The Chinese government has posed a most novel problem for General Motors. It is basically telling GM, “If you want access to our enormous car market to sell your Volt (as planned for the end of this year), you’ll have to share some of the car’s core technology.”
The story broke in the New York Times and promises to grow into one big brouhaha unless cooler heads prevail. Of course, cooler heads are scarcer than hen’s teeth these days—or a good cliché.
Here’s the nub of the problem:
The Chinese government is refusing to let the Volt qualify for subsidies totaling up to $19,300 a car unless G.M. agrees to transfer the engineering secrets for one of the Volt’s three main technologies to a joint venture in China with a Chinese automaker, G.M. officials said. Some international trade experts said China would risk violating World Trade Organization rules if it imposed that requirement.
China has pushed hard for the development of clean cars, giving large subsidies not only to buyers but to carmakers and developers, like BYD. But they need advanced technology to go to the next level. From the government’s point of view, why shouldn’t GM trade off something for the millions, nay, billions it will make in the world’s largest and hottest green-car market?