China’s car market is one of the fastest-growing in the world, and the implications of that are huge for the car industry.
They’re huge for the environment too. With the sort of air quality that Los Angeles was experiencing back in the 1970s, cities like Beijing are keen to get people into zero-emissions vehicles.
The issue is getting potential buyers interested, says the New York Times.
Slow take-up
Three years ago, the Chinese government set a target for the country to produce half a million hybrid and electric vehicles per year by 2011. With production of only several thousand, they’ve failed spectacularly.
Buyers simply don’t seem keen. There are still doubts over the technology, range anxiety is a major problem, and China’s industry has lagged behind some others – leading to scenarios like the tug-of-war over electric car secrets between China and GM.
The odds are against imported electric cars too. Unless cars are built within China, they don’t benefit from the same, large subsidies levied at domestic cars. That’s why a Chevy Volt will cost Chinese buyers over $75,000, more than $36,000 more than you’d pay pre-incentive in the U.S.
Utility companies have the power
In stark contrast to many other nations, the government-run electricity companies have more influence than their oil-producing counterparts. Enticing buyers into electric vehicles is a priority for the utility companies, and to prove it China Southern Power Grid has opened a sales and service center in Beijing, dedicated to electric cars.
Three-storeys high and showcasing the Better Place quick-drop scheme, visitors can watch vehicles having battery swaps and electric car owners can charge their vehicles.
Plug-in, not necessarily all-electric
It’s a positive step, representative of the way China’s power companies want to expand and control the charging network. “I see the Chinese fully committed on a path towards electric vehicles – the time frame may shift, the volume numbers may shift,” explained Raymond Bierzynski, executive director of electrification strategy at General Motors China.
GM has a vested interest in China’s electric progress. Initially the country attempted to leapfrog Japan and the U.S. by going all-electric, but range-extended vehicles and plug-in hybrids are now looking like a more logical interim step.
The country’s new targets include regular hybrid vehicles as part of the one million “new energy” vehicles on the roads by 2015, and incentives of up to $20,000 for renewable energy vehicles. China also wants to become an exporter of electric vehicles, but World Trade Organization rules will need to ensure that the country’s practice of industry subsidies doesn’t break fair-trading rules.
China’s option to exclude imports from this strategy may seem unwise, but industry experts see China’s energy industry as having even greater power than the automotive industry.
Rather than the cars themselves, it could be the power companies that decide China’s electric future.
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