The Chinese government recently unveiled a plan to allow new players to enter the electric vehicles sector. Several companies outside the auto sector, including handset maker Xiaomi, have expressed an interest to explore the opportunities before the announcement, Guangzhou’s 21st Century Business Herald reports.
The National Development and Reform Commission published a draft plan regarding new electric vehicle projects and production on its website on Nov. 26.
“The bar is set high. There are probably only two to three local companies that can meet the requirements,” said Chen Quanshi, a professor at Tsinghua University in Beijing. China tightened the rules governing the issuance of new licenses for auto production after it came to light in 2009 that the country has the highest number of auto factories, but sources told the newspaper that the situation is about to change.
The emergence of American electric car maker Tesla has made Chinese policy makers realize that the new energy cars they are trying to push might not necessarily come from traditional car companies, sources said. According to the draft plan, companies planning to apply for an electric car manufacturing license are required to have three years of experience in research and development of electric vehicles, and own patents on batteries and the electric control system.
Data from the Ministry of Industry and Information Technology showed that the production of new energy cars between January and October reached 47,000 vehicles, growing nearly fivefold from last year. Many companies outside the auto sector have been tempted by the potential of the sector, which has received great policy support in recent years even before the draft plan was announced, said the report. Smartphone maker Xiaomi is one of these companies, made known by co-founder Lei Jun in an article he published on electric cars, expressing an interest in the business after meeting Tesla founder Elon Musk.
The recent trip made by Xiaomi co-founder and vice president Li Wanqiang to Silicon Valley for an undisclosed new product of the company is suspected to be for new energy cars, the newspaper said.
Handset and telecommunication equipment maker Huawei, on the other hand, has chosen to team up with car maker Dongfeng to tap into the business opportunities surrounding electric cars, the newspaper added.
Zhejiang-based Wanxiang Group, which set up an electric car subsidiary in 2003 and acquired a license to produce special purpose cars in 2008, is widely expected to be the likely winner of the new license, said the report.
Several companies licensed to produce sports utility vehicles, but not sedans, are also eyeing the opportunity, which will allow them to build electric sedans.