Does China own the keys to the Chevy Volt?
GM's plug-in wild card?What's the coolest car in China? It's a Buick, of course, which is good news for GM, as China is the hottest automotive market in the world. In fact, quite soon GM could be selling more than 3 million cars in China annually.
And that's the thought I couldn't get out of my head yesterday during a GM conference call on the Volt and the lithium-ion batteries powering GM's EV. During the call, GM mentioned the importance of its battery lab in Shanghai, China, a lab focused on next generation propulsion systems, such as the Voltecs powering the Chevy Volt.
Why care?
China is quickly becoming a very important lithium ion manufacturer and the country is developing fairly aggressive plans to increase electric vehicle adoption. If GM can work this relationship successfully, they might be able to own a piece of lithium-cell manufacturing and increase the profitability of all their battery-powered vehicles. Moreover, selling Voltec vehicles in China helps scale down costs in all markets.
Certainly, GM's battery-powered dreams are not dependent upon China, but the potential of GM's Chinese play is extremely intriguing.
posted by Dahcredyns at
9:36 AM
4 Comments:
This is a tangent comment, but virtually all cars sold is the US are replacements, so the car population is not increasing. It even decreased during the recession. Most of the cars sold in China add to the total number on the road. Even if someone in China replaces one, the 3-5 year old car will be around for another 10 years.
My guess is that it takes 2 to 4 American hybrid sales to offset 1 new car in China. They're selling at more than 10 million/year now.
I think I'll pay someone in China not to buy a car. Can I get a loan for that?
Great tangent, yet I'm not so sure it's really a tangent.
10 million sales per year. That's barely tapping the market potential of China. That's the scary part. If China follows America's trajectory, well, it's simply not feasible within the parameters of a petroleum economy.
Fortunately, China does seem to have some realization that the idea of 30 or 40 million gas guzzlers sales per year is a losing proposition. That's why the EV market, I'd bet, will probably be defined in China, not the US, and that could put GM in a very sweet spot.
Of course, China might just kick GM out sometime in the future. That's the converse danger, and based on rhetoric coming from the Chinese military, such a move wouldn't be totally unexpected.
Moreover, tax manipulation, etc. could make BYD range extended vehicles much more profitable than GM Volts in China, without being so militaristic, etc. So, if I were GM, I certainly wouldn't put all my eggs in the Chinese basket.
Still, to your point, the China realization is more evidence of the need for the US to move as quickly as possible to non-petroleum resources, particularly foreign. Ultimately, I think we have everything to gain and nothing to lose from becoming energy independent as quickly as possible.
The Chinese lithium market is over-stated. We just have a collective hair in our asses regarding China, although that hair is somewhat justified. (Buy any Chinese milk for your newborn recently?)
The big lithium markets are Bolivia and, I believe, Chile. But Bolivia has a hair up its ass regarding America and that's why Japan is trying to cut deals with it to secure those future rights.
If we want to get serious about lithium for the long run, we need to re-think our policies about Bolivia and Chile and let China suck eggs.
There is no doubt that South America is home to the largest supplies, however, China has a pretty sizable supply. Likewise they already use home supplies for cell production, and they have rare metals and rare earth metal refining.
These resources and manufacturing capabilities coupled with China's fast growing auto culture and devastating pollution point to a robust battery-powered future for China, and if GM is a top selling automaker in China, it would seem to provide great opportunities for GM.
That being said, I do completely concur that the US needs to greatly improve its relationship with South America.
Toyota has already made some big lithium deals, and now that the Japanese government is getting directly involved in the latest negotiations, I don't see how America can continue to sit on the sidelines.
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