China's $18 Billion Electric Car Bubble Looks Ready to Burst
By Jordan Davidson
Electric vehicles will be the stars of the show when the Auto Shanghai 2019 expo opens Tuesday. China wanted cleaner air, reduced dependence on foreign oil and to be a pacesetter in a growing high-tech industry. So, it invested more than $60 billion in electric vehicles over the last decade and plans to keep that investment going over the next decade, according to Quartz.
The downside is the $18 billion electric vehicle industry in China is set to crash.
In 2018, sales of electric cars there outpaced the rest of the world combined. Yet, with more than 486 homegrown electric vehicle manufacturers vying for market share and in-flux of foreign companies ready to grab customers, concern is rising that too many manufacturers are churning out cars for nonexistent demand, according to Bloomberg. When the bubble bursts, only a few companies will survive.
"We are going to see great waves sweeping away sand in the EV industry,'' said Thomas Fang, a partner and strategy consultant at Roland Berger in Shanghai, as Bloomberg reported. "It is a critical moment that will decide life or death for EV startups.''
However, China's goal of having annual sales of 7 million new-energy vehicles by 2025 would barely sustain a few companies, not the hundreds currently in the industry, according to Bloomberg.
The massive growth potential drew investors not only from traditional car markers, but also from companies not known for building cars, such as internet startups, electronics companies and real-estate developers. Two dozen of those companies will show off their vehicles at the Shanghai auto show alongside Renault, Audi, Buick, Volkswagen and several other companies trying to make headway in the Chinese market, according to the automotive journal Overdrive.
"Only companies that have solid technology reserves can stand out amid competition,'" said Wang Chuanfu, founder and chairman of BYD, as reported by Bloomberg. "By owning core technologies, we can see further and deeper.''
The ones facing the biggest risk are the upstarts still seeking their footing. Many are founded or funded by people with an internet or technology background, used to hefty cash-burn rates but still not necessarily fully aware of the massive investment needed for car manufacturing, Roland Berger's Fang said, according to Bloomberg.
The dangers of creating oversupply were evident in March when an electric car "graveyard" was photographed on the outskirts of Hangzhou. Thousands of electric cars divided into three sections sit idle in the photographs. The cars belong to Microcity, a ride-sharing company. Yet ride-sharing companies, which have bought heavily into the electric vehicle market, have faced a tough road. Several folded in 2018 and the state media, CCTV, questioned not only the business model, but also whether the companies add to congestion by putting more cars on the road, according to Abacus News.
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By Aaron W Hunter
A chance discovery of a beautifully preserved fossil in the desert landscape of Morocco has solved one of the great mysteries of biology and paleontology: how starfish evolved their arms.
The Pompeii of palaeontology. Aaron Hunter, Author provided<h2></h2><p>Although starfish might appear very robust animals, they are typically made up of lots of hard parts attached by ligaments and soft tissue which, upon death, quickly degrade. This means we rely on places like the Fezouata formations to provide snapshots of their evolution.</p><p>The starfish fossil record is patchy, especially at the critical time when many of these animal groups first appeared. Sorting out how each of the various types of ancient starfish relate to each other is like putting a puzzle together when many of the parts are missing.</p><h2>The Oldest Starfish</h2><p><em><a href="https://www.biorxiv.org/content/10.1101/216101v1.full.pdf" target="_blank" rel="noopener noreferrer">Cantabrigiaster</a></em> is the most primitive starfish-like animal to be discovered in the fossil record. It was discovered in 2003, but it has taken over 17 years to work out its true significance.</p><p>What makes <em>Cantabrigiaster</em> unique is that it lacks almost all the characteristics we find in brittle stars and starfish.</p><p>Starfish and brittle stars belong to the family Asterozoa. Their ancestors, the Somasteroids were especially fragile - before <em>Cantabrigiaster</em> we only had a handful of specimens. The celebrated Moroccan paleontologist Mohamed <a href="https://doi.org/10.1016/j.palaeo.2016.06.041" target="_blank" rel="noopener noreferrer">Ben Moula</a> and his local team was instrumental in discovering <a href="https://www.sciencedirect.com/science/article/abs/pii/S0031018216302334?via%3Dihub" target="_blank" rel="noopener noreferrer">these amazing fossils</a> near the town of Zagora, in Morocco.</p><h2>The Breakthrough</h2><p>Our breakthrough moment came when I compared the arms of <em>Cantabrigiaster</em> with those of modern sea lilles, filter feeders with long feathery arms that tend to be attached to the sea floor by a stem or stalk.</p><p>The striking similarity between these modern filter feeders and the ancient starfish led our team from the University of Cambridge and Harvard University to create a new analysis. We applied a biological model to the features of all the current early Asterozoa fossils in existence, along with a sample of their closest relatives.</p>
Cantabrigiaster is the most primitive starfish-like animal to be discovered in the fossil record. Aaron Hunter, Author provided<p>Our results demonstrate <em>Cantabrigiaster</em> is the most primitive of all the Asterozoa, and most likely evolved from ancient animals called crinoids that lived 250 million years before dinosaurs. The five arms of starfish are a relic left over from these ancestors. In the case of <em>Cantabrigiaster</em>, and its starfish descendants, it evolved by flipping upside-down so its arms are face down on the sediment to feed.</p><p>Although we sampled a relatively small numbers of those ancestors, one of the unexpected outcomes was it provided an idea of how they could be related to each other. Paleontologists studying echinoderms are often lost in detail as all the different groups are so radically different from each other, so it is hard to tell which evolved first.</p>
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