China May Be Overreached by Jumping Directly to EV
03 September 2012
www.chinabuses.org: The Plug-in hybrid electric vehicle (PHEV) market in China is expected to grow at a compound annual growth rate (CAGR) of 60 percent from 2012 to 2017, surpassing 150,000 units in sales annually by 2017, according to the latest Pike Research’s report.
With government support, C. C. Chan, chairman of the World Electric Vehicle Association, said last year that he expected China would lead the electric vehicle sector with an estimated 15 percent market share for hybrid and pure electric vehicle sales in the world’s biggest automobile market by 2020.
However, China’s ambition forms a sharp contrast against JP Morgan’s estimate that EV sector may only account for 1 or 2 percent of global vehicle sales, which may hit 60-70 million units by 2020.
China produced only 8,368 new energy vehicles (including 5,655 BEVs and PHEVs and 2,713 hybrids) in 2011, according to statistics from China Association of Automobile Manufacturers (CAAM). There will be a long way to go for China to lead the world due to the lack of charging facilities, core technologies (battery, electric control and electric motor) as well as poor reliability and safety of new energy vehicles, agreed experts in a recent industry forum.
Also the Chinese government may find it difficult to implement its incentive policies and realize its ambitious goal on new energy vehicles due to the competing interests of central and local governments, which may create problems in the integrated efforts of new energy vehicles value chain, such as tax break, technology standardization, technologies and information sharing, etc.
McKinsey, a consultancy, said that China is slowing down on the development of new energy vehicles compared with its counterparts Japan, U.S., France and Germany in a recent report titled “Recharging China’s Electric Vehicle Aspirations.” It reckoned that China has fallen from third place to fifth in the global electric car race. It also argued that the Chinese government may overreach by pushing for a leap straight to all-electric cars.
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