(Bloomberg) -- China’s policies to cut pollution is driving a rapid move toward electric vehicles in the world’s biggest market and causing an upheaval in the global auto industry, Aston Martin Holdings Ltd. Chief Executive Officer Andy Palmer said.
“This whole show is revolving around what they call new energy vehicles, but Chinese policy is very much driving the move towards electric cars and certainly Aston has to go with that flow,” Palmer told Bloomberg Television in an interview at the Beijing auto show on Wednesday. “We’re probably in the biggest change in the automotive industry since we moved from horse to car.”30
President Xi Jinping’s administration is implementing production quotas for new-energy vehicles, targeting a seven-fold increase in NEV sales and considering a ban on gas guzzlers as China tries to reduce emission in smog-choked cities and cut its reliance on imported oil. Conventional manufacturing giants from Volkswagen AG to General Motors Co. are scrambling to gain a lead in the race for the future, competing with a slew of small startups.
China also plans to ease a 50 percent limit on investment by foreign automaker in what has become the world’s biggest car market, paving the way for more partnerships and deals, even as domestic makers eye the European and U.S. markets.
Aston Martin is "talking to everybody" to understand new technologies, as everyone from Internet companies to classical electrical suppliers innovate, Palmer said. “We are putting down a fairly significant number of people basically to pick up those trends and to tap into some of the technology here.”
The British brand plans to add some hybridization to every car by the mid-2020s, with as many as half of all car sales to be fully hybrid by that time, Palmer said. The rest will be powered by “efficient” gasoline engines.
Aston Martin unveiled the Lagonda Vision Concept, an electric luxury car range that will have its first battery-electric model by 2021, at the Geneva Auto show in March. The company will revive the 114-year-old brand to present its electrification and autonomous driving technologies.
Sales of the marque jumped 58 percent to 5,117 units in 2017, the highest in nine years. Revenue jumped 48 percent to a record 876 million pounds ($1.2 billion). All this came largely from rising demand in North America, the U.K., and China.
China is “also changing the tax structure and significantly reducing what they call a luxury tax on expensive cars, and that will drive growth,” Palmer said. “That saving gets passed on to the customer and that means their cars become more affordable.”
©2018 Bloomberg L.P.
With assistance from Yan Zhang, Anurag Kotoky