China has licensed nine electric-car plants, more than U

China has licensed nine electric-car plants, more than U.S. has today

BYD e6 electrified taxi in service in Shenzhen, China

Quick trivia question: how many plants are there in the United States presently building electrified cars?

To be generous, we’ll permit both battery-electric and plug-in hybrid models. Any idea?

The response turns out to be four.

Meantime, China—which has a long-term aim of predominant the world’s electric-car sector—has now licensed nine separate electric-car plants.

That factoid comes via NEVS, the Chinese company using some of the remnants of the old Saab brand to build electrified cars.

It has just inked a deal to develop and build electrified cars jointly with Iconiq, one of dozens of existing Chinese automakers.

Saab 9-3 EV electrical prototype shown by NEVS, 2014

Saab 9-3 EV electrified prototype shown by NEVS, 2014

NEVS starts production of two thousand fourteen Saab 9-3

An significant step in the deal was passed when the Chinese government granted the pair its ninth license for an electric-car assembly plant.

To understand what that licensing process represents, and how earnestly outsiders should take the granting of such a license, we reached out to an old China forearm.

Michael Dunne, of the consultancy Dunne Automotive, has more than twenty years’ practice in the market. He wrote:

Chinese officials love to use licenses to form their industries, and the electric-car sector is no exception. The government gets special powers derived from granting licenses:

  • Licensing creates the perception of scarcity: companies jostle frantically for approval before the “door” closes. Until China joined the World Trade Organization in 2001, China had granted infrequent auto-production licenses to only a handful of foreign players: Volkswagen, Jeep, GM, Honda, Suzuki, and Peugeot.
  • Officials get to determine who is permitted to play the game. Just ask Google or Facebook how that works.

Venucia E30 (Chinese version of Nissan Leaf electrical car), Guangzhou Auto Display [photo: ChinaAutoWeb]

  • By limiting the number of players, the industry should get to scale sooner.
  • Licensed players are members of a privileged circle. Benefits comes in the form of subsidies, exemption from quotas or EV purchase mandates.
  • Because government agencies and city-owned taxi fleets are major buyers of EVs, a license starts to look like a purchase order.

In other words, the granting of electric-car assembly-plant licenses lets the government reduce the number of players to boost efficiency, conveys official imprimatur and an incentive for other government figures to buy the cars, and boundaries the potential for non-Chinese companies to direct the country’s auto industry.

Oh, those four electric-car assembly plants in the U.S.?

The highest-volume one to date is the Tesla factory in Fremont, California, which built slightly more than 80,000 vehicles last year. That number is expected to soar when the Tesla Model three goes into production.

2014 Tesla Model S in China

Then there’s the large Nissan facility in Smyrna, Tennessee, where the Leaf is built alongside various gasoline models.

Eventually, there’s a pair of GM plants in Michigan.

Those are the Orion Township plant where the Chevy Bolt EV is assembled, along with the Chevy Sonic subcompact, and the Detroit-Hamtramck plant where the Chevy Volt is built interspersed with several other vehicles. (That plant also built the now-defunct Cadillac ELR.)

China has licensed nine electric-car plants, more than U

China has licensed nine electric-car plants, more than U.S. has today

BYD e6 electrical taxi in service in Shenzhen, China

Quick trivia question: how many plants are there in the United States presently building electrified cars?

To be generous, we’ll permit both battery-electric and plug-in hybrid models. Any idea?

The response turns out to be four.

Meantime, China—which has a long-term purpose of predominant the world’s electric-car sector—has now licensed nine separate electric-car plants.

That factoid comes via NEVS, the Chinese company using some of the remnants of the old Saab brand to build electrical cars.

It has just inked a deal to develop and build electrified cars jointly with Iconiq, one of dozens of existing Chinese automakers.

Saab 9-3 EV electrified prototype shown by NEVS, 2014

Saab 9-3 EV electrical prototype shown by NEVS, 2014

NEVS starts production of two thousand fourteen Saab 9-3

An significant step in the deal was passed when the Chinese government granted the pair its ninth license for an electric-car assembly plant.

To understand what that licensing process represents, and how earnestly outsiders should take the granting of such a license, we reached out to an old China palm.

Michael Dunne, of the consultancy Dunne Automotive, has more than twenty years’ practice in the market. He wrote:

Chinese officials love to use licenses to form their industries, and the electric-car sector is no exception. The government gets special powers derived from granting licenses:

  • Licensing creates the perception of scarcity: companies jostle frantically for approval before the “door” closes. Until China joined the World Trade Organization in 2001, China had granted infrequent auto-production licenses to only a handful of foreign players: Volkswagen, Jeep, GM, Honda, Suzuki, and Peugeot.
  • Officials get to determine who is permitted to play the game. Just ask Google or Facebook how that works.

Venucia E30 (Chinese version of Nissan Leaf electrified car), Guangzhou Auto Demonstrate [photo: ChinaAutoWeb]

  • By limiting the number of players, the industry should get to scale sooner.
  • Licensed players are members of a privileged circle. Benefits comes in the form of subsidies, exemption from quotas or EV purchase mandates.
  • Because government agencies and city-owned taxi fleets are major buyers of EVs, a license starts to look like a purchase order.

In other words, the granting of electric-car assembly-plant licenses lets the government reduce the number of players to boost efficiency, conveys official imprimatur and an incentive for other government bods to buy the cars, and boundaries the potential for non-Chinese companies to direct the country’s auto industry.

Oh, those four electric-car assembly plants in the U.S.?

The highest-volume one to date is the Tesla factory in Fremont, California, which built slightly more than 80,000 vehicles last year. That number is expected to soar when the Tesla Model three goes into production.

2014 Tesla Model S in China

Then there’s the hefty Nissan facility in Smyrna, Tennessee, where the Leaf is built alongside various gasoline models.

Ultimately, there’s a pair of GM plants in Michigan.

Those are the Orion Township plant where the Chevy Bolt EV is assembled, along with the Chevy Sonic subcompact, and the Detroit-Hamtramck plant where the Chevy Volt is built interspersed with several other vehicles. (That plant also built the now-defunct Cadillac ELR.)

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