Beijing appears to be rethinking its electric vehicles strategy as it becomes increasingly clear that its targets for mass-producing EVs in China are unrealistic, reports the Financial Times.
The newspaper said that China had planned to leapfrog a generation of conventional engine technology to develop an early advantage in EVs and although no formal decision has been taken to abandon that plan, the government now sees its original timetable as too optimistic.
Chinese premier Wen Jiabao recently questioned China’s road map towards alternative vehicles in a Communist Party journal and the FT said analyst now expect Beijing to shift its focus to hybrids and other vehicles that can reduce fuel consumption.
China’s targets of 1m new-energy vehicles on the roads by 2015 and 5m by 2020 could be revised to include conventional hybrid vehicles.
Analysts also say Beijing has been disappointed by slow progress towards a domestic electric vehicle industry. The FT noted that China’s highest profile electric vehicle maker, BYD has repeatedly delayed plans to commercialise and export its EVs. Government subsidies of up to CNY60,000 (US$9,370) for pure electric vehicles and CNY50,000 for a new generation of plug-in hybrids are already available in five Chinese cities on a trial basis, but very few buyers have taken them up.
Analysts added that it was never realistic for a fledgling auto industry to skip conventional hybrids and immediately electrify although they do not believe this will deter China from a long-term goal of pursuing such a goal.
Chinese buyers have also shown little appetite for conventional hybrids: last year, Toyota sold only one Prius in China, produced by its local joint venture with FAW, according to IHS Automotive.
Because of the limited range of EVs, along with high prices compared to conventional cars, there are doubts over how many consumers will buy them. Early reviews of Nissan’s all-electric Leaf, while mostly positive, have emphasised the car’s limited driving range and relatively high price for its size.
A number of carmakers think that pure electric vehicles will be a small niche market. Many are developing hybrid electric models but are also emphasising the major gains in fuel efficiency and CO² emissions that can be gained by downsizing and turbocharging of conventional engines.