Shanghai promotes new-energy vehicles

As a center of China's automotive industry, Shanghai is speeding up the promotion of new-energy vehicles development, the 21t Century Business Herald said on September 16th.

A document entitled Proposals on Accelerating the Promotion of Shanghai New-Energy Vehicles Industry (the Proposals for short in the following content) has been initially drawn up by Shanghai Municipal Development and Reform Commission and Shanghai Economy & Information Technology Commission. According to the Proposals, Shanghai Municipal Government will offer a variety of supports for the development of new-energy vehicles and the production of key auto parts. Companies and institutions which provide service about new-energy cars will not only get fiscal and financial aid, but also have access to the supports of human resources and public procurement from Shanghai Government. At the same time, Shanghai will promote the establishment of a production base of key parts of new-energy vehicles in Jiading District.

The Proposals points out that from 2010 onwards customers will not have to go through auction process to gain a vehicle license when they buy new-energy cars. Shanghai aims at increasing the production capacity of new-energy cars to 100,000 by the year of 2012, with output value hitting 30 billion yuan (US$4.394 billion).Shanghai is striving to found an internationally competitive and independent industrial systems and clusters.

Shuai Hongyuan, the general manager of Shanghai Leibo New Energy Automobile Technology Co., Ltd., is inspired by the policy supports. In order to promote the sales of electric vehicles made by Leibo, Mr. Shuai established a new model. According to Shuai Hongyuan's plan, the price of an electric bus is same as the normal one. Therefore Leibo could lease batteries to bus groups. Then bus companies should be responsible for the cost of repairs and oil. As a result, bus companies will not burden extra cost for using electric vehicles. Technically speaking, Mr. Shuai's idea is a win-win solution. Every battery can be used for eight years and Leibo will get paid by operating the leasing trade. However, due to the cost of oil and batteries, every electric bus would actually result in a loss of 160,000 yuan in the period of validity. In addition, the cost of power plants is also high. Faced with the contradiction between development and profitability, Shuai Hongyuan has to figure out new solutions.

On January 23rd, the Ministry of Finance and the Ministry Science and Technology issued a notice about the promotion plan of new-energy vehicles. Chinese Government determined to provide fiscal aid for the development work of energy-saving and new-energy cars. According to the notice, companies would be awarded with 500,000 yuan for the procurement of electric vehicles. But both the bus companies and Mr. Shuai have no idea about how to obtain the subsidy.

As to the Proposals, Shanghai has affirmed Leibo's model and put forward specific measures. The Municipal Government will learn the valuable experience of energy management mechanisms and support the battery-leasing business models. Financial capital and intermediary organizations will be introduced as well. Shanghai will set up special funds to encourage banks to provide loans for the battery-leasing companies. At the same time, Shanghai encourages the development of related infrastructures such as charging stations. Special funds will be provided by the Municipal Government for the fixed-asset investment.

Meanwhile, the government procurement of new-energy cars would be gradually expanded. By 2012, government will buy more new-energy vehicles for official use. Public transportation, commuter, postal services, sanitation and other sectors will also be encouraged to be equipped with new-energy cars. In the domestic automotive market of China, the development of battery, motor and electric control equipment is relatively weak, which has been an indeed tough issue as those components are critical and integral parts of automotive industry. Therefore the Proposals is mainly aimed at accelerating the development of battery, motor and electric control equipment. Gong Jun, the general manager of Shanghai Oneida Drive Technology Co., Ltd. whose main products include automotive motors and controllers, pointed out that the Proposals may be the largest and the most complete support package issued by Shanghai Municipal Government, promoting the development of new-energy technologies at the same time. The Proposals reflects that Shanghai is supporting new-energy enterprises in several aspects ranging from financial aid to technological support. (Qinghua)

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