Gaming the Electric Car Chase

As the four front-runners sprint around the track, some favorites could end up in the dust.

NOVEMBER 2010

CHINA

Size of the bet: $15 billion by 2020

Strategy: Beijing has set wildly ambitious targets for its car companies, demanding that they put 500,000 electric cars on the road by the end of 2011, three to four years ahead of their U.S. competitors. The country is also luring foreign innovators with cheap manufacturing -- in exchange for invaluable intellectual property.

Why it could win: Because it really, really wants to.

Why it might not: Brains. Virtually all the leading battery-development scientists in the world live elsewhere, and China doesn't hold any of the patents for today's most cutting-edge technologies.

JAPAN

Size of the bet: $6.8 billion in subsidies for electric and high-efficiency vehicles

Strategy: Japan's car companies have partnered with local electronics giants, aiming to seize the new market for both batteries and electric cars.

Why it could win: Because it's winning today. Japan figured out the future of battery-powered locomotion before anyone else: The country's companies launched the first version of today's lithium-ion battery and sold 43 percent of them last year.

Why it might not: Japan has a relatively small domestic consumer base and relies on exports -- leaving the country at the mercy of Chinese and American trade protectionism, which has proved a stumbling block before.

SOUTH KOREA

Size of the bet: $12.5 billion over the next decade

Strategy: Unlike the other big three, South Korea isn't expending much effort on building hybrid and electric cars -- its companies have a single-minded focus on winning the battery game.

Why it could win: South Korea has a record of needling its way into Japanese markets. In 2005, South Korean companies began to crack the Japanese hegemony over consumer electronics such as flat-screen televisions. Industry analysts see a similar future unfolding in advanced batteries.

Why it might not: Japan has a record of figuring these things out first.

THE UNITED STATES

Size of the bet: $27 billion in loan guarantees and grants

Strategy: The U.S. government is pumping money into joint ventures between domestic car companies and foreign battery manufacturers. Its stimulus bill also poured billions for battery work into the government's elite research laboratories.

Why it could win: Because it has to. The United States badly needs a new platform for economic growth. History counts for something, too: Every major battery breakthrough of the last 100 years has originated in the United States.

Why it might not: Have you visited Detroit lately? The American manufacturing base is a thing of the past.

WILLIAM WEST/AFP/Getty Images

 

CORSTRAT

3:29 AM ET

October 13, 2010

China Will Win. Why?...

Because it has the internal needs, and yes it does have the "brains". Perhaps not in the scholastic sense, but in common sense and more importantly "street" sense.

While the rest of these countries are spending billions to develop the "end product" with the consumer as an afterthought, China is now concentrating on the "whole" market with the consumer as the key player.

The primary roadblock to considerable EV sales is not the concept or even the cost. It is the limiting factor of “refueling” that restricts the EV driver to only being able to get from point A to point B. Once the consumer has comfort that he can get from point A to B and on to the rest of the alphabet, EV’s will flourish. Admittedly, China is the best positioned to address this problem with the world’s lowest cars per capita in such a rapidly developing country. With the vast majority of it 300 million emerging middle class with 50 million added each year still using scooters and mopeds as their primary vehicles, a move up to an economic min-ev is a luxury not a concession.

"China doesn't hold any of the patents for today's most cutting-edge technologies"?

Not so fast. Even as this article was being published, young innovative companies like China based, US NASDAQ listed Kandi Technologies (KNDI), China’s largest exporter of mine-ev’s to the US with over 3500 in the past twelve months alone, and patent holder to two minute battery exchange technology, announced the imminent opening of its first six mechanized battery exchange stations in Jinhua China next month. Not by themselves, but as the leader and 30% owner in a three way Joint Venture with Tianneng Power International, Ltd. (China’s dominant vehicle battery manufacturer), and State Grid Power Corporation, PRC owned largest Electric Utility and Worlds 8th largest Corporation.

http://www.marketwire.com/press-release/Kandi-Announces-Joint-Venture-With-Leading-Domestic-Battery-Maker-Power-Company-Create-NASDAQ-KNDI-1329714.htm

The KNDI model address the total problem. KNDI makes and sells an attractive mini-ev for around $6000 US without the battery. Tianneng provides the battery as a lease, and State Grid builds the main battery charging farms and stations. A common sense, totally scalable operation that was developed and implemented in less than twelve months.

Don’t bet against China.