The Real Story Behind China's EV Rise

Right.

As we're coming to the end, what are some of the broader lessons from China's experience with industrial policy for auto industry and EVs? Can other countries learn or is this something just unique to how China has done things?

Well, it's actually sort of like yes and no.

So there are some uniqueness to China, but I don't think all of those experiences, none of those can be generating any insights for other countries.

So let's talk about those different pillars.

Well, the central government's industrial policy, I think, well, of course, it has been, well, largely regarded as pretty successful in a lot of ways.

Well, it is true that, well, the Chinese government, I think, when you're talking about their industrial policy, I think, well, the remarkable thing is that, well, first, they are pretty consistent over time, especially for EVs over the last 20 years.

It's pretty true that, well, you know that, well, they are, like, consistent support for for EVs, for building EV charging facilities, for batteries, and so on.

But I think there are two things that we probably need to note.

One thing is that there are still some back and forth creating some disruption over time, and I think it's something that the Chinese government probably needs to avoid, and many other governments also need to avoid.

For example, I think around 2017, the Chinese government actually changed their ways of calculating subsidies for EVs.

They changed it into a way more favoring the ranges, how much range that you can cover.

which actually was a big hit for companies that were specializing in making LFP batteries over MNC batteries, for example, like BYD and so on, because LFP just has lower energy density.

And also, I think it will be a little bit too dangerous just to say that this consistent expectation for policy is totally because of Beijing's industrial policy.

For many Chinese, they do understand that China's reliance on imported oil is a little bit too dangerous.

It's generating a lot of uncertainty.

So if you ask people like Wang Chuanfu or some people like a company that will A lot of people are forgetting about them.

They were also one of the pioneers of Chinese EV sector, although they didn't make a lot of successful investments.

It's Wanxiang Group in Zhejiang.

They actually bought the Fisker.

from the United States in the early 2010s.

They bought a battery company called A123 also very early on.

They had this idea of like, well, EV is China's future back in the 90s when there were no even like industrial policies about EVs back then.

And also another thing I think a lot of people have been sort of like overlooking recently is that, well, the Chinese EV, the Chinese automotive industrial policy actually is more inclusive, right? than many other, well, EV promoting industrial policies.

For example, in the European Union, like before the diesel gate, it was, well, pretty much promoting diesel cars.