The car industry is full of missed opportunities. Ten years ago General Motors abandoned their pioneering electric car, the EV1. Three hundred years before that, the world’s first automobile was built by Jesuit missionary Father Ferdinand Verbiest for Emperor Kangxi. When the steam-powered novelty was demonstrated in the Forbidden City, it was dismissed as a toy.
China’s current leadership is determined to avoid making the same mistakes. They are committed to backing electric cars – a big decision given China already outpaces the US in annual car sales. However, to make the technology popular two obstacles must be overcome: the lack of an infrastructure to power the cars, and their high cost.
To solve the first challenge, the State Grid Corporation is planning to build 75 “smart-grid” charging stations in 27 cities this year, according to a State Grid executive.
It’s a good start, but the country will need hundreds more if the government’s ambitious target of 500,000 “alternative-energy” cars (sold by) 2011 is to be met (and from less than 10,000 last year).
“The improvement in infrastructure will certainly boost the development of the whole industry,” predicts Wang Bin, president of electric car firm Beijing Lithium Energy Investment. He also wants the government to outline a national standard for electric cars.
“Smart-grid” charging stations are designed to take pressure off the electric grid by billing more to ‘charge’ when demand is high. At the Southern Grid Corporation’s Shenzhen pilot station a car with a range of 300km costs $8 to charge at peak times, and just $2 otherwise. A regular car would need $23 of gasoline to travel the same distance.
The typical electric car takes about six hours to charge in a wall-socket, and two hours in a charging station. Chinese companies have yet to invest in “battery-switching” stations, where it takes just minutes to install a fresh battery.
Gasoline-powered cars still cost substantially less, but the government is considering subsidies for private buyers of “new-energy” cars. Taxis and postal vans have been subsidised since last year.
“The more advanced the technology, the greater the subsidy,” said Ministry of Industry and Information Technology Vice-Minister Miao Wei. “This is aimed at encouraging technological innovation.”
The government’s decisions have had a major impact on the industry. Last year, the State Council directed each major domestic car manufacturer to offer an “alternative-energy” model by 2011, and China’s electric-car technology has quickly move far beyond golf carts. BYD’s E6 has a top speed of 160 km/h, and though that’s significantly less than the Tesla Roadster’s 201 km/h, it’s still more than enough for city driving.
So far, China’s electric cars haven’t offered much help to the state’s efforts to slow the country’s rising carbon emissions. Most of the electricity used to power them will come from coal power stations, which emit not only carbon dioxide but also acid and heavy metals. In an effort to reduce the need for coal, the State Grid Corporation is investing in ultra-high-voltage transmission lines that would make it easier to use renewable energy on the grid (see WiC45).
Making “new-energy” vehicles cheaper involves paying a low price for the rare earth metals used in their batteries, which often come from Chinese mines. But that poses significant risks for the environment since many mines use destructive methods to get at the metals.
The country’s emphasis on low-cost production could also be a serious barrier to taking the technological lead and defining how the industry moves forward. Domestic carmakers will have to contend with nimble high-tech foreign start-ups as well as the major car companies with billions to invest.
National Development and Reform Commission expert Li Junfeng thinks there should be more investment in research and development: “Without key technologies. China may achieve nothing in the industry, despite some current advantages.”
It won’t be easy for China’s leaders to get it right. “The challenges involve nothing short of reinventing the traditional automobile industry,” said industry expert Zhong Shi. “[China] still lacks the necessary infrastructure, technology and capital needed to be competitive.”
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