EV industry put under the spotlight of Two Sessions as China boosts its clean energy initiatives

March 15, 2022 0 Comments

Electric vehicle sales in China have grown by more than 150% since last year. As the country focuses on its clean energy initiatives to reduce carbon emissions, the accelerating growth of the Chinese electric vehicle industry is of keen interest to delegates and industry leaders at the Two Sessions – the country’s most important set of political meetings.

Li Shufu, an NPC (National People’s Congress) delegate and founder of automotive company Zhejiang Geely Automobile, proposed building more battery-swapping stations, which could help increase the charging efficiency and lower the upfront prices of EVs.

“The process of swapping out batteries takes roughly one to five minutes, which is way more time-efficient than charging. The cost of Lithium batteries accounts for approximately 40% of an EV’s price. The battery swap approach could lower the upfront purchase price by a maximum of 50%, which will boost sales” Li noted in his proposal. Such solutions have already been explored by companies like Nio.

Geely first started developing its battery-swapping technology in 2017 with an R&D team of more than 1,000 people and subsequently launched its first battery-swapping station called ‘E-Energee’ in Chongqing in September 2020. At present, Geely has already established approximately 100 battery-swapping stations across ten cities in China.

E-Energee allows drivers to automatically swap out their vehicle’s battery without even having to exit the door. The whole process takes 59 seconds to complete, which is an improvement from the previous 90 seconds that Geely had initially announced.

Li also suggested that China should also speed up the adoption of methanol-powered vehicles to achieve carbon neutrality in the transport sector. The Chinese government has already added the development of methanol vehicles into its 14th five-year plan as the country aims to replace fossil-fuel vehicles with clean fuels like methanol.

In addition, he believes that China should focus on the extraction of domestic lithium resources as lithium is a critical component of EV batteries due to its light weight and reusable properties, as well as the development of resources for lithium batteries to ensure supply chain security and minimise any supply issues as EV adoption increases.

Li Shufu’s suggestion has been echoed by Zeng Yuqun, founder and chairman of China’s largest EV battery manufacturer Contemporary Amperex Technology Limited (CATL), and a CPPCC (Chinese People’s Political Consultative Conference) delegate.

Zeng suggested improving the transportation management of lithium to enable a highly efficient and low-cost battery supply chain system.

Much like Geely, Tesla’s battery supplier CATL is also speeding up the development of its battery-swapping services in a bid to occupy a larger share of China’s burgeoning EV battery market. Driven by the country’s clean energy initiative and rapid EV market development, the company is currently one of the major investors in lithium mines around the globe, in companies including North American Lithium, Australia’s Pilbara Minerals, Canada’s Neo Lithium, Africa’s Manono, etc. 

Lei Jun, founder and chief executive officer of smartphone maker Xiaomi, has expressed support for more government-built high-power charging stations and new infrastructure for EVs, contrary to Li Shufu’s battery swapping proposal. 

“We should improve the current charging infrastructure because it is the foundation of the EV industry,” Li noted in his proposal, adding that the country’s current charging stations are relatively low in power, which makes the battery charging process lengthier.

In March 2021, Xiaomi joined its peers, including Baidu, in the EV race by announcing the launch of a new EV business unit and the plan to invest USD10 billion in it over the course of the next ten years.

Lei Jun remarked that this step forward into the EV territory would be his “last major entrepreneurial project,” and that he would dedicate himself to this last venture.

Fast forward to September 2021, and Xiaomi had already completed the official business registration of its EV unit. The headquarters’ location is planned to be in the Beijing Economic-Technological Development Area, more commonly known as Beijing’s Yizhuang new town.

Sales of new energy vehicles, including electric, plug-in hybrid, and hydrogen fuel-cell vehicles in China have surged by 160% year-over-year to a whopping 3.54 million units, being the world’s largest new energy vehicle market for the seventh consecutive year, according to data released by the Ministry of Industry and Information Technology in a press conference.

EV sales in China have jumped by 160% to a record 2.91 million units in the last year, reflecting the country’s active efforts to replace fossil fuel vehicles with a more sustainable option.

In November 2020, China’s State Council set a goal for sales of new energy vehicles, the share of which will be aimed to account for 20% of total new car sales in China by 2025 and account for the majority of sales by 2035.

“We anticipate the sales of new energy vehicles to reach 5 million units in 2022, representing a year-over-year growth of 42%. By then, the share of new energy vehicles will approximately account for 18% of total new car sales in China, and we can achieve the 2025 goal of new energy vehicle ahead of schedule if we keep this pace” said Fu Bingfeng, executive vice chairman of the China Associate of Automobile Manufacturers.

The state council also highlighted the need for further industry infrastructure improvements in areas such as battery power, charging power, and battery replacing facilities, as well as promoting the coordinated development of electric networks, and intelligent technologies.

Photo by Possessed Photography on Unsplash

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