China’s Major Automakers Focus on EV

　　Lifan and its cooperative partner Shanghai China-science Electric (Group) Co. (ECC) formally established an electric vehicle company on March 16, aiming at carrying out the industrialized operations for the technological achievements which were developed by both companies. Lifan and ECC achieved some progress in the field of new energy and electric vehicles. Lifan 320 will be introduced to the market soon with an expected price of 105,000 yuan. The first batch of Lifan 320 will serve for the Shanghai World Expo.

　　Yin Mingshan, the Chairman of Lifan, was quite happy recently. So was Wang Chuanfu who is in charge of BYD. The sales of BYD doubled in 2009 and BYD has just signed a memorandum of understanding with Daimler with the plan of establishing a joint venture and introducing some electric vehicles for Chinese market. BYD has produced a dual-mode electric car named F3DM which doest not rely on professional charging stations. That model will be on sales in the first quarter of 2010. Once the national subsidies are offered by the government, the price of F3DM will be less than 100,000 yuan. For vast majority of the consumers, the price is indeed attractive.

　　BYD issued the notice of cooperation with Daimler on March 2 and on the same day China South Locomotive & Rolling Stock Corporation Limited (CSR) and SG Automotive Group Co., Ltd. formed an cooperative relationship to build a joint venture named Hunan South Locomotive Yellow Sea Electric Vehicle Co., Ltd. CSR and SG Automotive aimed at establishing the largest industry base of new energy bus in China. According to people’s expectations, the industry base will have an annual output of 10,000 electric buses within the next two years. Li Shufu, the Chairman of Geely, said that "every day brings new progress" as to Geely's R&D project of new energy vehicles.

　　In addition, Chery, Chang'an, the Great Wall and other automakers are ready to introduce some electric cars in 2010. Chery has already announced that it would launch two pure electric vehicles-S18 and QQ in 2010. The pure electric model of QQ may be priced at as low as 50,000 yuan. According to the Xiaoxiang Morning News, almost all the automakers will take some actions for the low-carbon, energy saving and emission reduction projects in 2010. More than 60% of all the automakers have highlighted the development plan of new energy cars in their strategies. We can see that every automotive giant has its own ambition in the field of new energy cars.

　　The subsidy program for new energy cars will be introduced in March.

　　During the 2010 sessions of National People's Congress and Chinese People's Political Consultative Conference, the Ministry of Finance and the Ministry of Industry and Information Technology pointed out that individual consumers would enjoy subsidies when buying new energy cars and the specific amount of subsidies was being studied.

　　Zhang Shaochun, the Deputy Minister of Finance, told reporters:" The State Council has decided to provide subsidies for private consumers who purchase new energy cars in a small number of cities. The subsidy will be in the form of purchase subsidy. Currently the amount of subsidy is being studied. “At the same time, the Ministry of Industry and Information and Technology, the Ministry of Finance and other relevant departments have submitted a plan on supporting the development of new energy vehicles. The plan clearly pointed out that the number of pilot cities would be expanded from 13 to 20. Energy saving and new energy vehicles will be put into use for public service in those cities.

　　Miao Wei, the Deputy Minister of Industry and Information Technology told reporters that the subsidy program for private consumers would be released in March. Miao Wei said that the subsidy standard would be determined according to how much fuel can be saved. Individuals will be primarily limited to the purchase of new energy vehicles and the maximum subsidies are about 50,000 to 60,000 yuan. The minimum subsidies may be less than 10,000 yuan. Since the central government will introduce subsidy program, local authorities are likely to carry out subsidy plan as well.

　　According to the requirements listed in the new energy vehicle plan which was introduced by the State Development and Reform Commission and the Ministry of Science, the new energy vehicles will account for two thirds of all the vehicles in China by the year of 2020 with a total number of about 65 million units.

　　At present a variety of new energy models produced by 42 automakers have been listed in Chinese government's directory of manufacturers and products. The Ministry of Industry and Information Technology, the Ministry of Science, the Ministry of Finance and the State Development and Reform Commission have joined together to promote the development of new energy vehicles. Now 24 enterprises, 47 kinds of vehicles meet the requirements, covering ordinary hybrid cars and plug-in hybrids. There are a variety of models such as sedans, buses, cleaning cars and etc.

　　Reporter's Observation

　　However, based on Roland Berger's most optimistic expectations, new energy vehicles can only account for 15% shares in China's auto market by the year of 2020. Roland Berger believed that the industry standard is a problem waiting to be resolved if China wants to promote new energy vehicles in a large scale. Therefore the year of 2010 is a critical period of great significance for Chinese auto industry which just stepped into the field of independent innovation. It is extremely important for China's auto industry to master core technologies in the trend of saving energy and emission reduction.

　　Now the infrastructure and industry standard are lack of uniformity and consumers have to change their concepts. In addition, the establishment of charging network needs the co-ordination with the State Grid. Because of different technical routes there is some controversy about the industry standard. The consumption concept is related to the price of cars. Now the price of hybrid vehicles is twice as much as that of traditional models or even higher, which makes energy-saving vehicles less attractive.

　　Li Jianxin, the Deputy of NPC and Chairman of Changfeng Group, pointed out that with the development of new energy vehicles in China it was necessary for Chinese government to set Hunan Province as China's new energy vehicle industry base. Li Jianxin said:" A more important problem is that the development of relevant infrastructures and facilities are lagged behind, which restricts the market of new energy vehicles. For example, if the electric vehicles are short of power on the road, it is difficult for the drivers to charge the batteries. On the contrast, you can find gasoline stations everywhere. Only by promoting the development of infrastructures and facilities can the industry of new energy vehicle achieve great progress.

　　The industry insiders believed that the development of new energy vehicles had become a part of national strategies, according to the Xiaoxiang Morning News. New energy vehicles have already got rid of the limitations of automotive industry. All the phenomena indicted that China would embrace a technological revolution based on low-carbon economy. Therefore, the industry of new energy vehicles will become a focus point of China's "low-carbon economy" and a new growth point of greatest significance for Chinese economy. Then the industry of new energy vehicles will rise to become an important part of national strategies. (Translator: Qinghua/Hanxin)

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