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  • The global electric vehicle market is heating up and China wants to dominate.

  • Increasingly more and more analysts expect China to be a leader in EV production, partly because it has the largest automobile market in the

  • world, and then it has all these government policies to support consumers to buy EVs.

  • The Chinese government has invested at least 60 billion dollars to support the EV industry, and it's pushing an ambitious plan to transition to all

  • electric or hybrid cars by 2035.

  • They have an all of society approach to winning and dominating the electric vehicle market globally.

  • In 2020, EV sales in the U.S.

  • were far below Europe and China.

  • Out of the 3.24 million electric car sold, only 328,000 were in the U.S.

  • , 1.33 million were sold in China and 1.39 million were sold in Europe.

  • And as we go to 2025, China will pull away from everyone else, accounting for at least half of total global vehicle sales.

  • Despite the pandemic, deliveries of EV's grew year over year in 2020 by 43 percent globally, the U.S.

  • only saw a four percent increase.

  • But there are signs that the U.S.

  • is getting more serious about going electric.

  • President Joe Biden has renewed the U.S.

  • commitment to fighting climate change with a goal to reach net zero emissions by 2050.

  • He's also announced investments in green infrastructure, including adding an additional 500,000 charging stations in a move that came as a surprise

  • to many. General Motors, one of the largest automakers in the U.S., announced plans to exclusively offer electric vehicles by 2035.

  • They've got a long ways to go.

  • Carl, let me give you some perspective on GM's global sales.

  • Last year, the company sold about 6.6 million vehicles worldwide.

  • Take a guess how many were fully electric?

  • Just 49,149 . But can the U.S.

  • catch up to China's massive lead?

  • U.S. seems to be a kind of the young reluctant colt saying, well, we'll get around to it, but what's the hurry?

  • Well, there is a hurry. The race is on.

  • China and Europe are way ahead.

  • Let's take a look at how China came to control the market.

  • The country decided over a decade ago that it wanted to be the world leader in electric cars.

  • The industry in China is one that has been very interesting to me because it's an example of how government policy

  • can potentially drive innovation in an industry.

  • China is betting big on electric vehicles for several reasons.

  • First, they've always been a follower in traditional vehicles and they wanted to find a way to catch up technologically and not be dependent on

  • Europe or the U.S.

  • on engine technology.

  • Also, they have a significant air pollution problem and they're also the world's largest importer of oil.

  • China is the world's biggest emitter of greenhouse gases and has pledged to be carbon neutral by 2060.

  • In an effort to support the adoption of EVs, the Chinese government has played a massive role.

  • It has spent tens of billions of dollars to support the sales of electric vehicles.

  • It's no secret that without regulation, without rules, without subsidies, electric vehicles would have never gotten off the ground.

  • Whether it's in California, in China or in Europe, it's been the government pushing the electric vehicle future.

  • China has been the most aggressive in this regard.

  • China has subsidies and incentives that benefit automakers, suppliers and consumers.

  • In certain cities

  • for example, in Beijing, you can only have access to the city center in a car if you're driving an electric vehicle.

  • Elsewhere in Shanghai, there's an incentive if you buy a gasoline powered car, you must, first of all, pay $12,000 for the license plate

  • just to have the rights to buy the car.

  • Now, if you buy an EV, they waive that licensing fee, you get it for free, you save $12,000.

  • And then even in cities that are not restricted, the registration wise, they kind of restrict your access to the road.

  • You can only if you drive a ICE car, you can only go onto the street between a certain time and a certain time and perhaps certain

  • days during the week.

  • And I CE is short for internal combustion engine.

  • China also has a quota system for manufacturers, they must produce a certain percentage of electric vehicles every year or they're fined.

  • But some question if this is sustainable.

  • In 2019, after the government cut back on some incentives, sales fell and the shares of EVs overall dropped from eight percent in mid-2019 to five

  • percent by the end of the year.

  • Other than Tesla,

  • the only way to sell EV's so far has been through subsidies, whether it's state or federal.

  • We saw that in China a lot.

  • What we haven't seen is organic demand really outside of incentives or early adopters.

  • The amount of funding that has been poured into the industry, it's mind boggling.

  • It is thirty three percent of all sales, not thirty three percent of profits, but thirty three percent of all sales.

  • This is a government created market.

  • But subsidies cannot last forever.

  • And some think with the introduction of more luxury brands like Tesla, consumers can eventually be weaned off them.

  • I think the perception is that China is winning the electric vehicle race because there's so many subsidies in place, but if we look closer,

  • something happened in 2020 that shifted the picture.

  • When Tesla arrived in the market and other EV startups like Nio and Xpeng began to deliver highly desirable, good looking,

  • reliable, long range vehicles.

  • Chinese customers for the first time said we don't need subsidies to make the decision to buy this electric car.

  • In the US, there is a $7,500 tax credit available, but not all cars are eligible and the incentive goes away if the automaker sells more than two

  • hundred thousand cars.

  • Tesla hit that threshold in 2018.

  • Democrats have introduced a new bill to expand the credit for automakers who have hit the threshold and have extended the limit to 400,000 cars for

  • a $7,000 tax credit.

  • For example, Tesla doesn't break out deliveries by region, but it delivered almost 500,000 cars last year during the pandemic.

  • The Biden administration here in the U.S.

  • seems much more open to expanding, if not providing additional incentives for the EV market as well as the infrastructure buildout, which is one

  • of the major concerns.

  • China has been very supportive of the EV infrastructure and EV companies for years, and we've seen it in their EV sales and almost same thing with

  • Europe. There's no question that all of this move to electric globally would not have really gotten traction without China

  • first mandating that electric would be part of its future and as the largest vehicle market in the world, that has a global impact.

  • Primary barrier for consumers to buy electric vehicles is the cost, and batteries represent the bulk of the cost of the electric

  • vehicles besides subsidies.

  • China's government also provides support and battery manufacturing and the supply chain.

  • It's the leading producer of electric batteries and motors.

  • Battery production around the world is concentrated in Northeast Asia.

  • It's Japan, Korea and China.

  • Together, they account for about 95 percent of total battery production for vehicles.

  • Now within that ninety five percent, China has more than 60 percent at this point.

  • So it's clearly the leader in terms of battery production capabilities.

  • And analysts are basically across the board saying that China has control of the chemicals, the production facilities

  • that are needed for electric vehicle battery production for the next probably five to 10 years.

  • So there's actually some groups in the U.S.

  • who are also raising this as a concern if the future of mobility is going to be electric.

  • Other than Tesla, battery manufacturing in the U.S.

  • is almost nonexistent, General Motors and others have announced plans or initiatives to kind of enter the market.

  • GM has a 2.3 billion dollar investment right now with LG Chem.

  • They're building a plant in Ohio and that plan is set to open, be finished in 2020 too.

  • Look at the situation,

  • the U.S. and China relations are at their worst in 50 years.

  • And should the U.S.

  • become over-reliant on Chinese batteries?

  • Well, it would be so simple.

  • The Chinese would say, sorry, we don't have enough supply for you.

  • China also made charging a national priority and has been installing an extensive network throughout the country, it has over half a million

  • charging points compared to the U.S.

  • that has roughly one hundred thousand.

  • Even Tesla has a massive network in China with thousands of points.

  • And China has already unified their charging infrastructure.

  • So whatever car you're buying, you know that you could go to a station and get charged up.

  • So America's first step should be try to work toward a unified standard for charging so that no matter what electric vehicle you're buying,

  • you'll have peace of mind.

  • Oh, I can get it charged there.

  • No problem. Tesla has seen rapid growth in China after building a factory in Shanghai at the end of 2019.

  • The company earned 6.66 billion in revenue from the country in 2020.

  • And the model three was also the best selling NEV last year.

  • Tesla's China made Model Y began deliveries in January and was the third best selling electric car in February.

  • Tesla has played its hand really well.

  • Elon Musk understood that China wanted to be a leader in electric vehicles and that the incentives may be in place for Tesla to take advantage of.

  • Though other foreign automakers make cars in China,

  • they were all required to set up joint ventures with a Chinese automaker.

  • SAIC owns 50 percent of GM in China.

  • Ford also has two joint ventures there.

  • But Tesla was able to get a unique deal in the country.

  • They're the first automaker to come into China and that the government let them own their own factory and let them operate without a joint

  • venture with a local Chinese affiliate.

  • So Tesla's growth in China thus far has been helped by the Chinese government.

  • It's been a red carpet welcome for Tesla because the Chinese government sees the value of having Tesla and its suppliers

  • right there planted inside China, further fortifying China's stance as the strongest EV industry in the world.

  • But Tesla has lowered its price in China a couple of times at first to qualify for subsidies and then because of cheaper Chinese made batteries.

  • One of the reason Tesla did extremely well in China this year is because it had price cuts a couple of times and

  • the biggest cut was a percent, a beginning of October.

  • So that really boosted the orders.

  • So we are looking at an older number of 12, 13,000 a month in September, all of a sudden jump to about 31,000

  • in October. Tesla also dominates the U.S.

  • market. The company made up 79 percent of all electric cars registered in 2020.

  • The only non-Tesla of the top five cars was the Chevy Bolt, which had around 19,000 vehicles registered compared to the Model 3, which alone was

  • over 90,000. The company's market cap grew over 500 billion in 2020, making it worth more than the nine largest automakers combined,

  • even though it sells a fraction of the amount of cars.

  • China sold roughly one million more EVs in 2020 than the U.S., with less aggressive subsidies and lack of battery manufacturing.

  • The United States has its work cut out for it if it wants to catch up.

  • The U.S. and China are really different markets.

  • The U.S. is not going to mandate certain things as much as China will.

  • China kind of had mandates to cut down on pollution.

  • They had the very large incentives.

  • Their owners in many of these companies that are pushing the EVs in the US, we have to have more of an organic growth.

  • Plus, the consumers in China and the US are quite different.

  • While the Chinese will buy miniature cheap EVs, Americans are more drawn to SUVs and gas guzzling trucks.

  • In fact, Ford's F-series, which includes the F -150, remained America's best selling vehicle for the 39th straight year in 2020.

  • The F-series brought in 42 billion dollars in revenue in 2019, which is more than the NFL, NHL, NBA and Major League Baseball combined.

  • New EV trucks pose a threat to the truck makers market share.

  • When word came out about the Cybertruck, the main message was: we're going after your profits on your biggest selling vehicles trucks.

  • So Ford and GM responded and said, oh, we better not be asleep at the wheel.

  • There are a slew of electric trucks coming in the U.S.

  • in the next few years and a number of startups entering the space.

  • American auto giants are making big changes too.

  • Make no mistake, this is General Motors and Mary Barra making a very clear and declarative statement right now.

  • They will be fully electric and they plan to be there at least by 2035.

  • GM's CEO Mary Barra said we're committed to fighting for EV market share until we are number one in North America.

  • China is GM's largest market worldwide when it comes to total vehicle sales.

  • In the summer of 2020, it launched the Hong Guang Mini with its joint venture Wuling.

  • The small EV cost s $4,400 and has seen rapid growth in sales.

  • They're selling more than 30,000 of these a month.

  • If you can get to that volume in a month, you're doing extremely well.

  • So GM went from sort of quiet and not doing much in China with electrics to this surprise sensational new product.

  • EVs are still a very small percentage of the global auto market, so it's still anyone's game.

  • Automakers want to keep their customers happy, but also don't want to lose market share to startups or Tesla.

  • In China, competition is growing rapidly.

  • Warren Buffett-backed BYD's new luxury sedan jumped into the top 10 electric cars sold in China last year.

  • China also has hundreds of startups.

  • These include shorter range and lower priced cars.

  • But there are also notable luxury brands popping up to compete with Tesla.

  • They include Nio, Xpeng and Li Auto.

  • All three companies have seen high valuations in the past year.

  • The EV auto startup companies are extremely well-funded and welcome on Wall Street and global capital markets.

  • It's the wide open capital market and that's the rich valuation makes the entrepreneurs believe that it is a

  • worthwhile effort to try, even though, you know, the outcome can be binary, but they still think it's attractive venture.

  • In the US, the race between the Detroit automakers and a slew of startups is starting to unfold.

  • GM has unveiled the all-electric Cadillac and Hummer EV.

  • Ford will debut the fully electric Mustang Mach-e.

  • Then there are startups like Rivian, Canoo and Bollinger Motors, all working on electric pickups.

  • In Europe, Volkswagen is another automaker accelerating plans to dominate the EV space.

  • In the fourth quarter of last yeay, it sold more than Tesla, but that number includes plug in hybrids.

  • The German automaker expects half of U.S.

  • sales to be electric vehicles by 2030.

  • While China has a commanding lead, all hope is not lost for the US to catch up.

  • China is ramped up battery production as well as car production for electric vehicles.

  • But the quality of their batteries and particularly the quality of their own cars is still not world class.

  • And that applies to Chinese cars in general.

  • They're not piles of junk, but they're not going to compete with leading European brands or Tesla, though if they're going to set their sights on

  • Europe and the United States, they're going have to raise the quality of those cars overall to be competitive.

  • We've been the standard for the world and so many technologies here in America for 100 years that it's impossible for us to conceive of a future

  • where we're not in charge, we're not the leader, we're not the standard setter.

  • But the risks are real.

  • We can come back. It's early days.

  • Only five percent of total sales are electric.

  • But the longer we wait, the harder it's going to be to do a comeback victory.

  • But we better get our act together now.

The global electric vehicle market is heating up and China wants to dominate.

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中国为什么要打败美国电动汽车(Why China Is Beating The U.S. In Electric Vehicles)

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    joey joey 發佈於 2021 年 05 月 14 日
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