Page 188 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
for NEV sales to make up 20 percent of the overall auto documents, plug-in hybrids, together with electric cars
market by 2025. A total of 2.29 million vehicles were and fuel cell cars, are defined as new energy vehicles (Li,
sold in China last month, up 9.6 percent year on year, Guideline Proposes).
according to the CAAM. Auto production went up 12.8
percent to 2.34 million (Xinhua, NEV sales). A California-based Chinese electric vehicle (EV) startup
announced in March 2018 that it plans to produce two
China is planning to curb new gasoline and diesel kinds of all-electric SUVs that will use its own advanced
car projects and raise the threshold for electric car electric motors and battery technology. SF Motors, a
manufacturing. In a proposed guideline that came out Silicon Valley-based subsidiary of Chongqing Sokon
late in 2018, the National Development and Reform Industry Group that produces electric vehicles and
Commission (NDRC) said the move is designed to prevent components, said in a statement that it has made major
low-end excessive production capacity and boost the technological advances and launched a new line of
growth of the budding new energy vehicle sector. intelligent electric vehicles. Their two SUV models SF5
The guideline, which as of this writing was soliciting and SF7 will be equipped with “a flexible motor system”
public opinions, came days after the commission’s allowing vehicle design using one, two, three, or four
announcement that the 50:50 equity cap is to be removed motor configurations. The powerful four-motor system
for foreign electric carmakers from late July 2018 and for will deliver over 1,000 horse power (HP), meaning
foreign passenger carmakers from 2022. vehicles can accelerate from 0 to 60 miles (about 96
km) per hour in less than three seconds. The remarkable
The commission proposed in the guideline that the results were made possible by the company’s motors,
authorities do not approve of establishing any new motor controllers, and gearboxes, with a peak power
company that is dedicated to producing conventionally ranging from 100KW to 400KW. SF Motors said that the
fueled cars, including hybrids and plug-in hybrids. If any SF5 production will begin in 2019. The EV firm said it is
existing automaker would like to expand its capacity, it experimenting with next-generation battery modules
must meet a number of criteria, ranging from its current that will integrate directly into the vehicle chassis. This
capacity being better used than industry average for design will also support rapid manufacturing using laser
two years in a row to a higher than industry average welding to connect the battery cells. “Our mission is to
percentage of new energy cars in its total production. transform human mobility—and perhaps our planet—
Should the criteria be met, any new plant’s capacity through intelligent EVs,” said John Zhang, founder and
should be no less than 150,000 cars a year, and the CEO of SF Motors. The Chinese auto firm purchased AM
plant should be located in provinces where overall car General’s South Bend, Indiana assembly plant, where
production capacity has been better used than average they produced commercial Hummer in 2017. It also
in the country. Electric carmakers are to meet similar, if bought the electric power train startup founded by
not stricter criteria, to produce their models, according Martin Eberhard, co-founder of Tesla, the leading US EV
to the commission’s guideline. One rule is that their manufacturer (Xinhua, Chinese Electric Vehicle).
plants should be located in provinces that boast a more
competitive manufacturing basis and also have more Of course, when there are winners there are losers.
new energy vehicles on their roads than the country’s China’s breakneck push to lead the world in electric-
average. Another prerequisite for an electric carmaker to vehicle adoption may cause collateral damage among
build new facilities is that all existing plants for electric the legion of domestic carmakers deemed superfluous to
cars in the same province must have used at least 80 that mission. A flurry of manufacturing and technology
percent of their designed capacity. And should the alliances points to the urgency among Chinese carmakers
automakers overcome all these hurdles, shareholders to bulk up their new-energy vehicle businesses before
will be prohibited from selling their shares before the the rules of the road change. Carmakers that can’t keep
new plants reach their designed capacity, which should pace may not be around for long, and that applies to
be no less than 100,000 passenger cars a year or no less the biggest state-owned companies as well as smaller,
than 5,000 commercial vehicles. And one thing that regional manufacturers. Dozens of niche manufacturers
may disappoint carmakers such as Toyota as well as and fledgling startups also could be bought or go out of
China’s BYD and SAIC Motor is that plug-in hybrids have business because they don’t have enough scale or money
been categorized in the guideline as conventional cars to produce new models. Last year, about 15 domestic
whose production will be curbed. In other government companies sold fewer than 10,000 vehicles each,
188
for NEV sales to make up 20 percent of the overall auto documents, plug-in hybrids, together with electric cars
market by 2025. A total of 2.29 million vehicles were and fuel cell cars, are defined as new energy vehicles (Li,
sold in China last month, up 9.6 percent year on year, Guideline Proposes).
according to the CAAM. Auto production went up 12.8
percent to 2.34 million (Xinhua, NEV sales). A California-based Chinese electric vehicle (EV) startup
announced in March 2018 that it plans to produce two
China is planning to curb new gasoline and diesel kinds of all-electric SUVs that will use its own advanced
car projects and raise the threshold for electric car electric motors and battery technology. SF Motors, a
manufacturing. In a proposed guideline that came out Silicon Valley-based subsidiary of Chongqing Sokon
late in 2018, the National Development and Reform Industry Group that produces electric vehicles and
Commission (NDRC) said the move is designed to prevent components, said in a statement that it has made major
low-end excessive production capacity and boost the technological advances and launched a new line of
growth of the budding new energy vehicle sector. intelligent electric vehicles. Their two SUV models SF5
The guideline, which as of this writing was soliciting and SF7 will be equipped with “a flexible motor system”
public opinions, came days after the commission’s allowing vehicle design using one, two, three, or four
announcement that the 50:50 equity cap is to be removed motor configurations. The powerful four-motor system
for foreign electric carmakers from late July 2018 and for will deliver over 1,000 horse power (HP), meaning
foreign passenger carmakers from 2022. vehicles can accelerate from 0 to 60 miles (about 96
km) per hour in less than three seconds. The remarkable
The commission proposed in the guideline that the results were made possible by the company’s motors,
authorities do not approve of establishing any new motor controllers, and gearboxes, with a peak power
company that is dedicated to producing conventionally ranging from 100KW to 400KW. SF Motors said that the
fueled cars, including hybrids and plug-in hybrids. If any SF5 production will begin in 2019. The EV firm said it is
existing automaker would like to expand its capacity, it experimenting with next-generation battery modules
must meet a number of criteria, ranging from its current that will integrate directly into the vehicle chassis. This
capacity being better used than industry average for design will also support rapid manufacturing using laser
two years in a row to a higher than industry average welding to connect the battery cells. “Our mission is to
percentage of new energy cars in its total production. transform human mobility—and perhaps our planet—
Should the criteria be met, any new plant’s capacity through intelligent EVs,” said John Zhang, founder and
should be no less than 150,000 cars a year, and the CEO of SF Motors. The Chinese auto firm purchased AM
plant should be located in provinces where overall car General’s South Bend, Indiana assembly plant, where
production capacity has been better used than average they produced commercial Hummer in 2017. It also
in the country. Electric carmakers are to meet similar, if bought the electric power train startup founded by
not stricter criteria, to produce their models, according Martin Eberhard, co-founder of Tesla, the leading US EV
to the commission’s guideline. One rule is that their manufacturer (Xinhua, Chinese Electric Vehicle).
plants should be located in provinces that boast a more
competitive manufacturing basis and also have more Of course, when there are winners there are losers.
new energy vehicles on their roads than the country’s China’s breakneck push to lead the world in electric-
average. Another prerequisite for an electric carmaker to vehicle adoption may cause collateral damage among
build new facilities is that all existing plants for electric the legion of domestic carmakers deemed superfluous to
cars in the same province must have used at least 80 that mission. A flurry of manufacturing and technology
percent of their designed capacity. And should the alliances points to the urgency among Chinese carmakers
automakers overcome all these hurdles, shareholders to bulk up their new-energy vehicle businesses before
will be prohibited from selling their shares before the the rules of the road change. Carmakers that can’t keep
new plants reach their designed capacity, which should pace may not be around for long, and that applies to
be no less than 100,000 passenger cars a year or no less the biggest state-owned companies as well as smaller,
than 5,000 commercial vehicles. And one thing that regional manufacturers. Dozens of niche manufacturers
may disappoint carmakers such as Toyota as well as and fledgling startups also could be bought or go out of
China’s BYD and SAIC Motor is that plug-in hybrids have business because they don’t have enough scale or money
been categorized in the guideline as conventional cars to produce new models. Last year, about 15 domestic
whose production will be curbed. In other government companies sold fewer than 10,000 vehicles each,
188
