With tougher rules, China wants fewer, but better, electric car makers
Source: Agencies | December 5, 2016, Monday | PRINT EDITION
An Article from the Shanghai Daily news below that highlights why Spodumene/Lithium will be in demand for many years to come and why CXO with a successful drilling program, accelerating to be a miner/ producer and their proximity to Darwin port are beautifully positioned to succeed. China simply wont have enough Lithium to supply this growth without knocking down our doors and that is already happening. Fingers crossed GLTAH
相册
AFTER paying out billions of dollars in subsidies to promote greener cars — and creating a gold-rush among unknown start-ups — China is tightening its grip on the world’s biggest electric vehicle (EV) market to weed out weaker domestic firms.
But some leading local EV makers are, for now, ignoring calls to apply for costly manufacturing licences, preferring to invest in design and technology innovation.
That, analysts warn, could prove costly down the road if they fail to secure permits to make and sell their new cars.
China has rapidly built the world’s largest EV market, throwing money — subsidies of US$4.5 billion last year alone — at a sector it hopes will lower fuel imports, improve big city air quality and create technological champions.
Subsidies, paid to the manufacturer for each car sold, can be worth more than a third of the sticker price of a model like BYD’s e6. Subsidies are due to be phased out over the next few years.
Automakers have responded with a slew of electric cars, with new models from SAIC Motor and Chongqing Changan Automobile at the Guangzhou Auto Show, while General Motors unveiled a concept car previewing its new-energy plans at the event.
Beyond the traditional automakers, Beijing opened the sector to investment by technology firms and others. EV start-ups such as LeEco, Future Mobility and WM Motors have raised hundreds of millions of dollars to develop green car technology.
Sales of new-energy vehicles (NEVs) in China — including all-electric and plug-in hybrid models — totalled 337,000 in January-October, up sharply from last year, but still some way short of China’s target to have 5 million NEVs on its roads by 2020.
In recent months, authorities have cracked down on firms making substandard products and gaming the subsidy schemes through phantom car sales. State support has been tightened and there are new rules for companies applying for a licence to make all-electric cars. These include intellectual property rights; research and development; sales and after-sales support plans; trial production of at least 15 cars; and more. Separately, new safety rules for NEVs, such as battery testing, will make life tougher for weaker firms.
Since March, just a handful of companies, all auto industry veterans including those with ties to BAIC Motor and Chery, have been granted licences — around a quarter of the total applications, auto executives say.
Some of the leading tech and start-up companies, including those backed by Tencent and Foxconn, are holding off from applying, saying they are either still some way from actually making cars or expect the rules to change.
Jack Cheng, head of manufacturing at NextEV, which is backed by Tencent and Hillhouse Capital, said the company would apply for a licence — but only after it makes its first car, delaying investing directly in manufacturing and instead teaming up with traditional automaker Anhui Jianghuai Automobile (JAC) .
Wang Chao, chairman of EV start-up Kaiyun Motors, said that instead of pitching directly for a licence, he preferred to buy a struggling petrol car maker whose licence can also be used to make electric vehicles. That ‘grandfathering’ process allows firms to produce cars in existing factories, though they would need permission for any new plant.
“You can spend tens of millions and get a licence, but all you get is a licence. If you buy a company, you also get a factory,” Wang said.
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