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Setting standards for electric vehicles could make China a global leader

10 October 2011 Inderscience

Can the rapidly expanding automobile industry in China leapfrog to electric vehicles and so avoid the environmental harm that further decades of internal combustion engine use could cause? In a paper published in this month's International Journal of Automotive Technology and Management, management researchers Hua Wang and Chris Kimble of Euromed Management École de Marseille explain how China could make such a leap by setting standards.

The researchers explain how the idea of leapfrogging, where a newly industrializing nation moves directly to the use of more advanced technologies without following the path of its predecessors, is an attractive idea but is often poorly understood. They suggest that it is especially pertinent in the automobile industry where there is an urgent need to develop technologies that are more sustainable and reduce dependency on oil. Having reviewed previous research in the field, they describe three routes that China might follow as its electric vehicle industry develops and grows.

The first sees China import core technologies from abroad and, using the economies of scale available from its domestic market, take a global lead in volume production. In the second, a lack of clear government policies means that China only grows in one segment of an existing market, such as electric bikes or low-speed electric vehicles.

The researchers concede that neither of these scenarios is likely to be attractive to industry or the Chinese government. "In the first", they explain "neither the social nor the technological pieces of the puzzle fall into place" and China ends as a volume production leader but a technology follower. In the second, “although the technology works, weak governance means that the potential dominance of a niche market could be lost."

Their third scenario could prove more advantageous for China. Instead of following the lead of other nations, it could build on its recent domestic legislation on standards for electric vehicles and, through its sheer economic power and prowess in mass production, take the lead in setting the standards for the world market. In doing so China would take the high ground before the other nations were able to catch up and create their own standards.

"Based on its understanding of the technological constraints of EVs and systems of governance that allow it to implement a single standard across a globally significant market, it might be possible for China to implement a paradigm changing leapfrog that will make it a global leader". However, until the race has been run, all of this will remain speculation. Will China successfully leapfrog to electric vehicles? Only time will tell, the researchers conclude.

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