Global Market Shaper, Pay Attention

You can’t open any form of media without seeing something about alternative fuel vehicles, etc. In fact, the news is so broad and plentiful, that most of us have tuned it out. But, we’ve mentioned some upcoming mandates and now have some competitive moves that you need to pay attention to – they are market shapers.

Remember when we wrote about the coming Chinese mandate that all new vehicles had to be fossil-fuel free by the year 2040? We also said that competitive pressures and the need to get well out in front of that deadline would accelerate global investment and production of electric vehicles (and every raw material, component input, charging infrastructure, etc. that comes along with it).

Well, Ford just announced a major joint-venture with a Chinese automobile manufacturing company (Anhui Zotye Automobile Company) to produce electric vehicles for the Chinese market. It wasn’t the joint venture that was most intriguing, it was a number of data points that emerged during the announcements of this $750 million venture that were most interesting.

1. Pure electric and hybrid vehicle sales grew by 50% last year in China.
a. That’s about 336,000 electric or hybrid vehicles (40% of total global demand)
b. The US sold about 159,620 in comparison.
2. Sales are up 14% YTD through October in 2017.
3. Ford expects Chinese sales of pure electrics to be in the 6 million unit/year range by 2025.
4. 70% of the models that Ford markets in China will have an electric option by 2025.
5. Daimler AG Mercedes Benz has a similar joint venture with a Chinese firm and GM and Volkswagen have publicly stated that they are looking for similar opportunities.
6. Volvo will have its first electric vehicles launched by 2019 in China.
7. Remember that California is largely following China’s lead in trying to limit conventional fossil fuel vehicles being sold in the state. They have long-term plans to limit or ban the sale of new gas and diesel vehicles in the state.

If this works like other emerging technologies, the competitive fight that will emerge to build the best electric vehicles to capture a lion’s share of the market will improve the performance, reliability, and lower the cost of these vehicles. That will make broader adoption of them much easier – and it will spur a global change.

For those of you who do long term strategic planning, you know that 2040 is not that far away. It makes 2025 feel like tomorrow. – KP


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