The Liujiang River, the second largest tributary of the Pearl River in Guangxi, has a curved river channel in its lower reaches, forming a U-shaped convex bank from north to south under the centrifugal force of the water flow. The downtown area of Liuzhou, the second largest city in Guangxi, is located on this convex bank.
From a certain angle, you might mistakenly think that you are looking at Manhattan on the west coast of the Atlantic.
However, unlike Manhattan, which is known as the world’s economic center and the richest district in New York, Liuzhou is only a third-tier city among many prefecture-level cities in China.
Liuzhou does not have the Broadway shows every night, towering Empire State Building, or Wall Street tycoons with pockets full of cash. You won’t even find a Zara or Burger King here, but it has its unique charm.
The spicy snail rice noodles, the lifetime savings of elderly people in need of a coffin, and the popular mini electric cars on the internet all come from here. Although it cannot compete with Manhattan in terms of economy, politics, and culture, the penetration rate of new energy in Liuzhou is like the AE86 (Toyota model, the ride of Takumi Fujiwara in Initial D), descending the hill; even if it is just carrying a block of tofu, it makes the trailing cars unable to see its taillights.
According to the “2021 Liuzhou Model Big Data Report on New Energy Vehicles in China,” the proportion of pure electric passenger vehicles in Liuzhou reached 35% in September of this year, and was 31.6% for the first nine months, ranking first in the country. The second to fifth places are held by Sanya, Shenzhen, Shanghai, and Beijing, respectively. On a global scale, the popularity of electric vehicles in Liuzhou is only second to Oslo.
In contrast, the United States had only a 2.2% penetration rate of new energy in 2020.
How did Liuzhou surpass the first-tier cities with even more strict license plate and traffic control policies to become the leader in China? Can other cities easily copy its success in the wave of new energy vehicles?
One of the Five Automobile Cities Paves the Way for Electrification
As one of the former 18 railway bureaus, Liuzhou is traversed by the Xianggui, Qian Gui, and Jiao-Liu railways, as well as the Liujiang River. Ships leaving from Liuzhou Port can travel upstream to Rongshui, Rongan, and even Guizhou, and downstream to Guiping, Wuzhou, Guangzhou, as well as Hong Kong and Macao, making it an important transportation hub connecting southwestern, central southern, eastern, and southern China.
The convenient transportation system has made it an industrial powerhouse in southwestern China and one of the five automobile cities, with many complete vehicle enterprises such as SAIC-GM Wuling, Dongfeng Liuzhou Motor, and Guangxi Automobile Group.
In fact, Liuzhou’s relationship with cars can be traced back more than 80 years ago.In 1933, to solve the problem of material shortage, Liuzhou Machine Factory was assigned to create a car using charcoal as fuel. After several months of repeated trial and error, Liuzhou successfully made its own car – the charcoal car – which was also the first car in Guangxi.
In 1969, Liuzhou Agricultural Machinery Factory and Liuzhou Machine Factory jointly produced cars. Workers used paper to paste the model of the cockpit, dug deep pits, and hammered the steel plate into a car cockpit. On April 2 of the same year, Guangxi’s first Leap Brand car was successfully trial-produced, and in the same year, the first batch of ten Leap Brand cars drove to Nanning to participate in the 20th anniversary of the founding of the People’s Republic of China.
Four years later, Liuzhou Agricultural Machinery Factory was officially renamed Guangxi Liuzhou Automotive Manufacturing Plant, later renamed Dongfeng Automotive Industry Joint Venture Liuzhou Automotive Plant, which is the predecessor of Dongfeng Liuzhou Motor Co. now.
Wuling’s predecessor was Liuzhou Tractor Factory, which was separated from Liuzhou Machine Factory in the 1950s and initially produced tractors, just like Lamborghini. However, while Ferruccio Lamborghini was inspired by Ferrari to create sports cars, Liuzhou Tractor Factory was inspired by a microcar brought back from Beijing by the factory manager, opening the door for Wuling to the automotive industry.
In the 1980s, Liuzhou Tractor Factory was renamed Liuzhou Minicar Plant, transformed into the production of minicars, and began to introduce Mitsubishi car technology and equipment from Japan. The first microbus was produced, and the Wuling logo was designed with reference to Mitsubishi’s logo and officially put into use.
Nearly 40 years after Liuzhou Machine Factory and Liuzhou Tractor Factory separated, Liuzhou Machine Factory was merged into Liuzhou Wuling Motors Co., Ltd., now known as Liuzhou Wuling Locomotive.
As China joined the WTO and entered the tide of the world economy at the turn of the century, the automotive industry also ushered in changes. The following year, Shanghai Automotive, General Motors, and Liuzhou Wuling formed a joint venture to establish SAIC-GM-Wuling Automobile Co., Ltd.
During the formation process, the local governments of Guangxi and Liuzhou transferred 75.9% of the state-owned legal person shares to SAIC group for free. After restructuring, SAIC Wuling was established, and then General Motors invested to establish SAIC-GM Wuling. In the process of establishing a modern corporate system, many state-owned enterprises did not know how to do it. If it were not for the local government’s far-sighted vision, Liuzhou and Wuling might have become the next Sanshui and Jianlibao.
Since then, Wuling has been like most people’s memories. From a breadvan, to a shed-structured truck during the epidemic period, to this year’s popular Hongguang MINI EV, Wuling is known for “Making whatever the people need”, traveling along the streets and alleys of China’s market economy, and becoming the loyal “partner” of many people’s first pot of gold.
In addition to passenger cars, Liuzhou also produces new energy vehicles, commercial vehicles, MPVs, medium and heavy-duty trucks, and other types of vehicles, and the output value of the automotive industry has successively exceeded 100 billion, 200 billion, and 240 billion yuan in 2010, 2014, and 2016. At the same time, a relatively complete automotive parts supporting industry system has also been developed.A number of local component companies, including Liuzhou Wuling, Fangsheng Industrial, Liuxin Stamping and others, have followed the rapid development of the auto industry, while a number of well-known domestic and foreign component companies, such as Leoni Wiring Systems, North Sea Special Supply, Yanfeng Visteon Automotive Trim Systems, Fuyao Glass and Linglong Tire, have also established production bases in Liuzhou.
In 2019, Liuzhou’s automobile production reached 1.85 million vehicles, with a total output value of 200.4 billion yuan. Against the backdrop of the continuous decline in the national automobile output value, Liuzhou cannot avoid being detached from the overall trend, but the production and sales volume of new energy vehicles in Liuzhou is on the rise.
According to statistics from the China Association of Automobile Manufacturers, China’s automobile production and sales have declined for two consecutive years. The production and sales of new energy vehicles nationwide in 2019 were 1.242 million and 1.206 million respectively, with year-on-year declines of 2.3% and 4.0%. However, in 2019, Liuzhou’s production and sales of new energy vehicles increased by 80.7% and 122.2% respectively, and in 2020, the production value of new energy vehicles in Liuzhou increased by nearly 200%, which led to the leapfrog of the production and sales volume of Guangxi to first place in the country.
The prosperous new energy automobile industry in Liuzhou cannot be separated from the decades-long development of the traditional automobile industry, nor from decisive transformation.
Micro electric vehicles occupy Liuzhou
Guangxi’s new energy policy can be traced back to 2010. A document entitled “Opinions of the People’s Government of Guangxi Zhuang Autonomous Region on Promoting the Development of New Energy Vehicle Industry” (hereinafter referred to as the “Opinions”) was released on the official website of the Guangxi Zhuang Autonomous Region Industrialization and Informatization Department at the end of that year.
The “Opinions” specifically pointed out that “supporting enterprises such as SAIC-GM-Wuling Automobile Co., Ltd., Liuzhou Wuling Automobile Co., Ltd., and Liuzhou Yanlong Automobile Co., Ltd. to accelerate the construction of new energy vehicle production bases.”
That same year, Wuling’s new energy electric trucks and electric sightseeing cars were put into use at large-scale sports events in Liuzhou. In terms of supporting facilities, Liuzhou Tan Zhong Electric Vehicle Charging Station started construction and was put into use, which became Guangxi’s first electric vehicle charging station.
Since the beginning of this year, Liuzhou has been creating a “10-minute charging circle”, which means that charging facilities can be found within 10 minutes in the urban area and some suburban counties. Walking in the urban area, the coverage rate of charging facilities has surpassed that of gas stations.
Currently, Liuzhou has built a total of 28,000 various types of charging facilities and 1,330 charging piles, while the number of gas stations in the urban and suburban areas of Liuzhou is about 190.
Liuzhou’s electrification is different from other cities, as it has already been occupied by “micro-electric vehicles”.
Tourists who arrive in Liuzhou for the first time and get off at the high-speed railway station may be surprised to see rows of neatly parked micro-electric vehicles on the East Square. And after staying for a while, you will find something even more surprising – shared bicycles, which can be found everywhere in other cities, are scarce in Liuzhou.
Residents reported that shared bikes had also briefly appeared on the streets of Liuzhou around 2017, but were quickly removed by the local government.
However, Liuzhou has its own public bicycle rentals and also has WarmCar, a car-sharing service, represented by rows of yellow-and-white Baojun E100s in the image above, which are referred to as “Xiao E” by local residents.
In the same year that shared bikes appeared and disappeared, Liuzhou was intensifying its promotion of new energy vehicles and had issued a series of documents for the overall planning and layout of new energy industry development and ecological construction.
At the same time, SAIC-GM-Wuling and the Liuzhou municipal government carried out a series of actions to open up the personal consumption market for micro electric vehicles, a model also known as the “Liuzhou Mode.”
From 2018 to 2020, with adoption rates of 19.9%, 24.7%, and 28.8%, respectively, the electrification of passenger cars propelled Liuzhou to the top spot in the country for three consecutive years. Many people, however, are not aware that the Mini EV is not the most common microcar on the streets of Liuzhou. The true hero that helped Liuzhou reach the new energy vehicle throne is its twin brother, the Baojun E100.
In 2017, the Baojun E100 was first released in Liuzhou, and two years later, it was officially launched nationwide. It can be said that this model was born for Liuzhou from the very beginning.
If a vehicle model appears on the streets as a ride-sharing or car-sharing service, its sales at the consumer level are usually not particularly good. However, this is not the case for the Baojun E100 and E200 in Liuzhou.
These two-seat micro electric vehicles, which are less than 2.5 meters long, can be found everywhere in the streets and alleys of Liuzhou. Most of them are parked in small dedicated parking spaces between the trees on sidewalks, or “squeezed” into a standard parking space with another car. Meanwhile, the Liuzhou government has also set aside dedicated parking spaces in some public institutions, enterprises, commercial districts, and other public areas.
By making proper use of road space, promoting special parking spaces for small new energy vehicles, Liuzhou has saved about 127,000 square meters of space, which is about 3.6% of the total area of Liuzhou’s urban area of approximately 3,554 square kilometers.
Although these micro vehicles may be small in size, they have considerable right of way. In Liuzhou, you can see these two-seat new energy vehicles sharing a lane with buses. Early on, policies such as reduced parking fees and mileage subsidies were also available during promotion.
Local government departments also took the lead in driving micro electric vehicles on the road, and many government and law enforcement vehicles were painted in the style of the Baojun E100.
As of the end of June this year, Liuzhou’s new energy vehicle ownership was about 95,000, accounting for 10.7% of the city’s total vehicle ownership, while the national average for new energy vehicle ownership was about 1.75%.Baowei seized the opportunity, and at the beginning, the NEDC range of E100 was only about 160 KM, which was later increased to 250 KM. Now, it is basically equipped with a range of 300 KM, with a price maintained at around 40,000 to 50,000 RMB. Subsequently, Baowei E200 and E300 (later renamed KiWi EV) with more youthful styling were also launched.
In July 2020, the listing of Hong Guang MINI EV established SAIC-GM-Wuling’s position in the micro electric vehicle market, with the total sales of small pure electric vehicles under SAIC-GM-Wuling exceeding 174,005 in 2020. According to the “Big Data Report on China’s Small Pure Electric Passenger Car Travel” in 2020, SAIC-GM-Wuling’s market share reached as high as 51%, and the monthly release rate was as high as 93%.
In the new energy winter of 2019, Liuzhou welcomed two world-class companies-Hi-Stat and Hilor. Both companies are among the top 100 global automotive parts suppliers. In addition, Liuzhou Jointly established a joint venture with French automotive parts giant Faurecia and American Axle in Liuzhou.
Behind Liuzhou’s domination by micro-cars is a win-win situation for the local government and enterprises, but not all cities can easily replicate it.
Liuzhou’s success has attracted many relevant personnel from Geelyn, Hebei, Henan, Sichuan, Yunnan, Jiangxi and other places to come to Liuzhou to learn from it. During the period from 2018 to 2019, there were almost inspection teams coming every week.
In May of this year, SAIC-GM-Wuling delivered 300 new energy vehicles to the Puer Municipal Government in Yunnan as official vehicles, hoping to take the first step in the “Liuzhou model”.
The development of the new energy industry in Liuzhou not only eases traffic pressure and makes the air and water cleaner, but also revitalizes the declining traditional automotive industry. However, for other third and fourth-tier cities, they usually lack similar industrial foundations.
In 2020, the total output value of Puer was about 94.5 billion yuan, with the first and third industries accounting for about 75.8%, and the industrial sector accounting for a relatively small proportion. The total output value of Liuzhou was about 317.6 billion yuan, with the secondary industry accounting for about 47.3%, among which the automotive industry was its largest pillar industry.
The subsidies and infrastructure construction expenditures of Liuzhou’s municipal government in the early stage can be converted into total output value, while other cities may bear greater financial pressure.
If placed in first-tier cities, micro electric vehicles will also lack convincing power.
In recent years, with the rising demand for travel in first and second-tier cities, the low range and low speed have limited their development in large urban areas. Therefore, the proportion of micro pure electric vehicles has been on a downward trend since 2017.The CEO of Automobility, a consulting company, believes that if the price of electric cars is reasonable and convenient, they will replace bicycles, motorcycles, or other commuting tools.
Perhaps the mini electric vehicles are more aimed at taking over the electric bicycle, scooter, and motorcycle market rather than the traditional fuel car market. Within a reasonable price range, who can refuse a Wuling that can shield you from wind and rain?
Since Beijing banned motorcycles in the 1980s, more than 170 cities have followed suit, and China’s stock of electric bicycles and tricycles has exceeded 300 million. If a large number of mini-cars appear in first-tier cities, the pressure of traffic congestion will increase further.
The success of the Liuzhou model gathered favorable timing, location, people, and other elements. Observing China’s five major automotive industrial cities, the other four are Shanghai, Guangzhou, Changchun, and Chongqing, mostly first-tier or super-first-tier cities, and the worst is also a second-tier city, with difficult political, economic, and cultural gaps to bridge.
Liuzhou’s ability to stay ahead of the trend of electrification may be due to the charm of being a third-tier city. Here, people can leisurely spend their time without relying on an extra second of acceleration to run the next traffic light, nor commuting across the entire city cluster. They just sit in their two-seater pure electric mini-cars, with a top speed of no more than 100 km/h, going to work, buying groceries, and picking up their children.
Everything in this third-tier city seems to be slow, except for the rapid development of new energy.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.