How China could redefine the car

chinadialogue

One of the most significant single developments for the global environment is the recent transformation of urban mobility in contemporary China. The number of cars in China, already the world’s largest auto market after the collapse of demand in the United States two years ago, increased from 9.2 million in 2004 to 40.3 million in 2010 and the total number of vehicles from 27.4 million to 90.9 million.

Growth is expected to continue at 7 per cent to 8 per cent annually in the medium-term, helping to sustain China as the global leader for absolute national greenhouse-gas emissions as well as catapult it towards a dauntingly high per capita carbon footprint

This growth has many consequences, and not just for global climate change: so too for burgeoning urban areas being (re)designed around the ‘smooth’ movement of cars; for intolerably unhealthy levels of atmospheric pollution; for car death and injury rates among the highest in the world; and for rapidly rising oil consumption, with the growing risk of geopolitical competition or even conflict. Indeed, American car intensity would seem impossible within China as this would mean some 970 million cars consuming 33 billion barrels per year, or 102 per cent of current world oil output.

Aware of these issues, the Chinese government, at both national and local level, is increasingly focusing efforts on a supposedly singular technological opening: electric vehicles (EVs). EVs have been identified as one of seven “key strategic emerging industries” for the next five years. One hundred billion yuan ($US15.7 billion) of support over the next 10 years has been announced, with a view to getting 500,000 EVs on China’s roads by 2015, and five million by 2020. EVs are subject to 0 per cent sales tax and receive consumer subsidies of up to 60,000 yuan ($US9,400) from central government, which is doubled by some city-based programs.

This policy focus has been matched by the striking emphasis of Chinese car companies, in comparison to those domiciled elsewhere, on developing EVs. The most high-profile internationally is BYD (Build Your Dreams) but other private car companies and major state-owned enterprises alike are also pouring concerted efforts into this market. International attention is growing too, with a stream of reports from major consultancies, think-tanks and international institutions such as the World Bank. 

There are several good reasons for this focus. Economically, the current global oligopoly of major multinational car corporations may currently be in crisis, but the opportunity for a Chinese company to break into these lucky ranks seems bound up with assuming early leadership in a new fundamental technology. Institutionally and geographically, China’s intense population density in the east of the country also makes it amenable to the compact and relatively short daily distance range of the EV, as against the large gas-guzzlers of America’s spread-out suburbs.

In terms of innovation too, existing and emerging Chinese strengths in electronics, batteries and nanotechnology fit well with development of EVs. And last, but by no means least, EVs do seem to have an environmental benefit – especially for local air quality but also for greenhouse-gas emissions – over conventional internal combustion engines, even given the current coal-dominated electricity generation, at least in many densely populated regions of China.

But EVs also come with significant problems. First, conventional cars that are EVs do nothing to solve the intensifying problems of traffic gridlock that plague Chinese cities. Second, while EVs may improve greenhouse-gas emissions in some regions, in others, especially coal-rich regions in the north and north-east, it has no such advantages. Third, despite the existing science and innovation strengths, innovation capacity for EVs in China remains highly dependent on foreign enterprise, while the record of technology transfer to date, including in the joint ventures that have dominated the Chinese car market, offers no promising precedent. 

All of these objections, however, may be diminishing as cities put quotas on licence plates, or the efficiency of coal-power stations is improved or innovation capacities are developed. There is one consideration, however, that threatens to undermine completely the grand plans of a transition to electric cars. This is the almost complete lack of consumer demand for EVs, despite the significant state subsidies for their purchase.

To some extent, this may be explained by the lack of a charging infrastructure – an issue that is also being addressed in Chinese cities with more commitment than elsewhere in the world. But it is also arguable that the lack of take-up reflects much more deep-seated problems for the EV policy. Moreover, it reflects a general weakness in the perspective of Chinese low-carbon innovation policy.

This policy focuses overwhelmingly on the development of new, ‘low-carbon’ technologies, in the expectation that R&D and invention alone will drive transition to a low-carbon mobility system. But a growing academic literature on low-carbon innovation is showing that these systems, and their transition, are inextricably both technological and social, to the extent that each of these cannot be understood without simultaneously considering the other.

From this perspective, it is clear that in the absence of significant consumer demand, any invention, no matter how technologically impressive or environmentally beneficial, will never be successfully introduced. This also forestalls the process of incremental improvements that underlies the majority of technological progress, so that a promising invention is likely to remain only an inadequate and uncompetitive prototype.

Once these irreducible socio-economic issues are considered, however, an alternative route to successful low-carbon transition presents itself. Where there exists consumer demand, perhaps from unexpected groups, for innovative but low-cost combinations of existing technologies, the possibility arises that these unpromising prototypes may develop in time into increasingly attractive, technologically sophisticated and competitive innovations. In doing so, they may even come to redefine existing social understandings of specific technologies, such as the car: what it looks like, what it can do, how it is used, owned, manufactured and paid for.

Such innovation is often called ‘disruptive’ because of its potential to unseat incumbent technologies and the corporate hierarchies built on their continuing success.

What has all of this got to do with the EV and Chinese policy? The answer lies in an example of such disruptive – and low-carbon – innovation that is already a striking success story in China, namely electric bikes, also called E2W, for electric two-wheelers. China is the undoubted leader in E2Ws, with approximately 120 million on the road by the year 2009 to 2010. The appeal of this transport is as a low-cost, speedy (maximum speeds can reach 40 to 50 kilometres per hour) and nimble form of transport, able to weave through congested streets and onto and off pavements.

Moreover, the market is dominated by small, start-up Chinese companies, some of which have grown to large enterprises, using their own technology. The E2W is thus a significant Chinese disruptive low-carbon innovation. Moreover, it is significantly ‘lower-carbon’ than EVs as it is smaller, lighter and more mobile, making it much more energy efficient. 

The real promise of E2Ws, however, is that they could redefine the very concept of the car. This is in striking contrast to the EV efforts of Chinese car companies, which are simply – and unsuccessfully – trying to change the engine in otherwise conventional vehicles.

Conversely, E2W companies are taking advantages of the opportunities for considerable experimentation and radical redesign of the car offered by an electric drive train, which removes the cumbersome engine and transmission of an internal combustion engine, around which the rest of the car is built; for instance, as E3Ws. This may, in turn, increasingly come together with seemingly isolated changes, whether increasing the levels of ICTs and digital technologies integrated into their design or the development of innovative vehicle-sharing schemes. 

There are, of course, important objections to E2Ws too. These include the penalties and even outright bans that several Chinese cities have placed on them, and the potentially negative environmental effects of increased demands for lithium being merely mitigated, not eliminated, by a shift of focus from EVs to E2Ws. 

The biggest objection, however, may be that E2Ws are likely to replace only bikes, not cars, and thus increase energy inefficiencies and demand. Certainly, this is possible, and indeed even likely insofar as electric ‘bikes’ and ‘cars’ are understood as simply replacements for existing technologies. But such understanding is not written in stone and there are significant economic incentives for disruptive Chinese companies and consumers to challenge these established definitions with new visions of vehicles and vehicle use. These new E2W or E3Ws, then, would not so much replace cars as render the very category outdated, obstructive and obsolete.

In this way, a transition in the whole socio-technical system of urban automobility may indeed emerge in China, possibly quite suddenly, and on the basis of largely Chinese enterprise. In contrast, given that the urgent challenge of decarbonising Chinese – and global – urban transport is one of completely changing the high-carbon, US-dominated model of the twentieth century, the existing policy of targeting global leadership in a low(er)-carbon cars is unlikely to yield significant results.

David Tyfield is a lecturer at the Centre for Mobilities Research at Lancaster University.

This article was originally published on chinadialogue – www.chinadialogue.net. Reproduced with permission.