Father of China’s electric-car industry says his friend Elon Musk set to challenge local market

The 66-year-old automotive titan discussed his vision for the industry, his friendship with Musk and why his daughter doesn’t want to own a car

Wan Gang, a vice chairman of China's national advisory body for policy making, says the world's biggest car market is set to embrace hydrogen fuel-cell vehicles the way it did EVs. Bloomberg

The man dubbed the father of China’s world-leading electric-vehicle industry said the automotive business is undergoing its biggest revolution in 100 years thanks to cleaner and smarter cars.

Wan Gang, a vice chairman of China’s national advisory body for policy making, spoke in a two-hour interview inside the offices of the Chinese People’s Political Consultative Conference in Beijing. The 66-year-old automotive titan convinced leaders two decades ago to bet on the then-untested technology of vehicle electrification. He discussed his vision for the industry, his friendship with Tesla chief executive Elon Musk and why his daughter doesn’t want to own a car.

The following excerpts from the interview have been condensed and edited.

Wan Gang on Elon Musk

He is a pretty good friend of mine. The first time I saw him was in the spring of 2008, when I was in San Francisco. Several friends said I had to go to see Elon Musk. I drove his green Roadster. They put up a tent outside, the car was inside, and I drove it myself. After that, we often met at conferences.

Musk has done well in R&D, production and sales service, so he is very popular in China. I believe his car also will be a challenge to China’s automobile enterprises. We can learn from each other’s strengths and develop rapidly in the future. The spirit of entrepreneurship is gradually forming among not only the private companies, but also the state-owned enterprises.

On China’s slowing car market

Last year was the first time that sales of traditional automobiles fell. The whole industry was worried about whether something was going to go wrong. Actually, it’s a natural phenomenon. The root of it is that we haven’t solved the problems in the market. Oil prices are still increasing, and congestion is becoming more and more serious, from the mega-cities in the past to the second- and third-tier cities now.

If China’s automobiles can solve the problems of energy, environmental protection and traffic congestion, our industry will have a lot of room for development. That’s why we need to develop new-energy vehicles.

On phasing out EV subsidies

Although many automakers are registered in China, the top 10 manufacturers’ production accounted for 75 per cent of passenger car sales last year. China’s production capacity has concentrated quickly, primarily because of market competition. Whether there are subsidies or not, there is always market competition.

With the coming of electric vehicles, business models will change greatly. People born after 1990 don’t want to have their own cars. My daughter was born after 1990, and she told me she doesn't need a car in Beijing because there are many ride-hailing services and rental cars.

The new-energy vehicle is the best one for developing and increasing the sharing function because its efficiency is relatively high.

Facing the future, we should formulate new industrial development plans, strengthen scientific and technological support, coordinate development and promote market forces.

On trade war with the US

We don’t want trade unilateralism. We want multilateralism. We want all of us to develop together. Especially in the face of the challenges of the common future of mankind, we should not return to unilateralism. We should be more open. Businesses shouldn’t be punished for innovation and for improving their competitiveness.

The automotive industry is facing a revolution that hasn’t happened in a century. This great change means more globalization, so we need to end this as soon as possible and return to the road of globalisation together.

On phasing out fossil-fuel vehicles

I don’t think China will use administrative orders to phase out fossil-fuel cars by a particular year because China is too big, there are too many provinces, and the climate and resources from north to south, including the number of vehicles, are too different.

China will be divided into regions, models and fields, and then go step by step to achieve the transformation. But the speed of that transformation won’t be slow.

Will the traditional internal-combustion engine go down the road of the camera-film industry? Our expectations for the automotive industry are for transformation and upgrading.

The sales of traditional automobiles in China are declining. It tells us that our society needs more advanced automobiles. Our society needs new-energy automobiles.

On China’s hundreds of EV start-ups

The start-ups and our existing automobile companies are both cooperative and competitive. When the start-up enterprise is big, it may eat up the existing enterprise, transforming that business. The process of change is bound to be a process of reorganization. From this point of view, these start-ups are still promising.

Maybe these enterprises will become global enterprises, maybe the ones born in China would grow up in the United States, or become a big brand in Europe. Nowadays, people are looking for opportunities everywhere.

On China’s NEV credit system

The credit system will continue, but it gradually will be converted to a carbon trading system. But before that, there should be corresponding tax incentives for cars without carbon emissions. The credit system is for the automotive industry, and carbon trading is for the whole society.

Volkswagen, Mercedes-Benz and BMW, including Ford, all expressed great interest in China’s car-sharing business. In the past, most of them stayed away from our public-transportation system. Now they’re all paying attention to this, which shows that the pressure is turning into market momentum.

On autonomous driving

People still want to drive or have a sense of control. We will make great efforts to develop the function and technology of autonomous driving, but the point of its development certainly isn’t to take people out of the driver’s seat.

On being called “the father of electric cars in China”:

The title is more in name than in reality because the development of electric vehicles is to everyone's credit, not just my own. I just contributed my strengths to this process as a participant and promoter. Secondly, I’m not that old, and I will continue working with my colleagues to help the auto industry grow.