China, much like the United States, has ambitious goals related to the spread of green car technology among its population.
Whereas President Obama called for 1 million electric vehicles on the road by 2015 last year, Chinese leaders were hoping for 500,000 cumulative EV sales by 2015 and 5 million by 2020.
We know here at home Obama’s goal unfortunately likely won’t be hit, and now a new report suggests China might not hit government targets in that much more populous nation either.
Bloomberg New Energy Finance (BNEF) believes “sales of plug-in electric vehicles in China, including those using plug-in hybrid and battery electric technology, are likely to fall well short of government targets.” To date, electric car sales there have been slow, with just 13,000 sold between 2009 and 2011, and this include public sector vehicles such as buses.
The numbers the Chinese originally had forecasted are part of that government’s 2012-20 New Energy Vehicle Industrial Plan, which is said to reflect “the potential of EVs to reduce emissions, increase China’s energy security and help the domestic auto industry to catch up with, or even leapfrog, foreign competition.”
Three primary factors are seen, according to BNEF, behind this lackluster sales growth. In some ways these factors are similar to what has contributed to the slow growth of electrics here in the United States – higher costs consumers can’t, or won’t, pay; lack of major auto manufacturer marketing muscle behind promotion of EVs and shortage of necessary technological expertise in the supply chain.
In terms of consumers, the costs of these cars unfortunately tends to be higher, despite government incentives, compared to more traditional automotive offerings. There’s of course also concerns around range anxiety due a lack of of charging infrastructure and a string of accidents involving these vehicles which apparently have made for some bad green car press.
The issue around marketing from major auto manufacturers seems to stem from them “waiting for the government to publish the 2012-20 industrial plan, in order to avoid investing in the wrong technology.” Most electric cars released in China to date, said BNEF, are from so called “second-tier manufacturers” and not considered that competitive to more traditional passenger vehicles.
And, finally, with regards to the shortage of technological expertise in the supply chain, it is noted this is necessary to produce what’s deemed “a competitive, safe, mainstream electric passenger vehicle.” This type of expertise takes time to develop, with early adopters, as it has been here domestically, being public fleets such as buses and commercial vehicles.
BNEF, based upon all of these factors, projects under even the most optimistic of situations cumulative sales of electric cars will amount to 343,000 by 2015 and just over 1 million by 2020, which is only 20 percent of the Chinese government’s official target.