The electric vehicle (EV) sector in China, as elsewhere, has benefitted from government support in its early phase as an up-and-coming green industry. The government has been subsidising producers of EVs for public transport, taxis and the consumer market since 2009. Moreover, EV consumers in China have received purchase subsidies from the government for a number of years.

More than 200 billion RMB (US$28 billion) was spent on EV subsidies and tax breaks in China over the 2009-2022 period. In 2022, the country sold more than 6 million EVs, accounting for half of all sales globally.

As the market has matured, government support and subsidies have declined. Purchase subsidies for EV consumers were phased out at the end of 2022. And, according to information gleaned by China Dialogue from an internal industry meeting, it is likely that other subsidies for EV producers, such as tax breaks, will also be phased out.

Can China maintain its frenetic pace of transport electrification as subsidies disappear? And will the rate of carbon reduction in the sector be affected?

Subsidies have accelerated transport towards carbon peaking

As of the end of 2022, carbon emissions from transport accounted for about 10% of China’s total carbon emissions, making it the third largest source after the power sector and manufacturing. The major share of those transport emissions came from road traffic. Electrification has a significant part to play in reducing road transport emissions and enabling peak carbon to come as soon as possible.

China needs to meet domestic demand for new cars with EVs, making sure they capture the new market, while also accelerating the EV substitution of conventional combustion vehicles on the existing market. To this end, a comprehensive set of financial support policies have been rolled out.

At a national level, China uses exemptions on consumption tax to help lower production costs for EVs and fuel cell vehicles. (In China, consumption tax is payable by producers of luxury and environmentally unfriendly goods, including cigarettes and cars). At the same time, consumers have been spurred with purchase subsidies and relief from vehicle purchase tax. China also exempts car owners from vehicle and vessel tax, while providing infrastructural support to optimise conditions for EV usage.

Meanwhile, regional administrations can offer localised subsidies and other incentives to businesses and consumers, complementing central government support and making EV ownership even more attractive. The municipal government in Chengdu, for example, which wants 800,000 EVs on the road by 2025, awards up to 50 million RMB (£5.5 million) to any carmaker that develops and brings a new EV model to market, and also gives individual consumers 8,000 RMB (£890) for acquiring an EV.

How are subsidies being phased out?

The EV industry and market have grown rapidly in China, with policy backing, and for eight years now the country has ranked number one in the world for both production and sales. EV ownership in China at the end of 2022 reached 13.1 million units, accounting for more than half of the global total.

As the market has developed, there has been a winding down of incentives.

One of the best-known was the vehicle-purchase subsidy for EVs, particularly for private buyers. Funded by the state, the policy gave consumers a 4,800 RMB (£530) discount on the cost of a PHEV and a maximum 12,600 RMB (£1,400) on a BEV, enabling them to afford EVs that met the policy criteria.

In 2015, the Ministry of Finance announced that subsidies for models other than fuel-cell vehicles would be reduced year by year, and in 2019 the end was declared on subsidies for BEV passenger vehicles with a range of less than 250km. A further announcement in 2020 specified another reduction, and the subsidy was fully withdrawn at the end of 2022, after 13 years.

Support in the form of purchase-tax exemptions has also tailed off, having been extended three times since launching on 1 September 2014. Under the terms of the most recent of those extensions, the tax-free allowance for an electric passenger car purchased between 1 January 2024 and 31 December 2025 is a maximum of 30,000 RMB (£3,320). For a vehicle bought between 1 January 2026 and 31 December 2027, purchase tax will be levied at 50%, with a maximum allowance of 15,000 RMB (£1,660).

The withdrawal of vehicle-purchase subsidies and phasing out of purchase-tax incentives raises costs for buyers, which could result in higher prices for EVs coming onto the market, deterring consumers.

In fact, some car companies were facing losses even before subsidies were withdrawn. Corporate earnings reports show that most Chinese EV brands have failed to achieve profitability, having relied on the major technology companies and traditional auto manufacturing to establish themselves. Among Chinese carmakers solely selling EVs into the domestic market, BYD is the only one making an annual profit.

Investment in R&D and fixed assets is the main reason for car company losses. As one report points out, EVs require much higher technology R&D investment than conventional vehicles. At a scale of 400,000 vehicles, for example, EV makers invest more than twice as much as producers of conventional cars. Fluctuating prices for battery materials, the rising price of traction batteries and the tight supply of chips also add to the pressure on EV makers.

What determines the phasing out of subsidies?

EV firms may not be profitable as yet, but this is not the key criterion for deciding on the timing for phasing out incentives. A recent article by the lead specialist at China Automotive Technology & Research Center (CATARC), Liu Bin, lists eight key factors affecting the timing for withdrawing vehicle-purchase tax incentives: the scale of the EV market as a share of new car sales; the reaching of price parity between EVs and conventional vehicles; the degree of consumer acceptance; the industry’s stage of development; the government’s financial situation; requirements for environmental protection; the withdrawal of support policies abroad; and the need for domestic economic stimulus.

According to data from the Ministry of Commerce, the share of EVs as a fraction of new car sales increased from one-eighth in 2021 to one-quarter in 2022. Addressing the 2022-2023 annual conference of the China Clean Transportation Partnership (CCTP), Liu Bin said: “It is generally forecast to be over 30% this year and around 40% in 2025. Looked at this way, the gradual withdrawal of vehicle-purchase-tax incentives should be considered without delay.”

In terms of full life-cycle cost of ownership, the gap between EVs and conventional vehicles is shrinking. A report from the International Council on Clean Transportation (ICCT), released in 2021, analysed eight EVs compared with conventional vehicles. It found that lifetime costs for only one of the EVs were on par with those of conventional vehicles in 2019. For the model with the largest gap, the cost of ownership was around £4,700 higher. However, by 2030 lifetime costs for the four BEVs among the eight were predicted to be £4,700-£6,200 lower than that for conventional vehicles. While costs for the other four, which were PHEVs, essentially matched those of conventional vehicles.

Regarding market development, the scale of the EV market will gradually stabilise, with technology and products becoming basically mature and market competition being relatively intense, predicted Liu Bin in his article. Firms will focus more on improving efficiency, reducing costs and seeking competitive differentiation. Liu Bin believes that policy should give more ground to the market at the current stage, allowing incentives to be steadily withdrawn.

However, he also suggested that compared with the scenario of restoring a 10% levy, maintaining vehicle purchase tax incentives beyond 2023 will benefit EV sales to the tune of around 1.3-2.6 million units per year. Continuing to offer EV purchase-tax incentives will significantly accelerate electrification of the transport sector, he wrote. It will also bring forward, from 2030 to 2025, achievement of the 40% target for sales of new-energy-based and clean-energy-powered transportation affirmed in China’s “Action plan for carbon peaking by 2030”, he noted.

What comes next?

“China is still providing support for EVs in terms of policy, but the policy is shifting from carrot to stick”, ICCT researcher Chu Yidan told China Dialogue.

Since 2018, China has operated a “dual-credit” scheme for makers of passenger cars. This involves parallel sets of credits determined by “average fuel consumption” levels and output of “new energy vehicles” (NEVs). Firms that meet the benchmarks are awarded positive credits, while those that fail to receive negative credits. One way for firms to offset negative scores and reach zero is by buying NEV credits from other companies. Those that fail to get to zero have to submit their offset plans to the Ministry of Industry and Information within a specified period, and realise those plans. Otherwise, the offending company is subject to penalties, including suspension from producing and selling high-fuel-consumption products, and from expanding production capacity. To meet benchmarks, carmakers have to produce more, cleaner, and better (having a greater range, for example) EVs. By tightening its policies in this way, China is accelerating its transition towards electrification.

From the corporate perspective, Liu Bin spoke at the CCTP conference about how reducing the green premium on the price of EVs is the key to achieving the transition to zero-emissions vehicles. Only by speeding up cost reductions can stakeholders in the market be lastingly incentivised to drive the transition to clean transportation.

Cost reduction begins with technology upgrading and product differentiation. “Apple phones replaced Nokias because they added new features that won favour with consumers”, says Liu Bin. “New features brought in with EVs include functions for assisted driving and smart cockpits, which also encourage consumers to buy them. If added features do not attract buyer support, however, then the increased costs become a drag on sales instead.” Internal management and strategy also become key factors for a company in reducing costs. Carmakers should consider key nodes in policy development and the changing costs for different models, and determine their targets for profit, production and sales accordingly.

Municipalities may also manage to continue supporting new EV development by providing subsidies and tax incentives in lieu of central government. According to He Hui, project director at ICCT China, there are a range of financial and non-financial incentives that cities can exploit. These include exclusive parking spaces and ultra-low- or zero-emission zones; privileged right-of-way or road use; convenient charging facilities; and reduced or exempted service fees for parking and charging. These can strongly incentivise development of EVs and spur consumer interest in buying the vehicles, He added.

This article was originally published on China Dialogue with the title “Life After Subsidies for China’s EVs” and has been reproduced under the Creative Commons BY NC ND licence.

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With a growing focus on sustainable transportation and environmental consciousness, Chinese original equipment manufacturers (OEMs) are making significant strides in BEV battery technology, revolutionising the industry and impacting markets worldwide.

China’s emergence as an electric vehicle (EV) powerhouse has been underpinned by its dedication to innovative battery technology. One of the most critical components of any BEV is its battery pack, which determines range, charging speed, and overall performance. Chinese researchers and manufacturers have invested substantial resources into developing high-performance battery chemistries, resulting in lithium-ion batteries with improved energy density, safety and longevity.

Several Chinese OEMs have made significant contributions to the evolution of BEV battery technology.

“In some ways, the environment in China for developing NEVs is unique in that there are literally hundreds of companies of differing scale and experience,” says David Gregory, China Market Business Advisor, CBBC. “Some are legacy players from the automotive industry, of course, but many have roots in completely different industries, all competing intensely for the home customer and in some cases, for those overseas, as well. This creates an extremely competitive and creative environment where technological advances that increase range, efficiency, safety, and convenience are moving at pace”.

Contemporary Amperex Technology Co. Limited (CATL) has risen as a global leader in BEV battery technology. CATL’s lithium iron phosphate (LiFePO4) batteries are known for their enhanced safety features and are widely used in both passenger and commercial electric vehicles. Moreover, CATL’s pursuit of solid-state battery technology could potentially revolutionise the EV industry by addressing concerns about energy density and charging times.

Another prominent player is BYD Auto, which has focused on vertical integration by manufacturing its batteries in-house. BYD’s “Blade Battery” technology is designed to improve safety by minimising thermal runaway risks – when the battery’s temperature drops below or above a safe range and damages it or causes fire – and is a testament to its commitment to innovation. This innovative approach has not only bolstered the company’s reputation, but has also accelerated the global shift toward safer and more efficient EV batteries.

Geely Auto Group, one of China’s largest privately-owned automotive companies, has also demonstrated a commitment to BEV technology. Geely’s focus on research and development has resulted in cutting-edge battery management systems and thermal management technologies. These innovations contribute to longer battery life, improved performance and overall enhanced user experiences.

The United Kingdom, with its commitment to reducing carbon emissions and promoting sustainable transportation, provides a fertile ground for the adoption of BEVs. Chinese OEMs have recognised this potential and are actively seeking opportunities to expand their market presence in the UK.

“In China, the NEV sector started with huge government support and subsidies, initially to OEMs then to buyers. This is then coupled with the restrictions of ICE vehicle number plates in various tier one and two cities so those with the need and desire to purchase vehicles were persuaded down the NEV route,” says Mark Xu, CBBC Sector Lead, Advanced Manufacturing and Transport. “The market environment in the UK is somewhat different so it will be interesting to see how NEVs take off in the UK”.

BYD’s electric buses have found a strong market in the UK, contributing to the country’s efforts to electrify public transportation. With an emphasis on cleaner air and reduced noise pollution in urban areas, British municipalities have shown interest in BYD’s electric bus solutions. These vehicles not only promote sustainability, but also highlight Chinese OEMs’ commitment to environmental responsibility on a global scale.

While the integration of Chinese BEV technology into the UK market presents numerous opportunities, challenges also arise. One primary concern is the perception of Chinese brands in a market traditionally dominated by established European manufacturers. Overcoming this will require Chinese OEMs to emphasise their technological advancements, safety features, and commitment to quality.

Government incentives and charging infrastructure will be pivotal in accelerating BEV adoption in the UK. For example, Chinese EV brand Nio recently pushed back its UK launch until it has developed the infrastructure to offer battery swaps. Nio’s 1,200 ‘Power Swap’ stations are one of its main USPs in China, allowing drivers to exchange their depleted batteries for new ones in minutes. Chinese OEMs must collaborate with local authorities and businesses to establish a robust charging network, addressing range anxiety and ensuring a convenient experience for BEV owners.

The UK market, driven by environmental concerns and governmental support, provides a promising platform for the integration of these cutting-edge technologies. As collaboration between Chinese OEMs and UK stakeholders continues, the road ahead for BEVs appears increasingly charged with potential, paving the way for a greener automotive future.

Photo by Michael Fousert on Unsplash

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The global shift towards sustainable and eco-friendly transportation solutions has given rise to the rapid adoption of electric vehicles (EVs) across the world. China has been leading this transformation and has been strengthening its EV market for over a decade. The size of the EV market – which grew 29% year-on-year in the first quarter of 2023 to over 8 million vehicles – has led to the development of a comprehensive charging network.

Although battery-powered EVs (BEVs) make up 70% the market, plug in hybrid electric vehicles (PHEV) are also seeing huge growth, with a surge of 88% year-on-year. This growth comes despite the fact that the Chinese government has discontinued the 13-year-old new energy vehicle (NEV) purchase subsidy, and is in no small part due to the country’s vast and successful EV charging infrastructure. This infrastructure means that it is not just cheaper and more environmentally friendly to drive an EV in China today, but also a lot more practical than it was in the past.

In 2014, China started to roll out EV charging infrastructure in urban areas, along highways and in key regions where EV adoption was encouraged. By 2018, there were approximately 330,000 public charging points servicing 2 million electric vehicles. Today, there are over 1.2 million charging stations, demonstrating the country’s rapid progress in building a comprehensive charging network and commitment to sustainable mobility. The dominant provider of charging stations across China was the State Grid Corporation of China, but an increasing number of private car manufacturers and energy suppliers are joining the EV charging race.

Chinese original equipment manufacturers (OEMs) have emerged as significant players in the EV market. While compatibility among different EV models is generally high, it is important to note that not all EVs made by Chinese OEMs work with the same charging stations. The charging infrastructure in China includes various types of connectors and charging speeds, leading to a requirement for adaptable charging solutions.

The compatibility of internationally made EVs with Chinese charging stations also depends on the type of charging connector used. However, as the industry has evolved, many internationally manufactured EVs now offer adaptability to the Chinese charging infrastructure. This adaptability has allowed foreign EV manufacturers to ease into China’s vast EV market with less friction.

“As with other areas of BEV technology, China continues to generate ideas to make ownership and utilisation more practical. One of the more creative ideas is the battery swap concept, which is now being widely introduced,” says Mark Xu, Sector Lead, Advanced Manufacturing and Transport at CBBC.

Battery swapping offers a quicker alternative to conventional charging, addressing the time-consuming aspect of recharging. Users can replace depleted batteries with fully charged ones, significantly reducing waiting times. This approach is particularly beneficial for EVs used by ride-hailing platforms such as DiDi and delivery services including Meituan and ele.me, where downtime affects profitability.

This concept has been embraced by Chinese EV companies like Nio. Nio has set up an extensive network of over 1,300 battery swap stations, allowing its customers to exchange batteries quickly, akin to refuelling a conventional vehicle.

International energy company bp has also recognised the potential of China’s booming electric vehicle market. Bp, known for its expertise in fuel retailing, has made strategic moves to establish a foothold in China’s EV sector. One of its initiatives involves collaborating with DiDi to develop a charging network through its joint venture, bp Xiaoju. This partnership already provides rapid charge points across a network of around 400 charging hubs, covering 30 cities.

“We’re really excited by our joint venture with DiDi in China. Their drivers are completing around 25 million journeys a day, covering approximately 300 million kilometres and all these journeys need to be electrified. We’re doing that and we’re serving other fleet customers across the country,” Richard Bartlett, head of bp pulse says. “China holds massive market potential and bp pulse has substantial potential for expansion there. And we’re expanding fast. bp pulse entered the China market in 2020 and today has around 10,000 DC rapid or faster charge points. We see massive opportunity for more growth and fast, launching us towards our ambition to be China’s leading EV charging brand, providing ultra-fast and rapid charging services to customers when and where they need it.”

As well as the State Grid Corporation of China and NIO, Chinese tech giants Tencent and Alibaba have also invested in EV charging infrastructure through their respective platforms. They aim to integrate charging services into their ecosystems, offering users the convenience of locating, reserving and paying for charging services through their apps.

In terms of international brands, Tesla has taken a unique approach to charging in China. In addition to its widely adopted standard charging connectors, Tesla has also established its own network of Supercharger stations across the country. These Superchargers are designed exclusively for Tesla vehicles and offer faster charging speeds compared to standard charging stations. This approach aligns with Tesla’s commitment to providing seamless charging experiences for its customers.

China’s EV charging landscape is dynamic and rapidly evolving, accommodating a diverse range of EV models and charging solutions. The compatibility of both Chinese and international EVs with charging stations has contributed to the expansion of the EV market. As China continues to witness remarkable growth in EV adoption, collaborations between companies like bp and DiDi underscore the global interest in shaping the future of sustainable transportation. With Tesla’s unique charging approach complementing the infrastructure, China’s electric vehicle sector is poised for continued progress and innovation.

14 September: CBBC Auto Roundtable event in collaboration with the Institute of the Motor Industry

The next CBBC Automotive Roundtable of 2023 will be hosted by the Institute of the Motor Industry at its conference centre on 14 September.

This roundtable will focus on how the industry is tackling new automotive technology and the skills gap, with speakers including Steve Scofield FIMI, Head of Business Development, Institute of the Motor Industry; Owen Edwards, Head of Downstream Automotive Consulting, Grant Thornton; Andy Turbefield, Head of Quality at Halfords Autocentres; and David Gregory, China Market Business Advisor, CBBC.

After the presentations from the Institute of the Motor Industry, Grant Thornton and Halfords, there will be a Q&A session, where you’ll get the chance to put your questions directly to the industry experts. The event will conclude with a networking buffet lunch.

Click here to register.

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BP and China’s Didi Chuxing (DiDi) announce they are forming a new joint venture to build electric vehicle (EV) charging infrastructure in China, the world’s largest market for electric vehicles. The new joint venture plans to develop a network of EV charging hubs across the country.

The ride-hailing and car-sharing platform Didi has approximately 550 million users, and around 600,000 EVs are running on it in China.

The joint venture with BP will develop standalone, reliable and high-quality charging hubs to provide EV charging services to DiDi’s drivers and the public. The partners also intend to expand the venture into loyalty and convenience offerings and other fleet services in the near future.

“As the world’s largest EV market, China offers extraordinary opportunities to develop innovative new businesses at scale, and we see this as the perfect partnership for such a fast-evolving environment,” said Tufan Erginbilgic, BP’s Downstream chief executive. “The lessons we learn here will help us further expand BP’s advanced mobility business worldwide, helping drive the energy transition and develop solutions for a low carbon world.”

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Human innovation created the steam turbine and the internal combustion engine, paving the way for the Industrial Revolution and the horseless carriage (now known as the car). These innovations have made our lives easier, but our planet less healthy and our roads busier. China’s increasingly innovative and influential but smoggy cities, that play host to some of the world’s worst traffic, exemplify this. But like the era of the Yellow Pea Soup in London, this is about to change and in doing so provides British industry with an array of opportunities. Cue the era of the electric vehicle (EV) and the underground charge park.

Innovation, innovation, innovation

A recent article in The Economist provides a solid solution for offsetting negative environmental impacts from technological advancements, suggesting that the best way to tackle global crises is by doing what we humans do best: “to keep inventing”. This will need significant political and financial backing, such as government subsidies for those wanting to produce and purchase cleaner, greener cars. Increasing demand and disrupting the status quo will help progressive newcomers establish themselves in the market.

Now that the Paris Agreement has been ratified by enough states worldwide, a significant amount of finance is being unlocked with the aim of tackling greenhouse gas emissions and climate change. This explains why the Chinese Prime Minister, Li Keqiang, believes innovation will be the top driving force for future growth. He cites that 60 percent of China’s economic expansion will come from advancements in science and technology. The combination of ambitious government environmental targets and a growing consumer middle-class (larger than the entire population of the United States) means that opportunities in China are abundant.

Like the monumental industrial advancements that occurred during the 19th Century, the upcoming Green Tech Revolution of the 21st Century will provide unprecedented opportunities of which Beijing – along with the likes of San Francisco, Tel Aviv, Bangalore and London – is at the forefront. There is no finer example of this than the new-energy vehicle market and the sectors that complement this booming industry.

“We are living through a golden era in the automotive sector with new technology revolutionising almost every aspect of the car industry from the energy to drive a vehicle to the way that the vehicle is driven,” says Peter Jostins, Senior Research Fellow at Coventry University.

“Even the word driving seems to have been swapped for ‘intelligent mobility’ and car ownership models like ‘electric shared self-drive car fleets’ are now considered the future for city transport.  Add to this the negative side of VW dieselgate, climate change, pollution in our cities and a reluctance of investors to invest in old technology companies and we have a sea change in the concept of motoring,” he says.

Enter the “Electric-motion steam car” 

Like the steam turbine and combustion engine before it, the electric vehicle (or diàndòng qìchē in Mandarin Chinese) will shift the technological, business and geopolitical landscape, revolutionising how private drivers and corporate fleets around the world will operate. President Xi Jinping has subsequently categorised “new-energy and green vehicles” amongst the most important strategic and emerging industries in China, after signs that the combination of research grants, infrastructure investments and consumer subsidies have started to yield results.

Xi’s rhetoric was backed up by a commitment to inject $1.5 trillion to ensure Chinese firms not only curb pollution, reduce their dependence on imported oil and leapfrog traditional automotive manufacturing, but become preeminent players on par with US, Japanese and German firms.

Due to China’s global dominance in rare earth materials (REE) they are also well placed to lead innovation in battery technology. These strategic moves – in solar, wind and now electric energy – have put China in the top spot as the largest state investor in green technology. Vital if the country is to use green energy to power the estimated 5 million EVs that will be on the road by 2020.

The new environmental and economic benefits of China’s strategy gives us insight into why EV manufacturers Tesla and VIA Motors, are expanding into the world’s largest automotive market. Traditional car manufacturers are also expanding their offerings. BMW who recently launched their hybrid i3 and i8 cars are working with Chinese tech giant Baidu on electric driverless cars, and Apple has invested heavily in Didi Chuxing, China’s car-sharing app that is making ride-sharing and mobility the increasingly preferred way to travel.

New companies and old are both clamouring to become market leaders as the size of that market is phenomenal. Gerald Page, VIA’s China Director, stated that “the estimate of 5 million EVs forecasted by 2020, could easily double as China accelerates the installation of charging infrastructure with over $20 billion of approved investment from the Central Government.”

Having previously underperformed in the sector, partly due to a lack of personal charging facilities, China is now likely to become the epicentre of competition amongst the new-energy vehicle players. International companies have started to enter the arena in joint ventures to help China tackle such challenges and to establish an increasingly sophisticated market. Currently, this has not provided any logistical problems with different charging stations and charging piles.

Tea leaf nations

The United Kingdom too is another leader in the EV space. A fine example is Aston Martin partnering with Chinese tech giant LeEco . They are combining forces to launch the Rapid-E in China by 2018. CEO Andy Palmer is so confident that he stated that Aston Martin is the true “trailblazer in luxury electrics” and is now, he claims, in a league above US rival Tesla.

All across the supply chain British expertise can contribute to, and grow from, these opportunities across China. British research, design, high-tech and engineering firms are well placed. With funding from the government, the European Union and various car manufacturers – notably Jaguar Land Rover (JLR) and Nissan – the UK is in a prime position to utilise its research and development (R&D) knowledge and industrial expertise in China. Currently, one in four European EVs is built in the UK. British financial institutions could further exploit the opportunities by following the lead of Berkshire Hathaway, Warren Buffet’s firm that invested in China’s BYD Auto, the world’s largest provider of EVs.

It is also fitting that Formula-E, the emission-free Grand Prix, began in Beijing and finished in London.

It’s worth noting, however, that it won’t just be the multinational giants that will shake up the new-energy market. After all, it’s the smaller, more dynamic enterprises that account for most growth and job creation. For example, Gloucestershire-based Ecotricity’s has built Nemesis, the UK’s fastest EV, powered by wind energy. The increased demand for such EVs will require a vast amount of green and efficient energy production in the UK and China alike. As such, firms that can predict weather patterns will be well placed to help Chinese energy providers better harness energy. As will those that are able to utilise convection energy.

Petrol stations will have to diversify to cope with falling oil sales and consumers having to power their cars with clean energy, in the meantime providing entertainment, food and beverages while cars recharge. Jostins of Coventry university, stresses the benefits of hydrogen-powered vehicles, which can be “refilled in minutes”. This means there would be “no need to build whole new charging infrastructure because filling stations similar to gas stations are all that is required.” This has been backed up the Automotive Council, which sees the UK leading the market in a diverse way and not merely limiting infrastructure to EVs.

Yet for all these known opportunities in China’s new-energy industry, little has been said on the place where we park and, in the future, will charge our cars. For producers of new-energy vehicles and for the green tech mavericks, the development of charge parks could also prove to be a goldmine – especially as this vast project has significant backing from the Communist Party.

Everyone has a chauffeur

Boston Consulting Group estimates that beyond EVs, the driverless car market will be worth $42 billion by 2025. Autonomous cars will reshape the industry, with far-reaching implications for governments and insurance firms that go beyond emission and traffic reduction: “The range of automotive development going on in the UK is staggering. It’s not just energy technology but driver assistance, autonomous vehicles, connected vehicles, drive by wire, new lighting systems, intelligent road signage, accident avoidance…the scope is endless.  Many of these are not just in-car technological developments but they require whole infrastructure changes, changes to policy and regulations, new levels of safety and require new ownership and insurance models,” states Jostins.

Rio-Tinto, an Anglo-Australian mining firm, is already using driverless cars to shift tonnes of materials, as is the military to transport troops and search out landmines. Despite the likes of Uber, nuTonomy and Baidu, that have been piloting driverless EVs, JLR has bucked the trend as they do not consider their “passengers to be cargo”. Yet in February 2016, JLR joined a $7.9 million programme, led by Bosch a German industrial firm, to further autonomous driving research and development, aiming to gather data on driving habits and test vehicle communications technology.

Whilst many argue the technology for self-driving cars is already there, the challenges that still remain are mainly legislative. Setting the rules for autonomous vehicles (AVs) is rife with challenges, especially in regions such as China where the rules of the road and the rules on the road aren’t always aligned. For example, if the driverless car is programmed to reduce speed when driving on a motorway to ensure a 70 metre gap remained between it and the car in front, the autonomous car in China would end up at a standstill as drivers would nop into the gaping gap left in front of the autonomous car. Likewise, programming cars to cause their own drivers to continue into an oncoming truck rather than allowing them to swerve onto a class of school kids on the pavement are decisions that are hard to make for both manufacturers and governments. However teams from both sides are busy at work and as more AVs hit the streets, it is expected that the number of car accidents will continue to reduce.

Start your (eco-)engines

So, due to the energised political will to go green (and a serious lack of space to park your car) British inventors and entrepreneurs are being presented with a fantastic electric opportunity.

In an age of climate change and sluggish growth, governments should not merely be pursuing austerity (or retreating from the world), but should rather focus on unleashing human ingenuity and creating partnerships in priority markets. This approach helped ignite the Industrial Revolution of the 19th century, where economic growth was the bi-product of human dynamism and progress.

If the Economist‘s prescription of innovation is indeed the cure, we must continue to connect with global markets, transfer knowledge and pursue sustainable growth. The industrious folk who brought us the car gave us time, travel and connectivity. Today’s tech wizards have re-invented it to suit the challenges facing the 21st Century, only this time without compromising the quality of our air and our water. Welcome to the Green Tech Revolution. Please remember to put your car on charge.

Fact box

• In 2015 China overtook the US to become the largest market for new-energy vehicles
• Beijing is 3.5 million car parking units short of demand
• Every 10 households in the city share 3-5 parking spaces
• Beijingers now have to purchase a car-parking space before they are able to acquire a car
• The waiting list to buy a car is turning people to EVs, which does not use the lottery system
• There are funding incentives for fleet operators to make the move to electric
• Pick-up trucks that were previously banned in China’s CBDs are making a return in four provinces – total sales of EV trucks will boom if this policy is expanded to other provinces
• Growth in charging station ownership has jumped from 76 stations in 2010 to 3,600 in 2015
• Subsidies are gradually being phased out, but China’s RMB 37 billion investment over the last five years will be supplemented by an additional RMB 63 billion over the next five years
• In August, LeEco signed a $3 billion investment cooperation agreement with Zhejiang Provincial Government to establish an auto park
• Local governments receive funding to build charging stations relative to how many new-energy vehicles are sold
• 10 million electric car parking units will be built by 2020
• By 2022, EVs will cost the same as their combustion engine counterparts. This moment will be pivotal
• China will half its peak CO2 emissions by 2030. The use of EVs will be essential in achieving this target
• By 2040, over 50 percent of all new cars bought will be electric

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