Quick trivia question: how many plants are there in the United States currently building electric cars?
To be generous, we’ll allow both battery-electric and plug-in hybrid models. Any idea?
The answer turns out to be four.
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Meanwhile, China—which has a long-term goal of dominating the world’s electric-car sector—has now licensed nine separate electric-car plants.
That factoid comes via NEVS, the Chinese company using some of the remnants of the old Saab brand to build electric cars.
It has just inked a deal to develop and build electric cars jointly with Iconiq, one of dozens of existing Chinese automakers.
Saab 9-3 EV electric prototype shown by NEVS, 2014Saab 9-3 EV electric prototype shown by NEVS, 2014NEVS starts production of 2014 Saab 9-3
An important step in the deal was passed when the Chinese government granted the pair its ninth license for an electric-car assembly plant.
To understand what that licensing process represents, and how seriously outsiders should take the granting of such a license, we reached out to an old China hand.
Michael Dunne, of the consultancy Dunne Automotive, has more than 20 years’ experience in the market. He wrote:
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Chinese officials love to use licenses to shape their industries, and the electric-car sector is no exception. The government gets special powers derived from granting licenses:
Licensing creates the perception of scarcity: companies jostle frantically for approval before the “door” closes. Until China joined the World Trade Organization in 2001, China had granted rare auto-production licenses to only a handful of foreign players: Volkswagen, Jeep, GM, Honda, Suzuki, and Peugeot.
Officials get to decide who is allowed to play the game. Just ask Google or Facebook how that works.
Venucia E30 (Chinese version of Nissan Leaf electric car), Guangzhou Auto Show [photo: ChinaAutoWeb]
By limiting the number of players, the industry should get to scale sooner.
Licensed players are members of a privileged circle. Benefits comes in the form of subsidies, exemption from quotas or EV purchase mandates.
Because government agencies and city-owned taxi fleets are major buyers of EVs, a license starts to look like a purchase order.
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In other words, the granting of electric-car assembly-plant licenses lets the government reduce the number of players to boost efficiency, conveys official imprimatur and an incentive for other government bodies to buy the cars, and limits the potential for non-Chinese companies to direct the country’s auto industry.
Oh, those four electric-car assembly plants in the U.S.?
The highest-volume one to date is the Tesla factory in Fremont, California, which built slightly more than 80,000 vehicles last year. That number is expected to soar when the Tesla Model 3 goes into production.
2014 Tesla Model S in China
Then there’s the huge Nissan facility in Smyrna, Tennessee, where the Leaf is built alongside various gasoline models.
Finally, there’s a pair of GM plants in Michigan.
Those are the Orion Township plant where the Chevy Bolt EV is assembled, along with the Chevy Sonic subcompact, and the Detroit-Hamtramck plant where the Chevy Volt is built interspersed with several other vehicles. (That plant also built the now-defunct Cadillac ELR.)
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