Paper on the development of the Chinese EV industryRead an excellent paper on the development of the Chinese EV producers, and the help they got from the Chinese government. Part of the policy was that you could not sell an EV in China unless one of the 3 major parts was made in China. The foreign manufacturers, and therefore also their JV partners did not want to risk giving their technology away so did not set up Chinese production (and therefore could not sell EV's in China).
This left an opening for independent Chinese EV manufacturers, who have very rapidly moved up the curve (at least as much by innovation as copying) and provide 94% of the rapidly increasing Chinese EV sales. This is now a huge threat to the foreign manufacturers and their JV's that have a majority share of the ICE car sales. With this threat, plus new Chinese regs, the foreign manufacturers are rushing to catch up.
AbstractA vast literature on technology transitions within industries suggests that early phases of new technologies are marked by periods of intense experimentation, but we know little about the conditions under which these periods emerge. We apply inductive, grounded theory-building techniques to examine what prompts firms to experiment across one emerging technology platform—plug-in electric vehicles (PEVs)—in China. Triangulating annual vehicle make and model sales data from 2003 to 2016 (plus monthly data from 2010 to 2016); 112 English and Mandarin archival documents from industry, academic, and news outlets; and 51 semi-structured interviews with industry, government, and academic stakeholders, we develop four in-depth case studies. We find that in contrast to the innovation trajectories of multinational and Chinese arms of joint venture (JV) firms, independent domestic Chinese firms (those with no history of international JV partnerships) are undertaking significant experimentation across multiple levels—infrastructure, core system, subsystem, and component—of the emerging PEV technology platform. We propose the concept of “institutional complementarities” to describe how interactions among institutions—here the national JV regulation and local market support and subsidies—may have turned regional markets into protected laboratories, extending the incubation periods for independent domestic firm experimentation. While this diverse experimentation may be an important antecedent of technology transition, consolidation induced by national policy standardization or competitive pressure may be required for PEV innovations to scale beyond their early, protected regional markets.
"Our case study analysis suggests that this variety of experimentation across multiple levels of the PEV technology platform by primarily one type of firm (independent domestic Chinese) may be related to China’s institutional setting. Specifically, our results suggest that in China’s PEV industry 1) the national JV regulation and local content requirements, have (perhaps inadvertently) removed foreign competition while rewarding domestic firm PEV activities; and 2) local policy support for local firms, such as market protection and subsidies, have extended the incubation periods for independent domestic firm experimentation. Table 3 summarizes the links between China’s national and local institutions and the experimentation by our case study firms across the emerging PEV technology platform."
Helveston, John P. et al (2019). Institutional complementarities: The origins of experimentation in China’s plug-in electric vehicle industry. Research Policy 48, pp. 206-222.
https://www.sciencedirect.com/science/article/pii/S0048733318301938
