While we’re at home avoiding crowds, China is holding an international event.
I’m talking about the Beijing Auto Show.
The show that was supposed to take place in April and was probably one of the few places around allowing masked crowds. You can catch a glimpse here.
The event has given quite a lot to talk about. Not only about the crowds, but electric vehicles were also one of the big themes.
Car sales are starting to recover in China, and auto makers are putting some faith into electric cars.
BMW’s head of China Jochen Goller told the Financial Times he:
‘[P]redicts single-digit growth for BMW’s sales in China this year despite a 31 per cent year-on-year fall in the first quarter. An important aspect of that will be EV sales, which he said in China have evolved from a niche into the mainstream. “Only now [are electric vehicles] arriving in the core segment.”’
Porsche CEO Jens Puttfarcken told CNBC:
‘The electrical market in general is, like the whole automotive market, is a highly competitive market especially here in China where we see here a lot of brands that are unknown to the rest of the world, building up very interesting products and very highly sophisticated technologies.’
Tesla is also one of the big competitors there and Musk has said they’re looking to produce about a million vehicles there a year. Their model 3 is one of the best-selling EVs there, which just got cheaper in China.
The tech race for a cheaper EV is on.
It’s what’s interesting about EVs. As I wrote a couple weeks ago here, EVs aren’t a new thing. They were quite popular in the 1900s but failed to take off because of tech and economics. But we’re getting close this time to getting over those hurdles.
The auto show wasn’t the only EV show in town this week, so to speak. While it got far less attention than the debate, US President Donald Trump took time out of his busy schedule to present Lordstown Motors Endurance, an electric pickup truck.
The interesting thing about it is that the car has an electric motor on each wheel, which frees up space in the front trunk of the car to keep tools in. You can check out the video here.
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EVs do have a lot of perks
For one, they have fewer moving parts, making them cheaper to run and maintain.
But I digress. Back to China.
There’s quite a lot of optimism because China has put a lot of emphasis on electric cars for their recovery.
One of the things lifting EVs in China is the government. When the pandemic hit, the government extended NEV subsidies and poured money into battery-charging infrastructure.
It’s something they were already looking at before the pandemic, to be in the forefront of manufacturing electric vehicles. Not only to reduce emissions and pollution but to reduce dependency on other energy producing countries.
China has also said they want 25% of new car sales to be electric vehicles by 2025, up from about 5% in 2019.
They’ve also committed to go carbon neutral by 2060. I mean, we still need to hear what the plan is to get there. But the fact that our biggest trading partner is moving on this should give us something to think about.
Europe is also seeing a push towards electric vehicles. According to McKinsey, Europe increased their vehicle sales by 44% in 2019. Their global share of electric vehicles grew to 26% of the market during the pandemic.
Europe has already said that it’s looking to decrease its carbon dioxide car emission targets in the next years.
EV owners could see more savings because governments are also giving incentives to make the switch and meet those targets. But also, carbon emissions could become more expensive in the future. I mean, it’s something that happened with the tobacco industry.
There’s a shift happening towards green energy and it’s happening at a time when solar and wind are getting cheaper and consumers are producing their own energy too.
My point with all this is that governments are changing. Industries are changing. Consumers are changing. It’s all aligning.
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