Saturday , October 23 2021

China takes steps to avoid possible impact on its growing electric car industry


It's been a while since China has become the largest car market in the world, but its growing industry electric car It could end up being a problem for the Asian giant. So they decided to take steps to avoid a possible bubble and the subsequent collision.

O 486 Chinese companies related to the electric car seem too much for the Chinese government, which wants limit access to this industry and, more specifically, to curb the development of small or emerging startup who use third parties to manufacture their products.

What China wants to avoid at all costs is that the rise of this type of enterprise during the last decade leads to a bubble like dot com Two decades ago. And, since 2011, Bloomberg estimates that these companies have raised funds at the $ 18 billion (about 16 billion euros).

Nio Es6


The electric car industry in China is a $ 18 billion bubble, according to Bloomberg

Many of these Chinese electric vehicle startups have not yet released their first product, but the China market, which exceeds 22 million cars a year, has already surpassed the barrier last year. millions of electric vehicles and therefore is the largest market in the world also for electric cars.

At the moment, China has not detailed what measures it will take, as work is still being done on possible ways to deal with the problem. In essence, China's idea is to bet on a smaller number of actors in the electric vehicle industry, but more competitive, and this is that foreign competition is growing and it is important and the electric industry is still in its infancy.

Tesla, for example, already has its "most affordable" or Model 3 model on the market, but above all, traditional manufacturers They are already launching their new electrical products. The Audi e-tron, the Mercedes-Benz EQC, the Volkswagen ID.3, the Hyundai Kona EV or the Peugeot e-208 and Opel Corsa-e are some examples of zero emission models that have already been added or will be added soon for other electric vehicles available in the market for some time (BMW, Nissan, smart …).

A5 anywhere

Autos U5, the electric SUV of 400 euros per month.

Limiting the many emerging companies

In any case, the new measures, even in draft form, will complement the regulations already implemented this month, which contemplate that only qualified or eligible companies outsource your productionAlthough it is unclear what the Chinese government means by "apt."

This maneuver to outsource the production of electric vehicles has been the fastest route used by emerging to market electric cars as fast as possible, hoping to build their own factories, which obviously suppose a huge investment.

NIO Inc., for example, is the largest electric start-up in China and has sold 16,461 cars since 2017, but its cars are produced by Anhui Jianghuai Automobile Group when the company completes the construction of its factory in Beijing. Its most interesting model is the NIO ES6, which promises 510 kilometers of autonomy.


SF5, a Chinese sports utility with 480 kilometers of autonomy.

Among the measures considered are the need for companies that want to outsource their production to invest in R & D in China at least half a million euros (4 million yuan) in the last three years, and have global sales of pure electric power, at least 15,000 units the last two years.

In addition, these new rules could also limit such third-party manufacturing contracts to at least three-year agreements and at least 50,000 copies. In addition, emerging companies will not be able to sign production agreements with more than two car manufacturers.

Although measures are still in the air, most established electrical manufacturers they are already benefiting from the stock market with this Chinese government announcement. China's largest pure electricity company, BAIC Motor Corporation, grew 3.9 percent on the Hong Kong stock exchange on Wednesday, while Geely rose 4.2 percent.

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