THE BLOG
01/02/2018 16:20 EST | Updated 01/02/2018 16:29 EST

When It Comes To Electric Vehicles, China Has Canada Beat On Every Front

China has become a disruptive, ever-accelerating force driving a global migration of automakers toward zero and low-emission vehicles.

As the largest vehicle market in the world (with 28 million new vehicles sold in 2016, compared to the United States' 17.5 million that year), China is literally dictating the direction of the global auto industry with national quotas that require for 10 per cent of each automaker's sales in 2019 to be zero and low-emission vehicles (electric vehicles and plug-in hybrids). This quota will increase to 12 per cent by 2020, and 20 per cent by 2025.

Kim Kyung Hoon / Reuters
An employee works on an assembly line producing electric cars at a Beijing Electric Vehicle factory, funded by BAIC Group, in Beijing, China, Jan. 18, 2016.

Topping off the strict quotas, China has the world's most ambitious Corporate Average Fuel Economy (CAFE) requirement for 2020 at 5L/100km. CAFE refers to the average fuel consumption of vehicles sold by a manufacturer in a given year. China's determination on CAFE is exemplified by pre-2020 CAFE standards, culminating in China mandating that 553 separate vehicles be removed from China's market.

China, like India, is also pondering a ban on the lone internal combustion engine. For China, the question of a ban is not if, but when — likely around 2030. BAIC, the largest automaker in China and China's fifth largest automaker, Changan Automobile Co, will go 100 per cent electric by 2025.

Apart from the pollution issue, China wants to end the dependency on oil imports.

China's electric vehicle dominance applies equally to buses. Of the total of electric buses presently operational in the world, 98 per cent are in China. One-fifth of China's bus sales, or 100,000 buses per year, are electric buses. The city of Shenzhen alone now has 14,000 electric buses in its fleet.

Likewise, China's BYD offers a full line-up of electric trucks. Beijing is now replacing its entire fleet of sanitation vehicles with 26 different models of BYD trucks.

Summing it up, China is well on its way to achieving its target of manufacturing 2 million eco-vehicles in 2020, with over 500,000 electric vehicles sales in 2017.

Rebecca Cook / Reuters
Ford assembly workers install a battery onto the chassis of a Ford Focus electric vehicle.

North-American automakers: not so fast but...

In February 2017,then-CEO of Ford, Mark Fields, argued that the U.S. CAFE standards for the 2022-2025 period would result in one million job losses. But in August 2017, the U.S. Alliance of Automobile Manufacturers said that CAFE standards should be maintained, but also that the incremental slope to achieve the standards should be flattened. This about-face reflects global imperatives, in that the standards in Europe and China would remain stiffer than those of the U.S.

The Trudeau administration: asleep at the wheel

The best that the Trudeau administration has been able to come up with on electric vehicles to date is to appoint an advisory committee. This is consistent with there being only a handful of token cleantech gestures in the first two Trudeau budgets. No wonder — Canada has only 1.3 per cent of the global marketshare of cleantech.

And with its policies to increase tar sands production by 50 per cent by 2030, Canada rates 56 out of 61 on the 2016 Global Climate Change Performance Index.

Bobby Yip / Reuters
A Volkswagen I.D. electric vehicle is shown at a news conference in Guangzhou, China on Nov. 17, 2016.

Global automakers partnering with Chinese firms

China's tall order on quotas for zero- and low-emission vehicles has global automakers scrambling. Even General Motors sells more vehicles in China than in the U.S., and the same goes for Volkswagen.

The icing on the cake for commanding the world's largest vehicle market is that one's vehicles must be manufactured in the country, meaning foreign companies must necessarily have a partner in China.

And batteries of electric vehicles in the country must be sourced in China.

To address the China issue, the new CEO of Ford recently implied that Ford's China division along with its Chinese partner Zotye would have the global lead for Ford "electrified" vehicles.

Not surprisingly, in June 2017, Volkswagen announced a partnership with Anhui Jianghuai Automobile Co. (JAC) with the anticipation that this alliance, for which VW has committed $12 billion over seven years, will sell 400,000 electric vehicles in China in 2020. Now, rumour has it that Volkswagen's first battery facility will be in China.

China's invasion of global electric vehicle markets has already begun.

Then there is the about-turn of Toyota. Toyota, originally placed all its zero-emission vehicle eggs in the hydrogen fuel cell basket, but has since made a major shift to electric vehicle technologies to meet China's requirements. To this end, Toyota has entered into a Chinese joint venture with China FAW Group Corp and Guangzhou Automobile Group to manufacture electric vehicles in that country beginning 2020.

General Motors has set more modest global goals with the aim to sell 500,000 new energy vehicles/year by 2025. These goals include 20 entirely electric models by 2023, with two of these vehicles on the market around 2019. Much of this growth will be associated with the GM partnership with China's SAIC.

As is the case of other manufacturers, Mercedes is working with a partner, BAIC, to build a factory in China to make all-electric cars for the Chinese market. Another of its Chinese partners, BYD, will have the joint company build all electric vehicles under the Denza brand. In addition, Daimler will build a $740-million battery factory in China with BAIC and start production in 2019 with an electric SUV.

Bloomberg via Getty Images
BYD Co. electric buses drive out of a public transportation hub in Shenzhen, China, on Sept. 20, 2017.

China's electric vehicles are coming to a market near you

China's invasion of global electric vehicle markets has already begun.

BYD has a electric bus and truck manufacturing facility in Lancaster, Cali. and will be constructing an electric truck plant in Ontario. BYD will be selling Class 5, 6 and 8 trucks in the North American market and has recently signed a contract to supply UPS.

Another truck soon to enter the North American market is China's Chanje line of all-electric medium duty vans via a partnership with Ryder Systems.

The next step is bringing China's electric cars to North America. BYD will eventually be introducing the BYD Qin to this market.

China rules

China rules! This applies to clean energy technologies, electric vehicles and their batteries — and one cannot count on the U.S. or Canada to receive proportional shares of the pie.

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