【Text by Observers Network, Pan Yuchen; Editor by Gao Xin】"70% of the world's electric vehicles are made in China, and the electric vehicles produced in China are far superior to those produced in the West." In June this year, a comment by Jim Farley, CEO of Ford Motor Company, sparked strong global attention. Farley also said that this situation made him feel ashamed.

According to a report by The Economist on August 21, China has become the world's largest supplier of renewable energy industries. In addition to electric vehicles, last year it contributed more than half of the global growth in solar and wind energy equipment. Moreover, with the support of Chinese products, the renewable energy industry in the Global South is also developing rapidly.

Automobile production line, The Economist

According to the International Energy Agency (IEA), the sales of electric vehicles in developing countries in Africa, Asia, and Latin America increased by 60% last year. With the influx of Chinese electric vehicles into emerging markets, Turkey's electric vehicle sales have more than doubled in the past year, and the local electric brand Togg has also gained popularity, accounting for 27% of all car sales currently.

Interestingly, over 70% of the cars imported into Nepal last year were electric vehicles; after Ethiopia completely banned the sale of fuel-powered cars, about 60% of new cars sold there were battery-powered; driven by the local automaker VinFast, Vietnam's electric vehicle sales also doubled in the past year.

In emerging markets, the price of Chinese electric vehicles is now as cheap as traditional cars, and in some regions, even cheaper. According to the IEA, the average price of Chinese electric vehicles in Thailand was approximately $30,000 last year, while similar fuel-powered cars cost around $34,000.

Moreover, policy incentives for electric vehicles in various countries have had a positive impact. For example, in Turkey, electric vehicle consumers usually pay only 10% tax, while the tax rate for fuel-powered vehicles ranges from 45% to 220%.

On the other hand, due to tariffs imposed by the United States and the European Union to keep Chinese electric vehicles out, Chinese electric vehicles are seeking opportunities in the Global South. However, relatively free trade in developing countries is also facing challenges from protectionism. For instance, Brazil only recently allowed electric vehicles to enter its market duty-free; as India seeks to establish an independent supply chain, imports of finished solar panels in India have stagnated; Nigeria is also considering a complete ban on solar panel imports to support domestic manufacturers.

However, if relevant companies commit to producing locally, the local government can allow the import of their products. For example, Brazil has provided an exemption for BYD, China's largest automaker, and pushed for the establishment of a car factory in Brazil; Indonesia has also increased the local production ratio to 40% and pledged to reduce the value-added tax on domestically produced electric vehicles from 11% to 1% by 2026.

Nevertheless, despite lower long-term costs, clean technologies typically require more upfront investment compared to fossil fuel technologies. For example, according to data from the International Energy Agency, the typical capital cost of solar projects in India is 11%, while the proportion in developed countries is about half.

According to the United Nations Framework Convention on Climate Change and the Paris Agreement, countries bear the principle of "common but differentiated responsibilities" in combating climate change. Developing countries need to develop their economies, and most countries in the Global South are energy importers, so they must use scarce foreign exchange to purchase oil and natural gas, indirectly affecting their investment in clean energy technologies.

However, according to estimates by the Rocky Mountain Institute in the United States, due to the gradual decline in prices, the unit initial cost of many clean energy technologies has begun to converge with that of fossil fuels. Therefore, clean energy technologies will become more attractive in most parts of the world in the future.

This article is an exclusive article by Observers Network. Without permission, it cannot be reprinted.

Original text: https://www.toutiao.com/article/7541575057848533513/

Statement: This article represents the personal views of the author. Please express your opinion by clicking on the [Up/Down] buttons below.