Guangzhou sets sights on becoming ‘China’s Detroit’ after failing to lure Tesla
Jul 12, 2019
Guangzhou’s municipal government unveiled plans to become “China’s Detroit” by setting targets of nearly double current production capacity by 2025 with heavy emphasis on new energy and driverless vehicles.
Why it matters: Switching goals from becoming the world’s vehicle plant to a global powerhouse in smart and electric mobility are in line with the central government’s core initiatives.
- Guangzhou is not the first Chinese municipality which seeks to transform the city’s auto industry into an innovation hub. Chongqing announced (in Chinese) earlier this year that the city is targeting a goal of producing 10%, or 3.2 million units, of China’s total annual auto output in 2022. Half will be either new energy or smart vehicles, or a combination of both.
Details: Guangzhou is offering strong financial support, including land resources and government funds, to bolster NEV companies clustered around the city, said the municipal government in a file released Wednesday.
- Guangzhou is ramping up auto production with a goal of 5 million units by 2025, 80% of which will be driverless or NEV.
- For electric vehicle (EV) makers who invest more than RMB 2 billion (around $290 million) and equipment suppliers with investment deals of more than RMB 1 billion, the government will allocate a total land area of 5 square kilometers (around 2 square miles) for their use.
- Guangzhou will add RMB 200 million annually to its budget to fund research and development in key auto technologies, including autonomous driving and 5G-enabled vehicle connectivity.
- The government expects new energy vehicle will account for about one-third of total production capacity in the city in 2025, while four-fifths of newly produced cars will contain autonomous driving systems.
Context: Guangzhou first laid out its vision of a “world-recognized motor city” in a government plan released in 2018, and is ramping up efforts reportedly after losing to Shanghai in a competition for Tesla’s first overseas Gigafactory.
- There had been rumors about a fierce rivalry among municipal governments to attract the US EV giant. Guangzhou was one of the likely candidates, as well as Suzhou, a city in the eastern province of Jiangsu adjacent to Shanghai.
- The government in Guangzhou’s Nansha District made a special “T Plan” to encourage Tesla to build its factory in the city after its founder Elon Musk told media in early 2016 that it was looking at options for production in China.
- Guangzhou ranked second among Chinese cities in car production volume with nearly 2.97 million units last year, about 10,000 fewer units than Shanghai. It is also home to GAC Group, China’s third-largest automaker, and a list of auto tech startups, including Pony.ai, WeRide, and XPeng Motors.