Electric vehicles are here to stay, but with US gas prices staying historically (and questionably) low, many would-be EV buyers have stuck with internal combustion. The everyday consumer seems to be waiting for that magical day in 2018 when Tesla rolls out the first Model 3. We won’t really see massive adoption until 2020, so how can the industry sustain itself? Fortunately, for electric vehicles one country is already EV crazy.
China has mobilized its workforce incredibly fast. It wasn’t that long ago that a good majority of its population were farmers, and most couldn’t even dream of owning a car. Things are different now, with a steadily growing middle-class hungry for modern luxuries China now leads the world in automotive sales. While things seem well enough emissions from those cars have done a number on the breathable air and the Chinese government has had enough.
Back in 2013 EVs barely measured on the radar for a suddenly thriving auto market that had quickly become the largest in the world. However as automotive sales rapidly increased so did airborne pollution, and smoggy cityscapes that are now synonymous with China hit record highs. Civil unrest finally forced the government into action by (among other things) significantly subsidizing the cost of EVs. As you can see in the chart above China went from an EV market afterthought to the industry leader nearly overnight.
Along on that wild ride is automotive manufacturer most in the US have never heard of, BYD. The Chinese based car company produces more EVs than any other company. BYD was the first to deliver a truly zero-emissions ecosystem to the world in 2011 (as the only EV manufacturer that also builds low-cost solar panels and environmentally friendly energy storage to power fuel-efficient New Energy Vehicles). If this sounds familiar it's because Elon Musk just announced a nearly identical “master plan” for Tesla Motors.
Tesla may have a large technological advantage but it has no intention of resting on its laurels, or for that matter, soley the US auto market. Over the past three years Musk and Tesla have made a concerted effort to win the Chinese market. Dedicating massive resources to win over the public, if you need proof look no further than the Model X’s bioweapon defense mode. While laughed off as a fun aside here in US, in China this is a huge selling point and one that speaks volumes to Tesla’s future. Selling EVs is an important start to getting the market going, but infrastructure is the true key to ensuring that they truly take off.
Rapid Infrastructure Build-Out
Tesla recognized early on that if EVs, and Tesla in particular, were going to succeed they would need quite a lot of plugs to be installed. While it may seem simple, adding charging stations in places that were never designed for them is extremely expensive. Look no further than New York City, which has one of the highest interests in electric vehicles but where market penetration is low. Getting enough charging stations in a garage is not so simple. Most of them weren't designed to power vehicles the vehicles that they house, and as such, not a lot of power capacity was built in. EVs need a lot of additional infrastructure to add charging stations on site and that's where things get expensive.
While China is in worse shape from an infrastructure standpoint than the US, they do have one monumental advantage. US building codes are fairly complex and scrutiny is high, especially in places like New York and California, so knocking down buildings or rapidly doing anything is a big ask. In China things are, well, a bit more lax and because of this the Chinese government is able to rapidly build a charging network to help support the growing number of vehicles. While they can ramp up quickly it's already becoming a major pain point as more and more EVs are added.
Technology Made In America, Used in China
It's no secret the Chinese electrical infrastructure is inferior to the US, but that combined with such rapid growth has allowed many ingenious ideas to come to life. China now backs a litany of Venture Capital firms gunning for Silicon Valley talent. Companies like Tencent and Baidu throw substantial dollars behind proof of concept technologies in hopes of solving these issues.
Wireless charging, rapid charging, and smart charging, as well as many (fantastical) EVs will all see full-scale launches in China long before they make waves in the US. Many of these technologies are being installed and tested now on a wide scale thanks to mounting demand and true societal need. It may not feel like it but right now the US and China are in an EV race and while the US leads the charge for now, it's seemingly only a matter of time.
2018 may feel right around the corner, but as you can see it doesn’t take much for China to flip the switch and start rapid production. For the US to maintain its lead in the automotive industry it has to begin taking EV charging seriously.