China accelerates to become world lead in clean vehicles

This was my first trip to China. I had read often of its great landscapes, mountain vistas, powerful undulating rivers and, of course, the giant panda.

I was also familiar with the pictures of smog-smothered cities and how the government is responding to cleaning up the air. To date, part of this has involved shutting down coal power plants and ambitious commitments to accelerate the use of electric vehicles.

As we made our final approach into Beijing airport, the skyline was dominated by this vast city rising from the brown, arid desert. Its scale was like nothing I had seen before. And as I queued for a taxi, the acrid smell of pollution filled my nose. But nonetheless, I sensed something else in the air – change.

By the time I arrived at my hotel and peered across the skyline of this mega-city, it was the clear blue sky that struck me so profoundly. As the sun dipped below the horizon, I reached for my phone to capture the moment. A beautiful orange hue and a darkening blue sky: a testament to the success of cleaning up the skies above this historic city.

One of the objectives of my trip was to better understand the role that electric vehicles (or new energy vehicles, as they’re referred to in China) will play in keeping the skies of Beijing clear, as well as the role China will play in driving the global demand for clean cars.  

Although the conversations with partners and officials largely focus on the technical aspects of how China will clean up its transport fleets, making the streets safer and healthier, it is the sheer scale of the implementation that strikes me. It helps me to think of each regional province as a country, which puts the challenges into perspective.

I have made several general observations regarding the policy drivers that are setting the overall direction of travel for China’s electrification of the vehicle fleet:

• The first is an industrial strategy aimed at capturing markets for industries of the future. China has identified electrical vehicles (EV) as a technology that was “bypassed” by foreign automakers. By moving on this market, it can benefit from its ability to rapidly scale battery and EV manufacturing.
• The second goal is to limit oil imports. Car ownership and driving are growing rapidly, and China is now the world’s largest oil-importing country.
• Pollution is a third driver. Transportation is a major contributor to urban air pollution and is rising rapidly. EVs may seem like a counterintuitive solution, but various studies have shown that switching to EVs produces a significant air quality benefit.

But one thing is striking: new energy vehicles are driving a revolution in the transport sector, despite the gradual withdrawal of subsidies, which China sees as an opportunity for innovation. EVs, plug-in hybrids and fuel cell cars are expected to account for half of all new car sales by 2030.

Currently, China has no plans to follow the UK and France in setting a target for the phase-out of existing, polluting cars, but will instead let the market decide. Nonetheless, it was clear from all the discussions and presentations that I took part in, that there is a strong desire to lead the world in developing Third Generation battery technology, electric vehicle innovation and cleaner, shared urban mobility.

Intelligent, mobile applications are also forcing the paradigm shift, with the attitudes of youth to driving changing the perception of car ownership. Cheaper and more convenient options, like car sharing, are becoming more favourable.

Already, China is off to a good start, with about 1.6 million new energy cars on its roads, even surpassing the US by taking first place globally. Such is the pace of development of the anticipated range and costs for new energy vehicles in China that, by 2020, they will be comparable to the combustion engine. So, it is exciting, despite the challenges that remain, such as putting in place the infrastructure to meet demand, and the need to redesign the power infrastructure to ensure that regional networks produce clean, smart power.

Central government has embraced autonomous driving, in efforts to lead the world in this cutting-edge technology. According to the influential National Development and Reform Commission, China expects partly or fully automated cars to account for 50 per cent of all new cars sold in 2020.

I have many lasting impressions from my first visit to China, but there is one I would like to share.

One evening, my colleagues and I had dinner at a traditional restaurant in the old diplomatic quarter, centred around a dimly-lit courtyard. The food was delicious – I had braised tofu skin with chillies, rice and green beans. At the end of the meal, I asked for the bill and handed the credit card to the attentive waiter. He looked at the card, then looked at me. He then tutted, declared something loudly in Chinese, drawing the attention of the guests in the busy restaurant towards me, before marching me to the front desk.

It turns out that credit cards are so “New York in the late 90s”. In China, it’s either cash or WeChat. That’s right, you pay for everything with your iPhone. You can even donate to the homeless on the street corner, just by touching your phone against theirs! I had just been subjected to the credit card ‘walk of shame’. What can I say, the future is really here.