The day before President Trump hurt green technology development in the US by abandoning the Paris agreement, Angela Merkel was lobbying China’s prime minister Li Kegiang for favourable treatment for German electric vehicles in China.
China is the world’s biggest market for electric vehicles with 507,000 sold in the country last year – about 1.8% of the total 28 million vehicles sold in China last year.
China is set on becoming the world leader in EV production which has been driven by government subsidy. The government money and the huge market have brought down the cost of manufacturing EVs.
China wants to increase the EV percentage of total domestic vehicle sales to 8% next year, 10% by 2019 and 12% by 2020. In 2025, China plans to make 2 million EVs a year.
VW, the market leader in car sales into China, sold only a few hundred EVs into the China market last year whereas Chinese manufacturer BYD sold 96,000.
If the German car makers don’t get into the China market in a significant way they could be overtaken by the Chinese manufacturers in both EV technology and reducing production cost.
In Berlin this week, Daimler agreed with the Chinese car manufacturer BAIC to set up an EV manufacturing line at the Mercedes factory in Beijing.
Meanwhile, with the political pressure now off US car manufacturers to go electric, the momentum to build and buy EVs in the USA may slacken.
In disgust at President Trump’s decision, Elon Musk, the CEO of US EV maker Tesla, resigned from all his presidential advisory committees.