BYD ac­cel­er­ates green autos

China Daily (Canada) - - VIEWS - By ZHENG XIN zhengxin@chi­nadaily.com.cn

Car­maker BYD Co has vowed to scale up its out­put of new en­ergy ve­hi­cles to cut costs, as the govern­ment grad­u­ally phases out sub­si­dies for green en­ergy ve­hi­cles.

The com­pany will also boost its pro­duc­tion of new en­ergy ve­hi­cle bat­ter­ies in or­der to lower pro­duc­tion costs, it said.

The bat­tery re­mains the key com­po­nent of a new en­ergy ve­hi­cle, ac­count­ing for 30 to 40 per­cent of its to­tal pro­duc­tion cost.

Con­sid­er­ing the govern­ment’s sub­sidy for new en­ergy ve­hi­cles will de­crease by 20 per­cent in 2017, the com­pany has to cut its costs by 5 to 10 per­cent to com­pen­sate for this.

Ac­cord­ing to theMin­istry of Fi­nance, China will re­duce the 2017-18 sub­si­dies for newen­ergy ve­hi­cles by 20 per­cent from those granted in 2016, and fur­ther cut them by 40 per­cent in the 2019-20 pe­riod.

All sub­si­dies will be phased out af­ter 2020, it said.

China started of­fer­ing sub­si­dies to boost the pro­duc­tion of clean en­ergy ve­hi­cles in 2009, and 33.4 bil­lion yuan ($4.81 bil­lion) had been ear­marked by the end of 2015, said the min­istry.

How­ever, the one-size-fit­sall sub­sidy has­made­s­ome car­mak­ers rely too heav­ily on the govern­ment’s fi­nan­cial stim­u­lus, and they are re­luc­tant to in­vest in re­search and de­vel­op­ment, with some man­u­fac­tur­ers even tak­ing sub­si­dies as a source of quick money.

Ac­cord­ing to BYD, the com­pany has been pre­par­ing for the end of the sub­si­dies.

It re­cently signed up US movie star Leonardo DiCaprio as the brand am­bas­sador for its new en­ergy ve­hi­cles, who will work with the brand over the course of 2017.

Ex-Alfa Romeo and Audi de­sign chief Wolf­gang Eg­ger has been hired to take charge of the ve­hi­cles’ in­te­rior and ex­te­rior de­sign.

Zhang Zhiyong, an auto an­a­lyst based in Bei­jing, said end­ing the sub­si­dies will have an over­all ben­e­fi­cial ef­fect on the in­dus­try, as it will drive out those just seek­ing to make a quick buck.

Ac­cord­ing to Chen Qing­tai, di­rec­tor of China EV100, a non­profit or­ga­ni­za­tion ded­i­cated to pro­mot­ing new en­ergy ve­hi­cles, Chi­nese car­mak­ers should fo­cus on re­search and de­vel­op­ment to make them­selves more com­pet­i­tive, as in­ter­na­tional ri­vals are comin­gup­with an in­creas­ing num­ber of prod­ucts.

SAIC Mo­tor said it would raise an­other 15 bil­lion yuan for re­search and de­vel­op­ment of new en­ergy ve­hi­cles, while Volk­swa­gen AG also plans to in­tro­duce around 10 elec­tric car models based on its elec­tricMo­du­lar Elec­tric Model lineup to the Chi­nese mar­ket over 10 years.

Chi­nese green ve­hi­cle pro­duc­ers Geely Au­to­mo­bile Hold­ings Ltd and Chery Au­to­mo­bile Co Ltd also said ear­lier they would fo­cus on the re­search and de­vel­op­ment of elec­tric ve­hi­cles over the next decade.

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