China's government has set goals of producing 500,000 energy-efficient and alternative energy vehicles a year by 2015.
The State Council has unveiled an ambitious plan to provide generous subsidies to consumers and producers of new generation and greener vehicles in a effort to improve its green credentials and reduce its dependence on imported oil. The plan will also see heavy investment in the core technology needed to become globally competitive in the emerging industry, with a special focus on batteries.
Beijing is backing several battery enterprises in developing upstream core parts and technology supply. The plan aims to reduce the cost per kilowatt hour for EV batteries to just 2 yuan ($0.30) by as early as 2015.
While not without good intentions, some fear that the accumulated production and sales target of 500,000 units of pure electric and plug-in hybrid vehicles by 2015, which they intended to increase more than tenfold to 5 million plus units by 2020, is optimistic. However, the government is putting its money where its mouth is and in May announced 26.5 billion yuan ($4.16 billion) in subsidies to stimulate the purchases of energy-saving products.
Despite hefty subsidies and better technology, the success of the green vehicle is ultimately dependent on consumers. Industry analyst Zhong Shi believes that “market acceptance is vital” if the plan is to work, which will mean tempting consumers – who are normally subject to restrictive purchasing policies – away from status-symbol gas guzzlers and towards more environmentally friendly modes of transport.
Infrastructure will also need to be improved to cope with the increase. Californian firm ECOtality Inc. is forming a joint venture with Changchun Eco-Power Technology Co, which will be called Tianjin Eco-Power Technology Co, to build a network of 2,000 charging stations for electric cars across 20 Chinese cities by 2015. As well as charging EVs, the new chargers will also be compatible with two and three wheel vehicles, buses and airport vehicles.