Should we worry about Chinese EVs?
Should we worry about Chinese EVs?
The latest news from Britain's EV sector
Hello, I’m Tom Riley, and welcome back to The Fast Charge, a British EV newsletter.
Top story in today’s edition… Further to reports about state-backed hacking, I ask whether we should be worried about Chinese EVs.
Elsewhere… Fisker is still in trouble, Ofgem looks at ‘dynamic’ pricing, and BBC’s The Apprentice contestants undertake an EV challenge.
Finally, I’m going to try and get to Everything Electric on Thursday. If you want to link up, do drop me a line by replying to this email.
Should we worry about Chinese EVs?
Background: You may have noted over the past week that China has been called out as “reprehensible” by the UK government. The reason is the Chinese have undertaken a steady drumbeat of state-backed cyber attacks on UK individuals and institutions these past years. According to the National Cyber Security Centre, amongst other attacks, they accessed some 40 million British voter records. As a result, several Chinese individuals have been sanctioned by the UK.
Why is this important to discuss? This topic isn’t one the EV sector tends to debate that much. And I get it. Companies in this space are growing and receiving capital because of the legal deadline to go all-electric from 2035. These businesses, such as charging networks and car dealers, rely on there being affordable EVs, such as those coming from China, to succeed. Everyone would, obviously, love it for them to be made more locally, but that’s generally a nice-to-have rather than a red line. So, when this topic crops up in the debate, I’m never surprised when folk skate over it.
The facts… According to recent data submitted to Parliament by SMMT, Chinese-owned brands account for 10% of the UK's new EV market, with a further 20% accounted for by non-Chinese brands manufactured in China. And those figures are expected to grow as Chinese carmakers like BYD, ORA, and Omoda begin to sink their teeth into UK consumers. You may recall, I recently found these carmakers pushing adverts online about their low prices. Before too long, there may be millions of these cars being used by British drivers.
So, the big question… Should people be worried about the Chinese state increasing its footprint in the UK? Or is this all just overblown nonsense – after all, loads of our other goods and services are made in China? Here’s a short summary…
First off, this week… There have been several major media stories about the prospect of China potentially ‘paralysing’ its EVs remotely on UK roads. Frankly, I cannot personally envisage anything that extreme ever happening – it would be such an open attack on the UK that it would lead to significant retaliation, including from our global partners, such as those in the Five Eyes (Canada, US, New Zealand, Australia).
However… Chinese cyber espionage is well documented and said to be increasing. Additionally, worth remembering that the Chinese government demands loyalty from companies operating within it. While China has always denied it would ever seek access to data belonging to company customers, the fact that Huawei is being removed from the UK’s 5G network is an example of security service concerns. Likewise, one year ago, Ministers were banned from using TikTok on their official phones over similar worries.
Ultimately… In a world after Snowden and Assange, most people probably always assume in the back of their minds that when they say or do anything connected to the internet, it’s trackable – such as when you speak about sunglasses in front of your Alexa, and then suddenly you see lots of ads for them on your phone. But, importantly, China’s spy services aren’t trying to sell you Ray Bans.
State focus… The export of cars is hugely important to China. At the recent National People’s Congress – China’s legislative body – the country’s EV manufacturers were said to have taken the “spotlight” as China focuses on building upon its global dominance. Most (or all) major Chinese carmakers are benefiting from state support. This means they can price themselves extremely competitively to other carmakers and access a fully integrated supply chain at home. The EU believes, on average, Chinese EVs are 20% cheaper than European models. And they can go further still – there have been several reports about how BYD could overnight cut costs on its exports.
Naturally… There are ways we can keep China’s imports competitive with more locally-made EVs. Already in the US, they have placed tough tariffs on Chinese models (a Trump initiative that Biden looks set to double down on). The EU also looks set to follow suit – as it has been investigating subsidy claims – and in time it’s likely the UK will align itself with whatever the EU does. This may mean higher list prices for Chinese EV imports.
Lest we forget… From 2027, to access zero tariffs, rules of origin requirements between the UK and EU will incentivise EVs that contain locally made parts and batteries. The UK government is also investing billions to develop British automotive projects. Although, already China is working around this by opening its chequebook to the UK and EU too. For example, only this week reports suggest the West Midlands gigafactory site will get £1bn from the Chinese company EVE Energy. It will mean thousands more jobs, albeit further reliance on Chinese tech.
Proceed with caution… The laptop I wrote this newsletter on was made in China. We all deal with and trust Chinese products to work every day – probably without even thinking about it. However, a car is very different from a laptop. It’s often the second biggest purchase people make outside of buying a home. And, let’s be frank, if an estate agent explained your prospective two-up two-down was actually made in the Pingshan District of Shenzhen… you’d probably raise an eyebrow. China has always been a ‘necessary evil’ in the global market, though with our legal ZEV deadline in place for 2035, there’s all the more reason for us to ask questions.
Do you have a different view? Let me know by leaving a comment or email me.
Top EV news…
🚘 Carmakers such as VW are telling their suppliers to switch focus from EVs to hybrid vehicles as they contend with “a marked slowdown”. Read more (paywall).
🫰 Meanwhile, Nissan wants to cut its costs for making EVs by a third by 2030. See here.
😢 EV start-up Fisker continues to have trouble. Last week they were removed from the New York Stock Exchange and look set to go under. Read more.
🛜 It’s suggested that Tesla could soon deploy wireless charging and offer an aftermarket upgrade for its Cybertruck. Read more.
🔋 Interesting feature in Autocar about how sodium could end up being used in EVs to reduce costs. However, they are not as perfect as lithium batteries. Read more.
⚡ After recently acquiring Bonnet, OVO Energy has now launched a new public charging offer that could save drivers up to £220 a year. Read more.
📊 Speaking of energy, Ofgem is exploring whether the price cap should be upgraded so it’s more ‘dynamic’ and based on the time of day. Learn more.
🏎️ Rimac, the company behind the electric supercars, is expanding its foray into battery storage by opening a new centre in Oxfordshire. Read more.
📰 Another great mythbuster in The Guardian explores whether EVs are too heavy for our roads, bridges, and car parks. Read more.
🚔 How can the blue light sector go green? The Emergency Services Times has outlined five steps to follow further to a recent conference for fleet managers. Worth reading here.
🔌 West Midland’s Combined Authority has released images of rapid charging hubs it plans to build in the region. Each site will have 20x 150kW chargers. The design looks pretty tasty. See here.
⛽ Shell recently shared plans to transition away from some 1,000 petrol stations in favour of EV chargers between 2024 and 2025. Read more.
🛒 Elsewhere on EV charging, there have been numerous reports about Asda reducing the number of devices it has live at stores. At the start of 2023, Asda had 165 chargers but now only has 46 in operation. However, the caveat buried within is that Asda is looking to upgrade its sites, so it can compete with the likes of Tesco and Sainsbury’s. Read more.
😀 A positive case study about owning an EV in… the MailOnline.
📺 On last week’s BBC The Apprentice, the contestants were tasked by Lord Sugar with creating an advertising campaign for an EV. I’ve not watched all of it yet, but it’s on iPlayer here.
🤦 Finally, last week I published a story about Whitehall’s plan to solve grid issues. It seems a draft version went out by mistake without the government’s response. Oops. The article is updated online.
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