What lessons can the US learn from China to make their EV transition successful?

With China still expected to dominate the electric vehicle market, what are some of the crucial lessons the US can take away from their success?


Climate change is a growing concern among governments, and it is having a big effect on their policies and agendas. One of the more crucial areas is a net zero carbon plan, with an emphasis on reducing the carbon emission from petrol and diesel vehicles. In other words, it means a focus on advancing the electric transportation industry, for both the public and private sector.

2020 has been a crucial year for the US concerning the future direction of the electric vehicle (EV) industry, with the presidential election playing a large role in shaping the level of investment and federal policies in EV adoption.

President-elect Joe Biden's administration is likely to be a major boost to the EV market and EV automakers. He has outlined a proposal to help encourage consumers and manufactures to go clean, with plans to provide rebates to consumers for swapping old vehicles for newer American vehicles built from materials and parts sourced in the US. More importantly, he’s set to make some major public investments in automobile infrastructure, with the likes of 50,000 electric vehicle charging stations and a potential tax credit for the purchase of EVs. 

And while these are significant promises, how far along are the US in their EV journey?

America’s journey to EV

The US is going green, with an interest in reducing their carbon footprint and becoming emission-free. It seems along the way we will see an electric revolution. This level of change does not happen overnight and will require the right level of infrastructure investment and financial incentives to help change corporate and consumer behaviour. Currently, there are at least 45 states, and the District of Columbia, that offer some sort of incentive to support EV adoption and its required infrastructure, and this support is through either state legislation or private utility incentives. 

California announced plans to gradually phase out gasoline-powered cars and will require all new passenger vehicles sold in California be zero-emission vehicles by 2035. Currently, the transportation sector is responsible for more than 50 percent of California’s Greenhouse Gas Emissions. New York also announced plans to decarbonise the transportation sector and reduce overall state-wide carbon emissions 85 percent by 2050. More specifically the ‘EV Make Ready' initiative focuses on building the right infrastructure to accelerate the electrification of the transportation sector. The plan also outlines the deployment of more than 50,000 charging stations by 2025 and increasing the number and range of electric vehicles.

But China is still expected to dominate the EV market, and there are some crucial lessons the US can take away from their success.

The factors driving China’s success in EV

Alf Poor, CEO of Ideanomics, who explains how China became the world’s largest EV market with some of the largest concentration of EV manufacturers. He says, “A major factor in the transition to EV was the Chinese State Council mandate, the 2018 Blue Sky Plan, which incentivized the development of an eco-friendly transport system with higher fuel efficiency and lower emissions, including fines for pollution, carbon emissions and the contamination of water… Furthermore, in April 2020, the government announced a three-year action plan to accelerate its Blue Sky Plan which was originally unveiled in 2018.”

China’s focus has been a mixture of building the right infrastructure, with policies and incentives for both the public and private sector. The country over the last few years has heavily invested in their EV programmes and that is starting to pay off. Poor explains how their NEV programs started in 2016 and as they are being updated each year, they’re able to pivot and adjust policies as needed.

It is a long-term strategy that pays attention to not only changing the transportation sector’s infrastructure but also consumer behaviour and creating incentives to make the switch to EVs.

But perhaps one of the more important lessons the US should take note of is how they handle the transition and still maintain relationships with the big oil and fossil fuel companies, who are significant players in the American transport industry.

“Similar to Europe, gasoline tax in the US helps finance national and local road infrastructure costs so while reducing gas consumption is good for the planet, cutting off the Big Oil companies could be detrimental [to] public budgets,” Poor comments. He explains a potential solution to this problem through the help of Ideanomics’ Nanjing Pilot, which is expected to start in China later this year, or early 2021.

“The pilot focuses on three critical components in EV energy consumption: payment systems, charging stations and energy supply chains. Under the terms of the agreement, MEG and PetroChina will replace a few of the gas pumps with fast-charging stations. Rather than installing high-tension wires, the charging stations will be powered locally though PetroChina’s other products - fuels such as mixed hydrogen and compressed natural gas (CNG) power generation, hydrogen power generation, mixed methanol and hydrogen power generation. The pilot solves two important problems, the high cost of installing high-tension power wires and keeps Big Oil companies relevant.”

If the US can replicate an initiative like this, it could very well bridge the gap between the US’s environmental goals and the commercial interests of the oil companies. But is important to remember that they are two very different countries, who operate in very different ways. Poor points out that “in China, the largest manufacturers, energy companies and electricity companies are state-owned entities. In the US, all these industries are private so it’s far more complicated.”

But it’s not all bad, the US has made some positive changes recently, with a growing commitment to zero emissions backed by state legislation. And even within the private sector, while Tesla is currently dominating America’s EV market, other heavy hitters like GM and Ford have shown great interest in its future. And with the results of the recent election, it seems local states will likely have greater support from the Biden administration.

And not all hope is lost, because only recently did GM’s latest backed minicar become China’s most-sold EV. So maybe the US is playing close attention to China’s success.