The Chinese Electric Revolution
China’s industry ministry announced its intentions to end the sale and production of gasoline and diesel cars, following the actions of Britain, France and Norway. The largest auto market in the world, China is putting pressure on manufacturers to shift toward electric vehicles and phase out traditional combustion engines. A state-sponsored push for electric cars, in addition to saving on imported oil costs, allows the Chinese auto market to take advantage of early benefits in the emerging market.
Chinese electric and hybrid sales rose to 40 percent of global demand in 2015, surpassing the United States as the largest market. General Motors, Volkswagen and Nissan have announced their interest to collaborate with Chinese partners in producing and developing electric vehicles. This will expand the Chinese market and their lead over the United States, where electric car production is driven by entrepreneurs rather than state-sponsored programs.
Up to this point, Beijing spent billions of dollars on research subsidies for automakers, though the new initiative puts the ball in the manufacturers’ court. The current quotas require automakers to have electric and hybrid cars comprise 8 percent of their output to begin, increasing to 10 percent in 2019 and 12 percent by 2020.
To incentivize manufacturers and buyers, Beijing has also ordered Chinese power companies to install charging stations at a higher pace.
Electric car production was also part of Britain’s conservative platform in recent election cycles, mainly due to concerns over poor air quality. In many major U.K. cities, particulates and nitrogen oxides, some key ingredients of smog, cause 40,000 annual deaths, according to one study.
Britain recently announced its plan to end sales of new diesel and gas cars by 2040 and maybe remove cars with combustion engines altogether by 2050. The government also allocated $332 million for local governments to improve their transportation systems to reduce air pollution in the short-term. Michael Gove, the environment secretary, also pointed out the benefits of combating accelerating climate change in addition to dealing with the health problems caused by current emissions.
France announced its plans to take similar action as a reaffirmation of its commitment to the Paris climate accord, also setting 2040 as a goal. Other countries have taken more aggressive measures, with Norway planning to sell only electric cars beginning in 2025 and with India targeting 2030 as an ideal date.
Some politicians, however, are frustrated that these measures aren’t aggressive enough. After all, a 23-year deadline is great for the future but does little to ease the current pollution crisis. Furthermore, cars have a lifespan of over a decade, meaning gas and diesel will still be on the road beyond 2040.
Nonetheless, this swift and widespread action indicates a change in the public attitude towards fossil fuels, no doubt helped along by the Volkswagen emissions scandal. The German company covered up failed emissions tests on their diesel vehicles. To rectify their mistake and salvage their image, the automaker plans to add a fleet of electric cars to its lineup in the coming years, embracing the new market direction. As diesel car sales slide, public opinion shifts and Tesla and other electric car companies threaten business, traditional car makers are forced to evolve and use cleaner technology. Consumer power, in this case, provides hope for driving markets to become more environmentally conscious.
Even so, many still question Britain’s ability to cope with a rapid change in transportation. All countries shifting to electric cars will be forced to rethink their infrastructure and steel their power grids against the impending rush hour. This requires significant time, and more importantly, investment. In the United States, Tesla has slowly begun to build up its network of charging stations, though its progress will likely be overtaken by state-sponsored programs in Britain, France, China, Norway and India. The current direction of the United States doesn’t encourage development or evolution, seemingly rooted in returning to the past. This mindset will take a toll when the country is forced to scramble to make up for lost time when electric cars and infrastructure become ubiquitous.
The economic harm caused by lagging in this new market will likely bring about a change in public attitude in this country. On the other hand, if the United States recognizes the need for this next step in transportation and embraces it, rather than placing the burden of a nation’s future on private companies, the country will benefit economically and lead the fight against climate change. The sooner the better.