Sorry, Tesla. China Wants Golf Carts.
When Elon Musk closes his eyes and imagines the future of electric cars, he probably doesn't see city streets jammed with golf carts. The Chinese government does.
It's drawing up plans to regulate plug-in vehicles with maximum speeds of 43 miles per hour. Included in that category are a vast range of vehicles that ply China's countryside and smaller cities, including single-seat delivery trucks and pod-like three-seaters that are as little as four feet across. Though not nearly as stylish as a Tesla (or even a BYD Qin), these motley vehicles are far more likely to propel China -- and maybe the world -- toward an electric future.
The boom in low-speed electric vehicles (or LEVs) is an unplanned disruption in a Chinese auto market accustomed to central planning. LEV makers are out-innovating and out-selling their upscale electrified counterparts. Production of LEVs is growing quickly, and sales exceeded 300,000 in 2014, according to state media, far outpacing estimates of traditional electric-car sales.
One reason is economic. In the 1990s, electric bicycles began appearing on Chinese streets, catering to an upwardly mobile demographic that wanted more speed and range than a normal bike but couldn't afford a car. Today, there are more than 150 million e-bikes on China's roads, leading one expert to call it "the single largest adoption of alternative fuel vehicles in history." E-bikes aren't an endpoint, but rather an interruption in "the transition from bicycle to bus and from bus to car," as one study put it.
That's where LEVs come in. In general, they're cheaper -- often much cheaper -- than traditional cars. Some go for as little as $2,000. For consumers weaned on e-bikes, and accustomed to a limited driving range and frequent charging sessions, LEVs seem like a natural stepping stone into car ownership.
Yet much as rural Chinese adopted cheap mobile phones rather than wait for landline access, many drivers are finding that LEVs are actually all they need. For residents of smaller cities, a glorified golf cart that can take them to the market, a relative's home or the workplace makes a lot of sense. LEVs are easier to maneuver through traffic and into tight parking spots. Retailers are finding that they work well as delivery vehicles, especially to meet the booming demands of e-commerce. And China's growing population of seniors, much like their counterparts in the retirement communities of Arizona, are realizing that a souped-up golf cart can meet most of their travel needs.
Already, those golf carts meet China's long-term climate pledges. As battery technology and green-power generation improve, so will their carbon footprints. One study found that replacing diesel-powered delivery vans with LEVs significantly reduced traffic and carbon emissions. In a country newly obsessed with air pollution, that's a major bonus.
All of which suggests that, with more than 600 million people living outside of China's biggest cities, and car ownership rates still low, the opportunity for growth in LEVs is huge. And an explosion of manufacturers and hobbyists suggests many more innovations are on the way.
Even so, the industry has some problems to solve. Technically, LEVs don't require a license and can't even be registered, because the law doesn't recognize them. That helps explain why they typically lack basic safety features, such as seatbelts. Regulations that set minimum safety standards, including where LEVs are allowed to drive, would not only legitimize a quasi-legal industry, but even help it thrive.
For now, Elon Musk need not fear the competition. But he might very well learn from it.
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