Electric vehicles: racing towards clean mobility in China

Season five of Formula E rolls out some milestones this month in the People’s Republic of China. This season’s new Formula E Gen2 car has already hit the streets in Hong Kong in early March. And coming up, the ePrix returns to mainland China, with the Sanya race a timely nod to the Chinese government’s action on clean mobility.

As the world’s largest mobility market and manufacturer, China finds itself in a unique position when it comes to new energy vehicles (NEVs), which include plug-in vehicles, fuel cell vehicles and compressed natural gas vehicles. For nearly a decade the Chinese government has been subsidising and promoting the creation and use of plug-in electric vehicles, driven by both strong environmental concerns and ambitious industrial goals. In its infancy compared to the internal combustion motoring market, the electric vehicle market provides China with an opportunity to carve out global industry leadership in this growing area of the automobile sector.

A chance to align industrial and environmental interests

In 2015 China announced its ‘Made in China 2025’ strategic plan. The grit and determination that produced its track-record of rapid economic transformation is now being geared towards the upgrading of China’s manufacturing industries and a preference for domestically-produced core materials. This has worked to the benefit of the electric vehicle market, which is one of ten high-tech industries identified as key to the strategic plan. The government aims for Chinese firms to dominate 70 per cent of the domestic electric vehicle market, by next year and 80 per cent by 2025. Car components such as lithium-ion batteries are included in this plan. While China may currently face a surplus of domestically-produced car batteries compared with demand, increasing internal competition has the flow-on effect of raising standards and thus the made-in-China brand at an international level.

Environmental concerns are clearly another major driver in the race to clean up China’s mobility market. The past four decades of economic and industrial boom have come at a high environmental cost, including extensive water and air pollution and a rise in environmental-pollution-induced natural disasters. Despite launching a national action plan tackling air pollution in 2013, and the Chinese premier declaring ‘war’ on pollution in 2014, the skies of Beijing were so polluted in 2015 that the terms ‘airpocalypse’, ‘smogmaggedon’ and ‘airmaggedon’ were littered across news articles at the time. The government remains under immense domestic and international pressure to clean up its air and last year the ‘2018-2020 Three Year Action Plan for Winning the Blue Sky War’ was launched.

Racing towards greener mobility

The start of this year saw China enter a new phase of its relationship with electric vehicles. After nearly a decade of subsidies, tax discounts and other favourable policies, the government has amended its approach towards fostering the plug-in vehicle market. A ‘cap and trade’ system was introduced in January: it is no longer possible to establish new companies making combustion-engine only cars, and currently operating car makers must either produce a set quota of electric vehicles or purchase credits from other manufacturers producing a surplus. This move can be interpreted as the government’s first step towards pushing responsibility for electric vehicle development to the market itself, or as making life harder for the fossil fuel vehicle industry, or both.

Known as the Hawaii of China, Hainan Province provides a fitting location for the return of Formula E to the Chinese mainland. The first ever ePrix was hosted on the streets of Beijing in 2014 and this month, nearly five years later, the Sanya ePrix is an opportunity for China to showcase the commitment of Hainan Province to clean air and clean transport. March also marks a significant environmental milestone for the resort-like Hainan – already enjoying some of the lowest levels of air pollution in China, the province has addressed the fact that 40 per cent of its air pollution comes from transport by implementing a ban on diesel or petrol car sales from March onwards. It is also the only province in China to have set a clear timeline for the phasing out of fossil-fuel vehicles: government and public transportation will be clean-energy-driven by 2020 and diesel and petrol cars will be totally eliminated from Hainan by 2030.

It began as an idea to promote greener and cleaner driving and, since its conception in 2011 and launch in 2014, Formula E showcases what’s possible when top-of-the-range electric vehicles hit city streets. The new Gen2 cars have already raced earlier this month in Hong Kong, showing spectators that in less than five racing seasons, energy storage capacity has doubled and cars can now complete the entire circuit without substitution. Many view technological advancements in racing as a way of pushing the electric vehicle market forward. It’s therefore fitting that China, the country with the largest plug-in vehicle market-share, has two teams competing. And, with newly relaxed regulations allowing for partnerships between international and Chinese manufacturers, all eyes are on how the expansion of companies such as Tesla into China will drive the electric vehicle market forward.

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