Ok, the title of this post might be a bit too bold. But the essence is true. I just returned from a two-week stay in Shanghai to settle down in Vancouver, and I am thinking about what I have seen in Shanghai.

First, note that I did not go to Shanghai for business purpose. Of course I couldn't help thinking about LEVs and examine the market from a simple visitor's perspective, i.e. wandering around in the city and imagining how LEVs (light electric vehicles) can be used and sold profitably in a fast-developing city like Shanghai.

In theory, and according to the paper I wrote a few months ago, Shanghai is a perfect market: a fast-growing, polluted, traffic-jammed, overpopulated Chinese city with a growing middle-class, and located close to potential manufacturing facilities.

Unfortunately, I have to be honest and admit that what I saw in the city does not bode well for the LEV venture. The vast majority of people still uses low-end rusty bicycles. They rely intensively on their bicycles and use them in every possible situation, including to pull carts, to carry people and all sorts of stuff you cannot even imagine, all that in frantic traffic. In other words, they are very innovative for using their bicycles as multi-purpose transportation tools.

I cannot imagine the technical specifications of a LEV that could be used safely in all these ways, and there is absolutely no way it could be produced profitably given the ridiculous amount of money they are able/willing to spend on it (it's not even worth doing any financial analysis). To conclude, we can forget about selling LEVs as mainstream vehicles in Chinese cities.

Of course, it doesn't mean that the venture has to be abandoned here. First, we can examine how to produce the LEVs in China and market them in North-America and Europe. Second, we can consider targeting niche markets in China, such as golf court vehicles (golf is expanding fast in China) or recreational vehicles.