E-Mobility by law

The global automotive industry is looking to China

China is emerging as the world’s leading market for electrically powered vehicles. Eager to help e-mobility make the ultimate breakthrough, the government in Beijing has adopted a policy of ambitious legal quotas, massive subsidies, and systematic expansion of infrastructure.

Measured in absolute numbers, China is already the world’s most important market for new energy vehicles, or NEVs. The government in Beijing defines these as electrically powered cars, plug-in hybrids, and fuel-cell vehicles, although the latter still play no role.

NEVs in the fast lane

In 2016, some 417,000 electric cars were produced in China. With annual production of around 200,000 e-vehicles, Germany comes in second place, followed by the USA with 148,000. When it comes to new registrations, however, China’s lead is even more impressive: no less than 409,000 pure e-vehicles and 98,000 plug-in hybrids were sold last year in China, including 336,000 passenger cars and 171,000 commercial vehicles. By way of comparison, during the same period in Germany, a mere 11,400 pure electric vehicles were sold, plus 13,744 plug-in hybrids. Of those 171,000 commercial vehicles, 115,000 are electrically powered buses – an excellent example of China’s top-down “e-volution”: more and more public transport companies are converting their fleets to nonpolluting vehicles. In doing so, they are toeing the party line. The government in Beijing has recognized the need for urgent action in the country’s urban centers: many of China’s megacities suffer from severe air pollution; switching to e-buses is an efficient means of improving air quality.

Incentives and infrastructure

When it comes to passenger cars, the government is also taking the lead. For one thing, the purchase of e-cars and plug-in hybrids is being promoted financially in a multitude of different ways; for another, vehicles with alternative drive technologies in metropolitan areas receive coveted registration much more quickly than conventional vehicles. Last but not least, China is swiftly expanding its network of charging poles. In the future, all new buildings will be required to have charging stations for electric vehicles. Ten percent of existing parking places are being retrofitted with charging units. By 2020, no fewer than 4.8 million charging stations are to be installed in the People’s Republic of China.

In the future, the share of e-cars will continue to increase significantly. The central government has set ambitious targets: in the year 2020, two million NEVs are to be built in China, and by 2025, somewhere between 15 and 20 percent of all new vehicles sold in the country are supposed to be e-vehicles or plug-in hybrids. By 2030, the share should rise to forty or even fifty percent. There is no room for doubt that Beijing is serious about this plan. The first big step – at least as things stand at the moment – is due to take place very soon: in June 2017, the central government passed a law stipulating that, starting next year, carmakers will have to make sure that eight percent of all vehicles sold are either purely electric or plug-in hybrids. This rule applies to all carmakers with a production volume of over 50,000 units per year. Despite political resistance from Germany, Beijing is sticking to its guns.

These government measures are also shaping the structure of the industry. Following a decision by the Central Committee in October 2016, new vehicle manufacturers will receive a permit without difficulty only if they are capable of producing electric vehicles The production licenses are valid only for NEVs and are awarded in an accelerated process. In May 2017, for example, a license of this type was awarded for a joint venture between Volkswagen and Anhui Jianghuai Automobile Company.

Rheinmetall Automotive is upbeat

“The Chinese government’s extensive package of measures in conjunction with new forms of supply will continue to spur the market for electric vehicles on, solidifying China’s pioneering role as the world’s most important automobile market,” declares Horst Binnig, Rheinmetall Automotive’s chief executive. In the meantime, the Neckar sulm, Germany-based Group sees itself as well equipped to deal with the altered underlying conditions. The company has been present in China for over twenty years. In the meantime, its 5,000 employees generate annual sales of just under 1 billion EUR. Rheinmetall Automotive’s presence in China now runs to ten companies: three fifty-fifty joint ventures, two majority joint ventures, and one minority joint venture for piston rings. Rheinmetall Automotive’s array of products extends from electrified components for hybrid drives (e.g. controllable ancillary generators and pumps) to lightweight designs and products for pure e-mobility. These include battery mounts for electric vehicles and special casings for complete electric motors, which in the future Rheinmetall Automotive plans to manufacture on location for the Chinese market. Moreover, both the company’s Range Extender REx and new heating and cooling module offer numerous potential uses in electric vehicles.

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