Business Maverick: Reported Fires Threaten China’s Electric-Car Quest

Somewhere in Shanghai, a camera caught what looks like a Model S manufactured by Tesla Inc. bursting into flames in a parking garage. On Sunday night, the video began circulating on social media. Hours later, NIO Inc., a Shanghai-based NASDAQ-listed electric vehicle maker, announced that one of its ES8 models had burst into flames during a repair in Xi’an.

While Beijing has supported the industry for more than a decade, its efforts took on new momentum with the introduction of the now-notorious “Made in China 2025” industrial strategy in 2015.

But quantity can’t obscure what one Chinese energy journal last month referred to as the industry’s “Quality-Gate” scandal. The numbers are damning. In 2018, Chinese manufacturers recalled 135,700 NEVs for a crushing 10.8 percent industrywide recall rate. Already this year, another 23,458 electric vehicles have been recalled.

True, as with any new technology, teething problems are to be expected. But China’s government-sponsored largesse and highly protected market have clearly exacerbated the problem. By one estimate, there are “as many as 500” NEV startups in China, most of which have little to no experience in making or marketing automobiles.

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