During the Chinese Communist Party’s (CCP) “Two Sessions” meeting in March, the regime put forward a concept of “new quality productive forces” to promote China’s new energy vehicles or electric vehicles.
CCP’s Massive Subsidies
Guo Jun, editor-in-chief of The Epoch Times’ Hong Kong edition, said on the “Pinnacle View” program that statistics show Japan’s car exports increased by 16 percent to 4.2 million vehicles in 2023, while China’s car exports increased by 58 percent to 4.91 million vehicles, surpassing Japan for the first time to become the global leader.Two major factors led to the increase in China’s car exports: first, exports to Russia increased sevenfold to 700,000 cars in one year due to sanctions imposed on Russia by Western countries; and second, the export of electric cars reached 1.2 million vehicles in 2023, doubling the previous year’s figure.
“We often joke that many of Beijing’s policies end up being failures,” said Ms. Guo. “But there is one area where the CCP’s long-term planning, coupled with massive subsidies, led to seemingly successful results. This is the electric vehicle industry.”
Ms. Guo explained that China began offering high subsidies to electric cars in 2009. Depending on the range, each car could receive subsidies of up to 50,000 yuan ($6,900), a policy that lasted for 13 years. In addition, there were subsidies from local governments in various aspects such as funding, taxation, and land use.
In other words, before 2022, for every electric car produced in China, companies could receive up to 120,000 yuan ($16,600) in subsidies from Chinese authorities.
Safety Hazards
Independent Chinese TV producer Li Jun said on “Pinnacle View” that subsidies are undoubtedly a very important reason for the rapid development of China’s electric car industry. However, by relying solely on subsidies, China’s automobile industry was unable to achieve any breakthroughs in technology. However, Tesla changed the course of China’s electric car technology development.In 2019, Tesla began construction of its factory in Shanghai, and it had to use various China-made components. More than 95 percent of the components used in Tesla’s factories in China are locally produced Chinese products. Tesla has its standards and requires all its suppliers to produce according to its standards.
This led to an improvement in the overall level of China’s electric car industry chain. Therefore, Tesla played a catalytic role in China’s electric car technology development.
“The CCP made great efforts in [developing] car batteries because the core of [the] electric car is the battery,” Mr. Li said. “Many of the world’s main rare earth mineral areas are controlled by Chinese companies, which is an important material source for the research and development [of the batteries]. This improved China’s battery production volume and quality to a certain level.”
Nevertheless, according to Mr. Li, battery safety is still a major challenge to China’s electric car industry. On average, eight electric cars caught fire every day in China during the first quarter of 2023.
Future Challenges
Meng Jun, a Chinese entrepreneur living in exile in the United States, said on the show that since Xi Jinping came to power, new energy vehicles have been vigorously promoted as an important new productive force for China. The industry has been strongly supported by the CCP to expand its scale and influence the global market.“[China’s car technology] falls behind in the traditional automotive industry,” he said. “Since the emergence of new energy vehicles after 2008, the CCP saw an opportunity to surpass developed countries in Europe and America. So, it vigorously pushed for the development of new energy vehicles.”
Mr. Meng further explained that China’s electric vehicle industry may not be sustainable in the future due to China’s lack of advanced semiconductors and chips, which are key components for new energy vehicles.
Ms. Guo said that the biggest attraction of electric cars for consumers is the integration of computer technology. For instance, Elon Musk once referred to the Tesla Model S as a very “sophisticated computer.” Therefore, the key to future competition lies in integrating relevant information technologies into electric vehicles, aiming to achieve fully autonomous driving guided by AI and satellite navigation.
Ms. Guo predicted that in the future, the United States and Western countries will be containing the CCP’s influence, and China will face significant obstacles in continuing to develop electric cars.
President Joe Biden has already pointed out that China’s “connected” vehicles, including electric vehicles, pose a significant threat to national security. “Therefore,” Ms. Guo said, “within the next five years, China’s electric cars may be very powerful, but looking further ahead, I think they will lack momentum.”
