February 18, 2021

Why America is no longer in the driver’s seat of the global automobile industry

Broadcaster Sonari Glinton and podcaster Mike Pesca discuss GM’s recent proclamation to go electric by 2035.  (Full podcast here.)

Pesca: A couple of months ago, the state of California announced no new gas vehicles, they were going electric and they put a time stamp on it of 2035. The UK then ups the ante and announces no diesel or gasoline or as they say, petrol, cars and vans will be sold in that country starting in 2030. And then GM and their CEO, Mary Barra, announce, OK, GM sees that and we too will no longer make gas and diesel powered vehicles by 2035. I guess they figured if California won’t be buying them, what’s the use of making them?

Glinton: … what’s happening now for some people is that America is not in the driver’s seat.  When it comes to electrification, it is not even in the driver’s seat when it comes to the auto industry anymore. What our vehicles, our regulatory regime, even the styling is increasingly led by what China wants. That is where the industry is making the money. That is where the future is: Brazil, Russia, India and China. And I would throw in Africa for the long game.

Pesca: is it plausible that China can go gasoline free with their cars within the same kind of time frame we’re talking about with these Western countries and companies?

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Having gone through the greatest economic expansion in human history, Chinese cities have expressed that transition in their skylines – an undisguised statement to the West that ‘we can do it bigger and better.’  ‘Better’ is subjective, ‘bigger’ not so much.

Quora contributor Martin Andrews assembled contemporary photos of China’s Tier 1 cities in his answer to the inquiry: “What are Chinese cities like compared to western cities?” He begins with shots of Vancouver as an example of what impresses him about western cities, and then notes: “Vancouver has a metro population of 2.4 million and there are 64 Chinese cities with a population greater than one million that really puts things into perspective.”

Here are just a few of the skylines that, I expect, most of us will find totally unfamiliar.

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From The Atlantic, via PT correspondent Michael Alexander, one of two dozen artful (and depressing) images of the aftermath of China’s bike share boom.

The fallout of a burst bike-share bubble in China has left the country with millions of abandoned bicycles piled into “graveyards”—such as this one, photographed on April 14 in Nanning—that cities are still sorting through.

…In a few cases, plans have been announced to refurbish and distribute some of the bikes to smaller neighbouring towns; in others, wholesale recycling has begun, and bicycles are being crushed into cubes.

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China has a problem in their real estate market where vapid speculation has increased prices.

As Reuters has reported, a record 200 property-tightening regulations were implemented in early 2018, designed to cool the market.

But demand has continued in cities with lower property values; despite the supposed reforms, housing prices have escalated even faster to June 2018, and demand for housing has resulted in over three years of  progressive monthly price increases.

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From South China Morning Post, via Thomas Beyer:

A Chinese carmaker has launched a vehicle sharing service in Shenzhen by offering a special deal on rental prices that works out cheaper than bike sharing.

GoFun, a car-sharing platform backed by state-owned Shouqi Group, said has put 300 new energy vehicles into service in the southern Chinese city, considered to be China’s Silicon Valley. 

The rental cost is just one yuan (US$0.16) per kilometre plus 0.1 yuan per minute, which works out at about half the cost of using Chinese ride hailing service Didi Chuxing. However, new customers can take advantage of a special deal of one yuan for three hours of driving, which is even cheaper than bike-sharing services in the city.

“It is a common strategy for technology companies to use low prices or even free services to attract new users,” said Zhao Ziming, a senior analyst at Beijing-based consultancy Cyzone. “The price will go back to normal when the companies gain a certain market share.” 

Carmakers like Shouqi Group are looking to develop vehicle sharing services based on the assumption that future consumers would rather make short-term use of those assets than owning them outright. In February, Didi Chuxing teamed up with 12 Chinese carmakers to develop an electric-vehicle sharing platform.

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