Home World Business GM chief challenges China’s planned bans on petrol cars

GM chief challenges China’s planned bans on petrol cars

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Cars should run on petrol for a little while longer, argued Mary Barra, the chief executive of General Motors, in cautioning against the growing trend of officials in China and numerous other countries making plans to phase out sales of petrol and diesel-powered cars.

Speaking in Shanghai, Barra said her company was making a big push to develop electric cars but that consumers, not government dictates, should decide how cars are powered.

A worker assembles an engine at the General Motors plant in Wuhan, central China. A worker assembles an engine at the General Motors plant in Wuhan, central China.  Photo: AP

“I think it works best when, instead of mandating, customers are choosing the technology that meets their needs,” she said.

China this month joined other countries, including Britain and France, to say they will eventually ban sales of petrol and diesel-powered cars. Unlike those two countries, which said that they hope to halt sales in 2040, China has not set a date.

Other countries, notably India, have been setting similar goals without giving them regulatory force.

Targets set more than two decades in the future, which is roughly four generations of car technology, are to a considerable extent symbolic. But carmakers make a lot of long-range plans and are sensitive to how government targets may influence consumers’ preferences.

When it comes to China, the issue is more than academic for the Detroit carmaker. More GM-branded cars are now sold in China than in the United States.

The potential bans call into question GM’s plans to tackle the next generation of new energy vehicles. GM has focused much of its efforts on developing plug-in hybrid vehicles. These cars, like the latest version of the Chevrolet Volt, have batteries that can allow them to travel 160 kilometres or more per charge.

But they also carry petrol engines and petrol tanks that then allow them to travel several hundred kilometres further. The announcements of Britain, France and China could be read as possibly prohibiting plug-in hybrids because they call for cars not to emit any greenhouse gases, which internal combustion engines produce.

Many other carmakers have a stake in the issue of how any ban might be written. Even Volvo, the Chinese-owned Swedish brand that has taken the lead this year by saying in early July that it would stop making traditional petrol-powered cars in 2019, still plans to rely heavily on hybrids instead of trying to jump entirely to battery-electric cars.

Barra “is right to be cautious, because even if you look at Volvo’s strategy, it is not 100 percent electric vehicles,” said Yale Zhang, the managing director of Automotive Foresight, a Shanghai consulting firm.

Plug-in hybrids may prove popular in places with a lot of intercity driving, like the United States, GM’s home market. Internal combustion engines also provide a lot of power for challenging tasks like towing a boat on a trailer.

Geopolitics play a considerable role in the issue. China is unenthusiastic about plug-in hybrids because most of the patents are owned by foreign carmakers, particularly Japanese multinational companies. Chinese carmakers have been stronger in battery-electric cars.

China issued draft regulations in June to require all carmakers to begin selling large and ever-growing numbers of so-called new-energy vehicles over the next several years. Those draft rules, which would reward carmakers for the number of new-energy cars they make, emphasise battery-electric cars over plug-in hybrid electric cars. Global carmakers have been lobbying the Chinese government to loosen the rules before they are finalised.

Electric cars may have more appeal in China anyway. Major cities are linked by high-speed rail, and long drives between cities have never really taken root the way they have in the US and Europe.

GM is particularly vulnerable to any broad divergence of policy between China and the US. GM’s various joint ventures with Chinese carmakers together sold nearly 1.8 million cars in the first half of this year, while GM sold 1.7 million cars and light trucks in North America during this period.

GM’s goal is to create cars that meet common needs across markets around the world, using a combination of electrification, internet connectivity, self-driving car technology and ride sharing, Barra said.

“GM’s vision,” she said, “is a world with zero crashes, zero emissions and zero congestion.”

New York Times

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