Five to eight years ago, Chinese carmakers were going to blast into the US car market and sell huge volumes of inexpensive small carsjust like the Germans, Japanese, and Koreans before them.
President Obama has also set goal for the US to have a million electric cars on the road by 2015, but a commitment by the Chinese government has more legs because of the state managed economy in that country.
Chinas national government, working closely in partnership with large industrial companies, still has as its official policy that new energy vehicles will become a major part of the countrys outputand domestic sales.
Competing interests, such as companies producing vehicles with proprietary technologies, have already delayed the release of China’s Energy Saving and New Energy Vehicle Industry Development Plan (2011 2020), making it difficult for companies to plan their investment in EV production and infrastructure.
But, as knowledgeable China car industry observer Alysha Webb points out in a recent ChinaEV blog post, the pesky details of how that might actually happen have been left for the future.
Analyzing the “Plan for the Development of the Energy Efficient and New Energy Automotive Industry (2012 2020)” released in June, she notes that it deals largely with production, not market forces.
It sets a goal of having 500,000 plug in vehicles on Chinese roads by 2015down from an earlier goal of one millionand two million by 2020.
The country, for example, plans to produce 500,000 electric vehicles by 2015, followed by two million by 2020.
It focuses on using foreign technology wherever possible, which acknowledges that the quality issues plaguing parts of its lithium ion cell fabrication industry arent easily or quickly solved.
As Webb summarizes, the Plan shows that the government is still set on growing China’s EV sector—even if it doesn’t quite have a good way to do that.
The challenges to Chinas ambitious goals for electric cars are the same ones facing every other automaker: lithium ion cells are expensive, meaning electric cars cost far more to build and sell than gasoline carsand Chinese consumers are nothing if not price sensitive.
Added to that, wealthy Chinese buyers show virtually no interest in pricey, high tech plug in cars, preferring powerful and luxurious sedans from prestigious German makes.
Meanwhile, China has dialed back on its plans for pure plug in cars, and is focusing more on raising fuel efficiency and encouraging known technologies like hybrids.
Wuling is one of the oldest and largest vehicle manufacturers in China, producing 1.2 million cars and trucks each year.
China remains the largest single car market in the world, at 15 to 18 million vehicles a year today.
Analysts expect it to grow to 30 million by the end of the decade, possibly even 40 million.
China makes policy by using the crossing the river by feeling for the stones method, writes Webb.
She views it as a triumph of reality that the Plan encourages experimentation to find the best ways to achieve its goals.
But we suspect achieving those goals may be as challenging for Chinese makersor perhaps more soas it is for Nissan, General Motors, and other plug in pioneers.
____________________________This story originally appeared at Green Car Reports.
Jason Murdoch is a business journalist based in Hobart, Australia. Jason has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Jason spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.
