- China wants electric vehicles (EVs) to represent 60% of all new vehicles by 2035.
- The country now boasts 1 million EV charging stations.
- S. automakers such as Tesla are setting their sights on China’s EV market.
“No sun again today. Is it always cloudy here?” I asked the bartender busily pouring me a vodka martini, extra dirty.
“Those aren’t clouds blocking out the sun, sir. That’s smog.”
The year was 2007. I was standing at the rooftop bar of the Park Hyatt hotel in Beijing, China. In less than a year, the city would host the 2008 Summer Olympics.
At the time, China’s gross domestic product was growing at a whopping 14.2% per year.
China was building a city the size of Houston, Texas, every single month.
Annually, tens of millions of subsistence farmers were migrating to cities to find jobs in factories and construction.
Once there, a main method of transportation was a gas-powered motorbike. Hordes of these bikes zipped around the city, adding to the air and noise pollution.
And pollution from all this construction and new arrivals resulted in disgusting smog — which my bartender pointed out — throughout Beijing.
In fact, Beijing was consistently ranked as one of the most polluted cities on the globe.
When the Olympics arrived in 2008, the International Olympic Committee warned that athletes whose events lasted longer than one hour could be at risk from the combined effects of pollution, heat and humidity.
The world’s top men’s marathon runner, fearing for his health, pulled out of the event entirely.
Then things changed.
The World’s Largest Market for Electric Vehicles
A lot can happen in a decade.
Beijing is no longer considered one of the world’s most polluted cities. In fact, it’s not even in the top 200.
One of the ways the government battled pollution was by investing heavily in electric vehicle (EV) technology.
China wanted to be the dominant market for EVs. It invested $60 billion in battery technology, EVs and charging infrastructure.
The Chinese set a target to have EVs represent 60% of all new vehicles by 2035.
They spurred demand through heavy subsidies for EVs and a reduced number of licenses available for gas guzzlers.
This year, they imposed an emissions credit system, which requires automakers to either reduce emissions below a certain level or pay for credits from other companies.
This law compels both domestic and international auto manufacturers to become greener.
The potential payoff is threefold:
- Cleaner cities and air.
- Less reliance on imported oil.
- Leadership in a new high-tech industry.
So far these policies have paid off. They’ve made China the world’s largest market for EVs.
China Has More EV Infrastructure Than Anyone
In the first half of 2019, 56.9% of EVs in the world were sold in China. The U.S. was third with 13.2%.
(Source: The Edison Electric Institute)
China has also built more infrastructure for EVs than anyone.
The country boasts 1 million EV charging stations, according to data released by the National Energy Administration’s China Electric Vehicle Charging Infrastructure Promotion Alliance.
For comparison, in the U.S., there are only 20,000 charging stations.
That’s why China is expected to sell 1.6 million EVs in 2019, which represents a 30% increase from the previous year.
It has also replaced the noisy motorbikes with quiet electric versions. China has 99% of the world’s 250 million electric two-wheelers.
It’s clear to see why automakers are setting their sights on China as the biggest market for EVs.
Foreign Manufacturers Are Witnessing Rapid Growth
Despite the government’s support, the largest Chinese EV companies are stumbling.
Nio is struggling with battery fires and weak sales.
BYD Auto, which is backed by Berkshire Hathaway CEO Warren Buffett, reported an 86% drop in earnings.
But Chinese EV consumers are warming up to foreign manufacturers.
Audi already sells 30% of its cars in China. And it hopes to raise that to 40% in the next few years with the release of EVs and hybrids.
Ford and General Motors are expected to launch EVs specifically for the Chinese market this year.
But no bigger bet has been made on China’s EV market than Tesla’s Gigafactory 3. It’s the first EV factory wholly owned by a foreign automaker.
Elon Musk’s EV company has witnessed rapid growth in China over the last five years. Earlier this year, Tesla reported 40% year-over-year sales growth in the Chinese market.
But that growth will rapidly increase in the next two years as Tesla starts production at its Gigafactory 3 in Shanghai, which is expected to produce 3,000 cars per week by the end of the year.
Tesla also plans to double its number of service centers to 63 and grow its Supercharger network by 39% in the next year.
The Future of Automobiles
Perhaps the next time I’m viewing Beijing from above, I’ll notice Teslas all over the place.
But it won’t just be in China. EVs are a trend that I see emerging across the globe.
To take advantage of this trend, I recommended my Automatic Fortunes readers buy one of the pioneers of the EV movement.
I see this stock climbing as high as 400% in the next four years.
To find out how you can jump into this trend — and join China in its exciting EV future — click here.
Editor, Automatic Fortunes
P.S. I’ve discovered the master technology behind one of the biggest tech trends we’ve seen so far. It’s bigger than artificial intelligence, 5G and the Internet of Things … combined. Even Warren Buffett has personally invested a massive $10 billion in this master technology. Click here for more details.