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Hope Springs Eternal: Electric Vehicles in China (managingthedragon.com)
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Hope Springs Eternal: Electric Vehicles in China (managingthedragon.com)MARCH 7, 2013 http://managingthedragon.com/?p=2074 Hope springs eternal — and nowhere is it gushing more strongly than with electric vehicle enthusiasts all over the world. In the United States, investors in Tesla Motors, Inc. (NasdaqGS:TSLA), the U.S. maker of electric sports cars, seem to be shrugging off the fact that the company is losing a $100 million a quarter, the bankruptcy of battery maker A123 Systems, Inc. (OTC Markets:AONEQ), as well as the fact that the Obama administration, one of the biggest proponents of electric vehicles, is already walking back its prediction that there will be 1 million on the road in the United States by 2015. Why else would investors give Tesla a $4.3 billion market capitalization in the face of such question marks? In China, the government planners have named new energy vehicles (“NEV”) as one of seven strategic emerging industries in its 12th Five-Year Plan which began in 2011. China’s NEV plan is carried out under the country’s “863 Program,” a State High-Tech Development Plan that is funded and administered by the government to stimulate the development of advanced technologies in order to make China less dependent on foreign technologies. In a visit to Lishen Battery, a lithium battery maker in Tianjin, last September, then-President Hu Jintao underscored the government’s enthusiasm for battery and NEV technology when he said: “New energy is a strategic emerging industry with great promise.” China has two very important reasons for endorsing new energy vehicles. First, the country is looking for every way that it can to reduce its dependence on imported oil. Soaring car ownership and a recent shift to less fuel efficient vehicles, however, are making this an even greater challenge. Secondly, the government sees its NEV plan as a way for China’s automobile industry to technologically leapfrog the existing global automotive assemblers that have one hundred years of experience making cars with internal combustion engines. This objective is also running into important hurdles. If any country can successfully implement a comprehensive electric vehicle program, it is China. In addition to strong political support, China’s urban infrastructure is still a work in progress with an estimated 270 million people expected to move from the countryside into China’s cities in the coming years. With a virtual blank page on which to draw, there is significant latitude to build in electric charging stations and the other infrastructure needed by an electric vehicle industry. Moreover, China’s car culture is still young, and Chinese haven’t gotten accustomed to those long — and fast — car trips that their American counterparts take for granted. Theoretically, Chinese consumers should be more receptive to the limitations of electric vehicles. In his recently published, authoritative “Blackbook” (Chinese Autos, Part 1: The Quest for Global Competitiveness — Technology, Competence, Ambition and Politics) on China’s auto industry, Max Warburton, senior auto analyst for Sanford C. Bernstein & Co., LLC, expresses grave doubt that China’s NEV plan is viable. In an interview for Warburton’s research, a senior German auto executive was quoted as saying: With NEV, they’ve run into exactly the same technical barriers as everyone has faced in the rest of the world—the laws of finance and business may be different here, but the laws of physics and chemistry are just the same world over. The biggest technical challenge for electric vehicles begins with the battery — they are big and expensive, and can catch on fire, as General Motors found with its Chevy Volt. At today’s prices, the battery pack for an electric vehicle costs $15,000, and that’s before the other powertrain costs of electric motors, converters and inverters for motor control are included. To make a competitive electric vehicle, China’s automakers need to advance battery technology significantly, but according to Warburton’s investigation, Chinese battery technology lags Western standards by a number of years. Despite its claims to the contrary, Warburton does not believe that BYD Company Ltd. (HKSE:1211.HK) has unique technology, and questions whether any other firm or institute in China can develop superior battery technology in the future. Apart from the technical challenges, electric vehicles are not cost competitive and their performance is inferior to cars powered with internal combustion engines, according to Warburton. At current vehicle prices, oil prices would need to climb to $300 to $500 per barrel for electric vehicles to be cost competitive with gasoline and diesel engine cars in Europe, where gasoline taxes are 70 percent of the price at the pump. In countries with lower gasoline taxes, oil prices would need to be even higher. Oil prices would need to reach $800 per barrel in the United States, and $500 to $700 a barrel in China. In Warburton’s view, “logical” consumers will only buy new energy vehicles in significant quantities when it makes economic sense to do so — either if vehicle prices fall or become cheaper due to government subsidies. He does not see any evidence that Chinese automakers will be able to produce a significantly less expensive electric vehicle, so the only question that remains is how far the Chinese government will go in supporting NEV technology in the name of achieving greater energy security. Chinese Business Negotiation Training: Role of Technology and IP in Chinese Business Negotiation (chinesenegotiation.com)http://www.chinesenegotiation.com/2013/03/chinese-business-negotiation-training-role-of-technology-and-ip-in-chinese-business-negotiation/ Your sophisticated technology is NOT a source of power in Chinese negotiation. American negotiators in China often make the mistake of believing that their sophisticated technology gives them leverage in Chinese business deals. Their logic is simple and irrefutable – they have something that Chinese partners and consumers want and can’t get anywhere else. Learn to negotiate in China – online (from ChinaSolved) What they don’t seem to realize is that once the Chinese side of the negotiating table becomes aware of the technology, then acquiring it becomes their only priority. In the US or Europe that would mean coming to an equitable agreement with the property owner. In China a negotiated agreement for technology is option 4 or 5. A Chinese business will negotiate and pay for new technology if he must – but it’s certainly not his first choice.
So what will your new Chinese partner do to get his hands on your designs, specifications and IP (intellectual property)? Use sophisticated hacking or stealthy corporate espionage techniques? Probably not. It’s much easier to just ask you nicely to explain it to them – and maybe have a few of your engineers fly in (your expense, of course) to show their Chinese counterparts how it all works. Does this really work? Yes – surprisingly often. The myth: Information is a scarce commodity – and if I have IP or technology that can be turned into a profitable business then I am in a powerful position when negotiating. The reality: The Chinese side sees IP as a temporary – almost accidental – advantage that should be acquired as quickly and cheaply as possible. It was very considerate of you to take your creative, quirky, interesting ideas and convert them to files, documents or samples – but now that you have done that then you are really not necessary any more. The negotiation is no longer about your joint business – it’s about how to acquire the files or documents. China Negotiating Power Technique 1: Wishing for more wishes Convert your vulnerable technology to real negotiating power by using it to attract more Chinese counterparties. This takes a bit of finesse and experience, but the idea is to get potential Chinese partners to compete with one another over you. You don’t have to be clever, dishonest or James Bond-ish. Simply refuse to discuss exclusivity and make it clear to each Chinese counter-party that that you plan on talking to other people. China Negotiating Power Technique 2: Channels of distribution If your technology is in constant development – like software or fashion – and periodic obsolescence is part of your industry, then you have a different source of power. You should focus on developing independent channels of distribution. If you can control distribution channels in China, then you have power. The second best option is to control the people who control channels of distribution. Learn more about negotiating in China on the ChinaSolved/China Training Institute online course: Negotiate Successfully in China. Directory: 2013 2013 -> Annual InStructional unit plan 2013 -> The Ministry of Education and Science of Ukraine 2013 -> #1 a lifesafer of virginia inc 2013 -> Name(s): your name here team or Group #(if applicable): Professor’s name 2013 -> Alcott Local School Council (lcs) Meeting Minutes 2013 -> Table Of Contents introduction 2 2013 -> Supplemental demographic information 2013 -> 【Education&Working Experience】 Download 438.17 Kb. Share with your friends:
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