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China Shunde Towns Focused Entirely on Making Electric Cars

Auto News - Published on Tue, 11 Jun 2019

Image Source: bloomberg.com
Bloomberg reported that Shunde New Energy Vehicle Town takes shape inside the city of Foshan, part of southern China’s manufacturing heartland. Local officials boast that their planned hub for EV production and research could eventually generate 100 billion yuan (USD 15 billion) in revenue for the hometown economy. Shunde is one of at least 20 electric-centric versions of Detroit under construction as China goes all-in on a technology projected to sell in record numbers this year. President Xi Jinping wants the nation’s 500 electric car makers to be magnets for ancillary industries as he pushes to build a manufacturing superpower by 2025. That blueprint meant to make China more self-sufficient and diversify an investment landscape dominated by volatile property and equity markets has become central to the US-China trade war.

Municipalities needing ways to recalibrate their economies want a piece of that plan. They’re offering cheap land, tax breaks and housing subsidies to carmakers, parts suppliers and engineering labs in hopes of attracting thousands of high-technology jobs in the burgeoning EV sector.

Mr He Xiaopeng, chairman of Xpeng Motors Technology Ltd., an EV startup backed by e-commerce giant Alibaba Group Holding Ltd. and Taiwan’s Foxconn Technology Group said that “The new-energy vehicle industry is a bet local governments must take. A successful EV maker could bring at least 200 companies in the industry chain into a province.’’

The amount of investment committed to developing these EV towns is a staggering 209 billion yuan equal to about USD 30 billion so far, according to Bloomberg calculations based on public announcements. The commitments range from fixed-asset investments to development costs by carmakers, private capital and local government-backed entities.

The other hubs include Geely Automobile Holdings Ltd’s plan for a research and production base in Yiwu, LeEco Vehicle Ecological Town in Huzhou and Self-Driving Auto Town in Xiamen.

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Posted By : Rabi Wangkhem on Tue, 11 Jun 2019
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