$440 billion global drive in China for electric cars

DETROIT: Global car makers are planning a $US300 billion ($NZ440 billion) surge in spending on electric vehicle technology over the next five to 10 years.

Nearly half of the money will be targeted at China, accelerating the industry’s transition from fossil fuels and shifting power to Asian battery and electric vehicle technology suppliers.

The unprecedented level of spending — much of it by Volkswagen — is driven in large measure by government policies adopted to cut carbon dioxide emissions, and will extend technological advances that have improved battery cost, range and charging time to make electric vehicles more appealing to consumers, according to Reuters.

China for decades played catchup to German, Japanese and American car makers, which dominated internal combustion vehicle technology.

Now, China is positioned to lead electric vehicle development, industry executives say.

‘‘The future of Volkswagen will be decided in the Chinese market,’’ VW chief executive Herbert Diess said.

VW has decadesold joint ventures with two of China’s largest car makers, SAIC Motor and FAW Car.

Speaking earlier this week in China’s capital, Beijing, Mr Diess said China ‘‘will become one of the automotive power houses in the world.’’

‘‘What we find [in China] is really the right environment to develop the next generation of cars and we find the right skills, which we only partially have in Europe or other places,’’ he said.

‘‘We have very clear policies established here in China. Policymakers and regulators are requiring’’ a shift to electric vehicles.

As China and other countries place more restrictions on conventional petrol and diesel engines, car companies have accelerated the shift to electrifi cation.

A year ago, global car makers said they planned to spend $US90 billion on electric vehicle development.

The $US300 billion that car makers have earmarked to put electric vehicles into mass production in China, Europe and North America is greater than the economies of Egypt or Chile.

Almost onethird of the industry’s EV spending total, about $US91 billion, is being committed by the Volkswagen Group, which is aggressively trying to distance itself from the Diesel gate scandal, which has cost it billions in penalties and legal settlements.

VW’s sweeping electrification plan envisions capacity on three continents to build up to 15 million electric vehicles by 2025, including 50 pure electric and 30 hybrid electric models. Eventually, VW plans to offer electrified versions of all 300 models in its 12brand global portfolio, which includes Audi and Porsche.

VW’s staggering EV budget dwarfs that of its closest competitor, Daimler AG, which has committed $US42 billion.

In comparison, General Motors, the No 1 US car maker, has said it plans to spend a combined $US8 billion on electric and selfdriving vehicles.

Roughly 45% of the global industry’s planned EV investment and procurement spending, more than $US135 billion, will occur in China.

EV spending by major Chinese car makers from SAIC to Great Wall Motor could be matched or even exceeded by multinational jointventure partners such VW, Daimler and GM.

CEO Mr Diess said VW is ‘‘evolving from the model where we have been developing and bringing European technology into this market to a new phase where we will codevelop part of the automotive technology in China for the rest of the world. I think this is a significant step change.’’ — Reuters

❛ The future of Volkswagen will be decided in the Chinese

market