May 17,2010

Is China's Electric Car a Pipe Dream?

By CSC staff,Shanghai

Among the recently launched new energy vehicles, how many are really low-carbon oriented cars? The answer is: None. Detailed implementation rules for subsidies for new energy vehicles are expected to be announced by the end of this month. There is a lot of insider speculation as to the nature of those rules.


At the 2010 China Low Carbon Economic Forum held recently by the Low Carbon Research Center at Peking University, Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission (NDRC), noted in a keynote speech, titled New Energy Development Outlook, that among new energy vehicles, none is low carbon and that new technology must be developed to produce low-carbon cars.


Li said that not one new energy mode, not fuel cell, nor bio-gas, nor fully electric, is truly low-carbon under existing technical criteria, and he warned carmakers against using the "low carbon" claim while building high-carbon vehicles.


The government is preparing to introduce subsidies for new energy vehicles, but analysts explain that a policy not in line with the relatively strict market access system will fall victim to short cuts and some companies will use trickery to gain subsidies.


A Dongfeng Motor deputy manager says, "The issue of emissions and low-carbon makes cars the focus of contradictions. Auto industry insiders do not want the business to become a second real estate, everybody's target."


In China, like in much of the developed world, developing and promoting new energy vehicles has become highly fashionable.


In January 2009, the NDRC, the Ministry of Industry and Information Technology(MIIT), the Ministry of Science and Technology (MST), and other ministries announced their vigorous support for the development of new energy vehicles, resulting in a wave of new-energy and electric vehicle projects in a market that had been perfectly quiet. So far, among domestic car companies, only BYD says it will enter the electric car field, but it has not come up with a purely electric model. Toyota's hybrid Prius represented at that time the most advanced technology for new energy vehicles

Almost overnight, however, hybrid technology was going out with the tide, and pure-electric development is the focus of domestic automobile companies. Statistics are incomplete but show that more than 40 domestic auto enterprises claim to have mastered pure electric car technology, apparently far outshining the industry in Japan and the United States.


According to the new-energy vehicle strategic objectives of the China Association of Automobile Manufacturers(CAAM), the number of pure electric vehicles is to reach 500,000 by 2015, electric technology is to be widely used in conventional cars, hybrid vehicles should account for 30% of annual production, whole vehicle and key component production for new energy automobiles should reach a world advanced level, and new car average fuel consumption should drop by 30%, reaching international levels.


In the Directory of Recommended Models of Energy Conservation and New-Energy Vehicles, released by the State Council, almost all major domestic automobile manufacturers have their new energy vehicles on the list, and more than 100 new-energy car products are included. China seems to be leading the world in new energy vehicle production.

Have so many companies in a not entirely developed country truly mastered the technology of new-energy cars? There appears to be a large dose of speculation among firms about new-energy vehicle concepts.


Chen Quanshi, director of Auto Research Center at Tsinghua University and deputy director of the State Key Laboratory of Automotive Safety and Energy Conservation, points out that it is only the eve of the real development of new-energy vehicles and the bulk of the needed technology is still in planning stages. China's key technologies in electric cars, in fact, have as yet made no breakthroughs, as even the big international automakers are struggling with reducing carbon emissions from current industry standards.


Xu Jun, director of the Division of Resources and Environment for MST Social Development, says as the development of new energy vehicles is yet a trend, some issues such as fuel cells have not yet been solved. Dong Yang, deputy director and secretary general of CAAM, also admits that there is a gap between domestic new-energy vehicle technology and advanced international-level tech, and domestic products lack sufficient experimental verification.

The biggest problem China's new-energy vehicle push faces is the lack of original technology, which is to say that China has very little. Some carmakers, however, blow hard. In 2009, more than 20 domestic auto makes announced their successful development of pure electric cars, surpassing even Japan, the leader in electric car development. According to China Business News, senior managers of one domestic private car company say the so-called pure electric car is an assembly of components bought from other companies and developed by an R & D team of 30 individuals over 2 months, at the total cost of not more than 5 million yuan. The result is that the company has yet to meet the actuality of green energy, but has inflated its reputation and also obtained specific government grants.


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