China hits potholes on road to green autos
Foreign and domestic carmakers are struggling to sell environmentfriendly vehicles in China, the world’s largest auto market, even as Beijing pumps billions into clean energy.
China wants five million “new energy” vehicles on the streets by 2020 to ease chronic pollution and reduce reliance on oil imports, but high prices, lack of infrastructure and consumer reluctance are creating major roadblocks.
The number of electric and hybrid vehicles in China is only about 100,000, mostly in government fleets, an industry estimate says.
A salesman at the main Shanghai showroom of Chinese carmaker BYD said the dealer sold only one electric car and two hybrid cars — which combine a conventional internal combustion engine and an electric motor — last year.
BYD, backed by U.S. investment titan Warren Buffett, launched a fully electric vehicle for private buyers in October priced at 370,000 yuan ($60,000), but subsidies cut the cost by at least 16 per cent.
“People hesitate to choose cars with a high price,” said BYD sales manager Zhang Jiankun. “Although the government can provide subsidies for alternative-energy cars, the lack of charging stations is a main concern.”
China had an estimated 243 charging stations at the end of 2011, but Beijing plans to invest 100 billion yuan over the next 10 years to build the new-energy vehicle sector, focusing on electric models.
Foreign automakers are also promoting the new technology in China. U.S. giant General Motors imported its first Chevrolet Volts into China in December and will begin selling the hybrids in early 2012 at 13 dealerships in eight cities.
The firm is also developing a separate electric vehicle with its Chinese partner, domestic auto giant SAIC Motor, which itself launched five new energy vehicles in November.
China overtook the U.S. to become the world’s top auto market in 2009 and is increasingly important for global players as economic turmoil hits developed markets.
But the push for clean-energy cars comes as China’s overall sales slow. Auto sales rose just 2.5 per cent, to 18.51 million units, last year, compared with an increase of more than 32 per cent in 2010.
China has set up 15 pilot zones for electric vehicles across the country. But in a country where car culture is only two decades old and fuel prices are government-controlled, flashy luxury brands carry more appeal.