Jordyn Dahl writes:

After the Cultural Revolution of the 1960s and ’70s crippled China’s economy, the country began to open its markets to the outside world. The aim was to bring in technological know-how from abroad that domestic firms could then assimilate. By the early ’80s, foreign automakers were allowed in on the condition that they form a joint venture with a Chinese partner. These Chinese firms, by working with foreign companies, would eventually gain enough knowledge to function independently.

Or so the theory went. Chinese-produced cars subsequently flooded the market, but they were largely cheap copycats—they looked like foreign-made cars, but the engines weren’t as good. Carmakers in the US and Europe had too much of a head start for China to catch up.

The only way to outdo the rest of the world, then, was to bet on a whole new technology. Enter electric vehicles, which require less mechanical complexity and rely more on electronic prowess. A Chevrolet Bolt’s electric engine contains just 24 moving segments, according to a teardown performed by consulting company UBS. In comparison, a Volkswagen Golf’s combustion engine has 149. Meanwhile, China already had an electronic manufacturing supply chain in place from its years of producing the world’s batteries, phones, and gadgets.

Now the Chinese government is embracing the shift from combustion to electric engines in a way no other country can match. It’s made electric vehicles one of the 10 pillars of Made in China 2025—a state-led plan for the country to become a global leader in high-tech industries—and enacted policies to generate demand. Since 2013, almost 500 electric-vehicle companies have launched in China to meet the government’s mandate and to cash in on subsidies designed to generate supply. [Continue reading…]