes in. (See my Feb 19 blog for more on the partnership, and Ener1’s side of this story).
I asked Li, who has been in his current post for a couple of years, why Wanxiang partnered with Ener1. “We have only been researching EVs since 1999, he said. “Ener1 used to be part of Delphi. It has been doing this for much longer. It has good technology.” Wanxiang has some good technology, too, he said. Plus, it has a good customer base. So one plus one equals more than two.
The two aren’t just looking at the mobility side of the battery business; they are also looking to be major players in the energy
storage industry, Li said. “The cooperation with Ener1 really raises our profile in the industry,” he concluded.
Electric vehicle components isn’t the only “green tech” area Wanxiang Group is involved in. Like BYD, Wanxiang aims to supply a range of
products, including solar panels and LED lighting, as well wind farm development. Wanxiang America produces solar panels in the U.S. state of Illinois and is working with New Generation Power http://www.newgenerationpower.org/ on a large solar energy project in the
same state. http://www.greenenergyapproach.com/green-energy/illinois-governor-quinn-signs-solar-ramp-up-law-and-announces-one-of-the-largest-solar-development-projects-in-the-u-s/
It has wind power projects in China.
Like many large Chinese corporations (indeed, like many corporations worldwide), Wanxiang also has financial, real estate, hotel and restaurant management, and aquacultural (eels and snakes!) businesses, to name just a few. Indeed, after the interview we went to lunch in an excellent Chinese restaurant (no eel or snake, however) in a nearby hotel owned by Wanxiang. Saves money on hotel bills when people visit the HQ, I suppose.
Wanxiang Group is very international, including subsidiaries in the U.S., Brazil, and the U.K. That doesn’t mean it will be any more successful than other Chinese or non-Chinese company at producing complex electrical vehicle components such as batteries, motors, and motor controls. But at least it is taking a refreshingly business-like and sober approach to the EV sector. Unlike some of its compatriots.