Chinese quota pushes carmakers to rush to their electric future
28 November 2017
28 November 2017
Although the Chinese electric vehicle quota scheme has been pushed back by a year, not coming into force until 2019, vehicle manufacturers are still pushing to ensure they are ready and do not lose out in the world’s biggest automotive market.
Toyota has been vocal in its need, rather than its want, to go into the electric vehicle (EV) market, and plans to introduce models running on electric power in China starting in 2020. The company is considering selling battery-powered models developed by its local partners under the Japanese marque.
Selling electric vehicles in China will mark the return of Toyota into the EV market after it halted production of the RAV4 EV in 2014. Toyota President Akio Toyoda said in September the company is a ′little bit late’ in the EV segment.
Japan’s biggest automaker said it will expand a feasibility study for selling its Mirai fuel cell vehicle in China to include commercial vehicles such as buses. The company will also introduce a pair of compact crossovers, the C-HR and IZOA, from the middle of next year, a key segment of the world’s biggest auto market where Toyota currently offers no models.
Meanwhile, at the Guangzhou automotive show, Daimler said that it will produce its first electric car in China in 2019. Volkswagen Group said at the event it will invest more than €10 billion with its partners to develop a range of new-energy vehicles in the country. Ford has also said it will invest €641 million with a Chinese partner, while Honda announced in September that it will launch a China-specific EV in 2018.
The Financial Times reports that industry experts are voicing concerns that Chinese quotas will hit manufacturer profits ″” and that some carmakers may not survive. ′There will be pain in a coming war of attrition,’ Michael Dunne, an analyst based in Hong Kong who believes the mountain of government-mandated EVs could spark a shakeout in the industry as companies lose money, told the newspaper. The wealthier EV producers and those with access to state funds would remain, he said, ′while the less well-endowed fall away.’ Bernstein, the brokerage, said in a recent report that the new rules adopted in September would push car brands in China, including global groups such as Volkswagen (VW) and GM, to produce more than two million EVs by 2020, compared with 336,000 passenger EVs sold in 2016.
The addition of a compact crossover should give Toyota a boost in China, where it trails Japanese peers Nissan Motor and Honda even as sales at all three got help this year from troubles at Korean rival Hyundai Motor. Honda is challenging the leadership Nissan has held since 2009, partly on the success of the XR-V and Vezel small SUVs.