China may learn techniques from the west, but adapt these for the local culture. So it is with electric vehicles. Over the weekend, an industry vice-minister has said a European-style timeline to stop "sales of traditional fuel cars" will also be implemented in China. He predicted "turbulent times" as a result. He is right - there will be a scramble for scale.

The country's pollution problems mean it has every incentive to push electric propulsion. It also sees electrification as an opportunity for its domestic auto industry to catch up with established western carmakers. It is already the largest EV market in the world with 1.2 per cent of car sales last year, according to UBS.

China's problem with EV economics is the same as everyone else's. Bernstein estimates that a mid-size combustion vehicle costs $US15k to produce compared with $US24k for a comparable EV. The differential is down to the battery, which accounts for half of an EV's cost. A combustion engine is just 15 per cent of a traditional car.

State subsidies helped make EVs affordable for consumers while helping manufacturers with the higher build costs. But the subsidy system is being overhauled to focus more on quotas and credits, in effect pushing more of the cost on to the industry. Carmakers have increasingly had to choose between maintaining pricing at the expense of volumes, or sacrificing margins to preserve market share.

Meanwhile, western producers, for whom China has been a very lucrative market, have been reluctant to push battery and hybrid cars. They fear losing valuable intellectual property to their joint-venture partners. The threat of a full-on ban might yet force their hands. They do at least have the scale to finance the necessary investment.

China's automakers are not yet big enough to make electric cars profitably. Note that Great Wall, the carmaker that recently pronounced its interest in buying Fiat Chrysler, had to row back quickly for lack of resources. In this context, Monday's 6 per cent pop in the shares of battery maker BYD looks premature. It may be some time before investors know who has achieved the necessary scale and technological competence to win in an all-electric world.