Managing The Dragon

“If the policymakers and the capital providers are both telling you to do it (i.e. build EVs)…then you’d better get on and just do it.”

Even those who consider themselves somewhat knowledgeable about the electric vehicle (“EV”) industry would be hard pressed to name more than a handful of EV battery suppliers.

Tesla’s experience in China so far has actually been quite good.

In 2016, almost 95 million autos were made and sold globally, nearly all powered by an internal combustion engine (ICE). For the past 100 years, internal combustion engine (ICE) powered vehicles, and readily available oil supplies have dominated autos. The winds of change are blowing, however, and many believe that the $2.0 trillion global auto industry is about to undergo a significant transformation as all-electric vehicles (EVs) begin to replace ICE vehicles.

While vehicle sales in January and February are always problematic due to the timing of Spring Festival in China, a number of additional cross currents were at work this year.

More than three million shared bikes can now be seen in over 40 Chinese cities. From a standing start at the beginning of 2016, there were an estimated 18.9 million bike-sharing app users in China at year-end, a number that is expected to triple in 2017.

By any definition, the global electric vehicle (EV) industry appears to be at an inflection point. UBS, a large securities firm, believes that significant change is on the way and predicts that a growing global electric vehicle fleet will be disruptive to gasoline demand by 2031.

2016 turned out surprisingly well for China’s automakers. Among other factors, auto sales benefitted from the cut in the purchase tax on small cars initiated by the Chinese government in the final quarter of 2015 to boost flagging demand. The resulting surge in sales carried over into 2016, and when rumors surfaced later in the […]

Ever since MTD began making China predictions in 2009, the state of China’s economy has been a major question mark. For that reason, I have felt compelled to throw my hat into the ring and make my own prediction for the growth of China’s gross domestic product (“GDP”).

As in past years, MTD made its predictions for 2016 last January, and it is now time to grade our paper.