China forcing consumers into electric cars to clean up their smog

Pollution caused by internal combustion engine cars are killing the Chinese. The government is taking steps to rid it's country of the menace

China has created the world’s largest electric-car market by sheer force of will, a giant bet on domestic production that’s leaving major foreign auto makers scrambling to keep up writes Trefor Moss of The Wall Street Journal.

The government is funding its own manufacturers, luring domestic buyers with subsidies and building a vast charging-station network–while strong-arming its consumers by making sure buying an electric car is the only sure way to get license plates in crowded cities.

William Zhou, a 33-year-old software-company manager, recently abandoned his 18-month quest to buy a gasoline-powered foreign car–a middle-class status symbol–when his wife became pregnant.

He drives in gridlocked Shanghai, where severe restrictions on issuing license plates for new gas-powered cars don’t apply to electric or plug-in hybrid models. He settled for a Chinese plug-in hybrid because “I didn’t want to waste any more time and energy on the license plate."

In the U.S. and elsewhere, there is some skepticism about whether electric vehicles will be a significant market soon. China has made up its mind. One goal is to curb pollution and reduce reliance on foreign oil. China’s chief aim, though, is to use the emerging electric market to improve the patchy quality of its domestic auto makers. To that end, it is using industrial-policy measures to create a giant test bed for its companies’ designs and technology.

Already, Chinese-made models dominate. More than 100 electric models are on the domestic market. Sales of plug-in passenger vehicles reached 351,000 in 2016–nearly half the global total, according to EV-Volumes, a research group that tracks electric-car sales.

Chinese auto makers built nearly all those. Tesla Inc. is the only foreign electric-car maker to have sold in significant numbers, having imported and sold 11,000 cars last year.

New-energy mandate

Foreign makers will have to join the fray if they want to keep selling. Beijing on Thursday said it would require foreign auto companies manufacturing in China to start making new-energy vehicles in the country by 2019.

The nation’s overall car market is so huge, comprising one-third of 2016 global sales, according to Macquarie Research, that foreign auto makers have little choice but to adjust strategies to adapt.

“That’s why we’re investing so heavily in electrification," General Motors Co. Chief Executive Mary Barra told reporters in Shanghai last month, when asked about China’s push to phase out traditional cars.

Of GM’s global unit sales, 40% were in China last year. Beijing’s bet has translated into “a very aggressive rollout on electrification in China," said Ms. Barra, who detailed GM’s plans to have at least 10 plug-in models available in China by 2020. GM hasn’t outlined such targets in its other markets. GM currently has three plug-in models in China, including a local version of the Volt, introduced several months ago.

China will have 4.8 million charging points by 2020, the government forecasts, up from 156,000 in March. The U.S. had 43,000 points in June, according to a University of Michigan study.

At those rates, China has roughly one charging point for every six electric cars, versus about one for every 17 in the U.S. and Norway.

A persuasive tool

Beijing’s most persuasive tool–and a reason foreign makers are eager to start producing in China–is restricting license plates for new gasoline-powered cars in seven cities. In Beijing, more than 11 million people typically enter a monthly lottery for 14,000 gasoline-car plates. Shanghai auctions them to the highest bidders. Electric-vehicle buyers in the cities can get tags almost instantly at no cost. Read the full story by Trefor Moss of The Wall Street Journal