EV Future Depends on U.S./China Bond

By · May 02, 2011

Better Place China

While Americans are preoccupied with the recent introductions of the Nissan LEAF and Chevrolet Volt, the long term success of the plug-in vehicle (PEV) market may rest on the development of a robust market in China. According to Pike Research, the two nations are forecast to be neck-and-neck in PEV sales during the next five years, and together will comprise nearly 60% of the global market. Sales of PEVs in the two countries in 2015 will total almost 600,000.

Like in the United States, the government of China is strongly encouraging the adoption of PEVs through incentives and publicly-funded projects aimed at reducing emissions in urban centers. Although hybrid and PEV sales in China have been slow to start, in looking to become a global automotive power, China will largely leapfrog the established ICE industry by focusing on producing hybrid and electric vehicles. As gas prices climb in China and around the globe, consumers are likely to increase their interest in hybrid and electric vehicles.

Pike PEV Sales

Even more important than their combined market share is the extensive collaboration and dependency between the United States and China. China plays an important role in American PEV auto and component makers’ manufacturing and sales efforts. Ford has three PEVs planned for China as part of its expansion into the region, while GM is partnering with SAIC on a new electric vehicle platform.

Other examples of the intercontinental collaboration include Coda Automotive sourcing batteries and the body for its upcoming EV from China, and Johnson Controls-Saft supplying batteries to Beijing Electric Vehicle Company.

Government agencies are also integral to the market develop, as both the city of Denver and Ford have an Eco Partnership with the city of Chongquing and Chang’an Motors, and the city of Los Angeles is sharing EV data with China.

While automakers have been reluctant to buy batteries from China due to quality concerns, these initiatives are bringing necessary intellectual property to China’s massive manufacturing capacity, which should enable the country to compete with battery makers in Japan, Korea, and the United States. Automakers are challenged by balancing the desire to participate in the lucrative Chinese market with protecting their IP so that the technology is not copied.

For EV and battery prices to come down through larger scale manufacturing volumes, both the U.S. and Chinese markets need to be vibrant and competitive. Joint ventures and technology sharing agreements is the chosen course today.


· Samie (not verified) · 7 years ago

A question for John, or others

Cost reduction in theory points to pure electric vehicles like the Leaf gaining more market penetration compared to the Volt or other types of PEVs. Is this factored into market forecasting? Should government at some point start separating incentives based on the technology of plug-in vehicles?

My opinion is that at a point in the future, pure electric vehicles will cost about the same to produce as ICE vehicles (& we are talking about no government subsides). The only concern I have is that battery swapping schemes will monopolize this market, reducing the producer's desire to enhance battery range & life.

· · 7 years ago

(I am assuming that when you say, "battery swapping," you mean you pull into a battery swapper - what use to be a gas station - and your depleted battery is swapped for a charged one)

I personally do not see battery swapping as a viable option. With 10+ electric car models in production (or soon to be) with different battery types/locations/makes (passive/active cooling) it would be nearly impossible to get car companies to agree on a specific battery type/placement for future models. The days of 'standardized parts' is gone - which for the most part I hate but this is an area where it might actually be positive.

Maybe once a new battery type is developed which has little deviation - Li-Air or Solid State Battery - maybe then battery swapping can be looked at again; but then all older electric cars are out of luck and the initial price to make nation-wide battery swapping available would be huge for little gain. By this time (8-10 years) everyone will be use to charging in 5-10 mins because by this point fast charging will be in many more places. Heck it'll probably (hopefully) be hard to find shopping centers that don't have 240 volt charging stations for the 3-4 hour charge as you shop.

The only people that would need a battery swapping infrastructure would be freight and long commuters. In this case they'll be stuck with some sort of gas backup, maybe battery swapping for freight (18 wheelers) along highways, or maybe this'll help push a reinvestment in mass transit..... lol a man can dream.

· Samie (not verified) · 7 years ago


I agree there are lots of constraints to swapping batteries, possibly including legal ones. But lets separate personal feelings for a minute & think like we our at work. It doesn't take a genius to understand the significant amounts of revenue that a swapping market could present.

Lets look at this more closely.
1. Monopolize the market.
By that I mean any PEV sold in the U.S. would have a mandatory swapping service as part of the "bumper-to-bumper" warranty. To do this we would have 3-5 (with 2 holding over 50% of the market share) swapping companies partnering with various auto-manufactures/energy companies/battery companies, along with standardizing technologies into maybe 2-3 types.

2. Increase the market for PEVs but do so in a way that makes sure consumers will need to depend on a battery swapping service. To do this auto manufactures would reduce the cost of battery but make sure the battery doesn't offer superior range or lifespan. The trick would be to make sure after the initial warranty, a consumer could not purchase a off-brand battery that is better (this means you control the intellectual rights of the technology).

Remember that there is a lot of money to be had & it is not inconceivable that this will play out in the next few years. It may seem hearsay or rubbish to many who leave comments on this site, including authors of some recent stories but it could happen because of the monetary incentive to create this market. We all get caught up in short-term thinking but lets remember that we live in a capitalistic society & if there is a way to create a battery swapping scheme, it will be done.

· · 7 years ago

I don't disagree that your scenario is possible; I just doubt any of the car makers would agree to go along with this… well maybe the idiot CEOs ignoring their engineers. (FYI I am an engineer (not car) so I will be biased)
The battery placement is vital to each individual car model for balancing purposes. If your scenario plays out it will force engineers to design the car around a standard battery which will destroy innovation not only in battery technology but also car selection. If this were to play out your next car will be a sedan or compact with all looking more or less alike. No option for SUV or Truck.

One solution would be each battery swap location would have to support 2 different types of cars with two different types of batteries. Say one battery swapper for compacts/sedans and one for SUVs/Trucks. This now doubles the cost for infrastructure. Or have a smart swapper able to determine what you're driving and swap accordingly; though this still adds a huge cost for batteries so the swapper has a reserve of batteries.

I believe a much smarter investment for anyone planning to start a monopoly would be to offer gas stations and shopping centers chargers based on a new proprietary standard for fast charging - intelectual property. If there are enough of the fast charging stations before a US standard is agreed upon, then you'll have the people demanding that all car come equipped with this new standard. You then license your charging technology to all companies that want to make charging stations. You make billions with your charger monopoly.

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