China’s comparative advantage over the US and the EU in electric power-driven transport vehicles
During the last decade in China, huge investments have been made by the
Chinese government in the field of public bus electrification, taxis and private-use
cars, leading China to pioneer today technological in the field of electric
powered batteries, infrastructure and sales of all types of electric vehicles.
More than 400000 electric buses are currently circulating throughout China,
covering 98% of urban transport needs, when in the EU there are 2400, USA 700,
UK 377, India 400 and in the rest of the world 800 respectively.
The basis of this amazing Chinese technological progress
China’s technological advances in this field were achieved due to the
utilization as a basis for developing a Chinese multinational company named
Build -Your -Dreams (BYD) based in Shenzhen. The company itself initially
started in 1995 as a battery company, and in its course, it was strengthened
thanks to the brave and powerful subsidies from the Chinese government.
BYD Company in 2003 entered in the automotive sector. It currently employs
220000 employees and cooperates with Daimler AG and Mitsubishi Motors. It
produces the Denza car, while it specializes in the production of cars, trucks,
buses and lifting mechanisms based on both the internal combustion engines and
the electric drive. At the same time, it produces hybrid models that they
combine the internal combustion engines with the electric drive.
The world’s largest car market
China is now the world’s largest market in conventional vehicles. At
present, electric vehicles cover 4% of the total market, while the Chinese
government has set a target of reaching 50% by 2025.
The Chinese government in its effort to limit the export of foreign currency
to the car market, with a view to the Chinese automakers gaining an ever
greater percentage of this target set for the replacement of conventional
vehicles in the Chinese car market, has produced a series of measures in this
In particular, it subsidies with a high amount the purchase of electric
vehicles through the reimbursement of excise duty, while delaying and having
made expensive the handling of the registration license of conventional
vehicles within the country. The aim is to facilitate the development of the
new industry of electric vehicles.
The weakness of European automakers
Chinese electric powered cars have begun to be exported to the demanding
European market. The small electric cars of European construction are sold at a
price close to €30000. The European electric SUV will be available with a
selling price of around €50000, while the model of the American company Tesla
is sold close to €100000 in the EU.
At the same time the electric SUV U5 of the Chinese company Aiways will be
placed on the EU market at a cost of €25000!!!!
Even if the European automakers wanted to produce electric cars in bulk in
order to shed their cost of production and of course their selling price, there
are no basic infrastructure number (charging points) in EU member countries to
facilitate the shift of the consumers towards the purchase of such electrically
Member countries such as Germany, France, Poland, Spain and Italy should
have already created more than 100000 charging points on their territory to
trigger mass production of electrically powered cars of European construction
from the European car manufacturers.
The conversion of the EU and the US into Electrically powered vehicles
To quickly pass both the US and the EU in the era of the mass use of
electrification, the whole process must be started from replacement of the
buses, the taxis and creating the appropriate infrastructure.
If thousands of charging points are created both in the territory of each
member country and throughout the territory of the EU, and given the will of
the governments of the EU member countries and the respective US states, then
it should be done and mass replacement of buses in urban transport.
Certainly, the cost of obtaining an electric bus is twice as much as a
conventional bus. This is due to the cost of batteries, which with current
technology have a lifespan of seven-ten years, while the bodywork of electric
buses has a lifespan of around twelve years.
But the fact that the orders of electric buses will be massive, this alone
will lead to lower cost of acquisition.
For the proper operation of electric cars, large and strategically placed
charging areas are required. The prerequisite of all this is to make infrastructure
projects along the road axes to recharge these buses and since they will be
charged within two-three hours and have an autonomy of 200-250 kilometers. At
the same time, fiscal incentives and generous subsidies should be given to
replace the taxi fleet in both the EU and the US.
It is not possible for the EU to boast of sustainable environmental and green development when it is not progressing rapidly to replace the bus and taxi fleet in its territory. In this type of green development direction, all citizens will be involved but will be perceived by all citizens as they will improve their quality of life by reducing air pollution and protecting their health.
Thanos S. Chonthrogiannis is an economist-researcher in the fields of economic research/business planning and strategic planning. His work experience moves in a wide professional field between managerial and advisory roles. He holds a degree in BSc (Econ) in Financial Economics, Birkbeck College, University of London and a postgraduate degree in MSc in Economics & Finance, University of Warwick (UK)