Some Chinese e-car makers mull alliance to save money
BEIJING: A handful of China’s many electric vehicle (EV) startups are considering setting up an alliance to pool resources, develop joint technology and bring cars more quickly to the world’s biggest autos market.
In a sign that the country’s fledgling EV industry is already consolidating as rules get tougher and competition fiercer, Shen Haiyin, co-founder and CEO of Singulato Motors, said his company and four others - CHJ Automotive, Hongxing Automobile Manufacturing Co, AIWAYS and WM Motor have discussed an alliance for months.
Keen to push for cleaner energy cars, in part to combat air pollution and a dependence on imported oil, Beijing wants eight per cent of carmakers’ sales to be so-called new energy vehicles (NEVs) - battery electric or plug-in hybrids - by next year, rising to 12 per cent in 2020, according to latest draft proposals released last month.
Sales of NEVs this year are forecast by the China Association of Automobile Manufacturers at around 700,000, roughly three per cent of the overall Chinese autos market.
Shen, known as Tiger Shen, told Reuters the start-ups aim to finalise the move by end September with the aim to start developing a common EV platform by the end of this year.
As the industry shifts towards smart, internet-connected, battery cars, with electrified powertrains, it’s increasingly hard for carmakers to differentiate, he said.
“Just like smartphones, whose gut is the same Android operating system across many brands, smart EVs should compete more on ownership experience and services,” Shen told Reuters.
The move to pool resources and know-how highlights how Chinese start-ups are scrambling to save time and money in developing products as they face increased pressure from established global automakers shifting into a new market, so far led by Tesla Inc.
Also, Chinese policymakers have put on hold approving new EV ventures because of concern that some start-ups have cut corners on technology or have set up just to access attractive subsidies.
Regulators are reviewing licensing procedures and may bring in tougher technical requirements early next year, three EV start-up founders and executives told Reuters.
Freeman Shen, co-founder and CEO of WM Motor, reckons the prospect of tougher new technical requirements is a big factor spurring start-ups to consider an alliance to develop basic vehicle technology.
“The government worries about some new start-ups, thinking some of them actually don’t have the technology and management expertise to be a legitimate player,” he told Reuters. “This shows start-ups need to work together to face competition from traditional automakers.”
“Gasoline car platforms are often over-designed,” said Singulato’s Shen. “Who needs cars with platforms that allow you to do a high-speed U-turn or slalom? While we want to design an advanced platform for plug-in battery cars, we don’t want to make platforms excessively over-spec’d.” — Reuters