Eco-innovation and firm growth: Leading edge of China's electric vehicle business

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Abstract:

Since 2000, escalating energy security issues have been identified as factors for exploiting China's unique potential advantage in the electric vehicle (EV) market. First, the structural risk management system of China needs to be optimised as a hedge against energy security risks from a growing future dependency on oil imports and also from geographical ubiquity in coal. Second, these risks force the Chinese Government to promote eco-innovation through the coal-electricity integration project. Plugging EVs into the electricity grid will not only enhance coal-fired power plant efficiency but also improve the efficiency of energy use from renewable sources. In 2010, the Chinese EV market was still small with annual sales less than 15,000 units. However, the low-speed EV market has grown rapidly, expanding by two or three times in the last ten years. This study focuses on firm growth using case studies on BYD Auto and Baoya New Energy Vehicle and clarifies that a market-oriented thinking, rather than a technology-oriented thinking, can contribute to further growth in the Chinese EV business. Copyright © 2015 Inderscience Enterprises Ltd.