Will China Dominate the Electric Car Market?
Chinese car designer Tang Hua unveiled this peculiar electric concept car, named “Detroit Fish,” at the North American International Auto Show in 2008. Flickr photo by GmanViz.

Chinese car designer Tang Hua unveiled this peculiar electric concept car, named “Detroit Fish,” at the North American International Auto Show in 2008. Flickr photo by GmanViz.

Step aside, Japan. Don’t even try, Detroit. China has plans to corner the electric car market.

From the New York Times:

TIANJIN, China — Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years, and making it the world leader in electric cars and buses after that.


As it stands now…

Japan and the United States currently lead the world in gas-powered vechicle technology. Japan, additionally, ranks first in hybrids, which run on both electricity and gasoline, with cars like the Toyota Prius and Honda Insight.

What is China’s plan for electric car domination?

China’s hoping to leapfrog its competitors by adopting new technology and raising its “annual production capacity to 500,000 hybrid or all-electric cars and buses by the end of 2011, from 2,100 last year.”

Plus, the government plans to dole out rewards to encourage the purchase of hybrid or all-electric cars. Taxi fleets and local government agencies in 13 Chinese cities can earn up to $8,800 in subsidies for each vehicle they purhcase. And consumers may also soon receive tax credits if they buy “alternative energy” vehicles.

By boosting production (and purchase) of electric and hyprid cars, China aims to stimulate its economy, reduce urban air pollution and decrease its dependence on oil.

The advantages of China going electric:

  • Electric cars are well-suited to short, low-speed commutes, which are common in Chinese cities.
  • First-time car buyers, who make up most of the market, aren’t loyal to gas-powered cars, yet, so they’re more easily persuaded to adopt electric car technology.

The obstacles:

Smog will persist. Seventy-five percent of China’s electricity comes from coal, which produces more pollution and greenhouse gases than other fuels.

A report by McKinsey & Company last autumn estimated that replacing a gasoline-powered car with a similar-size electric car in China would reduce greenhouse emissions by only 19 percent. It would reduce urban pollution, however, by shifting the source of smog from car exhaust pipes to power plants, which are often located outside cities.

Urban dwellers will find electric cars inconvenient. Since most urban Chinese live in apartments, they cannot re-charge their car batteries in their own driveways, so the government will have to set up public charging stations.

Chinese consumers are wary of rechargeable lithium-ion batteries. Some counterfeit batteries used in cellphones and laptops have caught on fire, or worse, exploded and caused injuries. Even though the types of batteries used in cars are more “chemically stable,” it will be hard to convince consumers of their safety.

Lithium-ion batteries are expensive. Gas is still relatively cheap. Why would thrifty Chinese consumers spend more on an electric car?

Print Friendly

  • Gilberto Silva

    NO DOUBTS, THEY’LL DOMINATE THE MARKET !

  • http://www.evsroll.com EVsRoll

    Good points.

    It also appears that China controls most of the rare earth metals (http://www.evsroll.com/Rare_Earth_Alloys.html) used in EV production.

    In terms of energy use, electric vehicles do offer the potential of charging from renewable sources. China has been investing heavily in wind and solar, though the infrastructure is admittedly lacking at this time. That can change though.

    The bigger point here is that most oil produced is used for transport. 2/3 of the energy from that oil is simply turned to heat and harmful fumes. This is a huge waste of energy, and huge amount of pollution.

    The electric vehicle is the best way to at least begin to change to cleaner running rigs now. It may not happen all at once, but incremental air improvements are better than incrementally increasing particulates and compounds.

    It is better to make new EVs and begin to turn pollution around verses just making more ICE cars and just compounding the problem.

    EVsRock!

  • http://chinabizgov.blogspot.com G.E. Anderson

    Slight correction to my previous comment… The literal translation of the Chinese term I used is “NEW energy vehicles”. I often translate it as “alternative” because it seems to be more commonly used in English-speaking circles.

  • http://chinabizgov.blogspot.com G.E. Anderson

    Erica, these are all valid points that Chinese automakers must take into account. Without question, there is much more to dominating a market than simply being first to market with the technology.

    While the Chinese certainly have far to go, I think it is safe to say that they are at least thinking about many of the issues you have mentioned. For example, the central government, local governments, State Grid and several domestic and foreign automakers have already begun to meet to work out how to roll out public charging stations.

    Also, in their auto policy, the government doesn’t talk only about electric vehicles. They use the term “新能源汽车” or “alternative energy vehicles”, of which electric vehicles are only one type. I think there is a recognition that there are, or at least can be, other possible technologies.

    Of course, whether they can invent these new technologies, or merely copy existing ones from Japan and the West, remains to be seen.

    I am delighted to discover your blog and look forward to reading more.

    Greg

  • Pingback: Is China Poised to Dominate the Electric Car Market? « ChinaLuxCultureBiz

  • http://fptcanada.blogspot.com fpteditors

    The electric car is worse than a disaster. It does not solve anything and it distracts us from solving the problem: the private auto system is extremely wasteful and highly subsidized regardless of the fuel it burns.

  • Pingback: thecityfix.com: Will China Dominate the Electric Car Market? | ResponsibleChina.com: Environmental sustainability, corporate social responsibility and social entrepreneurship in China.

  • Pingback: TheCityFix.com: Will China Dominate the Electric Car Market? | ResponsibleChina.com: Environmental sustainability, corporate social responsibility and social entrepreneurship in China.

  • Dario Hidalgo

    Your post is very balanced, telling the two sides of the story. Usually electric vehicles are called “zero emissions”, but this needs to be carefully re-assessed. If the power grid is coal intensive, electric vehicles can even be worse in terms of some local pollutants and green house gas emissions. Anyways, it is interesting to see how fast the technology for vehicles is now moving, even this year that gas prices are less than half that the speculative peak last year. The ingenuity of the Chinese is welcomed and should be praised; but focusing on the vehicle technology is not enough, and has little impact in reducing congestion, accidents and urban sprawl.