Electric car, maxi plan of the Chinese government
The Chinese government pushes the electric car. Beijing has released a position paper with measures to further boost vehicle sales in the countryfocusing mainly on the so-called new energy vehicles, such as electric cars, plug-in hybrids and hydrogen vehicles.
The measures not only include financial incentives, but increasingly also concern infrastructure. Even if the individual points of the strategic document, signed by as many as 13 ministries (including the important National Commission for Development and Reform, the Ministry of Industry and Information Technology and the Ministry of Finance), are relatively generic, they provide a clear direction. The phasing out of internal combustion vehicles must be accelerated and sales of electric cars, plug-in hybrids and hydrogen vehicles.
In addition to the already announced extension of theacquisition tax exemption for new energy vehicles the construction of charging infrastructure will be accelerated and networks in rural areas will be improved to recharge electric vehicles. The government also wants to provide more support for the establishment of battery replacement stations, the compatibility of which needs to be improved. The operators of the charging and battery replacement stations will be encouraged to gradually reduce prices. Additionally, state sector and local governments will be urged to increase the number of new energy vehicle purchases. With this new document, the Chinese government confirms its intention to grow the entire economy based on the automotive sector.
Because the Celestial Empire focuses on the green
The Beijing authorities are well aware that the competition on the endothermic engine it has only one winner, namely the western car manufacturersthere. The game on the front of dell is quite different‘electric where the producers Chinese enjoy an undisputed advantage. First the China is practically a monopolist in terms of raw materials for batteries (rare earths etc.) e per i mocrochip. All this, combined with the low labor cost, allows Chinese manufacturers to offer cars on the market that are technologically on par with European models but at a more affordable price.
Until the domestic market was traveling in double figures, there was room for everyone, but for just over a year, car sales in China have taken a worrying turn. Hence the top-down government intervention with strong policies to support national industry by discouraging consumers from buying Western diesel and petrol cars in favor of local green industry.
The cross-border assault
Beijing’s new massive support for the national houses, however, cannot fail to have repercussions in Europe as well. In the Old Continent it has been about ten years that the Dragon brands have been making less and less timid attempts to conquer market shares. Now that their internal market is languishing, this presence is becoming more and more consistent.
A report of TrendForce, world leader in market statistics, estimates that at the end of 2023 Chinese electric cars could reach a 9% market share in the Old Continent. According to the report they are Volvo (of the Chinese Geely dal 2010) and Mg (now owned by the Chinese Saic) are the brands that are achieving the best results. In the specific case, the price, as mentioned, plays a fundamental role, especially in the current European scenario, affected by inflation and rising prices.
But the lower cost is not the only factor, also because many Chinese models aim at the high end of the market. In this case, the ease of access to the fundamental components allows shorter delivery times and almost unlimited availability of the models in the price list. Finally there is the design factor. European industry, which for decades has led the way to new forms and trends, today seems to be struggling more to find new aesthetic schemes. On the other hand, Chinese brands are not afraid to experiment (and sometimes copy, improving them) the most modern solutions related to the concept of green.
Defenseless EU industry
But what makes the difference, in this moment of transition, are above all policies (and public funds) to defend national industries. Already two years ago the US Department of Energy launched projects financed by the fund $2.8 billion to bring to the United States the production of batteries for electric cars and the extraction and processing of materials such as lithium, cobalt, nickel and graphite.
The financing represents the first phase of a total of 7 billion dollars scheduled for encourage the production of clean energy and the electric car sector in the country. But the plan wanted by Biden also provides car purchase bonus up to $7,000 provided that the car in question has at least 65% of components manufactured in the U.Sniti. China too, as we are seeing, is deploying funds and projects to safeguard national industries.
And Europe? Unless deciding diktat against diesel and petrol cars (and put European car manufacturers in crisis) the EU doesn’t know how to do. There is no real and massive car policy. And the SOS launched against a transition, which according to experts will eliminate 600,000 jobs and part of the industry of EU countries, is simply ignored.