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Why China’s Electric Car Lead Has Been a Long Time Coming - YouTube
Channel: Bloomberg Quicktake: Originals
[5]
In the not-so-distant future,
[6]
the world is going to be
a very different place.
[11]
China is becoming the
world's biggest economy.
[14]
We would expect China to
overtake the United States
[17]
pretty quickly, perhaps around
[19]
the turn of the decade in 2030.
[22]
Its share of global
trade actually increased
[26]
at a record clip.
[28]
China's meteoric economic rise
[30]
is unprecedented in history.
[32]
There's something called China time,
[34]
where everything happens so much faster.
[39]
The reality of the last 40 years
[41]
has been a radical shift
from agrarian poverty
[45]
at the end of the Mao era
[48]
to something which looks like
[49]
a comfortable, middle class life.
[53]
Opening up to market
capitalism in the late 70's
[56]
kick-started a new era.
[59]
The trappings of Western capitalism
[61]
are now ubiquitous in China,
[63]
but so too is the iron fist of the state.
[67]
While it undoubtedly comes at a cost,
[70]
this central control has allowed Beijing
[72]
to nurture long-term economic strategies.
[75]
China has transformed itself into
[77]
a green energy powerhouse that produces
[79]
most of the world's solar
panels, wind turbines
[82]
and lithium-ion batteries.
[85]
By 2030, China is poised to grab
[87]
the lion's share of jobs and wealth
[89]
as the world gradually transitions
away from fossil fuels
[95]
and it's become fertile ground
for electric car makers.
[98]
At GM, we believe China will be
[101]
one of the main epicenters in the globe
[103]
of the adoption or the transformation
[105]
towards the electrification of the vehicle.
[109]
China is rewriting the
rules of global capitalism.
[112]
Can the rest of the world keep up?
[115]
You know, the President is concerned
[117]
that China is far ahead of us.
[119]
It is time for that to shift around.
[132]
While China has become a leader
[133]
in multiple green industries,
[135]
the progress it has made
in electric vehicles
[137]
or EVs is unparalleled.
[141]
The evolution of the
automobile in the 20th century
[143]
caused an economic revolution
in the United States.
[147]
After losing out to international
carmakers for decades,
[150]
China has learned to leapfrog
the combustion engine.
[154]
The country is already
home to the planet's
[156]
largest market for EVs by sales,
[159]
and it still has room to grow.
[161]
Electric cars account
for 5% of sales today,
[165]
but Beijing is aiming for that
figure to hit 40% by 2030.
[172]
Back in 2001, Beijing drew
up the 863 initiative
[176]
to strengthen the competitiveness of China
[178]
in the global economy.
[180]
It invested a relatively small amount,
[183]
about $130 million into three
[185]
new energy vehicle technologies,
[188]
fuel cell, hybrid and electric.
[192]
These guided China's
green vehicle development
[194]
for the next 15 years.
[196]
There is a technology
race on renewable energy
[201]
and electric cars that's emerging
[202]
between the United States and China.
[205]
Right now, China is ahead on electric cars
[208]
because the government has
had a very strong policy
[211]
supporting electric cars
now for a number of years.
[214]
I've been going to
China for about 25 years
[217]
and the changes are just amazing.
[219]
When I first went to China,
the streets were filled
[222]
with swarms, swarms and
swarms of bicyclists,
[226]
almost in this graceful swimming thing
[229]
as people were bicycling to work.
[231]
All gone, just streets now jammed
[233]
and you can sit there in
the longest traffic jams
[235]
I've ever been in and
that's just one
[239]
sign of the change.
[241]
They realize that
there's one global market
[243]
where they cannot be competitive.
[245]
They're too late, the traditional
[247]
gasoline, petrol-powered car,
[249]
but they see themselves, if they can get
[251]
at the forefront on electric vehicles
[253]
and almost half the world's electric cars
[255]
now are in China, that will give them
[257]
a foundation to be very strong competitors
[260]
in the global automobile
market of the future,
[262]
which they are not now.
[266]
This technological leapfrogging means
[268]
many of us haven't seen or even heard of
[270]
some of China's biggest automakers.
[284]
Like so many other Chinese companies,
[287]
Geely had grown into a behemoth
[288]
long before it started to operate abroad.
[291]
Now, it owns Volvo,
has a stake in Daimler,
[295]
and is listed internationally.
[297]
Geely isn't selling as many
cars as Tesla just yet,
[300]
but it is able to launch bold new concepts
[303]
in an environment that
actively encourages innovation,
[306]
such as its new rapid
battery-swap stations.
[324]
This is a technology Tesla didn't think
[326]
Western countries were ready for.
[328]
It's amazing, if you go back two decades,
[330]
China was a tiny automobile market,
[333]
one or two million cars a year.
[334]
Now it's like 27 million cars a year,
[337]
which is like 50% bigger
than the U.S. market.
[340]
So, that gives them a test bed
[343]
for promoting electric cars,
[345]
which they're doing aggressively.
[347]
It also means that the
automobile makers of the world,
[350]
and remember, the automobile business
[351]
is a global business, they may be
[353]
focused on the United
States, but they also
[355]
wanna sell electric cars
and be competitive in China.
[362]
China's vast domestic market,
[364]
400 million middle-class car buyers
[367]
means that major international carmakers
[369]
have to invest and compete there.
[374]
Beijing may be able to
take advantage of that
[376]
to further its strategic ambition
[378]
of clean-tech dominance,
[380]
but that's not to say it's a hard sell
[382]
for foreign car companies.
[385]
The city of Liuzhou,
thanks to a green push
[388]
by local authorities
has effectively become
[391]
the capital of the biggest
EV market in the world.
[394]
They basically have
created lanes in the city
[398]
where electric cars can go,
[400]
and, like, normal
combustion engines can't.
[403]
And the majority of these electric cars
[405]
are three meters long,
cost less than $5,000,
[409]
and out-sell Teslas.
[410]
They've created dedicated parking spaces
[413]
that are half the size
of normal parking spaces
[415]
that can only be used by those.
[416]
So, you've created an environment where
[419]
it's an advantage in that city
[421]
to have a Hong Guang mini EV.
[422]
So, it's a positive example of how to
[426]
encourage usage of products
[428]
that helps drive consumer behavior.
[432]
The cars are made by a
Chinese company called Wuling
[435]
in partnership with a
[436]
very famous American
company, General Motors.
[439]
♪ Baseball, hotdogs,
apple pie and Chevrolet ♪
[442]
♪ They go together in the good old USA ♪
[446]
♪ Baseball, hotdogs,
apple pie and Chevrolet ♪
[450]
Once a symbol of American
industrial might,
[452]
General Motors has to now look
[454]
outside the U.S. for opportunity.
[457]
China has become the
company's biggest market
[460]
and is, by far, the most
strategically important.
[463]
The Chinese consumer is very tech savvy.
[465]
This means you've got
a very fertile ground
[468]
to try new things, to experiment
[470]
and to get people to adopt new technology.
[473]
Every car we make we sell,
[475]
and this is not regulation-driven,
[476]
this is pure customer demand
[478]
that is driving the need for us
[480]
to supply that product to consumers.
[482]
In China, electric car
buyers can get subsidies
[485]
worth thousands of dollars.
[487]
In some cities, getting a parking permit
[490]
for a conventional combustion engine car
[492]
has become nearly impossible.
[494]
At the end of 2020, the country had
[497]
1.68 million charging points for EVs.
[500]
Compare that with 72,000 in
the U.S. at the end of 2019.
[505]
The vast majority of
Chinese driving habits
[508]
and actual miles driven
or kilometers driven
[511]
is in an urban environment,
which obviously
[512]
suits the adoption of electric vehicles.
[517]
If you look at the Hong Guang Mini EV,
[518]
we have ranges of 170
kilometers and 120 kilometers,
[522]
but for the vast majority
of our consumers that,
[525]
it's either a second car
or it's a primary car
[527]
in a real downtown area, that's adequate
[529]
because of driving conditions
[531]
and the charging infrastructure mean
[532]
that you've got a very high adoption rate
[534]
and not so many barriers to adoption.
[537]
There's a clear tipping point
[538]
around the 250, 300 mile mark in the U.S.
[542]
That is because a lot
of consumers in the U.S.
[544]
drive, you know, city to city.
[546]
So that's a big part of life.
[549]
That's a little different in China.
[550]
85% of miles driven are driven
in a non-highway environment.
[555]
The Chinese aren't just
transforming the EV market.
[559]
A government-led, top-down approach
[561]
also rewrites the rules of innovation.
[565]
In the Western conception,
the entrepreneur
[568]
is critical in the innovation process.
[572]
It's the entrepreneur, the Bill Gates,
[575]
the Jeff Bezos, and
the financial incentive
[579]
that innovation will
deliver enormous wealth
[582]
that's the catalyst for
the innovation process.
[586]
That's part of the picture,
[589]
but as we're discovering in China,
[591]
it's not the entire picture.
[593]
A government which is willing to patiently
[596]
pour resources, time, money, people
[601]
into solving problems and
pushing innovation forward
[605]
can also deliver some impressive results.
[609]
The majority of the cars GM sells in China
[612]
are made in China, which means the company
[615]
has to walk on eggshells to
stay in Beijing's good graces.
[618]
It represents the dilemma
most foreign companies
[621]
face in the country.
[623]
To catch up in clean-tech,
there's a trade-off...
[627]
My name is Joe Biden and I'm a car guy.
[629]
Which is why investment
in EV charging stations
[632]
is part of President Biden's new
[634]
$1.2 trillion infrastructure plan.
[636]
You know, the President is concerned
[639]
that China is far ahead of us
[641]
in the electric vehicle market,
[642]
and instead of producing the
technologies of the future,
[646]
we are importing them from somewhere else.
[648]
It is time for that to shift around.
[651]
Not everyone on Biden's
team is alarmed though.
[653]
I would venture to guess
that the vast majority
[657]
of all patents and innovations
[661]
in the clean tech space has been funded
[663]
by the Department of Energy and by
[665]
private sector players
within the United States.
[668]
They were commercialized
largely, I would say,
[670]
in Europe through the
Feed-in Tariff programs
[672]
and in China, through their
manufacturing prowess,
[675]
but a lot of the technology
really originated
[678]
here in the United States
[680]
but I think if you were to think about
[682]
what the most innovative
electric vehicles are
[685]
in the world, you'd think of Tesla,
[687]
and I think when you think about
[688]
who all of the players,
including the Chinese players,
[691]
want to emulate, it's American innovation.
[694]
It's not Chinese innovation.
[697]
The current lithium-ion battery technology,
[700]
really no one believes that
that current technology
[703]
will be relevant in 2030.
[705]
Whether it's the cathode or the anode
[707]
or the electrolyte or the substrates,
[709]
I think everyone sees a
dramatic amount of innovation
[713]
in the next generation of battery storage,
[715]
which is what we're scaling
up here in the United States.
[721]
There are facets to China's
success in clean tech
[724]
that are problematic to say the least.
[726]
Its booming solar
industry has been accused
[729]
of relying, to some
degree, on forced labor.
[732]
Where systemic oppression
of Muslim Uyghurs
[734]
is an international human rights issue.
[737]
Justice! Give us our justice!
[740]
China is also the world's biggest
[741]
greenhouse gas emitter, and is home
[743]
to huge environmental problems,
[745]
mainly thanks to its reluctance to rein in
[748]
its massive coal industry.
[751]
When severe air pollution
swept across the country
[753]
in the winter of 2013,
Beijing tilted further
[756]
towards green car policies.
[759]
Over the past 30 days, the average
[762]
air quality level in this city
[765]
has registered as hazardous
on the official scale.
[769]
By 2019, the government had designed
[772]
a world-beating system
of regulatory targets
[775]
which has required automakers
[776]
to accelerate investment in sales
[778]
of electric cars faster
than they might have
[780]
left to their own devices.
[783]
All this has set China on course for 2030,
[786]
where the country will
have an out-sized influence
[788]
in this strategic industry, with a big say
[791]
over technical standards
and terms of trade.
[794]
The big question, the Chinese,
[796]
state-sponsored conception of capitalism
[799]
worked really well when
China was catching up,
[803]
borrowing from, or some would say,
[805]
stealing technologies from
the rest of the world.
[809]
Will it work so well
when China has reached
[812]
the technology frontier and needs
[814]
to innovate through it?
[816]
I think you could have two scenarios.
[818]
One is, it actually
doesn't look too different,
[821]
a lot more electric cars on the road,
[823]
traffic still a really big problem.
[826]
The other is, what I
describe in 'The New Map'
[830]
as auto tech, where
you take electric cars,
[833]
put it together with ride-hailing,
[834]
put it together with
self-driving, autonomous vehicles,
[837]
and you have these very
large fleets of cars,
[840]
self-driving, that just come
[841]
and pick people up and people don't really
[843]
identify with their car anymore.
[845]
It's just a utility of facility,
[847]
and it's kind of moving
in a very different way,
[850]
and you don't have traffic jams
[852]
because everybody is well coordinated.
[854]
So, it's all these vehicles are
[856]
tied together by software.
[858]
So, I think it's not a
prediction of one or the other,
[861]
but rather two scenarios.
[863]
A lot depends upon the pace of technology,
[866]
and I think a lot depends upon
[868]
how this competition and
interdependence at the same time
[872]
between China and the
United States plays out.
[876]
Cutting edge EVs rely on a lot of software
[879]
and data for onboard navigation, charging,
[882]
wireless updates, and remote diagnostics.
[885]
That's a sensitive area,
[886]
given efforts in the U.S. and Europe
[888]
to restrain tech transfers to China,
[891]
and could damage development
if not handled carefully.
[897]
As China continues to grow
and lead this industry,
[900]
it will almost certainly have
[901]
a bigger say in the
outcome for everyone else.
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