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China's New-Energy Vehicle
Cover Stories Series 2011> China's New-Energy Vehicle
UPDATED: December 6, 2010 NO. 49 DECEMBER 9, 2010
Auto Alternatives
China counts on developing new-energy vehicles to maintain its auto-market leadership

E6 DEBUT: BYD's five-seat all-electric crossover, e6, is debuted at the 2010 Detroit Auto Show. The e6 is expected to enter the U.S. family sedan market by the end of this year (ZHANG JUN)

"New-energy vehicle makers will have to count on average consumers to achieve sales targets, that's why they should rev up marketing and allow individual consumers to experience advantages of such vehicles," said Luo.

By the end of this year, BYD will in total introduce 100 e6 vehicles into Shenzhen's taxi fleet.

The e6 now runs at a range between 160 km and 220 km per day, and can meet the demand for taxi operators in Shenzhen—single-shift taxi drivers in Shenzhen generally drive no more than 250 km a day, Li Guanghan, Vice General Manager of Pengcheng Taxi told China Securities Journal.

Li, confident about electric vehicle's market prospects, said the cost for electric taxi operation stands at less than 25 percent of that for gasoline-fueled taxis. This power efficiency will allow a taxi company to profit from the e6, which costs 179,800 yuan ($27,038) per unit—government subsidies at central and local levels will wipe 120,000 yuan ($18,045) off the original price—in the next three years, he said. Taxis in China usually cost around 80,000 yuan ($12,030).

The Shenzhen Municipal Government plans to have 24,000 new-energy vehicles and 200 charging stations by 2012.

While BYD targets utility buyers and hopes demonstrations through taxi operation in Shenzhen will help the e6 enter the U.S. family sedan market, Chery and Zotye encourage potential buyers to experience driving their electric cars through leasing programs.

Chery charges a daily rent at 90 yuan ($13.5), while Zotye launched 100 all-electric cars at a monthly rate of 2,500 yuan ($376) on January 21 of this year. Based on market recognition accumulated from the half-year trail operation, Zotye sold China's first all-electric car, the 5008EV, to an individual buyer, one of Zotye's first group of lessees on July 26.

Unlike BYD's plug-in hybrids and all-electric cars that rely on sufficient charging facilities, Zotye only sells vehicles and leases battery under a battery exchange system advocated by Better Place, a California-based company aiming to produce a market-based transportation infrastructure that supports electric vehicles.

Luo prefers leasing to utility buyers to promote new-energy vehicles. "Similar to overseas auto leasing financing services, new-energy vehicle leasing at cheap rents will bring consumers closer to being impressed by the performance and cost advantages of such vehicles," he said.

Speed bumps

In addition to high prices and a shortage of sufficient charging facilities, the yet to be improved maximum range per charge of electric cars, the lifespan of storage battery and a lack of industrial standards have not only deterred individual buyers, but also prevented the industry from growing fast.

Electricity charging convenience and high-intensity batteries will be two solutions to the limited range of electric cars.

Shenzhen has built China's most intensive charging network, which still fails to meet demands. The e6 taxi drivers in Shenzhen have turned down passengers who want to travel more than 70 km away and Pengcheng Electric Taxi, a joint venture between Pengcheng Taxi and BYD, has to operate on single shifts because Shenzhen has only two charging stations now, said Li.

The taxi company has built two charging stations themselves, but they cannot afford building more due to high land costs.

The government is expected to support and subsidize construction of charging stations. Large state-owned enterprises, such as CNOOC, National Grid and South Grid, have all participated in the planning and construction of charging stations nationwide.

In addition to facilitate construction, China has to make breakthroughs in key technologies for batteries, electric motors and electric control systems.

Efforts should be made to increase battery intensity and lifespan, cut its size and weight and slash its cost—batteries now usually account for half of an electric car's cost.

At present, more batteries are needed in order to increase the range, which could add to a model's weight and in turn consume more electricity and affect the extended range. The e6, for example, is as heavy as 2.35 tons, and its battery weighs nearly 1 ton.

Ouyang Minggao, an EV expert with Tsinghua University in Beijing, advocated lowering the threshold of electric vehicle development and developing small models to cut material and manufacturing costs. Zotye, for instance, introduced a model powered by lead-acid batteries, which is much cheaper than mainstream lithium battery. The model was priced between 40,000 yuan ($6,015) and 50,000 yuan ($7,519), targeting rural consumers.

Also, with an eye on facilitating battery exchanges at charging stations and national promotion of electric cars carrying different brands, it's imperative to establish a set of unified standards for battery products and services such as charge couplers and battery recycling.

According to MIIT official Lu Xi, the ministry is cooperating with industrial associations to work on national standards on charging stations, charging poles and charge couplers. Charge couplers' standards in particular are expected soon, he said.

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