Is China Backing Off From EVs?

Signs of pausing and reconsidering, but also of forging ahead

2 min read
Is China Backing Off From EVs?

China's ambitious goals for electrification of its automotive fleet call for 10 percent of the cars expected to be produced in 2015 to be EVs, as Micheal Austin reported in a "technology time machine" roundup earlier this year. The official hope has been that China might skip the hybrid phase that advanced industrial countries are going through and leap straight to all-electric cars. But the Financial Times reports this week that those goals are coming to be seen as too ambitious, and that some retuning or reformulation is in the works.

According to the FT,China's leading automotive battery and EV manufacturer BYD "has repeatedly delayed plans to commercialize and export its electric vehicles." Austin, who is in charge of BYD's U.S. operations, says in a personal communication that testing of the company's e6 all-electric sedan proceeded as scheduled and that commercial introduction of the car was delayed only because it was decided late in the game to change the size of the passenger compartment in response to dealer feedback.

Further, says Austin, the company has focused on production of fleet vehicles like its eBUS (above), responding to official emphasis on electrification of public transportation, rather on the more iffy consumer sector. While this has been "a fiscally conservative approach," he says, "the market [previously] crucified us for building capacity aggressively and then missing our 'doubling each year' targets." Yet  BYD's "15 percent growth last year should have been envied by any industry expert."

A month ago, Shanghai agreed to buy 200 of BYD's electric buses and 300 e6 taxicabs, initially to service the 2011 International Universiade Games and then, after the games end, to serve the city generally.

The consumer market in China is not looking to be an easy sell. Keith Bradsher, the New York Times' China correspondent, reports that Chinese have tended to prefer heavier, options-laden cars to the relatively light and simple EVs introduced so far. "A wide range of subsidies has not yet proved adequate to offset this," he observes. (Previously, Bradsher covered Detroit and the U.S. auto industry for the Times, so he can be assumed to know what he's talking about.) China's national government offers a subsidy for each EV bought of close to US $10 000, and the cities Beijing and Shenzhen another $10 000; Shanghai offers two-thirds that—40 000 versus 60 000 renminbi. In addition, Beijing and Shanghai exempt EVs from restrictions on issuance of license plates.

Under the circumstances, it's hardly surprising that introduction of the e6, which sells for 300 000 renminbi, has been cautious. Hertz announced this week it would start renting electric cars in China—but just three pairs of e6 sedans initially, and only with a chauffeur as part of the deal. By the end of the year Hertz hopes the Chinese total will be 25 to 30, Bradsher reports.

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A worker works on the frame of a car on an assembly line.

China has more EVs than any other country—but it also gets most of its electricity from coal.

VCG/Getty Images

EVs have finally come of age. The total cost of purchasing and driving one—the cost of ownership—has fallen nearly to parity with a typical gasoline-fueled car. Scientists and engineers have extended the range of EVs by cramming ever more energy into their batteries, and vehicle-charging networks have expanded in many countries. In the United States, for example, there are more than 49,000 public charging stations, and it is now possible to drive an EV from New York to California using public charging networks.

With all this, consumers and policymakers alike are hopeful that society will soon greatly reduce its carbon emissions by replacing today’s cars with electric vehicles. Indeed, adopting electric vehicles will go a long way in helping to improve environmental outcomes. But EVs come with important weaknesses, and so people shouldn’t count on them alone to do the job, even for the transportation sector.

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