Guess who’s the leading exporter of cars today...
IN its heyday in the 1950s, the British car industry was second only to its American cousin. How things have changed. First, German car makers dominated Europe with their luxury brands stealing the UK’s place as numbertwo car exporter to the world.
Then Japan, with its own car industry, keenly eyed the European and American markets and successfully competed by creating more reliable vehicles than their British and American counterparts to become a force to be reckoned with. It was Thatcher’s stroke of genius that led to Japanese car manufacturers coming to the UK, helping boost Japan to become the number-one car exporter in the world, overtaking America and Germany.
Meanwhile, in China, if I told you there are over 200 car manufacturers, you’d probably be surprised. But think about the British iconic brand that was MG, and how many more of those new electric MG cars you see on the roads today. China’s largest carmaker acquired MG in 2008.
This is just an example of how China has now usurped the lot to
become the number-one exporter of cars in the world.
Looking back, it seems obvious how they did it. Instead of competing on the internal combustion engine, China chose a different route to that of the West by taking the next technological leap – into the electric market, where Europe and America are now playing catch-up.
Ultimately China achieved its number-one status through its
government investing billions into creating an electric car industry.
It then controlled the supply of the rare earth metals that go into the main component of an electric car – its battery – just as it has done with cobalt, an equally essential mineral.
Some 80% of the world’s supply of cobalt comes from the Democratic Republic of Congo – where China exercises a great deal of control. No wonder Tesla is now exploring hydrogen technology as a way to break the Chinese stranglehold on electric battery technology and supply.
It’s companies like BYD (Build Your Dreams) that are now looking to come into the UK, Europe and America after conquering Latin America and the Middle East with new electric cars.
Given that an electric car is basically a battery with a shell on top of it, the legacy car manufacturers will find it hard to compete on price and technology even if Europe follows America’s suit to increase tariffs from 10% to match the 27.5% imposed by America.
Though in my mind this will not deter the Chinese, as you can’t compete with them on price when they control the supply of components for the batteries.
As with everything, time will tell where the technological revolution will take car manufacturing, and this is reflected in the secondhand price of electric cars.
As with any new technology, if you are first into the market the product costs a lot, and over time the price will drop.
Just think of the cost of plasma televisions and mobile phones and how over the last decade these have plummeted.