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China’s Very Ambitious Transportation Revolution

Consumption

The proverb goes that when China coughs, the world catches the flu. The unprecedented economic development of the world’s most populous country has led to a steep increase in national and personal wealth. An obvious beneficiary of economic growth is the automotive industry. Car ownership has grown to almost 58 per 1000 citizens and, currently, approximately 340 million vehicles are on Chinese roads, including 250 million cars.

China’s policies regarding its domestic automotive industry will have a profound effect on national and international suppliers. Beijing intends to replace its internal combustion powered car fleet by 2050. The gradual shift will significantly impact two industries: the automotive and energy sectors.

Beijing’s motivations

The historical economic development of China has led to industrialization and a severe pollution problem. The Chinese population is becoming increasingly vocal in its displeasure vis-á-vis the Communist party regarding the state of the environment. Beijing, therefore, has announced a ‘war on pollution’‘ to clean the sky, soil, and water towards acceptable levels. Phasing out conventional vehicles in favour of new technologies such as EVs fits into this agenda.

Furthermore, Chinese policymakers also intend to improve the Asian country’s energy security. China surpassed the U.S. in 2017 to become the largest importer of oil in the world. Despite the focus on EVs and other technologies, most cars are still powered by petroleum products. Dependence on foreign producers is a significant risk due to severe price hikes and supply disruptions.

Related: Hong Kong Billionaire Loses $20 Billion In Canadian Oil Sands

Technological leadership is also on Beijing’s mind. The ‘Made in China 2025′ strategic plan highlights the need to become a vital producer of the technologies of the future, which includes EVs. According to Hidetoshi Kadota of Nissan Motor, “production of EVs without Chinese-made parts is already no longer possible.” By reducing the incentive for conventional cars, Beijing intends to motivate companies to start investing in new technologies to power ‘China’s national policies.

The implications

Currently, automobiles account for 42 percent of China’s oil consumption. Reducing the use of petroleum products will significantly impact the global oil sector. According to researchers at Stanford University, peak oil will occur around 2035, after which consumption will decrease gradually. The replacing of China’s conventional vehicles by EVs or hydrogen fuelled vehicles will impact global consumption. Therefore, peak oil could come earlier than anticipated.

The shift towards competing technologies is already impacting alternative sectors such as the mining industry. The production of batteries require large volumes of, amongst other, lithium and cobalt, which can be found in a limited number of countries. Increasing demand could push up prices.

Besides the obvious economic consequences, China could also become more engaged on a political level. To secure a steady flow of resources, Beijing’s presence in resource-rich countries will grow comparable to its interests in the oil industry.

From planning to execution

The sheer size and importance of the automotive industry in China require a meticulously planned transition. The disparity between the level of economic development of the coastal regions compared to less developed areas such as the western province of Xinjiang, adds another layer of complexity.

These and other challenges complicate China’s ability to leapfrog into the 21st century with new technologies. Beijing will, therefore, probably maintain a multi-tiered phase out plan under which regions and cities are divided into four tiers based on economic development and level of pollution.

First, in line are the big metropolises with a severe pollution problem and substantial economic output. Second, regional capitals and cities in China’s ‘Blue Sky ‘War’ areas could receive the necessary attention such as Xi’an, Chongqing, and Chengdu. Lastly, it will be the turn of the economically less essential and sparsely populated regions such as Tibet.

China’s island province Hainan has already become a green pioneer with extended plans to transform its car fleet. The area plans to phase out conventional cars entirely by 2030. However, it is highly unlikely that the mainland will follow suit due to the size of the country.

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18 Comments on "China’s Very Ambitious Transportation Revolution"

  1. Kenz300 on Thu, 22nd Aug 2019 10:09 pm 

    China is going electric.

    Electric cars, electric trucks, electric buses, electric scooters all transportation is going electric. No noise, no emissions.

    Gas and diesel are OLD polluting technology.

    China has mandates in place to phase out gas and diesel in less than 10 years and replace them with all electric vehicles.
    Every auto manufacturer in the world is making electric vehicles for the China market.

    Soon the new electric vehicles will be in Europe and then the rest of the world. Tesla Model S, X and model 3, Nissan Leaf, Renualt Zoe, Audi Etron, Jaguar Ipace and others are already being sold with more models to come.

  2. Anonymouse on Thu, 22nd Aug 2019 11:12 pm 

    Why dont you go back to wherever it is you come from KenZtard. Your electric-hydrogen-too-many-kids shtick was old when you gave up and left last time, and know what has changed between then and now?

    Nothing.

    So go away, and stay that way this time. As in permanently.

  3. Cloggie on Fri, 23rd Aug 2019 12:20 am 

    “Why dont you go back to wherever it is you come from KenZtard.”

    Impotent anonymouse imagining that he is the local bouncer. And very impotent at that. As with everything else.

    I like Kenz300, every post is a home run.

    Still puzzled though where that “300” stands for.

  4. Mark in St Louis on Fri, 23rd Aug 2019 12:43 am 

    Nearly all analysts forget one thing about EVs: The energy to power them must come from some source, being either coal, natural gas, or renewables.
    So where does China get the energy for powering 200 million EVs? I don’t think they have the wind resources like the US, so that the conversion to EVs for China will mean extending their reliance on coal for decades.

  5. Davy on Fri, 23rd Aug 2019 1:19 am 

    “Mark in St Louis on Fri, 23rd Aug 2019 12:43 am I don’t think they have the wind resources like the US, so that the conversion to EVs for China will mean extending their reliance on coal for decades.”
    Actually, China has some of the best wind resources in the world and are set to have a record amount o wind power production. Still, coal will be responsible for a significant amount of their EV power for years.

  6. anon on Fri, 23rd Aug 2019 2:23 am 

    in a few more years they will all be on foot, scavenging for anything edible, and cursing all those who turned their once green and fertile country into a poisoned concrete wasteland.

  7. Robert Inget on Fri, 23rd Aug 2019 11:19 am 

    Trump pledged to retaliate against China’s latest round of tariffs, which sent stocks into a tailspin. He wrote in a tweet that the US doesn’t need China, that the country would be “far better better off without them.”

    “‘Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..your companies HOME and making your products in the USA,” the president wrote in a tweet.

  8. Robert Inget on Fri, 23rd Aug 2019 11:23 am 

    **Our great American companies are hereby ordered to immediately***

    ORDERED?

    By exactly whom, King Trump?

    Someone, HELP US!

  9. Robert Inget on Fri, 23rd Aug 2019 11:34 am 

    One problem, there are no adults remaining in the W.H.
    No one to keep Trump from imploding.
    I’ve had this feeling many times. But, maybe this time? Trump seems to be overstepping every
    norm. It’s time for him to get some rest.

    His 16, yes 16 lawyers he hired to protect his tax returns are coming up blank.
    The State of NY is waiting on one more court ruling to hand over New York State returns.
    This could very well be upsetting Our Dear Leader.

  10. elQuadashianalameriki-akaFmr on Fri, 23rd Aug 2019 11:42 am 

    robert inget pbuh, when are you going to get used to not winning? only then you will be happy. you have another chance to unseat Big Grab in 2020. Don’t fall for tulsi or yang (william hung in the making) because that’s when you’re taken by the scheming Big Goat Pbuh, who is a big muzzie lover.

  11. Chrome Mags on Fri, 23rd Aug 2019 4:48 pm 

    I’m becoming a huge fan of China! Not only do they not let Trump push them around like most R politicians and other countries not in a position to do much but appease him, but China keeps coming up with new ways to punch Trump’s ticket to Palookaville, where he belongs after he loses the next election (unless vote totals are hacked again in swing states to give it to him, and R governors in those states reject recounts). China is incensing him into fits of rage.

    I love it!!!!!!!!!!!!!!!!!!!!!!!!!

  12. elQuardashianalameriki-akafmr on Fri, 23rd Aug 2019 5:30 pm 

    you’re a fan of china but you still enjoy modern conveniences that supertards built for me to enjoy. and i’m humble and thanks our supertards for that. juan the big muzzie lover is the same way, he could park his boat in south america but he wouldn’t leave and wouldn’t return my bean bag either. you must like execution vans so much and open pit defecation must also be your thing.

  13. Kevin Cobley on Fri, 23rd Aug 2019 7:27 pm 

    China’s “transport revolution” is based on “Metro Rail” mass transit it’s Government policy that all major cities are required to have a Metro rail stations within 600m of every resident.
    Shanghai, Beijing and Guangzhou will achieve this by 2030.
    This is what a “first world” country does.

  14. Famlin on Sat, 24th Aug 2019 4:51 pm 

    Vehicle population increased from < 50 million in 2000 to 340 million now in China. At this rate, they will have 1,000 million ( 1 billion ) vehicles in year 2040.
    If USA consumes 20 million b/d of oil, then China will consume 90 million b/d with that many vehicles. There is no way the worlds oil consumption will increase so much to cater to their needs. So the smarter chinese are moving fast into electric vehicles and already they have become world #1.

    With the subsidies being drastically cut, the automakers have started selling at a lesser cost since the battery prices have gone down. With higher range, pure BEVs have started taking bigger share from the plugin hybrids and this will reduce their oil consumption drastically.

    China also has 6 million NGVs (natural gas vehicles), besides 10% of the fuel consumed is Methanol which is derived from Coal/Natgas. Methanol is blended into gasoline and sold as M15 just like E10, E15 in USA.

  15. Famlin on Sat, 24th Aug 2019 4:52 pm 

    Electric vehicles travel 3 times more than gassers, so even if they are powered by coal, they are still more efficient. Coal emits only 50% more pollution than oil, but if they go 200% more distance, then the pollution emitted is only 50% that of an oil powered gasser.

    No wonder the EVs are accelerating fast. And todays news is Chevy Bolt EV-2020 will have 259 mile range which is 21 more than previous year without any price increase. This type of gradual increases have made EVs cover longer range without much price increase.

  16. Davy on Sat, 24th Aug 2019 11:26 pm 

    Vehicle population increased from < 50 million in 2000 to 340 million now in China. At this rate, they will have 1,000 million ( 1 billion ) vehicles in year 2040.
    I seriously doubt China will have that many vehicles by 2040. The world has around 1BIL now compareable GDP’s and time frame say this won’t happen. China is landing hard from years of excessive growth. People don’t realize economic activity must bring a productive return long term not just short term. China is plagued with over capacity in many industries. This is part of the reason for the Belt Road initiative. They want to export population and economic capacity. China has huge debt both on and off the radar screen. Much of this debt is corporate and in dollars. Companies and Banks are struggling to meet bond payments. That is not a sign of rapid growth potential. Now there is the trade war and an economic ceiling of diminishing debt productivity they are bumping up to.

    “So the smarter chinese are moving fast into electric vehicles and already they have become world #1.”
    There is again the cost thing to consider with EV’s. China is a leader but EV’s are not a transitional technology yet with power supply or technology. There are many issues that remain. China is at or near peak coal and oil. There ability to rapidly grow with transport is likely now set to diminish.

    “With the subsidies being drastically cut, the automakers have started selling at a lesser cost since the battery prices have gone down.”
    Battery prices have not gone down much and there is still the issue of replacement cost making EV’s second life expensive. Range is still puts EV’s at a disadvantage with recharge time and there remains the issue of charging ports. EV’s are still a niche technology in my opinion. The easy part is building them the hard part is the application of the technology to the road.

    “ With higher range, pure BEVs have started taking bigger share from the plugin hybrids and this will reduce their oil consumption drastically.”
    I am not aware of china Having that many hybrids that would reduce their oil consumption if replaced.

    “China also has 6 million NGVs (natural gas vehicles), besides 10% of the fuel consumed is Methanol which is derived from Coal/Natgas. Methanol is blended into gasoline and sold as M15 just like E10, E15 in USA.”
    6million isn’t much and that market is likely stagnant. China does not produce much gas. It is importing gas from Russia, Asia, and LNG but that is not huge yet either in relation to total energy use. Coal still dominates China. Renewables are significant but not transitional yet. China has the cart in front of the horse with renewables. They build wind and solar assets but grid integration is an issue in several areas because of the lack of storage. I have read of stranded renewable power. They are forecasted to be a leader in battery backup but this tech is only short term. Real storage that is transitional is the longer-term kind both seasonal and over weeks. This kind of storage comes from large projects like pumped hydro. There is not a lot of this yet in China I have read about. It takes years to get large projects built.

  17. Davy on Sat, 24th Aug 2019 11:51 pm 

    “Electric vehicles travel 3 times more than gassers, so even if they are powered by coal, they are still more efficient.”
    It would be nice if you had a reference or explained this better. I assume you are talking efficiency. Yes, electric motors are more efficient but batteries and grid issues lower efficiency dramatically. If we could run cars on overhead or road power supply I would agree with the “3 times” but not when you throw in the battery part. I am linking a comment by Antius on 100% renewable fleet in GB as a reference to some of the issues the grid faces:
    “Antius on Wed, 28th Nov 2018 5:54 am”
    “Using the UK as an example, given that I know it and have the data available. According to Wiki, the Tesla 3 consumes 0.14kWh/km, i.e. a 50kWh battery provides a range of 350km. If 10million electric vehicles travel an average of 40km each day; energy consumption would be 56GWh per day, or 20.5TWh per year. That adds about 6% to UK electricity consumption. That is a modest addition to total electricity consumption. Problems emerge if everyone attempts to charge those vehicles simultaneously, creating a huge spike in demand. Pumped storage may be a good solution to this problem. Open cycle gas turbines are a cheaper, though dirtier, option. Demand management is a more efficient solution all round, if ways can be found to implement it.”

    “Coal emits only 50% more pollution than oil, but if they go 200% more distance, then the pollution emitted is only 50% that of an oil powered gasser.”
    I think this statement is not valid. 200% more distance of EV’s to ICE vehicles???

    “No wonder the EVs are accelerating fast. And todays news is Chevy Bolt EV-2020 will have 259 mile range which is 21 more than previous year without any price increase. This type of gradual increases have made EVs cover longer range without much price increase.”
    EV’s still don’t have the range needed with charging port accessibility and fast charging. There are economic limits to all of this. I see EV’s struggling to gain vehicle market penetration. Currently they are a play toy of the Rich. Norway is making great strides but Norway has the population of a mega city and huge hydro power potential. Trying to give EV’s a global foot print is not going to be easy especially considering renewables have not been built out yet that dramatically.

  18. Davy on Sun, 25th Aug 2019 1:12 am 

    “Texas Firm Claims To Have Developed The “Holy Grail” Of Electric Motors”
    https://tinyurl.com/y6qgflwh zero hedge

    “Vehicles with HET motors will eliminate transmission systems, will increase range by more than 10% from a current battery size while allowing the vehicle to have more power and torque. Linear Labs says the new motors can produce 2 to 5 times more torque output of similarly-scaled conventional electric motors, and twice the power output. Here’s the breakthrough technology explained by CNET: “HET uses four rotors rather than the single unit found in many electric motors that acts on the motor’s coils to create rotation. The number of coils that the rotors interact with is variable thanks to endplates that can be rotated independently so that they weaken the magnetic fields acting on them, allowing the HET to be infinitely variable for power and torque.”

    “HET generates a lot of torque at lower RPMs than a conventional permanent magnet motor, which means it can be constructed out of less expensive and widely available iron ferrite magnates, rather than expensive neodymium. Neodymium is used in motors where maximum torque is produced at high speeds, but it works similarly to iron ferrite at lower RPMs. This breakthrough would allow US EV manufacturers to ditch sourcing of neodymium from China, and use cheaper and widely available ferrite magnates from other countries. Linear Labs is currently building prototypes of its new motors for use in various industries. The first transportation application will be in micro-mobility (scooters, electric longboards, e-bikes, and motorcycles) next year, followed by electric cars in 2021.”

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