Ignoring the common view that ‘Chinese innovation’ is a bit of an oxymoron, here’s a really innovative idea from China that could turn the auto industry on its head.
China represents the largest car market in the world, but ownership is only at 10% of the level in the US and until recently most people managed with a combination of walking, biking, trains or scooters. As incomes have risen, however, more Chinese find the need for a car at least now and then, perhaps for a shopping trip to pick up a big box item or for a family outing.
As the country’s prosperity grows, so does the demand for cars with an estimated 80 million new cars expected on China’s roads by 2020 in addition to the 120 million already in use. In an effort to tackle the appalling air pollution, the Chinese government has taken the drastic step of actually limiting the number of new licence plates it will issue and is imposing a gradually increasing quota of green vehicles running on natural gas or electricity.
This video from Aaron Rockett shows how Chinese company Kandi Technologies has a solution for both the consumer demand and the environmental targets. It plans on making 100,000 electric cars available to the 8 million residents of Hangzhou for hourly rental over the next couple of years via 750 automated garages that hold between 30 and 300 cars apiece. They work like giant vending machines – you put in your card and out pops a car. The service is already operating and Kandi is planning to expand into 2-3 other cities this year.
For just £2.00 per hour, you can rent one of the Kandi cars that have a range of 75 miles and a top speed of 50mph - fine for urban use and Hangzhou’s 30mph speed limit. The system allows one-way rentals, so you can pick up at one Kandi Machine and drop off at another. If you want something closer to ownership it also offers the “Long Lease,” which runs 1-3 years for a single price of around £80-£100 per month and includes insurance, maintenance and power. For those who don’t have convenient access to a charging point, Kandi will solve the problem by swapping batteries that it will recharge at its convenience.
If this goes to plan, there will be more EV drivers in Hangzhou alone than anywhere else in the world and other Chinese cities will soon replicate the model. The Chinese are more ready to accept small, slow, short-range EVs, as they are not so heavily burdened with the western preconception of what a car should be like. And the people who come to the car experience through this low cost, low hassle, pay-as-you-go model are unlikely to become car-owning, parking-space seeking, insurance-buying folks in the future. We’re already seeing reduced car ownership among the young in Europe.
Assuming the plan works, it’s highly exportable and ripe for copying and with so much opportunity inside China, Kandi might face clones at home as well as abroad. It's effectively offering cars-as-a-service, like technology companies offer software-as-a-service, so I’m prepared to bet that we’ll see clones coming from outside the car industry.
And in case you think that car vending machines are a new idea, just check this report on VW from 2006.