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Electrification of cars helps establish China as global tech leader
By Frank-Jürgen Richter
Global Times, February 19, 2018

China is reaching quickly toward its promise to the 2015 Paris climate accord to rapidly reduce its world-topping pollution levels. China's central government, the mayors of its massive cities, and the people in these cities are seeing the evidence of lower pollution as blue skies are returning. Some claim that the increase in electric vehicle (EV) usage has brought on the clear skies - but it's more complex than that.

Oil consumption remains a strong leading indicator of economic growth, as oil is needed for all transport - first to carry raw materials to refineries, then finally to deliver goods to the consumers. The IMF has noted growth across all economies, and this implies greater fuel demand, specifically diesel.

The majority of oil is consumed by the transport industry - on the roads, railways and by shipping or aircraft. Russian oil producer Lukoil states specifically the motorization of the population in developing countries is a strong factor for the future demand for oil. For example, in today's China the number of cars per 1,000 people is roughly 100, and most forecasts anticipate the number rising to about 300 by 2030, leading to a substantial car fleet increase. This will need fuel - though some will be EVs powered by batteries, which need to be charged by electricity generated remotely, outside cities. This power will be more frequently generated by oil and gas, not coal - though as Chinese economic growth continues, the government has had to commission new coal-fired electricity generators, replacing older and dirtier systems.

In terms of pollution, all is not lost, as fuel oils have become much cleaner since 1990. The quantity of PM2.5 particles has been reduced, with the larger PM10 particles also being cut. The average of 60 percent reduction equates to a cleaner atmosphere and to a reduction of chronic illness as not only particulates but all pollutants have been reduced, especially the ozone-creating nitrogen-based exhaust gases. This is partly thanks to new standards for oil production quality, and also vehicle exhaust emission controls.

As modernization of factories eradicates old polluters and moves firms away from cities, EVs represent the greatest benefit to city-center pollution reduction. Perhaps it is not surprising that China is the world's largest producer of EVs. Globally, new registrations of electric cars hit a record in 2016 with over 750,000 worldwide, with China accounting for 40 percent of the sales, according to the 2017 OECD/IEA report on EVs.

Both BYD and Tesla note that battery technology is the limiting factor at present and vehicle designers have to balance battery weight against load capacity. A bike does not have space for a large battery, nor has a car if it is to carry four people a reasonable distance (all pure EVs have a short range, usually far less than 500 kilometers between charges). Trucks carry heavy loads and they demand a powerful engine - if batteries are substituted their weight reduces load capacity, so trucks become limited to light-load city deliveries with a range of less than 100 kilometers. By comparison a heavy freight truck can travel 3,000 kilometers between refueling, allowing considerable discretion in routing. The winner for city use is the bus. They have space for battery placement and, even if full of people, there is a limited load. Thus the city EV bus has enough range to deliver passengers backwards and forwards across towns.

But despite this positive outlook, the slow electric car market uptake is largely influenced by the policy environment, according to the IEA. The scale achieved so far is small: The global electric car stock currently corresponds to just 0.2 percent of the total number of passenger light-duty EVs in circulation. But the IEA notes this is still "small beer." Electric vehicles still have a long way to go before reaching deployment scales capable of making a significant dent in the development of global oil demand and greenhouse gas (GHG) emissions despite media and car manufacturers' hype.

China continues to relax its business competition rules, with its aim to remove restrictions on all manufacturing operations, reflecting its economic confidence. In the automotive area it has supported the manufacturing of EVs, by local firms as well as joint ventures with global brands, though a year ago the government clamped down on local, poorly built EVs. However BYD, Kandi and Changjiang are leading Chinese EV producers and JVs with international firms continue to create new NEVs (new-energy vehicles), creating a broad consumer choice.

China is also said to be considering easing joint venture rules for global EV manufacturers operating in China. I am sure China wishes to reduce its dependence on foreign oil and realize the urgency of cleaning up pollution to meet its climate change targets. Also, it believes electrification can help establish the country as a global technology leader - not only in the automotive sector, but across the whole of the transportation industry.

I believe pure EVs represent a positive approach to city well-being by reducing local pollution, as do ride-sharing and working from home policies rather than commuting daily to a city office. It will be the future soon, but not by tomorrow.


The author is founder and chairman of Horasis, a global visions community.


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