Chinese electric car maker, nourished by State now seek way embers from the

HANGZHOU, China (Reuters) – hum away in an industrial area in Eastern Chinese resort city of Hangzhou, electric vehicle designer is a by Hundreds of AUTOMAGIC companies that drive the national wave of investment in clean transport.

the company to find a niche in a crowded sector, the already renewable device manufacturers, battery manufacturers and property developers such as Evergrande want founded group, as well as auto giants.

but not all of these electric vehicle hopes make it to the finish line.

said Zhou Xuan, general manager of AUTOMAGIC referring

“this (large number of companies) inevitably, because when there is always a new technology or emerging industry, hundred schools of thought and hundred flowers to bloom”, Chinese leader Mao Zedong’s ill-fated 1956 “Hundred flowers” campaign aims to promote new ideas.

China uses preferred politics and brute production makes the positioning at the top of the world-wide efforts to electrify transport. Until end of 2017, ownership of new energy vehicles (NEV) – powered by fuels other than achieved gasoline – 1.8 million in China, more than half of the world total.

with high expectations of the market, Chinese EV manufacturer NIO, a rival of Tesla, launched a well-received initial public offering in New York last month.

published in July Ministry of industry a list of 428 recommended NEV designs of 118 companies in the country built. They contain not only established manufacturers such as FAW Group and Geely automobile, but also small, new participants with names such as Greenwheel, Wuhu Bodge automobiles and Jiangsu cars.

but regulators are already worried about overcapacity and “blind development.” How subsidies be cut smaller start-ups that need to develop a competitive advantage.

Zhou said

“after a period of intense competition, the rocks appear, and the weak are consolidated or eliminated”.

strategic GLUTS a lingering concern was overcapacity in many Chinese sectors, with thousands of companies, supported by growth-hungry local governments and backed by risky loans quickly expand.

over the years, China has been forced against price-sapping supply arms in steel, coal and solar panels, among other things to do.

electric vehicles could be next, as local governments feel pressure to create champions, while government instructions to their heavy industrial economy “upgrade”.

some executives

say the market is already distorted by subsidies for inefficient and under-performing businesses.

“just now, the rapid growth of the Nadeem is stimulated by subsidies, no market choice but Government guided behavior with growth” said Li Lei, Deputy Director of the new energy Department of Jiangxi Dacheng cars, a new joint venture Automotive manufacturer in Eastern China’s Jiangxi province.

Although sales rose 88 percent in the first eight months of the 2018, the national development and Reform Commission (NDRC) has promised hit 601.000 units, to combat irrational growth in this sector.

published in the draft of the rules this year, it said it would “plan and organize the new energy vehicle scientifically,” and block new production capacity in regions where the load less than 80 percent.

but China has often left on “strategic” supply arms for more competitiveness. Overproduction in solar power producers forced to reduce costs and compete, subsidy-free, with conventional sources of energy.

Liu Xiaolu, sales manager with ICONIQ motors, a Tianjin-based luxury electric vehicle manufacturer, said that the large number of companies could be a “necessary level of development” for the sector.

“you can say that 20 companies definitely capable, the entire industry needs to develop, and it is probably to get everyone together, and then gradually get removed afterwards,” he said.

competitive advantage said

established automakers Reuters news agency she already had enough time to prepare the transition to electric mobility.

Xu Hongfei, general manager with this automobile, a medium-sized Chinese auto manufacturer, said it had prepared for China’s “exit timetable” of conventional vehicles for more than a decade and developed core technologies such as batteries had.

with 20 employees, AUTOMAGIC was founded in the year 2015 by former engineers from IBM and Geely. He’s talking with partners, to bring his models on the market.

the company focuses on small, short-range family built vehicles rather than large cars from the likes of BYD. It is also striving to produce better, charging and batteries.

“the most important point is that new vehicles energy energy efficient with low energy consumption levels, therefore we us to cut weight and smaller cars focus, so that the use of batteries can be reduced, must”, said Zhong Jin, AUTOMAGIC co-founder and Chief Executive.

GCL, one plant from China’s largest renewable developers, its ‘new town’ of energy in the Jurong of Jiangsu province into a major production site with his expertise in batteries and recycling expertise and even a battery rental system.

Although all companies seek a lead through innovation, Li from Jiangxi Dacheng said success positioning on the market could just come.

“our company have not very great advantages or disadvantages of very large and competitive first focuses on branding, on the financing of second and third sales channels,” he said.

more reports by Shanghai Newsroom; Editing by Gerry Doyle

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