Analysis: Ongoing development of the new energy vehicle industry in China
2012-06-27 Source：Automotive News
Summarize：On April 18, the Chinese government officially unveiled new guidelines for new energy automobile industry development from 2012 to 2020. The technological framework and development goals laid down by the guideline are clearer than before, and signify that China is one step closer to mass commercialization of new energy vehicles.
www.chinabuses.org: On April 18, the Chinese government officially unveiled new guidelines for new energy automobile industry development from 2012 to 2020. The technological framework and development goals laid down by the guideline are clearer than before, and signify that China is one step closer to mass commercialization of new energy vehicles.
In order to popularize the usage of new energy vehicles, the Chinese government announced the Ten Cities-Thousand Vehicles plan in 2009, where it would use financial subsidies in ten different test cities to ensure that new energy models made up ten percent of total Chinese market share by 2012. However, the plan failed to achieve this result, with only around 15,000 new energy vehicles operating in the test cities at the end of 2011, 10,000 less than the stated target. In response, the Ministry of Finance announced government plans to invest 170 billion yuan ($26.84b) to help reduce automobile emissions throughout the country. A significant portion of those funds will be used to help develop the new energy vehicle industry. "Important parts [of our work] are to accelerate development of new energy vehicles, increase popularization work in test cities and encourage the use of hybrid vehicles for public transport in large to medium-sized cities," the Ministry stated.
In order to better understand the situation of new energy vehicle industry in China, Gasgoo (Chinese) and the 21st Century News Group jointly conducted a ten-day long survey of automobile industry insiders and experts. A total of 1,083 individuals participated.
Development of the new energy vehicle industry in China has been characterized by unclear technological work and lack of high-quality vehicles and auto parts. When asked how successful they viewed earlier development work in stimulating sales of new energy vehicles, 56 percent of participants answered that the results were very mediocre, without any significant successes made. 26 percent went even further to answer that no gains were made whatsoever. Only eight percent believed that the development work was successful in increasing sales, while nine percent were undecided.
When asked why development work has been progressing so slowly, three main reasons were cited by participants. First, while the scale of projects done has been impressive, their quality has been less than ideal. Secondly, new energy vehicle technology itself is not yet very mature. Finally, there have been reports of regional protectionism when deciding where to purchase auto parts from.
In order to ensure that development work is done according to standards, the government set up a monitoring group in 2011. The group set out to research the status of work in the country's 25 test cities. The results of their research were rather pessimistic. Several test cities were found to have purchased vehicles from other cities and provinces in order to make quotas. They were accused of only caring about the promised government funding, with some of them failing to establish a basic industry chain. There were even cities which had less than ten vehicles in operation.
"It is commendable that the problems have been publicly announced," one analyst stated. "However," he continued, "without a clear strategy from the start, the funds [allocated] for work would naturally not be very high."
An additional concern is that Chinese electric motor, battery and control system technology still lags behind that of Japan, the US and other countries.
When asked about prospects for new energy vehicles sales in China over the next five years, the majority of participants were also negative. 59 percent answered that the chance of mass commercialization of new energy vehicles among Chinese consumers is extremely slim. Only 16 percent maintain that mass sales can occur within the next three to five years. The remaining 25 percent were undecided.
New energy vehicles' path to mass market acceptance in China is hindered by several obstacles, including the immaturity of the technology, high production costs and short life of auto parts. Recent incidents of several electric vehicles, including the Chevrolet Volt, BYD E6 and Zotye EV, catching fire have also dealt a large blow to consumer confidence in the new technology. In addition, there is a general consensus among consumers in the country that the developments in the Chinese industry are simply slower than in those overseas.
China also has yet to implement universal standards for electric vehicles. Even after being implemented, there is still a high possibility that further adjustments will have to be made. As long as the country lacks universal standards, purchase and rental of EVs will still be treated as fairly risky. And without consumer support, it will be very hard for new energy vehicles to succeed in China.
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