Opportunities seen for California, China to collaborate on EVs

California, the pioneer of electric vehicle innovation and policies, can learn from and collaborate with China — a giant market with strong manufacturing capabilities — to move the industry forward, said insiders.

"There are a lot of collaboration opportunities if you want to move this (EV industry) forward to the goal of 100 percent EVs in the next decade," said Alfred Chu, founding investor at Octillion Power Systems, an EV battery company, at a recent webinar hosted by GlobalSF, a San Francisco-based organization dedicated to promoting economic growth in the city.

California has been the source of battery innovation and policy innovation, and China has learned "very attentively" from that market and the California Air Resource Board on how to jump-start the industry, said Chu.

For example, China learned from California's zero-emission vehicle (ZEV) credits and the Corporate Average Fuel Economy (CAFE) standards and has come up with its own programs, he said.

California has almost half of the 2.2 million electric vehicles on the road in the US, and Governor Gavin Newsom declared this year that all new California cars and trucks must be zero-emission by 2035, said Maureen Blanc, founder and CEO at Charge Across Town, a nonprofit organization promoting electric transportation in the state.

She said the reasons why California is becoming the US' largest EV market include strong policy, innovation, entrepreneurship, university education and a favorable venture capital ecosystem.

Chu said, "the US also has a lot to learn from China at this point because China has become the EV giant and industrial powerhouse".

Seven million EVs are expected to be deployed this year, and roughly 3 million are being produced in China. This year China's EV penetration has reached about 20 percent, while the rate is around 2 percent in the US, according to Chu.

"So the market is quite a bit more advanced in China," he said.

Local governments are catching up with policies concerning EV and autonomous vehicles in China, said Iris Cui, senior manager of global business development and strategy at WeRide, an autonomous driving startup based in Guangzhou.

"The Chinese government has been really proactive in terms of deploying EVs. Guangzhou, for example, has published a policy to replace 100 percent of the current traditional fuel taxis with electric vehicles by the end of 2022," said Cui.

This year, Guangzhou launched an autonomous-vehicle pilot plan that allows vehicles from autonomous driving companies to complete tests in mixed traffic-flow environments while operating various services.

"The autonomous driving industry relies heavily on the local government to publish the reasonable and accurate regulation to help us promote and test and improve our technology," said Cui.

Chu said the US should also tap into "the large scale" of China to be competitive in the EV market. "They (China) are thinking in terms of terawatt hours, not gigawatt hours, so they're going to have a scale advantage," said Chu.

There are 37 cell suppliers and 300 EV makers in China, and they are innovating at a very rapid rate, he said, but there are few cell suppliers in the US.

Chu attributed China's rapid EV growth to the "low-end disruption". "At one point, Elon Musk laughed at BYD but they (BYD) have become an EV powerhouse," he said.

US investor Cathie Wood dismissed SAIC-GM-Wuling's Hongguang MINI EV as a "golf cart", but within three months, sales of the vehicle surpassed those of Tesla's Model 3 in China, said Chu.

"I really believe in this partnership between the US and China and especially because China has a lot of the production expertise and accumulated capabilities at this point," said Chu.