Push is on in China for electric cars
BY GREG GARDNER
FREE PRESS BUSINESS WRITER
China’s new rebates for electric vehicles in five large cities put the world on notice that the economic Goliath wants to clean its filthy air and curb its appetite for imported oil. Chinese consumers receive $8 ,800 off an all-electric car, or $7 ,320 off a plug-in hybrid. Chinese consumers have shunned first-generation gas-electric hybrids because they cost nearly twice as much as gas-engine equivalents. But it will take more than subsidies to catapult China to a leadership role in electric vehicle technology. Americans buying the electric-powered Chevrolet Volt or Nissan Leaf will receive $7 ,500 tax credits. Buyers of conventional gas-electrics qualify for smaller credits. The U.S. is installing a recharging infrastructure faster than China. By the end of this year there will be at least 1 ,000 public charging stations across nine metropolitan areas, including Detroit. China expects to have about 75 charging stations, according to the China Daily. “I don’t see a short-term threat from China, but the fear is that companies like BYD could focus so intently on improving all-electric technology they could eventually introduce competitive (electric vehicles) here at an affordable price,” said Michael Omotoso, a powertrain analyst with J.D. Power and Associates. China aims to be a global electric-car leader Japanese and U.S. automakers will dominate the market for gasoline-electric hybrids that need no recharging, but Chinese automakers such as BYD and Geely are poised to make their mark with plug-in hybrids and all-electric vehicles, according to a recent J.D. Power and Associates study. Pundits have already warned that China is prepared to rule the world of electrified transportation. "China is going to eat our lunch and take our jobs on clean energy," said Joe Romm, editor of Climateprogress.org. "China has clearly made a strategic decision that it wants to be a leader in batteries and electric vehicles." Globally, hybrid sales should approach 830 ,000 this year, up about 70 % from 2007 , the J.D. Power report estimates. The majority of that growth has occurred in Japan, where the Toyota Prius has been the best-selling car of any type for more than a year. Over the next five years, according to J.D. Power, hybrid sales are expected to quadruple in the U.S. to 1.25 million, more than twice Japan's projected demand of 530 ,000. In that same period worldwide demand for plug-ins will reach about 500 ,000 , nearly half of which will be in China. The study assumed oil prices will range between $65 and $100 a barrel through 2015. "The hybrid market is going to be significantly larger than the market for plug-ins and pure electrics," said Michael Omotoso, J.D. Power powertrain analyst who conducted the study. "Hybrids are cheaper and they solve the biggest uncertainty facing the newer technology -- range anxiety." Range anxiety is techie term for the fear of being stranded hundreds of miles from your destination with no place to recharge. The Chevrolet Volt, for example, will be able to go 40 miles solely on battery power. After that, a 1.4- liter four-cylinder generator kicks in to provide about another 300 miles on one tank of gas. So does China have a larger, more reliable network of charging stations? Not so far. "Both countries are in the early phases, but the U.S. network is more comprehensive right now," said Jun Ni, director of the University of Michigan's Wu Manufacturing Research Center. Funded primarily through the American Recovery and Reinvestment Act, the ChargePoint America program plans to expand from 1 ,000 home and public charging stations by the end of this year to about 5 ,000 by September 2011. The China Daily reported recently that the country expects to have 75 charging stations installed throughout 27 cities by the end of this year. U-M's Ni said that the plug-in hybrids about to go on sale in the U.S. -- the Volt and the Nissan Leaf -- are more advanced than the early EVs available in China. But he warns that politically China has more leverage and power to see that policies change consumer behavior. "Because their government is centralized, they can make decisions quickly," Ni said. "In the U.S., by the time a proposal is made and goes through Congress, millions of people have to buy conventional gasoline vehicles." Respected investor Warren Buffett bought 9.9 % of Chinese battery maker BYD for $230 million nearly two years ago. Having exhibited electric car prototypes at the Detroit auto show the last two years, BYD is trying to bring its e6 model in compliance with U.S. crashworthiness and safety standards. In May, BYD announced a joint venture with Daimler to create a new brand of electric cars for China. "It might take 10 years or more for them to gain credibility through safety and reliability improvements," Omotoso said. "But remember what Americans thought of Toyota and Datsun when they first came to the U.S.?"
Contact GREG GARDNER: 313-222-8762 or ggardner@freepress.com |
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