Visitors look at a new-energy vehicle on the sidelines of the 2019 World New Energy Vehicles Congress in Bo'ao, South China's Hainan Province on Monday. Photo: VCG

The new-energy vehicle (NEV) industry involves a future contest of economic prowess among nations and China has built up an edge in leading relevant NEV technologies such as batteries, industry representatives said. 

The rise of the NEV industry, led by China, also could challenge the petrodollar system as well as the US dollar's status as the world's largest reserve currency, potentially thwarting US' global economic hegemony, according to analysts.  

The comment was made after the first World New Energy Vehicle Congress, which highlighted China's breakthroughs in NEV technology integration and applications, kicked off in Boao, South China's Hainan Province on Monday. The theme of the three-day event is "New Era, New Revolution and New Industry."

Chinese President Xi Jinping sent a congratulatory letter welcoming the opening of the conference on Tuesday. "The NEV industry has entered a period of fast growth, which not only injects new dynamics to the economic growth of individual countries but also helps cope with climate change and improve the global environment," Xi said in the letter. 

Some participants told the Global Times that they are impressed by the cutting-edge technology of Chinese NEV makers at the exhibition, such as the ability to make electric battery packs.

"Based on current trends, the NEV industry will be another area for China when it comes to leading a high-technology sector of core competitiveness, in addition to 5G, in the next five to 10 years," Zhu Bin, director of investment promotion agency Invest in Finland Greater China, who also participated in a panel discussion at the NEV conference in Hainan, told the Global Times on Tuesday. 

"China-led efforts to develop the global NEV industry could mean a lot in countering the petrodollar system. Traditionally, the internal-combustion vehicle created huge demand for dollars, but the rise of electric cars is putting the US dollar's hegemonic status at risk," said a participant of the event, who only spoke on condition of anonymity. 

For NEVs, the battery is a key component, and China has attained advanced technologies in the segment that neither the US or the EU can match, Jia Xinguang, an independent car industry analyst, told the Global Times. Jia noted that China needs to persist in research and development in batteries.

Zhu noted that China, Europe and the US are known as the three poles of the global NEV industry, but China has an overwhelming competitive edge in terms of the completeness of industrial chain from power battery manufacturing and development, car design and manufacturing, charging service and recycling. 

"EU electric carmakers may excel in motor techniques and car-building ability, but they still rely largely on imports of electric batteries from Chinese producers," Zhu added. "In contrast, Chinese NEV industry is self-sufficient," he said.

Last year, the electric batteries made by Chinese suppliers had a market share of more than 60 percent, according to data provided by the China Association of Automobile Manufacturers (CAAM).

Largest market 

China has now become the world's largest NEV market in terms of both output and sales as demand shoots up. 

Last year, China produced 1.27 million NEVs, up 59.9 percent from the previous year, according to data released by the CAAM, while 1.256 million NEVs were sold, rising 61.7 percent. China makes more than half of the world's vehicle batteries and prices are forecast to fall to the point where electric cars will be cheaper in China than fossil fuel-powered vehicles.

The Chinese government's full support for NEVs also played a significant role behind the rapid expansion, according to Jia.

Chen Zhixin, president of SAIC Motor, said at the conference that China has a "government-led mechanism" that pushes forward the development of the domestic NEV industry and accelerates research of key technologies and standards. 

In recent years, China has offered huge subsidies to NEV makers to drive the industry's fast growth. As the industry matures and economies of scale emerge, China will phase out subsidies by the end of 2020. 

In Hainan, where the conference took place, local authorities have vowed to have all vehicles running on new energy by 2030. 


Newspaper headline: China builds bulwark with NEV rise