China's new EVs will be a force to be reckoned with in the near future

I just returned from a business trip to china and all I saw was many hybrid and EVs on the roads and on display in shopping malls and in impressive car showrooms facing the main streets. What does this mean? China's foray into the EV market is growing by leaps and bounds unlike the information that is published in the western media. According to some local Chinese industry observers it is rumoured that 1 in every 3 cars sold in Shanghai alone is either a EV or a hybrid. Fuel prices in China is higher than in South East Asia but it is not as high as in Europe or Japan. The Chinese Government have been giving incentives to local car makers such as BYD, SAIC, Geely and many others to develop more EVs to help reduce air pollution. China's megacities are by far among the worst in the world in terms of quality and reducing the amount of smog by using EVs seems to be working.

The development of the EVs in China have been impressive. The Chinese car makers acknowledge that it will be a huge task for them to catch up to the Europeans or Japanese in terms of combustion engine technology so they shifted their focus to EVs which is easier to develop and also the most critical point is that all the materials needed to make the EV is readily available in China. China is the largest battery producer in the world and is the electronics manufacturing hub of the world. Accessibility for the required components is easy. Having said that many ex-Tesla engineers were also pinched by China car companies to help with the development of their EVs. This basically allows them to leapfrog the other car makers and be able to play at the front of the EV market.

Tesla is too expensive for many of the average Chinese buyers but a locally developed and produced EV with similar size and perhaps 60% of the performance capability of the Tesla at half the price would appeal to a big number of Chinese buyers. The incredible thing about the EV development in China is not just about creating the car but the infrastructure they have planned for it. For the new car company NIO that only produces EVs (and currently makes the fastest EV to lap the Nurburgring) they already have a battery swapping network in place across China. They claim that they can swap out a battery in under 5 minutes and replace it with a fully charged unit. This is as quick as refuelling at a gas station for a regular combustion engine car. This is solving a few issues that have been concerns of potential EV buyers. The range issue is solved and the battery life problem is also solved.

The design of the cars now look modern and come fully loaded with functions such as voice command, lane departure warning, traction control, blind spot warning system, interactive infotainment system and many more.

The car shown above is the Roewe Marvel-X which is owned by SAIC. this mid sized SUV comes in 2 variants, a basic 2WD and fully loaded 4WD version. On paper it claims to offer a 500km driving range when cruising at 60kph but in reality I would expect a realistic driving range of 380-400km since when you run the air conditioning and audio system and lights it will reduce the driving range. The car is capable of 0-100kph in 4.8 seconds. It is impressive to say the least and the expected selling price in China before subsidies is RMB200,000.
It claims to be able to achieve 80% charge in 40 minutes from a fast charger. This is good since many other Japanese EVs take much longer to charge.

Next comes the NIO ES8 SUV. This SUV is much larger and capable of seating 7 people. It has a driving range of 350km but the battery swap takes just 5 minutes. This car comes fully loaded is expected to cost US$60,000. The interior design is very cool and the build quality is top notch with nice materials used.

From what can be seen in China it can be said that the yardstick for the EV market just moved much further than I expected and I would also say that the Japanese car makers need to wake up and play the catch up game. The current offerings from Japan fall way short of what China has to offer. If the big guns in Japan remain asleep they will soon find themselves out of the game altogether. While the Japanese car makers still use the out of date Nickel metal hydride batteries for the EV, China is already using Lithium ion and soon lithium polymer batteries. I personally feel that the Japanese car makers have fallen far behind the EV industry. They will need something amazing to close the gap.

China and the European car makers are really pushing the development of EVs to a new level. It won't be long before China's EVs hit the world market. So far the EVs are only being sold in China but once the cars gain sufficient popularity in China the car makers will start to venture to other countries.

2018 Kuala Lumpur International motorshow

The Kuala Lumpur International motorshow 2018 (KLIMS) just opened today and it is the first time in 5 years the motorshow has been held. The motorshow had lacklustre turn out from visitors in previous years prompting the organiser to delay organising the motorshow by several years hoping that the long hiatus will create some interest from visitors to turn out in greater numbers. The fundamental part about any motorshow is the number of car companies that will participate and exhibit their new models or concept cars.

Sad to say the KLIMS 2018 is very pathetic since it could only attract less than 50% of the car companies present in Malaysia to participate. As expected the usual participating car companies would be Perodua, Proton, Kia, Hyundai, Toyota, Ford, Honda, Lexus, Peugeot, Mitsubishi and Nissan. As you can see many of the bigger names such as Mercedes, BMW, Audi, VW, Suzuki, Land Rover, Jaguar, Volvo, Mazda, Subaru, Renault, Alfa Romeo, Chevrolet, Maserati and Porsche were missing. One would accept if supercar makers such as Ferrari, Lamborghini and ultra luxury brands such as Rolls Royce and Bentley were missing. KLIMS consisted of 2 halls, one on level 1 and the second is on level 2. Level 2 housed Nissan, Petronas a several tinting brands and car care product retailers.

In short the motorshow is barely a motorshow when so many car manufacturers are not represented. A true motorshow would at least cover 75% of the brands that are currently sold in Malaysia. I can understand that brands like Alfa Romeo or Chevrolet is not represented since Alfa no longer has a distributor in Malaysia and Chevrolet's distributorship was just terminated with Naza.

Walking around Hall 2 where the back section was for accessories or automotive related products it was clear to see that the number of companies willing to exhibiting at this motorshow was very low. Many industry players such as major tyre companies, lubricant companies or mobile electronic companies were missing. Left were just a handful of window film suppliers and car care chemical suppliers. At the rate this event is going it is unlikely that there will be another KLIMS for many years to come.

Many visitors will feel that it is not worth spending RM20 to enter to see a handful of car makers exhibiting their cars. Unlike other international motor shows in other countries, the KLIMS is seriously a waste of time. The Bangkok motorshow which is held yearly has more to offer.

It was rumoured that in the past BMW and Mercedes were given false information about the competitor participating promoting BMW and Mercedes to participate but when one did not participate the car maker felt cheated and from then on they would not participate ever again. According to sources in BMW they would prefer to spend the marketing budget in smaller exhibits in major high end shopping malls which they can interact with buyer and receive immediate bookings for the cars without having to face their competitors.

Recently Hong Leong bank organised a premier banking event where they invited customers to test drive 10 different cars for free together with free lunch and drinks. The event was held over several days and received a great response from the customers which resulted in many of the car companies selling cars at the event.

I personally feel that motor shows in Malaysia is dead! The average salary earner with 2 or 3 children will not want to pay RM60 to visit a motorshow to see a handful of car companies exhibit their cars but they would pay RM30 to visit a car culture or motoring culture show like the Art of Speed. The visitors see more value when they can get up close to interestingly tuned cars or motorcycles and buy innovative bespoke merchandise.

those who still want to visit KLIMS, be warned!

making fuel from carbon dioxide and hydrogen

A company in Australia recently published a video about a technological break through that allowed them to create a carbon neutral clean burn fuel that can be used in any fossil fuel engine. This is amazing if it truly works. It basically combines the CO2 in the air and fuse it with hydrogen to make the liquid fuel that results in clean burn with zero emissions from the car's exhaust system. This is revolutionary as it will be like creating the perfect cycle in the fuel / combustion system. Whatever the car's exhaust puts out can be recycled into fuel to feed the car. This in the past is nothing but a dream but it appears that one company managed to do it.

This could mean that the electric car's future is numbered and may no longer be relevant. With this technology fossil fuel powered cars will be here to stay. This will open up further development of the combustion engine and motorsports. The electric cars will be a forgotten fad that never really took off. It will be interesting to see if any oil giant will buy up the patent for this technology or capitalise on it. So far there is no news about any investors stepping up to grab this technology. If the patent was open to all players it could very well help the motoring industry move forward.

Many electric car detractors still think that electric cars are counter productive in the carbon reducing effort which to some degree is true. The electricity used to power the electric cars are usually produced using fossil fuel or coal or nuclear power, only a tiny amount is actually from renewable energy such as hydro power, wind or solar power. This basically means that the electric car's source of power is polluting and it not much difference from a combustion engine car that produces carbon monoxide.

The CO2 to fuel concept will be way of the future if it is proven to work. According to the promotional video the cost of producing the fuel is cheaper than extracting crude oil and refining it into gasoline or diesel. This could mean cheaper fuel and cheaper transport costs which could lead to cheaper cost of food.

Driving a car using the recycled CO2 as fuel may be something in the future but it is definitely an interesting piece of technology that could alter the future of the automotive and transport industry.

Malaysia's 3rd national car

The rumours are buzzing again about the third national car and this topic does not seem to want to go away. This time round it appears that there is some sort of confirmation that it will be a private entity and the Malaysian Government will not be involved like how it was with Proton. However, the rumour is that the third national car will not be an electric car like how it was rumoured previously. It is strange that this new company would want to move into conventional cars since the future is electric with so many countries announcing that it will ban all fossil fuelled cars from a certain date in the future. Being a new entity with no prior history it should venture into electric cars as it is a fresh start and neither Proton or Perodua have any electric models.

The Government and Dr. Mahathir have been copping a lot of flack lately due to this topic as it appears to be his ego trip once again. He seems adamant to create the third national car since Proton failed and is not under Geely's control. His excuse is that it will create jobs and improve the industrialisation and engineering capability of Malaysia. He is also the one that does not want to admit that Proton is a failure.

The third national car can be introduced but not at the expense of other car makers. Dr. Mahathir in the past have allowed Proton to survive through protectionist policies which imposed heavy taxes on foreign car makers. The Malaysian public is sick of such actions and being deprived of buying foreign cars just to protect a poorly managed car company that produces substandard quality cars. The technology partner for the third national car is still unknown and if they were to introduce their first car in 2020 the company needs to be registered and the technology partner formalised. It is takes at least 24 months to develop and assemble a car from ground up. Seeing that the third national car is new it is likely that they will just do some rebadging like what Proton did in 1985!

Building a car from ground up is incredibly difficult and time consuming. It is not easy feat and to do one that the public will want to buy is a tall order. Even big companies like Toyota try not to introduce completely new models, they evolve a current model and improve it in critical areas and alter the exterior looks and call it a new model. It is rare that a large car company will create a brand new model from ground up unless it can see the business potential.

For one, I am not sure if this third national car will survive or even see the first model launch in 2020. With so little time and insufficient local engineering knowhow it looks like a long shot.

Mercedes EQC, Audi E-tron and Jaguar i-pace

The big luxury car manufacturers are now finally able to boast about their electric cars. Tesla's model S have been in the market for over 6 years now finally it faces some competition. This competition could seriously impact Tesla's business since Mercedes, Audi and Jaguar have a much larger sales network. All 3 manufacturers also have supercharging capabilities which allow faster charging than Tesla which is very important.
The biggest 2 problems with electric cars is the range and the time taken to charge the batteries. Mercedes' EQC can charge to 80% capacity in 40 minutes while the Audi can charge to 80% capacity in 30 minutes. This really helps especially when the driver needs to utilise the vehicle for long journeys.

The 3 models will take a chunk out of Tesla model X's sales since it is cheaper and more accessible. Tesla currently sells its cars on its own without appointing distributors or dealers. This basically limits its reach and coverage. In countries like Malaysia, Indonesia, Thailand, India and many other developing countries Tesla is not present while Mercedes, Audi and Jaguar already have a dealership network.

It will be a matter of time before BMW, VW, Toyota, Honda and Nissan introduces a flurry of electric cars. The question is how much will this impact Tesla. Will Tesla be able to survive when these giants get into the game. Tesla's trump card will be the gigafactory which aims to produces majority of the batteries for electric cars. The plan for the gigafactory is good but the construction is taking far too long and now China's BYD is teaming up with several battery manufacturers to building their own gigafactory and it appears that the construction have already begun and it progressing at a very rapid pace.

Tesla may have had the edge over the major car manufacturers but it seems like the competition have stepped up a notch and it won't be easy for Tesla to compete unless it changes its strategy. Since numerous Tesla engineers left for other car manufacturers so many new players have emerged making competition very stiff all of a sudden.

The EQC, E-tron and i-Pace may not be as quick as the Model X but it is good enough to rival the Model X and it has gained significant public interest. The electric car industry is really starting to heat up and will be exciting to see how it shapes up.

Proton X70 SUV

Proton finally launched the rebadged Geely Boyue as the Proton X70 SUV. This is the first time Proton offered a SUV in its line up. The entry model price is set at RM85,000 which is affordable for a SUV of its size. It is very likely to affect the sales of Honda's HRV and BRV which are priced at RM99,000 and RM85,000. The X70 holds a big advantage since it is larger than both the HRV and BRV and comes with a 1.8 Turbo engine.

Geely put a lot of effort into launching this car in a big way to capture a large slice of the market. The car comes in 4 levels of specification ranging from the basic 2WD to the top of the range 4WD version with a long list of accessories and functionality. For a so called local car it is unheard of to have such high level of specifications. Geely went all out to impress the local buyers to gain confidence for their ability to product decent cars at affordable prices. This of course is the long term strategy to build an image and move to exporting their cars to neighbouring countries such as Indonesia and Thailand. China cars struggle in Indonesia and thailand at the moment with Toyota, Honda and Daihatsu being the kings in these 2 countries. Geely through Proton wants to penetrate these markets.

Prior to the acquisition Proton was in the duldrums with its ageing models and dropping sales. The Malaysian public was sick and tired of the poor quality cars Proton produced and it was right timing that Geely came into the picture.

There is speculation that the Geely Borui sedan model could be introduced as early as mid 2019 to add to the Proton model line up. Proton desperately needs a new sedan model to boost its sales. The X70 will get the momentum going but the next sedan model will definitely boost the sales. It is rumoured that Geely already has plans to introduce 4 models over the next 2-3 years and increase their market share. The important thing now is to restructure the service centres to provide sufficient after sales support. Proton's service centres are notoriously poor in terms of service quality and it is about time that it is revamped to boost customer confidence.

In comparison to Perodua, Proton's after sales service cannot match the service quality of Perodua. the Japanese developed system of Perodua's after sales service is among the best in the industry and Proton needs to emulate this quickly. Selling many new cars is one thing but offering after sales service to meet the demand is just as critical. It will be exciting times ahead for Proton with many new models coming in.

Second Tier car rental companies vs Tier 1 car rental companies

In recent years I have rented a number of cars in various countries from major car rental companies such as Thifty, Fox, Enterprise and Sixt; and also from second tier car rental companies such as Green Motion. The biggest difference is in the way the car rental companies deal with the customers and also how they make money. The major car rental companies are more professional and their customer service team appear to have greater attention to detail and offer newer cars while the second tier car rental companies do not have such a large fleet and many are a bit older or have higher mileage. The biggest difference is actually in how they make money. I find that the major car companies do not try to scam you out of paying for damages that does not exist or damage that was already there when the car was picked up.

I had the unpleasant experience of dealing with Green Motion at Heathrow which had a sneaky strategy to milk more money from the insurance or the renter claiming there is damage to the car. Upon checking with other friends who also rented cars from the same company, they too experienced the same thing. The officer who received the cars upon return would inspect the car and try to find scratches or dents on the car body and claim the insurance or claim the access for the damage. The car I rented had no new dents nor scratches but the rental car officer claims a new scratch was on the body work and wanted to charge 400 Pounds for the repair which was ridiculous since I could take any polishing compound and rub it out with a cloth! It was clear that they had the intention of making extra money from the insurance claim or the access. they may offer the lowest rental rate for the cars but they had plans to earn more from this tactic.

Be warned when renting cars from second tier car rental companies. Take a video and photos of the entire car (covering every corner for scratches or dents or any markings) and make sure that the damages on the car prior you collecting the car is recorded so you do not fall into their trap. it is time consuming but in the end it will save you a lot of problems and save you arguing with the officer.