China’s Big Decision Would Impact U.S. Auto Strategy

This is big.

For a few months now, we’ve been following stories of certain countries playing with the idea of banning the use of gasoline and diesel vehicles. India, France, Britain, Norway, and Germany have floated plans to do away with the sales of new vehicles powered by fossil fuels.

France and Britain plan to ban sales starting in 2040, while India is looking at 2030. Germany hasn’t committed to a year yet, and Norway wants to see the ban go in place by 2025.

Now, the world’s largest car market is following suit, which could change everything.

The world’s largest auto marker is China. Plagued by chronic air pollution, the Chinese government is in desperate need of a plan to improve the environment. With dozens of electric models already for sale there and domestic automakers ramping up production, going electric makes environmental sense. There’s also an economic benefit that can’t be ignored.

The Chinese president didn’t announce a date to ban fossil fuels, but said he would set a deadline for carmakers to stop selling them in the country. Doing so would affect automakers around the world, especially in the United States. Everything from corporate strategy, capital spending, and trade policy would need to be revised. The move may even speed up the acceptance of EVs in the U.S., because automakers here would be forced to develop and refine the technology if they wanted to keep selling vehicles in China.

No doubt, this move would give China the upper hand in the market for electric vehicles.

While this is a potential game-changer, it certainly won’t happen tomorrow. A CNN article says,

But while electric sales are increasing fast in China, it remains an overwhelmingly gas and diesel dominated market.

Of the roughly 28 million vehicles sold in China last year, just over 1% were electric, according to the International Energy Agency. The agency defines electric cars as ones powered by batteries or hybrid cars that plug into the power source.

The Chinese government wants 5 million electric cars on the country’s roads by 2020.

Other signs, too, are pointing toward our electric future. Uber, for example, plans to remove gas and diesel-powered cars from use in London by 2022, while GM is working to create a brand of inexpensive EVs for the Chinese market.

The United States has no plan to ban the use of fossil fuels, though some states have proposed the idea of banning them by 2050.

This is happening, guys. From the looks of things, we’ve got about a generation left of driving our five point ohs before the world’s cars go electric.

When should the U.S. ban gas-powered vehicles?

-tgriffith

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