China Poised to Challenge Global Auto Giants in the Greener Vehicle Market

Under the government"s long-term science and technology plan China is exploring a variety of greener vehicle technologies. In 2006, the Chines government issued a policy directive to encourage the development of small cars with low fuel consumption and low emissions.

China's Chang’an Auto is already mass producing a hybrid vehicle for about $20,000, which is $10,000 less than the Toyota Prius hybrid. Chang’an produced 50,000 Jiexun-HEV hybrid cars in 2010.

China's efficient low emission vehicles are part of its global strategy aimed at the greener global vehicle market. In addition to the growing domestic market, China is increasing exports to developing nations, as well as to the US and Europe.

Inexpensive compact cars like the Chery QQ, and the Geely Panda are selling well domestically. There is also a resurgence of demand for larger sedans in China. These larger models are important to its export strategy. In 2009, 30,000 of the 190,000 Chinese cars were exported.

Geely plans to increase its overseas sales to 1.3 million vehicles annually by 2015, with assembly plants already operating in Russia, Ukraine and Indonesia, and another one planned in Mexico.

Chery, exported 120,000 vehicles in 2009 and has over 20 overseas plants designed to boost sales in Russia, the Middle East, South America and South Africa. The company also signed an agreement to produce compact cars under the Chrysler brand for US and European markets.

The Chinese are positioning themselves to take on the global giants in global sales of greener vehicles.

© 2011, Richard Matthews. All rights reserved.

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The Greening of China's Cities, Counties, Towns and Industry

According to China's deputy director of the National Energy Administration, Qian Zhimin, Chinese cities, counties and towns will be increasingly green in the next few years. As reported in China Daily, Qian estimated that by 2015, the country could see as many as 100 cities, 200 counties and 10,000 towns relying on alternative sources of energy like renewables.

“Against the backdrop of combating climate change and pursuing development in a way that saves energy and avoids harming the environment, the notion of a low-carbon town is becoming prevalent, and promising exploration have been conducted by a multitude of…cities,” Qian said. “Priorities should be placed on the development of public and rail transit and the construction of smart grids. We should also make cities more energy efficient”

China's first model town, Tianjin Yujiapu financial district was nominated as the first low-carbon model town project in the Asia-Pacific region at a forum that discussed low carbon model towns. The initial planning for the city was conducted by international design teams from Manhattan, Chicago, London, and Japan.

“In recent years, test projects have begun for regions that will emit relatively little carbon and have been preliminarily tried out in five provinces and eight cities, including Tianjin,” Qian said.

Li Bo, the president of the Tianjin Innovative Finance Investment Ltd., noted that the buildings in the city are being constructed in accordance to green standards. “Last year, we signed cooperative agreements with more than 60 low-carbon enterprises from home and abroad,” Li said. At present, 260 enterprises have invested in the Yujiapu financial district, with a total capital registered for the project at around 60 billion yuan, or $9.27 billion.

Xinhua reports that China’s minister of industry and information technology, Miao Xu, said that the government has plans to green the country’s industrialization strategy. The minister indicated that China will promote energy efficiency and emissions reductions. These measures are significant given the fact that as of 2011, Chinese energy consumption in industrial production accounts for 70 percent of the nation’s total energy consumption.

These efforts are consistent with China’s five-year plan which mandates movement away from fossil fuels, and lowering energy consumption per unit of gross domestic product by 16 percent.

© 2011, Richard Matthews. All rights reserved.

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Survey Shows China More Receptive to EVs than America

Electric Vehicles (EVs) may be taking the world by storm but public acceptance is better in China than it is in America. These are some of the conclusions of a 2011 Accenture survey tiled "Plug-in Electric Vehicles: Changing Perceptions, Hedging Bets".

Globally 58 percent of respondents said they favor plug-in electric vehicles as a long-term substitute for internal-combustion vehicles. In the US only 46 percent of respondents said that they favor plug-in electric vehicles replacing conventional vehicles over time.

Germany is a green energy leader and they are vying for leadership in the electric vehicle market, but only 53 percent of the population see electric vehicles as a viable, long-term replacement for conventional cars.

In Italy, 76 percent of the population surveyed favored electric vehicles as an eventual substitute for conventional vehicles. In China, the number was a staggering 86 percent in favor of plug-in electrics.

Traditional consumption patterns may help explain the difference. In China people appear to be more comfortable with charging their cars at electric fueling stations, while Americans and respondents from the rest of the world prefer charging their cars at home. Some 65% of global respondents stated that they would prefer to charge their vehicles at home as did 77 percent of respondents in the US. In China only 35% of respondents would prefer charging at home.

The Chinese are also more interested than the rest of the world in knowing where the EV power source is coming from. Accenture’s study indicated that globally 45 percent of respondents expressed a desire to know where the electricity to charge their electric car comes from. In the US, only 43 percent were concerned about the origin of their electric power, while in China 62 percent wanted to know where their power came from. This is a critical issue in the sustainability profile of an EV as a car powered by electricity from renewable energy is much better for the environment than EVs powered by the burning of coal

As revealed by the Accenture study, the Chinese are also more forward looking in terms of emerging technology. Although battery exchange may win out over home charging, 62 percent of Americans surveyed would prefer to charge a battery over exchanging it, while 35 percent of the Chinese respondents favored charging over an exchange.

A J.D. Power and Associates Report predicts that China is expected to reach sales of 35 million light-vehicles in 2020 while the US can expect sales of 17 million light-vehicles.

The US may be well positioned to lead the EV revolution, but with its massive domestic market and receptive population, China will give America a run for its money.

© 2011, Richard Matthews. All rights reserved.

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