GREEN WHEELS: Zotye Auto, a Hangzhou-based private auto producer, displayed its electric vehicle at the Shanghai International Motor Show in April

April 20 marked the 20th Earth Day as well as the opening of the annual Shanghai International Automobile Industry Exhibition, where electric vehicles were the highlight. Fifteen foreign and domestic auto manufacturers displayed their latest offerings, of which 10 were from China.

Amid the global economic recession, green power has been considered a viable alternative to high gas prices and the continued impact of global warming caused in part by auto emissions. A fad for electric vehicles has been developing since last August, when Beijing put 500 green energy autos into service to realize the ideal of hosting a green Olympics.

Local governments, auto-related enterprises, scholars and institutions are all striving to be a part of this auto trend under the banner of "going green." But despite their enthusiasm, China still lacks a standard commercial electric vehicle.

Politically correct

As the world's fourth largest auto producer and third largest auto consumer, China had 65 million cars on the road at the end of 2008, according to the National Bureau of Statistics. By 2020, the country will have more than 150 million autos that consume 250 million tons of gas annually, posing a severe threat to its energy security, said Ouyang Minggao, Director of the State Key Laboratory of Automotive Safety and Energy Director at Tsinghua University New Energy Vehicle Center.

Greenhouse-gas auto emissions are also a problem that China cannot afford to neglect. Auto emission pollution in China's big cities accounts for 65 percent of their total pollutants, Ouyang said at the Electric Vehicle Industry Development Forum in Beijing on April 10.

Unlike internal combustion engines that operate with a particular fuel such as gasoline or diesel, electric vehicles use electricity which produces zero emissions. New energy autos include hybrid electric vehicles (HEV), fuel cell vehicles (FCV) and electric vehicles, according to the National Administrative Regulations on New Energy Auto Industry Admittance issued in November 2007.

The future of electric vehicles has outshined the other two. HEV operates on two systems, including internal combustion engines (ICEs) and batteries. China has no evident advantages in ICE, so HEV does not offer a viable choice for the country to take the lead in the auto industry. FCV, mainly powered by hydrogen, faces difficulties because of the high cost of producing hydrogen.

With the development of nuclear and wind power plants, China now has a higher electricity oversupply at night. Because owners of electric vehicles must recharge their vehicles at night, the electric cars will help balance the huge difference in the amount of electricity used during daylight and at night.

By the end of 2007, China's installed electricity generation capacity was 700 million kw, which at its peak volume could supply enough energy to recharge 30-40 million electric vehicles with lithium-ion batteries, said Chen Liquan, a researcher at the Laboratory of Solid State Ionics under the Chinese Academy of Sciences.

The idea that green energy autos, or more specifically, electric vehicles, will save China from global warming has become something of an article of faith among policymakers. To vibrantly push forward the development of new energy autos is in accordance with China's situation and the new direction of the world auto industry, Miao Wei, Vice Minister of Industry and Information Technologies, said at the forum.

The Central Government will arrange a special fund of 10 billion yuan ($1.47 billion) to support auto technology innovation and new energy auto development, according to the State Council's Automotive Industry Readjustment and Revitalization Plan issued on March 20. The plan says the government will launch a new energy auto strategy to promote the industrialization of electric vehicles and their key components for use in large and medium-sized cities.

New energy buses and taxis will be put into operation in the first 13 pilot project cities, including Beijing, Shanghai, Wuhan and Shenzhen, according to a circular issued in January by the Ministry of Finance and the Ministry of Science and Technology. The Central Government will offer a 60,000-yuan ($8,823) subsidy for each electric public passenger vehicle and commercial vehicle, and 500,000 yuan ($73,529) for each public bus longer than 10 meters. Both central and local governments duly support the projects. Electric vehicles have become an essential part of local governments' efforts to build an environmentally friendly society.

Wuhan, one of the first pilot project cities, signed an agreement with Nissan Motor Co. this April to buy its electric cars through government contracts. The Wuhan Municipal Government will take a predominant position in promoting the electric vehicle industry, said Yue Yong, the city's mayor. Wuhan is considering preferential parking and highway fees for owners of electric vehicles, said Sun Ming'an, Deputy Director of the Wuhan Municipal Science and Technology Bureau.

Identical starting line

China has been a true auto giant from the perspective of production and consumption, but never in the field of technology. Luo Jun, Secretary General of the Asian Manufacturing Association, said as far as some core technologies such as engines and circuit compaction are concerned, China's traditional auto industry lags behind advanced countries by at least 20 to 30 years.

New auto energy forms--and specifically electric vehicles--present a golden opportunity for China to catch up with advanced countries, some industry insiders said. The country has strong advantages in resources, technology and market size.

"Electric vehicles should be the breakthrough point for China to catch up with and surpass the world's advanced levels," said Chen Qingquan, a member of the China Academy of Engineering and founder of the World Electric Vehicle Association.

China already has had a good start in this regard. It has formed a complete industry chain for the small-power, lithium-ion batteries used in electric vehicles and has taken a leading position in global lithium-ion battery technology, Chen said. He noted that China produces half the world's lithium-ion batteries and is also rich in other metals used in electric vehicle batteries such as manganese, iron, vanadium and phosphorus.

Encouraged by the bright future at their fingertips, China's electric vehicle manufacturers and related enterprises, both large and small, state-owned and privately owned, are all vying to grab a bigger piece of the electric vehicle sector.

According to Auto Business Review, a Beijing-based auto magazine, more than 40 carmakers, including BYD Auto, Chery Automobile, Chang An Automobile Group and Nissan, have started new energy auto projects, and 27 car manufacturers have already introduced 76 types of new energy vehicles, some of which include buses that run on electricity. During the Beijing Olympics, 50 electric buses traveled a total of 120,000 km and carried more than 140,000 passengers with no breakdowns, Ouyang said.

But getting past the demo phase for electric buses and taxis and moving to a point where they are sold commercially and used for public transportation on a regular basis is a major challenge. Although BYD, an automaker based in Shenzhen, produced its high-profile electric-powered F3DM sedan last December, the vehicle is still only available to a designated group of clients, and its price has not been made public. Last November, Chang An exported 30 electric cars to Canada, although the vehicles were intended for demonstration rather than sale. This February, Chery rolled its first electric vehicle off the assembly line, but is still awaiting regulatory approval.

From one to 10

From a purely technical standpoint, electric vehicles look promising for China's auto manufacturers. Although the country has more advantages in lithium-ion battery production, it still remains a big challenge, Chen Liquan said. He pointed out that the cost of lithium-ion batteries is still high and that their high defect rate has made them more costly to produce. What's more, the batteries are prone to malfunctions such as overcharging, high operating temperatures and periodic failures that can make them unsafe and increase the likelihood of an explosion, he said.

Besides the batteries, electric motors are a big problem as well, said Du Fangci, Assistant Secretary General of the China Association of Automobile Manufacturers. China lags behind the United States in electric motor technology by a decade, he said.

Amid the electric vehicle fad and the research and development surrounding it, China has established a unified technical standard for electric vehicle technology. Most auto manufacturers claim their products are 100 percent safe and ensure the high performance of their batteries and motors. But no national body exists to inspect and test the vehicles and their related components, Chen said. The auto industry has called for a unified national industry standard, but China does not seem ready for one, Du said.

"A premature industry standard may rule out other possibilities, since the whole industry is still too young and entails too much possibility," Du said.

Highly fragmented research and development efforts have also added a degree of instability to the progress of the electric vehicle industry. Such efforts require huge investment that no enterprise can afford on its own, said Guo Konghui, an engineering professor at Jilin University. He called on the state to take the leading position in the research and development of electric vehicles and their related components.