Ford chairman: China will lead the future of electric vehicles

SHANGHAI — Global automakers are only starting to bet on the future of electric vehicles, and already one of the industry's most influential people says that future belongs to China.

Ford Motor Company said on Tuesday it plans to launch 15 models of pure electric or plug-in gasoline-electric hybrid vehicles in China by 2025. In a speech in Shanghai, Bill Ford Jr., Ford's longtime executive chairman, outlined Ford's rationale for the plan in unusually blunt language.

“When I think about the direction of EV development, it is very clear that China will lead the world in EV development,” he said, using the acronym for Pure Electric Vehicle.

Ford Motor is far from the only company that thinks so. General Motors, Volkswagen, Daimler and other automakers have all bet big on China's pure electric vehicle market in recent months.

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Still, it's worth noting that Bill Ford Jr. himself has long had ambitions to develop other vehicles that run on power other than gasoline. Twenty years ago, when his wife was driving a gasoline-powered Lincoln Navigator sport-utility vehicle, he was driving around Detroit in an electric Ford Ranger pickup truck.

It now appears that China is driving electric vehicles. The Chinese government has been playing an important role in the development of pure electric vehicles and is working hard to dominate this market. Beijing hopes the effort will boost the level of Chinese-made technology, help address China's worsening pollution problems and reduce the country's reliance on oil imports from politically volatile countries.

To achieve this goal, China is offering the tantalizing carrot of financial support to global automakers while simultaneously threatening them with the stick of strict regulation. Domestic automakers under government control have begun investing heavily in electric vehicle production. Meanwhile, the Chinese government has mandated that automakers must start selling a significant number of pure electric vehicles and plug-in hybrids or lose the right to sell gasoline-powered vehicles in China, now the world's largest auto market.

“Of course, backed by the full power and strong support of the Chinese government, they are off to a pretty good start,” said James Chao, a China auto industry analyst at research firm IHS Markit.

China is not only the world's largest producer of electric motors, China also produces almost all components of electric motors. Chinese companies even mine the precious metals called rare earth elements needed to make the tiny magnets that are often needed in the production of many electric motors.

Volkswagen said it would spend nearly $12 billion with its joint venture partners to launch 25 electric vehicles in the Chinese market between 2020 and 2025. Volkswagen already plans to launch 15 electric vehicles in China by 2020.

Daimler, the maker of Mercedes-Benz and Smart cars, said at the Guangzhou auto show last month that it plans to significantly increase investment in the production of electric vehicles, especially batteries.

“In my view, China will be the biggest long-term market for passenger cars,” said Hubertus Troska, the member of Daimler's board of management responsible for China. Many of these cars will be fully electric, he added.

GM, which competes with Volkswagen for market leadership in China, has moved much of its all-electric vehicle research and development efforts there and is drawing up plans to expand sales of all-electric vehicles there.

"Globally, especially in China, there is a shift in the auto industry, new companies are emerging, and they are all focused on electrification products," GM China's chief electrification engineer Jennifer Goforth said Tuesday afternoon. said in a statement.

The supply base for pure electric vehicle parts is expanding rapidly in China due to changes in the automaker's production plans, Jason Luo, chairman and chief executive of Ford Motor (China), said in an interview on Tuesday. That has the potential to give China the economies of scale that make it difficult for others to compete, the same economies of scale that have made it a major global supplier of everything from solar panels to drones.

Luo Guanhong said that "I call the turning point" mass production of pure electric vehicle parts, once it becomes a reality, will cause prices to fall and sales to take off.

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Ford's market research has also found that consumers in China are less concerned than consumers elsewhere about issues such as how far a pure electric vehicle can go on a single charge, said Peter Fleet, president of Ford's Asia Pacific operations. too concerned. This may partly reflect the fact that cars in China mainly drive within cities.

Bill Ford Jr. has long had an interest in alternative fuel vehicles. In an interview, he said that when he was young, he had the idea of being an environmental activist, and later decided to work for the company founded by his great-grandfather. He felt that he could make a greater contribution to the world by doing so.