China creating a protective umbrella for EV parts industry, pushing foreign companies out
Making cars in China is not an easy business, every foreign car company that wishes to build in China has to partner with a local company. Early arrivals such as Volkswagen snapped up the best with First Automobile Works and Shanghai Auto Industry Corp, other later arrivals such as BMW had to make do with smaller regional players such as Brilliance Auto, then there are those such as Subaru and Renault who have been unable to find a willing partner.
30 years ago, when China opened up to the foreign car makers, the former China National Automobile Industry Corporation made it a rule that every foreign car maker has to found a joint venture with Chinese partners and the latter must hold no less than 50% shares. China wanted to learn from foreign partners and beat them in the future. Thanks to this rule, China has not been another Brazil or Argentina, although Chinese car makers still have too much to learn.
However, foreign suppliers are not fettered by the rule. Bosch owns 17 companies in China, but only 10 are joint ventures. Even Honda, a partner of Dongfeng-Honda and Guangqi-Honda, is operating a single proprietorship which produces automatic transmissions for the two joint ventures. Thus, even though many Chinese local car makers are growing rapidly, they depend on foreign suppliers to acquire some key parts or systems. Chinese local suppliers cannot rest easy in the firm competition.
This scene will not repeat in new energy vehicle industry. The Catalogue for the Guidance of Foreign Investment Industries (a draft document which is still under discussion) was published by China Legislative Affairs Office of the State Council in April, 2011. According to this draft, foreign companies are encouraged to invest the manufacturing industry of key parts for new energy vehicles, but foreign investments shall not exceed 50%. This is the first documentation to rule foreign suppliers’ shares in China.
The key parts include high-capacity batteries, cathode materials for batteries, separators for batteries, battery management systems (BMS), electric motor management systems, EV controlling integrated circuits, EV driving motors, DC/DC converters, insulated-gate bipolar transistors, PHEV electromechanical coupling systems, electric air conditioners, electric brakes, electric power steerings, start/stop motors, wheel hub motors, fuel cell stacks, hydrogen storage systems, onboard chargers, offboard chargers, etc. In a word, they are all key parts for BEV, PHEV and FCV you can imagine. Because these parts are not in mass production in China today, global suppliers’ existing factories are not heavily involved as of yet.
This restriction provides Chinese local suppliers with more chance to develop, but can they hold it? Only time will tell.
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Mr. IHC, your LG Chem battery technology has to be shared with the Chinese JV partners if Korean car makers want a share in the world’s BIGGEST Chinese EV market………….
@ hk
> a share in the world’s BIGGEST Chinese EV market………….
There is no market demand for EVs in China. Thus no incentive to produce EV parts in China.
OK…..
That proves you are just an idiot sitting in the US looking for fun in CCT.
Now I make a promise here —- I WON’T ANSWER TO IHC FROM THIS MOMENT THEN………………..
The LAST fact to you. There are too many electric bikes in China that whenever you walk around, they will shock you in everywhich way they pleased. Now GREEN is the selling word in China and you are telling us no market for EV in China??????????????????????????
@ hk
> There are too many electric bikes in China that whenever you walk around
Electric scooter is fine since you will be riding it for a short distance and is able to charge it everywhere.
Not so with EVs, EVs do have to have a long range and this means $$$$$ batteries. Hence why EVs cannot take off in China since Chinese consumers are extremely cost sensitive.
IHC, you are an ignorent bigot. Go to China first and you will see that right now 60% of the 2 wheelers are EV.
This is not a response to the “idiot – IHC”……
To my understanding, electric bike/scooter is a kind of EVs. Many big auto makers are working on their own versions to capture the GREEN market. The Chinese government and the people are willing to try out this technologies so as to release the pressure for foreign oils. There is a national interest to promote EVs and it looks liked China is heading to that direction. Even VW is working on an EV for the Chinese market. Someone sitting in front of a monitor churning out garbagge is really disgusting !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
@ hk
> The Chinese government and the people are willing to try out this technologies so as to release the pressure for foreign oils.
Chinese government wants to, but not the people. They only want the cheapest automobile, even if it is a polluter.
> Even VW is working on an EV for the Chinese market.
Well, it’s for China only, meaning cheaply engineered and cheaply built.
VW EVs for the rest of world are not engineered in China.
Chinese electric scooters and bicycles are so cheap, they can be had for less than a decent imported foreign bicycle. Of course they are popular, for 1000RMB (bicycle) – 4000rmb (scooter) very affordable and cheap to run.
Decent electric cars are much more expensve.
@ Chris_T
> Chinese electric scooters and bicycles are so cheap,
Yes, price is the sole driver of Chinese electric scooter market.
> Decent electric cars are much more expensve.
Yes, much more expensive than comparable gasoline cars. This is why Chinese EVs are doomed to fail in China, because the only deciding factor for Chinese consumers is price and a QQ3 EV would cost much more than a gasoline-engine QQ3.
No, Chery is going to have a EV derived from QQ3. Its powered by lithium-ion battery and/or with extended range small Wankel engine to recharge the battery when running in low power level. I don’t think Chery will market this QQ3-EV as an expensive model. I would guess the price is around 100K RMB, with federal govenment subsideries of 60K RMB, consumers are just paying 40K RMB. Do you call this not affordable? Mind you, you save alot in fuel bill by recharging the battery at night IF you got a HOLE to plug in.
@ hk
> No, Chery is going to have a EV derived from QQ3.
And it’s gonna sell as well as F3DM or E6.
> Mind you, you save alot in fuel bill by recharging the battery at night IF you got a HOLE to plug in.
How many people in China have a home garage?
OK, time to correct a few mistakes here – and by the way, I officially give IHC a new name – Idiot Heaving Crap (IHC). I think this fits a lot better, since it’s the only thing he ever does.
First – market demand in China for EV’s is developing, and will be HUGE – this is a fact. The interesting irony is that the electric bike/scooter market has created the foundation of a infrastructure AND awareness of the efficiency and practicality of EV’s – the ease of plugging in a bike at night beats the hell out of taking time to go to a gas station, and in 5-10 years or so all of these young electric bike owners will be buying CARS with the same kind of ease and convenience…..ELECTRIC CARS. Charging machines are ubiquitous for bikes/scooters all over most cities, and charging machines/stations are ALREADY being established for cars as well. In numerous instances the same physical location can be used for bikes OR cars – just set up a few parking slots for cars next to the area for bikes.
I love this next one – “how many people in China have a home garage?” The answer is simple – WHO CARES? You don’t NEED a home garage to charge your electric vehicle – any apartment complex with garage facilities ALREADY has charging areas for electric bikes, and many are preparing parking slots for electric cars as well. Restaurants and retail businesses are also getting in on this – imagine parking your car in a restaurant parking lot and plugging it in for a mini-charge while you’re eating – it’s already happening, I’ve seen it. Add in the charging stations that are being built/planned in most cities, and having/not having a home garage becomes a irrelevant issue.
Another funny one – “EV’s have to have a long range”…..WRONG AGAIN. The vast majority of cars in China will spend most of their lives on CITY STREETS – NOT traveling long distances on highways. In addition, commute distances for most people here are 20km or less one way (40km or less round trip) – WELL WITHIN the limits for a 150km range electric vehicle. Driving needs are different in China, and long distance driving for most people is a minor part of their overall driving experience.
Finally – “They only want the cheapest automobile, even if it is a polluter.” That’s funny – none of the top 10 selling cars in China is even CLOSE to being the cheapest in China – far from it. People buy what they WANT here – and they’re willing to save money and wait instead of buying the cheapest thing they can afford – THAT IS A FACT. My best friend just bought a MG3 (GREAT car, by the way – I’ve been in it, I’ll drive it soon and post my impressions here) – he could have easily chosen a cheaper car but he WANTED the MG3. His ceiling price was 100,000rmb, and he looked at everything – Fit, Polo, Fiesta, Yaris, March, FRV, 206, even the old Jetta and Santana……the MG3 was simply his favorite car – NOT the cheapest one or the most expensive one in his price range. In addition, polluters – WHAT polluters? Most current cars in China are built to Euro IV/V standards for emissions control, and more and more older cars are being phased out of use because they can’t pass emissions testing any more. Yes, there are still polluters on the road, but far less than before and getting better all the time.
Don’t you just love it when Idiots Heave Crap on the forum – especially Idiots who have NO REAL WORLD EXPERIENCE regarding what they are talking about? I DO have real world experience – I own a electric scooter (full size, 60kph top speed and 60km riding distance). I use it almost daily, I plug it in 1-2 times a week, I’ve used charging stations all over my city (Nanning), I see more and more stations being added all the time, I see auto charging areas being planned AND built……enough said.
@joninchina
IHC = IDIOT with HEAP of CRAP
I think I would revise you suggestion as above.
@ joinchina
> First – market demand in China for EV’s is developing, and will be HUGE – this is a fact.
BYD’s numbers say otherwise.
> The interesting irony is that the electric bike/scooter market has created the foundation of a infrastructure AND awareness of the efficiency and practicality of EV’s
You cannot use scooter recharging infrastructure to charge EVs because the amount of current required per charge is massive. We are talking about EVs sucking up several home’s worth of electricity per rapid charge(You will not be able to fill up the battery overnight using slow charge).
> in 5-10 years or so all of these young electric bike owners will be buying CARS with the same kind of ease and convenience…..ELECTRIC CARS.
And where will they charge?
> any apartment complex with garage facilities ALREADY has charging areas for electric bikes, and many are preparing parking slots for electric cars as well.
So will every parking spot have a rapid charger?
> Another funny one – “EV’s have to have a long range”…..WRONG AGAIN. The vast majority of cars in China will spend most of their lives on CITY STREETS – NOT traveling long distances on highways.
And they will stay in streets of China, because overseas markets require long distance travel.
[quote]WELL WITHIN the limits for a 150km range electric vehicle.[/quote]
E6 with a 50 kwh battery gets a 180 km real world range. Leaf with a 24 kwh battery is good for a 100 km real world range.
> My best friend just bought a MG3 (GREAT car, by the way – I’ve been in it, I’ll drive it soon and post my impressions here) – he could have easily chosen a cheaper car but he WANTED the MG3. His ceiling price was 100,000rmb, and he looked at everything – Fit, Polo, Fiesta, Yaris, March, FRV, 206, even the old Jetta and Santana……the MG3 was simply his favorite car – NOT the cheapest one or the most expensive one in his price range.
MG3 : 69,700 ~ 89,700 Yuan
Fit : 94,800 ~ 116,800 yuan
Polo : 96,000 108,000 yan
Fiesta : 79,000 ~ 110,000 yuan
Yaris : 85,000 ~ 120,000 yuan
March : 69,900 ~ 100,000 yuan
FRV : 57,300 ~ 85,300 yuan
Well, your friend did get the cheapest drivable car of the bunch, the MG3. Typical western shoppers would have picked Fit or Polo when given the choices.
> In addition, polluters – WHAT polluters? Most current cars in China are built to Euro IV/V standards for emissions control
The reason Brilliance chose to drop out of German market was that it was impossible to source Euro V emissions control devices in China and these must be imported, driving up Brilliance’s prices.
“You cannot use scooter recharging infrastructure to charge EVs because the amount of current required per charge is massive. We are talking about EVs sucking up several home’s worth of electricity per rapid charge(You will not be able to fill up the battery overnight using slow charge).”
> in 5-10 years or so all of these young electric bike owners will be buying CARS with the same kind of ease and convenience…..ELECTRIC CARS.
“And where will they charge?”
> any apartment complex with garage facilities ALREADY has charging areas for electric bikes, and many are preparing parking slots for electric cars as well.
“So will every parking spot have a rapid charger?”
Part of a response to a previous posting of mine (the response is in quotation marks) – basically a idiot that doesn’t think you can charge a electric car overnight using a standard household outlet. Here is just ONE link (out of many) that prove otherwise….
http://venturebeat.com/2010/08/13/charging-your-electric-car-at-home-what-you-need-to-know/
Oh…….a reminder that power in China is 220-240 volts already, no special adapters or wall mounted boxes needed for 240v charging overnight.
Enough said.
@ joinchina
> Oh…….a reminder that power in China is 220-240 volts already, no special adapters or wall mounted boxes needed for 240v charging overnight.
http://www.nissanusa.com/leaf-electric-car/faq/list/charging#/leaf-electric-car/faq/list/charging
“# Q: What is the estimated time for full charging with 110v, 220v and fast charge stations?
A: It takes about ~30 minutes to 80% at a 480 volt quick-charge station. Starting from a depleted battery, ~7 hours at 220/240V (depending on amperage), about 20 hours at 110/120V.”
It takes 7 hours to charge a Nissan Leaf at 220/240v, and it is widely agreed that Leaf’s 70 mile range isn’t practical for everyday use, the range needs to be greater.
You have clearly no idea on charging issues, in terms of both charge duration and the infrastructure. Charging an EV is nothing like charging an electric scooter because of the amount of current required and the grid’s ability to support such large amount of current.
@ihc
“You have clearly no idea on charging issues, in terms of both charge duration and the infrastructure.”
Infrastructure is the magic word and joninchina is ALWAYS spot on with this one and the issues around it regarding China.
EV’s may sound all fancy but the fact of the matter is that until power companies start to make available more juice to charge these things then they will never take off. More power stations will be needed for a start and public will not like that due to inevitable price increases. Most power stations are still coal burners which doesn’t help that argument much.
Local neigbourhood transformers in western countries are not designed to handle the sort of loads that EV charging will pull and will require extra investment to get them up to spec if suddenly 50 owners in the area buy an EV. Again this will increase power prices for everyone, not just EV owners.
Off peak charging is a great “idea” but most people will go home, plug in the EV and go inside forgetting about it until the morning. Seeing that 4-11pm and 6-8am would be peak times it would place even more pressure on the normal electrical grids than normal. If the chargers are intelligent and came on automatically it could help the grid a bit HOWEVER power companies would prefer to turn the grid down overnight to conserve energy rather than have it cranked up 24/7 (which makes sense).
“Starting from a depleted battery”
Depleted means empty…. Modern batteries used in EV’s are never empty, they are considered empty at about halfway. Fully depleted cells need a very long slow trickle charge and even then may already be too damaged to be used again.
“, ~7 hours at 220/240V (depending on amperage), about 20 hours at 110/120V.””
So… in the USA if you own a leaf and live 30 miles from work you can drive in the morning then come home at lunchtime to put it on charge and take the gas powered vehicle in the afternoon… unless of course you want to stop off halfway on the way home for a boost at a quick charge station.. either way it’s LESS economical than taking a normal vehicle and filling up once-twice a week. Of course things will be better if you country has 220/240V power like say…. China
This is perhaps the most pathetic (and hilarious) comment I’ve ever seen here……this is coming from someone who has NEVER OWNED OR DEALT WITH A ELECTRIC VEHICLE, telling this to someone WHO DOES OWN A ELECTRIC VEHICLE:
“You have clearly no idea on charging issues”……..