Why China Is An Ideal Market for Plug-In Electric Cars
By EV World Television
Yibing Wu, the Managing Director of Beijing-based Legend Holdings, briefs The Business of Plugging In conference
In this video from "The Business Of Plugging In 2009" conference, Yibing Wu, the the Managing Director of Beijing-based Legend Holdings, gives his perspective on why China is rushing to develop and introduce plug-in electric vehicles, noting a number of key factors driving this trend including:
* Like the USA, it is China's national strategy to reduce it dependence on imported oil and cut its overall carbon foot print.
* The recognition that 40-55% of pollution in China comes from transportation sector and must be controlled.
* China sees a shift to electric drive as a way to leap frog past the investment in an IC engine infrastructure, putting the nation on an equal footing with international competitors.
China is well on its way to wide acceptance of electric vehicles with tens of millions of electric bicycles and scooters already on its streets. While most are still powered by lead-acid batteries, the 80% that do utilize lithium ion batteries in China come from a subsidiary of Legend Holdings.
Mr. Wu also noted that because most Chinese are first time buyers of any type of automotive product, their expectations for the technology aren't as high as Western car buyers and they tend to be more "forgiving." Also, most Chinese affluent enough to afford a car, live in China's largest cities and have short commute distances; again, ideal for adoption of plug-in cars.
Because the Central Government charges excise taxes that can double the price of a car, it has a lot of latitude in the way of economic incentives to help stimulate BEV and PHEV sales in the nation. It now provides the equivalent of a US$9,000 tax credit for the purchase of an pure electric car; and US$7,500 for a hybrid.
Recently, the government designated three cities to serve as electric car demonstration centers starting in 2011. It's monopoly control of the national power grid also provides it with the ability to encourage consumer purchases of electric drive vehicles. Beijing has set a goal of producing half a million hybrid and plug-in vehicles annually starting in 2012
However, for all its strengths, Wu acknowledged that China's car industry is still highly fragmented and continues to lag behind the West in its IC engine technology, which is a critical component in the development of PHEVs. This, he said, offers OEMs in the West the opportunity to participate in the spread of EV technology in China.
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