This page is about the China Electric Car and its place in the rapidly changing world. China apparently wants to be poised to take the lead. The next page is about several electric cars made in China for export.
Future EV Growth in China
There are dozens electric car vendors working on electric vehicles, and programs in China. Many have suggested that China aims to become a world leader in electric vehicles. There are a lot of EVs in the country all right, but mostly smaller eBikes, eScooters and NEVs.
The Government has espoused an EV philosophy, but have not always backed up that position. It appears that the reality of the situation leans towards market forces, such as oil prices.
According to a survey of several trade and export journals, there are over 125 models of electric cars, vans, and trucks now manufactured for sale. This does not include the large number of Golf Cart type vehicles. No other country offers so many apparent EV choices.
The Chinese Domestic Market
The big question for the China electric car seems to be the same as everywhere else: Will people buy electric cars in significant numbers to promote EV growth? Will the Chinese people find electric cars desirable and affordable?
Before answering that question, it is worth noting that the biggest corporations in the world today (including China) are still Oil Companies. Much, if not most, of their refined oil ends up in vehicle gas tanks. These companies are not likely to volunteer to subsidize electric vehicle storage batteries at the expense of their profits. So, unless electric cars are made cheaper than internal combustion models, or there is government intervention, the electric car will lag. Enter the Chinese government.
It is reported that the Chinese government aims to have 500,000 electric, hybrid-electric, or fuel cell vehicles on the road by the end of 2011. China will likely manufacture about 10,000,000 vehicles in 2009. Assuming a flat market, or growth, at least 5% of the new vehicles in 2012 on Chinese streets would be EV, Hybrid, or Fuel Cell.
The government is promoting the China electric car to: Reduce dependence on foreign sources of oil, reduce ICE pollution, and move into the future along with other countries. At this time, most if not all major Chinese auto manufacturers appear to be preparing for an EV future. Time will tell how well the China electric car succeeds in China. In the news for example, the Smart Car manufacturer Daimler plans to market their Smart Car in China - in spite of the Chinese made Flybo electric smart car of the same name and style!
As an example of Chinese manufacturing expansion, representatives of Wuhan have stated plans to construct a $443 million EV production center. The new center aims to manufacture some 3,000 EVs a year, along with parts for total annual sales revenue of $1.5 billion US.
In an update, The Chinese government is subsidizing fleet EVs in 25 cities to the tune of 100 billion Yuan ($15 billion US). The updated estimate is now the production of some 1 million electric vehicles 2020, according to the official Xinhua news agency.
The new estimate includes Japanese, US and other imported EVs. The cars are expected to help reduce tailpipe emissions that now account for 70 percent of the air pollution in major Chinese cities.
The Chinese Export Market
The Chinese manufacturing sector is also building the China electric car for export to other markets. However, there are a few speed bumps for it to drive over before delivery.
The first bump: Many Chinese models are built mostly for the domestic market. These cars are not necessarily built to Western specifications. For example, many of the shops making these cars are listed as “unverified” by trade groups. This is just the opposite of companies like Toyota, where their vehicles pass rigorous quality controls, and are made mostly for the export market.
Secondly, many of the electric cars manufactured in China are of the NEV or Neighborhood Electric Vehicle variety. They tend to have 35-45 mph top speeds and 72 volt systems for example. This tends to limit the higher accelerations often demanded (needed or not) by many western drivers. A few manufacturers like BYD and Chery recognize this and are building cars to meet these demands.
Third, the world EV market at this time is no more mature than it is in China. There are local hotbeds of EV activity, but test markets are just now being set up by companies like Nissan. Mass China EV export will depend on the successful outcome of these test markets. The price of Oil will have a lot to do with that success.
Finally, compared to the major Japanese manufacturers like Nissan and Mitsubishi, the major Chinese auto manufacturers are just not as big yet. Consider for example, that in 2009, Toyota Corp had revenues of about $208 billion US. The largest Chinese auto maker by revenue, SAIF, had revenues of about $25 billion US…about 1/8 the scale. See the list here. Interestingly, China sales and production to November 2009
was a record setting 12 million cars. However, note that multinational companies produce about 50 percent of the autos in China.
However, there are some Chinese companies like BYD who are planning to take advantage of their capital, large labor pool and economies of scale in the overall manufacturing sector. Hopefully the market will benefit with better, lower cost
electric cars.
The Chinese manufacturing sector is sort of a Wild West at the moment. While this
leads to free market competition, there is also less standardization and quality now associated with Japanese automotive products. This wasn’t always the case with Japanese products back in the 1960’s and early 1970’s when “Made in Japan” labels sometimes elicited chuckles.
The China Electric Car will likely continue to improve and adapt to market demands just as Japanese automotive manufacturers did 30-40 years ago. It appears that materials, labor, manufacturing equipment cost and economies of scale favor China.
In the news: The Chinese Government is implementing programs to install electric vehicle charging stations all over the country. Automakers in China are ramping up to produce 500,000 plug-in hybrids and battery-electric vehicles by the end of 2011!
The Government will subsidize Chinese EV manufacturers with a twist. The car makers themselves will receive up to 3,000 Yuan ($440) per vehicle.
In addition, the Chinese Government will pony up some $14.8 billion US (100 billion yuan) over the next ten years towards plug-in hybrid and pure EVs. The plan is to put 5 million EVs on the road by 2020. Compare that to the mere $5 billion invested by the U.S. government.
China Success, Air Quality, and the EV Bottom Line
China air pollution is no secret or small problem. The Government is assertively
taking steps to counter bad air. EVs will take the lead in that effort.
From recent statements, China aims to be the biggest EV manufacturing
country worldwide by the end of 2012. The market is estimated at $100
billion US.
Regarding conventional cars made in China, large global companies like VW
and GM have spearheaded the boom in sales. However, the Chinese government aims to involve more Chinese companies in EV growth.
Recent rules would require that Chinese companies have majority ownership in EV
manufacturing concerns. If the rules work out, Chinese EV companies could achieve dominance in a global EV market. Why?
It is estimated at present that most EV growth will be in China, followed by Europe, and finally North America. EVs could reach a 5-7% market share in China as compared to 3-5% elsewhere. The future EV market in China will be very interesting, at the least.
Other EV Companies and the Bottom Line
In filling the EV mandate, and need in Chinese cities other EV makers are making inroads. Nissan just got the green flag to market the Leaf inside China. BMW is designing a line of EVs just for the China market. This is reportedly in response to pressure from the Chinese Government itself.
From Korean Engineers, Hyundai has also been requested to help out in providing EV design and production expertise. Hyundai will partner with Beijing Automotive to produce an EV in 2012. Next, Toyota will team up with the China car giant FAW to produce EVs.
GM is getting in on the act as well working with S.A.I.C. Automotive.
Chinese Rare Earth Metals
Components of EVs ,among other electrical devices, use rare earth metals in their manufacture. It happens that the geologic distribution of the ores from which these rare earths are derived are mostly in China...over 95%.
China is at present strictly monitoring and controlling export of these valuable commodities. The country would rather sell you an EV battery with the metal already in it than just the metal itself. It should be interesting to see how this policy plays out.
Nissan Leaf may grow in mainland China
The Chinese Government appears to move ahead with auto electrification efforts. Officials from Beijing and the National Development and Reform Commission call for plans to implement charge station installation along with boosting EV sales in some 25 cities. The effort is expected to be funded at the rate of $1.5 billion USD per year over the next ten years.
The Government also has posted on the web their intentions to build charging facilities and battery recycling plants. The effort is part of the stated goal to have some 500,000 EVs on the road by 2015, and 5 million by 2020! Wow, that is ambitious.
