The above link highlights the Shanghai Auto show, which is heavily skewed towards electric vehicles. GM, Geely, BYD and VW have unveiled an impressive array of new EV’s at the show that opens to the public this Saturday.
As they strive to become a global tech leader in areas ranging from robotics to biotech, China’s communist party have granted generous subsidies to EV manufacturers over the past 15 years in response to pollution problems and to reduce oil imports. This led to savings of thousands of dollars off the sticker price of a new electric vehicle. However, these subsidies are set to end next year with the onus now on the (EV) manufacturers themselves in the form of sales quotas. Those EV companies falling short of their sales targets will be able to buy credits from competitors who have exceeded theirs, or risk being fined.
However, the unveiling EV models at the show with new features and greater range capabilities in accordance with the Communist Party’s ambitions is against a backdrop of falling auto sales in China. This past quarter saw a year over year drop in total car sales by 13.7%. Reasons for this include a general slowdown of the economy as well as ongoing trade tensions with the US.
After seeing a 60% increase in EV sales in 2018 from 2017, expected sales of 1.6 million EV’s this year (half the global total sales) mightn’t be enough – the concern is that China could be in the process of creating too much supply. Remarkably China now boasts nearly 500 companies, in various stages of existence, that are all involved in the EV space. The Communist Party has set incredibly ambitious annual new sales targets of 7 million pure EV, hybrid or fuel-cell cars by 2025. This would represent about 20% of total vehicle sales! Competition will be fierce. It’s fair to say that not all will survive…
Watch this space!