SPEAKING FREELY China's electric car revolution
By Ryan Rutkowski
Speaking Freely is an Asia Times Online feature that allows guest writers to have
their say.
Please click hereif you are interested in contributing.
With 17 of every 1,000 people in China owning a car in 2008, compared with a
global average of 120 per 1,000 persons, the country is already the
second-largest auto market in the world. It is expected to exceed the United
States to become the largest auto market by 2030. While this astounding growth
is great news for the auto industry, it is disastrous for the world's most
populated country.
China is running up against environmental resource constraints
and an increasing dependence on foreign oil from Africa, Russia, and the Middle
East. The country is already the top emitter of carbon dioxide and experiences
widespread air pollution in urban centers.
The good news
is that the Chinese government is not only aware of the problems posed by the
prospect of fast-increasing numbers of cars on the road, but is also working to
address the issue. Many major urban centers are building efficient public
infrastructure and urban housing to incentivize people to get out of cars, and
China has maintained heavy taxes on vehicle registration, driver's licenses,
and car sales to limit the cars on the road. Nonetheless, the exponential
growth curve that represents China's passenger vehicle registrations points to
the fact these measures will not be able to stop the Chinese consumer.
But there may be another means to reduce China's dependence on foreign oil,
reduce urban pollution, and make Chinese auto companies globally competitive:
alternative fuel vehicles. In 2008, the Ministry of Science and Technology
mandated that 10% of Chinese cars will run on alternative fuels by 2012 and
called for 10 billion yuan (US$1.5 billion) in research subsidies over the next
three years for research and development of alternative fuel vehicles.
Last February, the Ministry of Finance announced a new commitment to promote
alternative fuel vehicles in the country's 13 largest cities - Beijing,
Shanghai, Chongqing, Zhangchun, Dalian, Hangzhou, Jinan, Wuhan, Shenzhen,
Hefei, Kunming, and Nanchang. The mandate calls for public services to begin
adopting alternative fuel vehicles in these cities and provides subsidies for
production and purchasing of alternative fuel cell vehicles, including 50,000
yuan per hybrid and 60,000 yuan per fully-electric model produced by domestic
car manufacturers.
While there are many different alternative fuel cars being considered (ethanol,
natural gas, hydrogen fuel cells, biodiesel to name a few), electric vehicles
are currently the most promising. They are simply more efficient than gasoline
cars, and promise a combination of lower fuel costs, lower emissions, and lower
production costs compared with most other competitive alternative fuel cars.
Nonetheless, there are some challenges in developing electric car technology.
First, the costs of building infrastructure, such as recharge stations.
According to "China Charges Up", a report by Mckinsey & Company, the
country will need to invest 5 billion to 10 billion yuan by 2020 to build the
necessary recharging stations.
Second, there are concerns over the safety, weight, and recharge speed of
lithium-ion batteries. Indeed, a major concern with electric cars is the amount
of time it takes to recharge a battery (even the most advanced batteries take
an hour to recharge at best). Nevertheless, manufacturers of the next
generation of electric vehicles and batteries have already found innovative
ways to address these concerns.
For example, Better Place, a US auto manufacturer, has developed a method of
using battery swap stations for long trips in which drivers can simply replace
a depleted battery with a charged battery rather than wait for it to recharge.
However, China's success in producing electric vehicles hinges on the ability
of its automakers to find a way to make electric vehicles at the "China price".
The country has had a great deal of experience in manufacturing cheap electric
vehicles, such as electric bicycles and tour vehicles, already in wide use
throughout the country.
While the leading global automakers in Japan, South Korea, the US and Europe
have made hybrid-electric and fully-electric vehicles - such as the Toyota
Prius and Chevy Volt - cheaper and more efficient, they are still just out of
the price range of the majority of consumers in the US, China, and especially
in the developing world.
China's history with electric vehicles, government mandates, and new consumer
trends have incentivized Chinese automakers to make electric vehicles.
Recently, one of China's leading domestic manufacturers, Chery Automobile,
announced the release of the S18, the first of their new S series fully
electric series. Chery was founded in Wuhu city, Anhui province in 1997, and
began specializing in cheap cars for the domestic market.
The company has 10 passenger car models, with its A-5 hybrid model selling for
less than US$15,000. Moreover, Chery is China's first automaker to sell cars
abroad, with production facilities in Russia, Iran, Malaysia, and Egypt, and
with plans to enter the US and European markets in 2011. The S18 can travel
between 120-150 km/h and comes equipped with a battery capable of recharging up
to 80% in a half hour. Chery also produces hybrid versions of its A5, A3, and
A13 models.
Shenzhen-based Build Your Dreams (BYD) was started in 1995 by Wang Chuan-Fu to
produce lithium-ion rechargeable batteries, and has since moved into the market
for passenger cars. In 2003, the company entered the auto business and its
$14,000 F3 sedan is quickly becoming the best-selling sedan in China. With
BYD's background in lithium-ion batteries and new found success in auto
manufacturing, it was only a matter of time before it developed an electric
vehicle.
In 2009, BYD rolled out a new F3DM plug-in electric "dual mode" vehicle. This
vehicle sells for $21,900 (just below the Toyota Prius and the Chevy Volt to be
released in 2010) and it promises to travel 100km on a single charge with the
capability to shift to gasoline if the battery runs low (similar to the Chevy
Volt).
Initially, BYD signed a deal to sell 50 cars to the Shenzhen municipal
government and is expected to hit the mass market in China soon, with hopes to
enter the US and European markets in 2011. It has already reached a deal to
sell this model in Israel in 2010.
Geely Automobile, China's largest privately owned car firm, has announced the
upcoming release of its EK-1 model, the first of its new EK series of
fully-electric cars, at the end of the year. Founded in Hangzhou in 1997, Geely
sold 30,000 units in China last year and has factories in Russia, Ukraine, and
Indonesia. It has big ambitions for foreign export, hoping for 75% of auto
sales in foreign markets and to establish production facilities in 15 countries
by 2015.
Its new EK-1 promises to travel 80km on a single charge, reaching a top speed
of 104 km/h, and is capable of a full recharge in five hours. Geely hopes to
follow up with the second generation EK-2 and the third generation EK-3 within
two years.
Indeed, all of China's major state-owned and joint-venture automotive companies
have announced plans to launch electric vehicle models. In 2007, Chongqing's
Chana Motors released the first domestically researched and produced
hybrid-electric model, the Joice HEV model, in preparation for the 2008 Olympic
Games, and will begin selling hybrid models in the third quarter of 2009.
SAIC Motor Corp will release a hybrid-electric car in 2010 and a fully-electric
car in 2012. Dongfeng Motor Corp began selling the Civic Hybrid model in China
in June. Beiqi Foton Motor is one of China's leading producers of
hybrid-electric buses and established the country's first energy auto design
and manufacture base in 2008. FAW group, China's oldest car manufacturer, plans
to release hybrid-electric cars by 2012
As Chinese domestic automakers find innovative ways to produce cheap electric
cars to fulfill the demand of China's domestic market, they will be able to use
this technology to expand internationally. A new generation of Chinese electric
cars may help drive down the production cost of electric cars globally.
In doing so, electric cars may become the car of choice not only in China, as
the fastest growing car market in the world, but also in the United States, the
largest car market.
Ryan Rutkowski is a freelance contributor.
Speaking Freely is an Asia Times Online feature that allows guest writers to have
their say.
Please click hereif you are interested in contributing.
(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please
contact us about
sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
