Automakers charged up about China’s electric car market

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28/04/2015 Leave a comment

German automaker BMW’s local joint venture, BMW Brilliance, last month teamed up with eHi Car Services to lease its fully electric Zinoro 1E in Beijing. The manufacturer made the model available for daily and long-term rental last year, installing charging posts in customers’ homes. To boost sales, it has also increased the number of its public charging points in Beijing and Shanghai.

The infrastructure for recharging, and helping customers to understand what e-mobility is, were vital to making e-mobility work, he said, explaining that the company provided rental services so drivers could experience lowbudget e-cars, get used to them, and maybe buy one in the future.

Daimler’s joint venture, Shenzhen BYD Daimler, also launched its electric SUV Denza in China last year.

Yet it is not just global players who are buzzed by the market. Chinese automaker BYD has made developing new-energy vehicles a priority, while its plug-in hybrid sedan, the Qin, has already proved popular, with 14,747 units sold in China last year.

This year, Geely also signed a deal with Taizhou Xindayang Group to make the Zhidou, an electric passenger car, in Gansu province. The joint venture will focus on developing and manufacturing e-vehicles for the domestic market.

Power points

Thanks to a rise in public awareness of environmental protection and the need for sustainable growth, China’s new-energy vehicle industry is booming. More than 23 million cars were purchased last year, more than anywhere else in the world.

According to the China Association of Automobile Manufacturers, output of new-energy vehicles was 78,499 units, 3.5 times higher than in 2013, while sales also more than tripled to 74,763 units.

China’s cabinet has set a goal of having 500,000 new-energy cars on the road by the end of this year

Industry insiders see huge potential, especially in light of the high expectations placed on the industry by the government and its supporting policies. “With central and local government backing, China can guarantee the best environment for growth in the sector,” predicted Hu Xiaoqing, marketing director for Shenzhen BYD Daimler.

The country’s more environmentally aware consumers have been quick to get on board with new-energy vehicles, and many have been equally anxious to share their concerns.

“I like electric cars because they’re friendly to the environment,” said Wan Yang, a 32-year-old TV producer in Beijing. “I’ll drive one as long as it’s convenient to charge.”

It is the second part of that comment that has so far proved a stumbling block. Zhang Yi, 33, lives in Baoding, northern Hebei province. Driving an e-vehicle in Beijing or Shanghai was fine, he said, because there were plenty of places to recharge the engine.

But that is not the case in smaller cities and on highways, he said. “I won’t drive one in my hometown, there are no charging points. And what can I do if the car runs out of power on a highway?”

Independent industry analyst Jia Xinguang has urged the government to focus on promoting the sale and use of new-energy autos in small and medium-sized cities.

“The subsidies on offer in smaller cities are much lower than in Beijing and Shanghai,” he said. “They need more charging stations and better after-sales service facilities.”

Geared for change

Chinese policymakers are attempting to lay the foundations for a transformation in the auto industry, from a global sales leader to a manufacturing powerhouse. Over the past 50 years, although the market has boomed, the competitiveness of domestic brands in advanced manufacturing has remained relatively weak, partly due to the fact that China was a latecomer and that its companies did not spend much on research and development.

But it is not too late when it comes to new-energy vehicles. Today, China stands on the starting line along with Germany, the United States and Japan; so with a major push China could realistically become a manufacturing power in the sector.

In 2012, the State Council, China’s cabinet, set a goal of having 500,000 new-energy cars on the road by the end of this year, and a total of 5 million by 2020. To achieve this, the government plans to establish a research and development system and industrial chain for e-cars within the next four years.

The State Council last month also unveiled “Made in China 2025”, a programme aimed at upgrading the country’s manufacturing power over the next decade. It includes special funding and tax incentives for 10 industrial sectors, including new-energy vehicles.

A draft plan to boost research and development of new-energy vehicles was opened for public consultation by the Ministry of Science and Technology in February, while city authorities have also introduced supporting polices.

For example, Beijing plans to ensure drivers within the sixth ring road do not need to travel farther than five kilometres to reach the nearest charging point by the end of this year. The city was also planning to cut the costs of parking and toll roads for e-cars in the near future.

Cutting emissions

After three decades of rapid economic growth, China is now dealing with some severe environmental problems. Efforts are ongoing to reduce carbon emissions, with smog continuing to cloud many cities, including Beijing and Shanghai, and authorities have demonstrated a strong determination to combat the root causes of pollution.

Efforts are ongoing to reduce carbon emissions, with smog continuing to cloud many cities, including Beijing and Shanghai

In November, China signed a statement with the United States to collaborate on climate change, saying that carbon dioxide emissions will reach a peak by 2030 and then decline as clean energies such as solar, wind and nuclear power replace polluting coal and oil facilities. The government is also trying to increase sales of e-cars to cut vehicle emissions.

Green energy and the environment were widely discussed at the annual sessions of the country’s top legislative and advisory bodies last month, including the development of new-energy vehicles.

In a speech to the National People’s Congress, the legislature, Premier Li Keqiang promised to beef up the fight against pollution by introducing cleaner energy and clamping down on illegal emissions.

China has gradually been increasing its emissions standards, and last month southern Guangdong province upgraded its standards for light vehicles to National V, which requires a sulphur content in fuel of no more than 10 parts per million, one fifth of the National IV’s 50 ppm. The province is the third provinciallevel region to apply the standard, after Beijing and Shanghai.

Yao Jie, deputy secretary general of the China Association of Automobile Manufacturers, urged Chinese automakers to invest more in research and development.

“Auto manufacturers need to be more innovative to meet the government’s rising emissions standards, as well as reduce vehicle fuel consumption and polluting emissions,” he added.

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On the futured picture: a range of new-energy cars parked at Beijing Capital Internation Airport


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