China’s Leapfrog to New Electric Vehicles

Abstract

In 2010, the Chinese government initiated a leapfrogging strategy to jump-start technological upgrading in the country’s automobile industry and facilitate the transition to electric mobility based largely on indigenous innovation. This move was driven by escalating environmental pressures as well as resource constraints and inspired by the prospect of greatly strengthening the technological capabilities and competitive positions of domestic automobile manufacturers. The aim was to establish an early lead in the field of electric vehicles featuring high electric power ratios and power grid connectivity. The paper identifies this leapfrogging attempt as a strategic project initiated by the central government and organized in a top down manner. It sheds light on the supporting public policy framework and conducts a preliminary review of the strategy’s accomplishments until mid-2012. By way of an in-depth examination of guidance policies and incentive structures, the paper highlights the challenge of coordinating promotion plans across the country.