Author: Tanessha Paranjape and Amit Koshal

Withthe recent launch of its Cybertruck, the American based Tesla proved itself tobe the EV giant once again. Although from the global perspective, China remainsthe most dominant player. The questions pertain- Is the future of EV ‘Made inChina’? Countries have finally woken up to face the imminent problem of climatechange and are taking efforts to reduce their carbon footprint globally. In thewake of the same, a shift from combustion engines to sustainable electricvehicles is on the rise.

AnEV uses electric motors or traction motors for propulsion. Basically, theyutilize electricity instead of fossil fuels. Since EV produce negligible to zerotailpipe emissions, they are the cleaner alternative driving towards a greenfuture. There are four types of EV.  BatteryElectric Vehicles (BEVs) are fully electric vehicles which use rechargeablebatteries to run the electric motor and onboard electronics. They also useregenerative braking wherein the electric motor slows down the vehicle andpartially recovers the energy that would have been converted to heat duringbraking. They do not have a gasoline engine and hence are the greenestvehicles. Hybrid Electric Vehicles (HEVs) use electricity as well asgasoline. First the electric motor uses regenerative braking and then itswitches to the combustible engine as the speed or load increases. It is stillmuch cleaner than using fully gasoline powered vehicles. Plugin HybridElectric Vehicles (PHEVs) are capable of recharging the battery by usingregenerative braking as well as by plugging in to an external source ofelectric power like an EV charging station. While standard hybrids run forabout 1.5 to 3.5 kms before switching to the gasoline engine, Plugin Hybridscan go from 16 to 65 kms before making the switch. Fuel Cell ElectricVehicles/ Fully Hybrid Electric Vehicles (FHEV) uses an electric motorwherein the fuel cell draws in oxygen from the atmosphere and reacts with thestored hydrogen resulting into a chemical reaction which moves the vehicle. Theonly emission or byproduct is water and hence it is considered as the cleanestEV, although it is still in development phases.

According to the “Global EV Outlook 2019"report brought out by International Energy Agency,  China remains the world's largest electriccar market, followed by Europe and the US, while Norway is the global leader interms of electric car market share. More than 2 crore EVswere sold by Chinese companies. With sales in the tens of millions per year,the Chinese market for electric two-wheelers is hundreds of times larger thananywhere else in the world. This is predominantly because of the governmentalsubsidies granted in EV sector under the ‘Made in China 2025’ industrial initiative.On an international footing, Chinese companies are the emerging forces in EVtechnology in USA and India as well. This is because of two reasons. Firstly,China majorly controls the lithium supply which is needed to make batterieswhich powers the EVs, by acquiring mines in Bolivia and Congo. Secondly, Chinesecompanies hold a huge number of patents to manufacture the said batteries. Moreover,China is also the home to nine out of the top 20 selling EV brands worldwide .

Ascan be seen from the data below, Chinese companies possess the most number ofpatents in the EV sector followed by USA.

The Chinese company  BAIC group and ‘Build Your Dreams’ or BYD Auto were the leading players in EV sale . In the global patent perspective, BYD auto holds the most number of patents in the EV Sector as can be seen from the data given.

China has the biggest EV market and its expanding globally, although at a slow pace. However, it is tough  for foreign companies to tap the Chinese EV market. Firstly, when companies reach the mass production scale, labor cost is crucial, and these companies cannot compete with the low labor cost that Chinese companies offer. Secondly, if a foreign company wants to open shop in China, it must form a joint venture with a Chinese company by manufacturing in China and sharing blueprints. This leads to the foreign companies losing exclusive control over their Intellectual Property. 

InIndia, Mahindra is the leading player in the EV sales currently. AlthoughChina’s SAIC Motor Corporation already established a  foothold in the Indian market through itssubsidiary - MG Motors by planning a $350 million investment in India.  Chinese company Sunra is also interested insetting shop in India as it sees India as the biggest market to sell electricbikes. More and more Chinese giants will take up space in the EV industry inboth India and USA considering the pace at which they are expanding. However, withtech giants like Tesla in the game, it will be interesting to see if Chinawould still be at the forefront in EV tech 5 years down the line.