Mr. Pin Ni is President of Wanxiang America, a four billion dollar American company that specializes in auto parts, hotels, electric vehicles, renewable energy, and more. He earned his bachelor’s degree and MBA from Zhejiang University and was a doctoral candidate in economics at the University of Kentucky. Mr. Ni established Wanxiang America in 1994 as a subsidiary of Hangzhou-based Wanxiang Group.
Though Wanxiang has been established in the US for quite a while, there are still many that are not familiar with the company and its industrial leadership on sustainability. Can you tell us a little bit more about Wanxiang—particularly the company’s focus on building its new energy vehicle (NEV) capacity and any other recent greening achievements?
Wanxiang is one of the largest Chinese privately-held companies, and we came to the United States in 1994. Clean energy is one of the major areas Wanxiang has been involved in and was an idea that originated from our Chairman, who unfortunately passed away 2 years ago. He hoped to achieve a balance among his four main principles of doing business—bring value to the customer, bring a future to the employees, bring return to the shareholders, and bring prosperity to the local communities. This was the main reason Wanxiang started to get involved in green technology. It is this social responsibility that has been motivating Wanxiang to push extremely hard into this area.
There is a clear strategy for the move into the clean energy space. In 2010, Wanxiang became the first company to build a solar panel plant in Illinois and it is now the only plant left in that state. Next, Wanxiang bought the best battery company A123 out of bankruptcy in 2013 and the electric vehicle company Fisker Automotive in 2014. Following the acquisition of Fisker, Wanxiang established a greenfield operation and launched its new innovation and customization center in California with 1000 people and 2 billion dollars. The new luxury automotive company was named Karma in 2015, commencing a new era. Although Wanxiang itself has not seen the return of these investments, the direction is very clear as the company believes that clean energy is the future.
As an established name in the NEV space, what do you see are the key differences between the US and Chinese NEV markets, and even globally?
There are several fundamental differences between the US and China in the NEV space.
First, the extent to which both governments are involved in economic system are different. While the Chinese government is more involved in the NEV market, the US government is more reliant on the market itself. Thus, it is logical that there are a number of Chinese policies in place to intentionally drive the development of NEV primarily because the Chinese government believes that NEVs are the future.
Second, the market sizes in the NEV space are different between two countries. Even though the US is more well-developed in terms of the traditional vehicle supply chain and the existing assets in the relevant industries, this can also be an impediment to embracing new technology. On the other hand, the Chinese market is far from settling and there exist lots of dynamism in this country. In this regard, China will have more market opportunities for new technologies including the NEV.
Lastly, the perception gaps toward NEVs are different. People in China, especially the younger generations, are less price-sensitive than people in the US. They are more willing to spend money to buy into the newest and latest technology. Therefore, in our experience, the demand in China for NEVs is higher than in the US.
Wanxiang is quite involved in the renewables space, which has seen significant transformation. How has it changed from your perspective and how can its intersection with green finance be better leveraged to generate sustainability gains?
I do see green finance as an extremely important field. Without the finance in place, the green industries cannot mature in a way to really compete with traditional industries. Green finance is really unique, and let’s take electrical vehicles for example. The higher costs of electrical vehicles are a big deterrent because of the up-front costs for consumers. But the operating cost of electric for the user is less than traditional vehicles, making them attractive to consumers.
Green finance helps to bridge the gap. Electric vehicles is just one example in which green finance can play a role. Another is solar. Most green energy companies have the same issue with front-loaded costs, a similar situation to consumers and electric vehicles. Green financing is a lot more important for the green industry than to the traditional industry in the way that it would be able to provide financing at the early stages of investments, which would resolve the most concerning issue for companies that would like to be green.
Global and national policy and regulatory efforts are ongoing to create a sustainable financial system, and there is a growing awareness among the private sector that green investments are win-win situations. From your perspective in the commercial sector, what would you suggest in terms of policy prescriptions—globally or domestically in the US—that would help promote green finance?
There is a lot that can be done and different approaches, but policies and regulations can act as the last mile prescription. Industry understands that they need green finance and financial institutions have an interest to do green financing, so the question is how to finish the last mile and to connect the dots for the two players.
I’m not a policy maker so I’m not sure what would be the right policies to implement. But one that I see has been helpful is the tax credits for solar farms from my experience. And from the NEV side, while it has seen subsidies applied industry-wide, providing green financing options—tax credits or attractive interest rates—might be a better approach. In most examples for greening industries, the issue is the front-loaded costs and if we can be creative about finishing the last mile, then that would go a long way.
Another part of this is recognizing the green contribution. In the solar space, there are solar renewable energy certificates and there are carbon credits, which are both mechanisms that recognize green contributions. This will help green industries, like the NEV space, mature. Again, there are many ways to explore different policies to promote green industries via green finance, and when the last mile is achieved, with stakeholders connected, then the system will start to work.
What historical figure do you most admire and why?
There are many admirable figures in history. George Washington was a great example – not because he was the best or most decisive US president, but because he put the well-being of the institutions and others above himself.
And in the same vein, I am most touched by our former Chairman Lu Guanqiu. Firstly, he was able to make everyone a hero. He used a lot of people who were not very well-educated including the farmers and he gave them power and encouraged them to become their own heroes. In addition, he had a slogan that said “making money is easy, but sharing that money is more difficult.” Thus, it is no surprise that Wanxiang donated 100% of its assets to set up a charitable foundation. Chairman Lu was always humble and had a strong faith in giving back to the society. He was quite ahead of his time in working to benefit others through entrepreneurship.