A Tale Of Two (Chinese) Cities And The EV Revolution

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Last Updated on: 10th April 2025, 03:10 am

The Victorian Era was similar in some respects to America today. People were not allowed to directly criticize the Queen, so satirists such as Gilbert and Sullivan set their plays in exotic locations to avoid offending their monarch. The Mikado, first staged in 1885, is a case in point. It is a spoof of Victorian society that rather pointedly exposes some of the corruption and social hypocrisy of the era. In one famous scene, the Lord High Executioner has a long debate with himself about whether he needs to cut his own head off before beheading someone else — a clear analogy to the absurdity of the British government at that time. Yet because it is set in Japan, the authors had the benefit of plausible deniability in case anyone accused them of besmirching the reputation of Victoria or her advisers. What does that have to do with the EV Revolution? Patience, grasshopper.

What follows is a report about two Chinese cities — Guangzhou and Shenzhen. The first one became a manufacturing hub when foreign automakers were coming to China two decades ago and needed to form joint ventures with Chinese partners. All of them were focused on building cars with internal combustion engines because that’s what they did in their home countries. According to Bloomberg Hyperdrive, Guangzhou is the capitol of Guangdong, China’s wealthiest province. For many years, it was China’s largest car manufacturing city, thanks to joint ventures between state owned Guangzhou Automobile Group and Toyota, Honda, and Nissan.

CleanTechnica readers are fully aware that Japanese automakers have been almost rabidly opposed to battery electric cars. Thanks in large part to intense pressure from the Japanese government, they championed fuel cell technology instead, wasting years and billions of dollars on technologies that were commercial disasters. Oh, Toyota did latch on hard to the hybrid dream, building scads of what are misleadingly called “self-charging electric cars,” but the core of its business — especially in China — remained conventional cars with conventional engines. The general thinking among Japanese automakers was that they had pretty much perfected the art of building reliable, inexpensive passenger cars. Those cars came to dominate the US new car market and they assumed the same would be true in China.

But we all know about the word “assume,” don’t we? Blackberry assumed its phones would dominate for decades to come; IBM assumed it was invulnerable to market pressures; Kodak assumed people would always need film for their cameras, and Lucent assumed it had the world of communications by the tail. All of them were wrong. As it turns out, Toyota, Honda, Nissan, and GAC were wrong as well.

Shenzhen Is The Home Of The EV Revolution

Shenzhen is located in southern China near Hong Kong. It is home to BYD, which stopped manufacturing conventional cars and conventional hybrids in 2022 to focus on plug-in hybrids and battery electric cars. Voila! The EV Revolution came to Shenzhen and left Guangzhou in the dust. In 2024, production in Guangzhou plunged 20 percent to 2.5 million cars, as Chinese customers embraced domestic brands and shunned foreign nameplates. Guangzhou lost its number one position to Shenzhen, where output soared more than 65 percent to 2.9 million vehicles.

What does this have to do with the price of tea in China? Precisely this: Guangzhou’s economy grew by only 2.1 percent in the last year — the slowest of China’s 19 biggest cities by output and less than half the pace of economic growth in Shenzhen. Are there lessons to be learned from the recent experience of both cities? Oh, you betcha. In the EV Revolution, “some places and people will inevitably be left behind,” David Hart, a senior fellow for climate and energy at the Council on Foreign Relations told Bloomberg. The move to cleaner cars — one that could turn out to be more comprehensive than other industry shifts — will have winners and losers, not just geographically, but also among companies and occupations, he said.

Zhang, who declined to give his full name, told Bloomberg he used to work at an American electronics manufacturer that supplied both Honda and Tesla, but orders at his company started drying up about five years ago. His employer froze wages and began laying off staff. Facing an uncertain future, he quit to become a driver for Didi, the leading ride-hailing service in China. His brother who worked for a Japanese auto parts supplier was laid off three years ago. He has been searching for another job in the industry without success ever since. Now he is driving for Didi as well.

In December, Honda started building electric cars at a factory in Guangzhou with a capacity of 120,000 vehicles a year. That facility is part of a joint venture with GAC. Some of the operations, such as welding, are now 100 percent automated, replacing human workers with by robots. For Zhang, that has added to the difficulties of finding employment in the sector. His position at the American contract manufacturer afforded him and his wife a comfortable lifestyle and made it possible for their their children to get a university education. But now they struggle to make ends meet. “The job used to have good pay with benefits like company housing for couples. Those days are gone,” he said.

What’s It All About, Alfie?

Is there a lesson here? We think there is. Electric transportation is the future; conventional vehicles are the past. Countries can try and lock the barn door after the horse has bolted, but they risk doing irreparable damage to their domestic industries if they do. Tariffs won’t protect them. In fact, tariffs will make the problem worse. Skillful leaders should be pulling every lever to promote supply chains that support the EV Revolution and using every policy initiative available to them to encourage customers to consider buying or leasing an electric car.

In some countries — especially the US — the national government is hell bent on destroying the EV Revolution. It is threatening to shut off the power supply to EV chargers that are already installed at federal buildings and seeking to claw back funding for more public chargers not only on major transportation routes but also in rural and remote communities where charging opportunities today are severely limited. Sadly, it’s all because the sicko leading the howling mob of MAGAlomaniac jackals is in thrall to his friends in the fossil fuel industry who shovel money in his direction and expect favorable treatment in return.

The lesson here is that the US is like Guangzhou — a once important manufacturing hub that has deliberately made itself irrelevant by ignoring market realities. Ignorance is a condition that can be remedied by the application of information. There is no cure for stupidity, and the US will pay dearly for its refusal to embrace the EV Revolution. If Gilbert and Sullivan were alive today, they would have lots of opportunities to pillory the current administration, but of course they would have to set their play in some other country to avoid being arrested and deported. Perhaps they might choose El Salvador, a nation whose government is almost as corrupt as the current administration of the United States.

The US, with its mania for big, gas guzzling, carbon spewing SUVs and trucks, is akin to Guangzhou — a once great manufacturing power very much in decline. To paraphrase William Shakespeare, “There is a tide in the affairs of [nations] which, taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat, and we must take the current when it serves, or lose our ventures.”

The EV Revolution represents just such a “full sea,” a time of infinite possibility. The United States, like Guangzhou, will be the biggest loser if it fails to take advantage of the flood tide that awaits. The question is, which countries will be the Shenzhens in this story? We leave you to ponder that question.