Fears that China will overtake the U.S. in the race to put electric
vehicles on the road have fizzled.
Despite choking pollution in big Chinese cities, consumers here see EVs as too
expensive or too difficult to recharge.
China has offered tax incentives on electric vehicles, but total sales of hybrid
and electric vehicles last year were 12,791, according to the Chinese
Association of Automobile Manufacturers.
In the U.S. in 2012, automakers sold 53,172 plug-in electric vehicles and
434,498 hybrids, representing a total market share of 3.4 percent, according to
HybridCars.com.
"I think everyone would say it hasn't really taken root yet," GM China President
Bob Socia said last month near the Shanghai auto show. "Objectives are worthy,
but progress is slow."
Experts once believed that Chinese consumers would embrace electric vehicles
because 4 out of 5 car buyers are purchasing a vehicle for the first time.
They've never had an experience with cars with internal combustion engine, so
they won't know what they're missing, the thinking went.
That thinking was wrong.
Similarly, progress is slow in the U.S. The federal government offers tax
credits of up to $7,500 for the purchase of an electric vehicle or semi-electric
car, such as the Nissan Leaf or Chevrolet Volt. But most people are still
choosing internal combustion engines.
That means the door is still open for leaders to emerge in the electric vehicle
space, as researchers pursue next-generation technologies amid a growing
consensus that the current technology of lithium-ion batteries won't get much
better or cheaper.
But the real number of electric vehicles sold in China last year was actually
about 3,000, when factoring out hybrids and vehicles that aren't roadworthy,
such as golf carts, said Namrita Chow, a Shanghai-based analyst for IHS
Automotive.
President Barack Obama's administration has rescinded its previous target of
putting 1 million electric vehicles on the road by 2015.
The Chinese government set a goal of getting 500,000 electric vehicles on the
road by 2015, with the central and provincial governments offering incentives
and also investing in infrastructure.
"They're going to continue to push it. ... There are some pretty fundamental
issues with respect to charging stations," Socia said.
Chow said the central government's EV incentives expired Dec. 31, "which means
everyone is waiting" for new subsidies to be announced under China's new
president, Xi Jinping.
But Yale Zhang, managing director of Automotive Foresight Shanghai, said "half a
million" is not a "mandatory target" set by the government. "It takes 10 years
to have this segment be more realistic," he said.
In both countries, electric vehicles are more expensive vehicles. For example,
the Volt, the most popular plug-in electric vehicle in the U.S. last year, costs
$32,500 after the federal tax credit. One could buy a well-equipped Chevy Malibu
with a mild-hybrid engine for less than that.
"It's exactly the same here," Chow said of China. "Even with the subsidies, the
cost of EVs is way higher than a traditional gasoline-powered engine vehicle."
Tesla Motors is opening dealerships in Shanghai and Beijing with high hopes for
its Model S luxury electric sedan. GM sells the Chevrolet Volt in China in
limited quantities, and Chinese automaker BYD, backed by billionaire Warren
Buffett, markets its own electric vehicle.
But people who can afford expensive cars in China prefer luxury gasoline-powered
vehicles like BMW, Audi, Mercedes-Benz and Buick.
"Brand image is really, really important _ and if you look at some of the EV
choices, they're not necessarily aligned with the high-end brand image," said
Steve Merkt, president of transportation solutions for auto supplier TE
Connectivity, who previously ran the company's China-based Asia business.
That's why some automakers are tinkering with their electric-vehicle strategies
in China. For example, BMW and its joint venture partner, Brilliance Auto, plan
to launch a new electric-vehicle brand in China called Zinoro later this year.
But some automakers announce electric vehicle plans in China for show, with few
intentions of following through, Chow said.
"They want to appease the government," she said.
(EDITORS: STORY CAN END HERE)
Still, many automakers are hoping for breakthroughs from their Chinese
operations. Technology developed in China can be applied to electric vehicles
throughout the world.
GM is conducting EV research with its joint venture partner, SAIC, and is
conducting battery cell testing, validation and chemistry research on its own at
its new Advanced Technical Center in Shanghai. In a tour of the center, which
finished its second phase of expansion in November, GM executives said the
Shanghai facility has the same battery capabilities as the sprawling GM
Technical Center in Warren, Mich.
Debbie Murphy, GM's director of China engineering, said there's "a potential" to
start procuring battery cells from Chinese suppliers, too. Currently, GM gets
cells from Korea-based LG Chem and turns them into battery packs at a plant in
Brownstown Township, Mich.
"Batteries are a key focus for China, and that will enable them to get more
electric vehicles here quicker," she said. "That's why we decided China was the right place to do this."
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News Column
Like US, China Slow to Embrace Electric Vehicles
May 10, 2013
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Source: (c)2013 Detroit Free Press. Distributed by MCT Information Services.
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