China gets (really) serious about electric cars

BRICS Leaders meet n the sidelines of 2016 G20 summit in China

Late last month Chinese regulators announced a BHAG. For those not familiar with the term, it’s a management-consultant acronym meaning: Big Hairy Audacious Goal. It’s usually unrealistic, but it’s something that rallies the troops.

In China’s case, their BHAG is very serious and not negotiable.

They set a mandatory sales target that stipulates 10% of automakers’ sales in 2019 must be battery electric vehicles (BEVs) or plug-in hybrids (PHEVs). The only exemption is for small automakers selling less than thirty thousand cars a year. If 10% does not sound particularly ambitious, consider this: It means that electric car sales in China need to grow from 350,000 in 2016 to 2,8 MILLION in 2019. This assumes no growth in the overall new car market over that period. If the market grows, then the electric vehicle (EV) number will need to be higher. Last year, neither France, nor Brazil, nor Italy nor Canada managed to sell 2.8 million conventional new cars. These are all among the top-10 car markets in the world.

Expressed differently, it means China’s EV challenge is an 8-fold increase over a 3 year period, or an EV sales mix that will grow from just over 1% in 2016 to 10% in 2019. And in 2020, the mix must further grow to 12%. And so on. For automakers, a 10% EV mix has just become a mandatory entrance ticket to participate in the world’s largest car market (by far).

China’s goal is to achieve easily the toughest nationally-enforced low-emissions automotive target on the planet, making those previously set by Norway, the Netherlands, France and the UK seem slightly pathetic by comparison.

Game on.


Be the first to comment on "China gets (really) serious about electric cars"

Leave a comment