The US Needs China For Electric Cars To Grow
If you’ve been reading the news the past four to five years, it is obvious that every major car manufacturers are not only eyeing China to help boost their financial health but also are involved in a frenetic race to establish a prominent position there. The Chinese automotive market is in its infancy and that means potential and lucrative returns for the next few decades for more establish Western carmakers.
When we think of the automobile market, we also have to take into consideration the growing percentage of hybrids, HEV, plug-in hybrids, PHEV and electric cars, EV in the industry. With growing climate change concerns from prominent global scientists, pollution is a reality that needs to be addressed. This is not just the automobile industry’s responsibility, but heavily industrialized areas and congested cities, which raise pollution to alarming levels. The electrification of the automobile is seen as a viable way to curb down tail-pipe emissions, as has been demonstrated time and over.
Can The US Lead The Automobile World? To this question, it is painfully obvious our “dominant” position has steadily crumbled over the past 40 to 50 years. The onslaught of Japanese cars in the 60s, followed by smaller, more nimble, fuel-efficient and more fun to drive European cars in the 70s showed our way of life with cheap petroleum was only manageable in our country. Both Japan and Europe are under the same economic crunch we are. China on the other has nothing to lose and everything to gain by concerting its effort toward building its domestic car industry and related battery technology.
China Buys US Assets. Is that a bad thing? Not necessarily and someone has to buy it. So, why not the market segment where most of the next decades revenues will come from. The recent investment from a major Chinese auto company in Boston-based battery maker, A123 Systems is good news for the fledgling maker, despite the political hubris. We just need to remember this is an election year and politicians are lowering the debates to extreme lows. After all, A123 batteries will be used in both locally made Chinese cars and western company cars sold in China. It should almost be a win-win situation.
We need more than ever global support, since after all we were the orchestrators of globalization in the first place. No matter how we look at it, the US will need China in the future. Car manufacturers know very well they probably won’t survive without a strong presence in China and this is especially true when it comes to the electricdrive and its equally important battery technology, most of which is either produced, manufactured or assembled in China.