- Published on Wednesday, 09 May 2012 13:09
- Written by Jussi Hulkkonen
The Chinese government’s strong support of the country’s burgeoning electric vehicle industry has rarely been more evident than at the 2012 Beijing Auto China exhibition and the Electric Vehicle Symposium 26, held in Los Angeles this week. The Auto China exhibition stood in stark contrast to recent European and North American auto shows in the number of automakers introducing new EV models or variants of existing EVs. Whereas recent shows in Detroit and Geneva have served as evidence of a marked decrease in many global automakers’ EV enthusiasm, the Beijing show hosted EV launches from: Daimler, introducing the first product of its partnership with Chinese automaker BYD; BMW, debuting an open-top version of its i8 EV; and Volkswagen, launching its Chinese-market directed Lavida EV. Alongside these familiar international names, the Beijing show also featured a strong contingent of local automakers unveiling new EV related projects and technology, both in cooperation with western automakers, such as BYD and Daimler or FAW and Volkswagen, as well as independent projects from Great Wall Motors among other rising companies.
Coming a mere week after the 2012 Auto China show wrapped, the presence of 30 Chinese EV companies at Electric Vehicle Symposium 26 in Los Angeles seemed to confirm the trend observed by many industry experts in the wake of Beijing; China is now leading global EV development. However, recent analysis and expert opinion has cast some doubt on the wisdom of China’s enthusiastic EV push. A recent report in the Economist pointed to the failure of promising companies, such as the Warren Buffet backed BYD, to fully realize the expectations set for them, noting “anemic” sales and plunging profits. From the perspective of market analysts, the failure of Chinese automakers to spur and significant consumer demand despite the overwhelming state support they’ve received and the subsidies and tax breaks offered to consumers is serious cause for concern.
Beyond the impact which weak consumer demand has had on Chinese automakers’ profits, industry analysts have also voiced serious concern regarding the failure of many Chinese EV demonstration pilots to come anywhere close to fulfilling the initial targeted EV capacities set out for the end of 2011. Furthermore, a report by Reuters addresses an equally pressing concern; a lack of sufficient charging infrastructure to support even the limited number of EVs already in circulation in many of the pilot cities, such as Shenzhen.
This failure to meet the ambitious goals set out by the state government a mere three years ago has cast into doubt the future of, not only, China’s role in the future of the EV industry but the global drive for EV development. However, industry experts have noted signs of promise in encouraging recent developments, primarily in the Chinese government’s reformed EV industry support plan released in late April, 2012. In this plan, China’s State Council announced steps to accelerate the promotion of pure EV and plug-in hybrid development while also adding non-plug-in hybrid vehicles and increasing the efficiency of gas-fueled IC engines to its list of priorities. Furthermore, the new plan also eased the conditions governing foreign investment and cooperation with local Chinese EV producers; no longer requiring the handover of key EV technologies, a stipulation which was largely credited for sowing seeds of disinterest among many foreign automakers exploring the Chinese market last year. The broadened scope and less restrictive attitude evinced in these new policy guidelines do not, however, signal a reluctance to continue EV development on the Chinese government’s behalf. Despite its slow start the Chinese government continues to aim high, setting its sights at a target of five million EVs on Chinese roads by 2020.
The Chinese government’s continued support for the future of its EV industry coupled with the more lenient restrictions have served to spark the interest of western auto industry mainstays such as Renault and Nissan Motor CEO Carlos Ghosn, who felt that the government’s new stance was a strong statement in support of the EV industry’s development and would serve a strong match for his own companies’ EV ambitions. Alongside the renewed interest of foreign automakers, local automakers such as SAIC Motor and Dongfeng Motor Group, who have pledged to invest $1.9 billion and $441 million respectively, have also recommitted their efforts to cooperating with global automakers.
While the EV industry seems destined to continue to struggle through a period of slow momentum building for the foreseeable future, the continued support of strong commercial actors, such as Nissan, BMW and VW, paired with strong public support, from state and municipal authorities around the globe, seem to leave significant hope for the future of the global EV industry and its potential to impact the fate of our environment.