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For automotive battery makers LG Chem Ltd <051910.KS> and Samsung SDI Co Ltd <006400.KS>, the Chinese market has begun to offer promise after painful loss-making investments.

The reason for their hardship: a government list of recommended battery suppliers published three years ago that became linked to generous car subsidies and did not include foreign firms. Since then, Chinese rivals led by Contemporary Amperex Technology (CATL) <300750.SZ> and BYD Co Ltd <002594.SZ> <1211.HK> have virtually locked up the world’s biggest market for electric vehicle batteries.

But signs that China is starting to open its car battery market are spurring the South Koreans to invest further despite having had to repurpose existing Chinese production for exports.

LG Chem said in July it will spend about 2 trillion won ($1.8 billion) on a second China car battery plant with production slated to begin in October 2019, while SK Innovation Co Ltd <096770.KS> plans to invest 400 billion won in a China plant that would build key parts of EV batteries.

Samsung SDI has said it may expand China battery capacity and Executive Vice President Michael Son has noted the company is preparing for a gradual change in what he called China’s ‘protectionist policy’.

“We are in active consultations with several Chinese automakers,” he told an earnings conference call in October.

With its huge shift to electric vehicles as it seeks to combat smog, China accounts for 61 percent of a global car battery market worth an estimated $13 billion annually.

That makes it vital to growth for LG Chem and Samsung SDI, the world’s No. 4 and No. 6 makers, even if they fret over having lost too much ground.

“Chinese battery makers are growing so fast, it’s scary. The next two or three years will be critical in determining whether we survive and can pull ahead of them,” a Samsung SDI official said. Like several other company sources, he declined to be identified when discussing competition with China.

NEW WHITE LIST

Company and industry sources say the South Korean investment plans were prompted by China’s pledge to phase out subsidies for electric cars and plug-in hybrids by 2020, as well as a new ‘white list’ of approved battery suppliers published by two auto industry associations in May.

The list includes LG Chem, Samsung SDI and a venture between SK Innovation and China’s BAIC Group. It is viewed as countering to some extent the November 2015 list that did not include foreign firms.

“When we made the new white list, the basic principle was that we thought it was time to open the market as we are confident about our own products,” said an expert who helped compile it, declining to be identified as he was not authorized to speak on the matter.

He added that Panasonic Corp <6752.T>, the exclusive supplier for Tesla Inc new cars, may also be included on a future version of the list. Panasonic said it plans to seek permission to be included – a move which comes as Tesla prepares to build a car plant in Shanghai.

The list is, however, not linked to subsidies and on its own has not been enough to prompt a rush into China sales.

According to a Beijing-based LG Chem official, automakers in China remain uncertain about how much weight it carries with the Ministry of Industry and Information Technology (MIIT), which published the first list and is charge of approving new vehicles.

For that reason, LG Chem has yet to start selling its batteries to car makers in China, the official added.

BURNT BEFORE

The South Koreans hope that China’s rapidly expanding electric car market will mean sufficient demand for their products, even if those hopes are tempered with wariness borne from experience.

Both firms completed their first China electric vehicle battery plants in October 2015, each banking that hundreds of millions of dollars in investment would pay off.

LG Chem’s plant in Nanjing, for example, was the size of three soccer fields, opening with much fanfare and government officials from both nations in attendance. LG Chem declared it was aiming to become the world’s No. 1 maker.

But the MIIT list was published the next month and subsidies for a type of bus battery mainly produced by the South Koreans were halted in January 2016.

That effective shutting out of the South Koreans from the Chinese market underscores broader concerns with Beijing’s trade and industrial policy at the heart of the trade war with Washington.

“China used subsidies to block the entry of Korean competitors, which gave Chinese rivals time to catch up with the technology,” said Koo Hoe-jin, director of the Korea Battery Industry Association.

MIIT did not respond to a request for comment on its EV battery strategy.

Pain has also come with a near 140 percent surge in prices for cobalt, a key raw material for automotive batteries, since 2016. The jump has prompted a reworking of contracts to link raw material prices to battery prices, LG Chem and Samsung SDI said.

In contrast, Chinese rivals have suffered far less as China accounts for half of the world’s cobalt smelting capacity and has been increasing its clout in the global cobalt supply chain.

That has helped CATL grow to be on par with long-time industry leader Panasonic. It is now also seizing contracts as automakers diversify their suppliers, including one with BMW which is a major Samsung SDI client.

CATL and Warren Buffet-backed BYD together commanded a third of the global market in the year to end-October, up from 18.2 percent in 2015, according to SNE Research. LG Chem and Samsung SDI’s combined share has risen less than a percentage point to 9.6 percent.

Unlike Panasonic, the South Koreans are unable to rely on a captive customer. The country’s main automaker, Hyundai Motor Co <005380.KS>, has bet more on hydrogen-fueled cars than battery-powered electric vehicles.

“The Koreans are sandwiched between Japanese and Chinese rivals. The Koreans are in an obscure position,” said Park Chul Wan, a professor at Seojeong University.

With new electric bicycles entering the market seemingly continuously, it is becoming harder to standout. And while some manufacturers are competing on price to create the most affordable e-bikes, others are competing on design and features. And that’s where SURU comes in.

The Canadian company introduced an electric moped that combines the best of motorcycles and bicycles to create a unique personal electric vehicle.

SURU electric mopeds

SURU has only been in operation since 2016, but already has a history of building high-end mopeds that look more like scooters than bicycles. The company was founded by motorcycle industry veteran Michael Uhlarik and Kevin O’Neil, who applied their extensive design and riding experience to develop a new class of EVs.

The company’s One Fifty and S19 models incorporated top-shelf components such as DOT certified motorcycle-grade wheels, brakes, suspension and lights.

The frame is inspired by step-through scooters and provides a comfortable, cushy seat and upright riding position.

With the popularity of SURU’s first models booming, the company decided to expand their lineup with a new version of the in-demand bike, the SURU Scrambler.

SURU Scrambler

SURU’s newest bike, the SURU Scrambler, falls squarely in the modestly powered division of scooters and mopeds. And for good reason.

By carefully selecting a number of important limits, the company’s vehicles are legally classified as electric bicycles in many countries. That gives them a number of advantages: no need for a motorcycle license or registration, free parking, using bicycle lanes, etc. Of course the exact perks depend upon local regulations, but riders in many countries will be able to take advantage of lax restrictions.

To help the Scrambler remain street legal in as many countries as possible, its power is limited depending on the country of sale. Americans get the 750 W version, Canadians get a 500 W version and Europeans have to settle for a 250 W version, according to Electric Motorcycle News. Though keep in mind that when companies like these offer a 250 W version, they can sometimes be more like “250 W, wink wink“.

The top speed is also adjustable depending on the country, but tops out at 20 mph (32 km/h) in the US. Other specs include a 31 mi (50 km) range from a removable 48 V and 816 Wh lithium-ion battery, powder-coated aerospace aluminum monocoque frame, 3” knobby motorcycle tires and a svelte 78 lb (35.5 kg) total weight.

While it’s certainly not the fastest moped around, the SURU Scrambler might be one of the highest quality electric bicycles on the market thanks to its slew of motorcycle components. And that provides new riders with an introduction to motorcycle-level vehicles without the intimidation factor.

According to Uhlarik:

“There are so many people who love the look and feel of cafe racer and dirt tracker style motorcycles. But getting into motorcycling can be scary. The e-bike offers the ideal platform for all kinds of people to dive into the fun of the custom motorcycle experience without fear or high cost. The Scrambler is just the first of many iterations of the SURU concept to come”

While the price of the SURU Scrambler isn’t released yet, the company’s previous model known as the S19 retails for $2,999 CAD ($2,230 USD).

The EU made official its deal to cut CO2 emissions from new cars by 37.5% by 2030, which should force automakers to sell more electric vehicles in Europe.

While the goal is aggressive and unprecedented for such a large market like Europe, it’s actually a compromise over a compromise.

As we reported earlier this year, the European Parliament was pushing for its own target of 40% by 2030, but Germany, where a large part of the European auto industry is located, lobbied for no more than 30% reduction in emissions from new cars.

The European Council was pushing for a 35% reduction in CO2 emissions from new cars by 2030.

It resulted in a compromise of 37.5%

The emission restrictions will apply to the overall sales of automakers – resulting in them having to sell more electric vehicles and low-emission vehicles in order to compensate for their gas- and diesel-powered cars.

Automakers are not happy about it.

The German Association of the Automotive Industry (VDA), which represents companies like BMW, Daimler, and Volkswagen, said in a statement about the deal (via DW):

“The regulation demands too much while promoting too little. Nobody knows today how the agreed limits can be achieved in the time given,”

That’s even though all of those automakers claims to be making significant investments into electric vehicles.

China wants to play in America’s car market. While US sales have plateaued around 17.2 million per year (paywall), it’s one of the most lucrative on the planet (and second in size only to the 28.88 million sold in China last year).

No Chinese brand has managed to break into the US market and establish itself as one that Americans will trust. If they were able to, they’re aiming to replicate the successes of Japan’s Toyota in the 1970s, and Korea’s Hyundai in the 1980s. Both overcame initial skepticism with inexpensive, well-built products that eventually stole market share from US manufacturers.

Last week, Qiantu Motor announced it would aim to become the first Chinese automaker to sell its own vehicles in America. So far, Chinese manufacturers have only sold their cars under established brands, such as the Buick Envision (built by Shanghai GM, a joint venture between China’s SAIC Motor and General Motors) and the Volvo S90 (Volvo was bought from Ford by China’s Geely in 2010).

Qiantu (the name is Chinese for Dragonfly) plans to start building its K50 electric vehicle (EV) in 2020. The electric luxury sports car will be a joint US manufacturing effort between Chinese automaker CH-Auto and Southern California-based startup Mullen Technologies. It will be assembled from American and Chinese components.

If successful, it will be China’s first attempt at challenging Tesla on its home turf by selling premium cars at what it calls an “unexpectedly affordable” cost. Although no exact prices were given, it’s likely that Qiantu will first target Tesla’s Roadster, Model S, and Model 3 vehicles. That would directly challenge Tesla’s grip on the top of the US sedan market which has displaced names such as Ford, Lexus, and BMW. During the third quarter of 2018, the Model 3 was the best-selling electric car in the US and the fifth-best selling sedan overall. With the Model S and Model X, Tesla holds three of the top four spots among best selling electric cars.

Jeremy Acevedo, a manager at auto industry analysis firm Edmunds, told Quartz that Qiantu has a tough road ahead of it. While Qiantu can dodge some tariffs on Chinese auto imports by building in the US, there is still uncertainty in the US trade war with China. A flood of new EV models from familiar brands like Audi, Subaru, and Mercedes-Benz will also enter the US market in the next two year. With so much competition for what still amounts to a niche market (roughly 2% of US sales), US brands could drain profits and stop the flood of Chinese EVs before it even begins, Acevedo wrote by email.

For more in-depth coverage of China’s electric-car industry, check out Quartz’s field guide.

The age of diesel and petrol in Australia is on the decline and interest in hybrid and electric cars at an all-time high, a new report released by market research agency Roy Morgan shows.

Sales of electric and hybrid vehicles are expected to rise dramatically in the near future, with over half of Australian drivers saying they are seriously considering buying some form of electrified vehicle for their next car, according to the data.

The findings are illuminating: as an alternative to petrol, the data shows a general decline in interest in diesel over the last 8 years from 46.6% to 45.5%.

While Roy Morgan notes that interest in diesel vehicles is still higher than all-electric vehicles, all-electric vehicles have seen a definite upturn from 31.5% twelve months ago to 36.2% now.

Significantly, interest in hybrid vehicles is now higher than diesel (52.4% compared to 45.5%), while interest in electric and hybrid combined is at 56.1% and rising.

Data showing what Aussies are driving now and what kind of car they will choose next reveals a considerable disparity for petrol cars – a drop from 77.5% now to 63.7% next – figures which spell dark (or rather, enlightening) times ahead for the petrol automotive market.

While numbers of of electric and hybrid currently driven are still very low, both vehicle types show a significant increase indicating that the EV market is on the precipice of taking off.

The Roy Morgan ‘Automotive Currency Report’ on which the findings are based represents the opinions of over 50,000 people per year, either already driving or intending to drive within 4 years, from October 2009 to September 2018.

Industry Communications Director Norman Morris said in a statement that the data shows how Australian’s attitudes to fuel choices are changing.

“Those alternatives considered more environmentally friendly than the traditional internal combustion engines, mainly hybrids and fully electric, have seen increased consideration,” he says.

An increase in the availability of alternatively-fuelled models is a driving factor in the changing attitudes, Morris says, however interest alone is not a guarantee of EV sales.

“Vehicle purchase intentions can be influenced by fuel considerations, however to date, this has been a long term indicator in converting this to actual sales.

“This is illustrated by the fact that despite high consideration levels among Australians for both hybrid and fully electric vehicles over the last eight years, they still account for around only 1% of total vehicles. The challenge is to convert fuel consideration into vehicle sales.

“There are some positive signs in this research that this will occur, as evidenced by the fact that there has been a very positive level of drivers saying that their next car is most likely to be a hybrid or fully electric,” he says.

With the introduction of Australia’s first sub-$A50,000 all-electric model, the Hyundai Ioniq, just last month and automakers poised to release more pure electric vehicles on the Australian auto market next year, it would seem that at the very least, the stage is set for this trend to continue.

Hyundai announced late last week that the Kona Electric, the company’s second fully electric vehicle, will start at $36,450 in the US when it goes on sale in early 2019 — basically dead even with the current average sale price of a new car in the United States, according to Kelley Blue Book.

On one hand, that’s amazing. It’s a sign that automakers are now able to ship what is still pretty radical new technology — an entirely electric drivetrain — at a cost that’s on par with the auto industry’s most typical purchase price. And with 258 miles on a full charge, the Kona Electric is no slouch on range, which is one of the most important deciding factors when it comes to convincing people to switch to electric cars in these early days.

But it’s also a reminder that many budget-minded buyers are going to remain priced out of electric cars in the near term. That’s a bit of a shock coming from Hyundai, which Kelley Blue Book says typically sells cars at an average price closer to $25,000.

Hyundai still deserves a lot of credit. The Kona Electric’s 258 miles of estimated range eclipse the advertised range of most other EVs on (or about to hit) the market. That’s about 20 miles more than GM squeezed into the Chevy Bolt EV, and it’s 38 miles more than the base level Model 3 that Tesla plans to start making in 2019. (Tesla recently announced a mid-range version that is good for 260 miles, though that starts at $46,000.) And it crushes a similarly priced new Nissan Leaf by almost double (150 miles).

The Kona will even outlast electric cars that cost far more. The Kona’s 258 miles beat out the range offered by the Jaguar I-Pace (234 miles), the base level Tesla Model X (237 miles), and will likely edge the Audi E-Tron (which is around 248 miles, though that’s based on the slightly more optimistic European standards), as well as the forthcoming Mercedes Benz EQC (expected to be in the low 200 mile range).

Hyundai is known for making some of the more affordable cars on the market, but the Kona Electric won’t undercut much of its direct competition. The Chevy Bolt EV starts at $36,620. Tesla’s cheapest Model 3, when it arrives, will start at $35,000. And Volkswagen is targeting the low $20,000 range with the most affordable versions of its upcoming electric cars, though it’s still not clear how much range those models will offer. (VW is said to be preparing a top-end model with over 300 miles of range.)

The $7,500 federal tax credit offered to buyers of all-electric vehicles will help drag that sticker price down, as will certain state incentives. (Though the future of the federal tax credit is a bit cloudy, as Trump has threatened to weaponize it against GM for its recent plant closure announcements.)

But even if the price is right for some, Hyundai’s rollout of the Kona will also be a bit slow in the US. The company says it will put the electric SUV on sale first in California, before shifting to “zero emissions vehicle-focused states” in the western and northeastern regions of the US ahead of a wider launch. GM has taken a similar approach with the Bolt, and while sales steadily increased in the electric car’s first year, they dipped in 2018 as the automaker struggled to both keep up production and foster demand. Hyundai has also had its own troubles maintaining production to meet demand of its first EV, the $30,000, 150-mile Ioniq.

All told, the Kona Electric’s most intense competition might come from its sister company, Kia. The fellow South Korean automaker is nearing the release of the Niro EV, an all-electric SUV that’s largely built on the same technological platform as the Kona. It’s still early, but the Niro is likely to fall in a similar price range and appears to have a less bare-bones interior than the Kona.

The Kona Electric and the Niro are exciting because they’re a signal that even more budget-conscious automakers are starting to bring competent and attractive electric vehicles to market. But they’re also proving how difficult it remains to strike that long sought-after balance of plentiful range and a price tag that’s within reach of most Americans.