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UPDATED: August 1, 2014 NO. 32 AUGUST 7, 2014
Green Drive
In the face of environmental degradation, a replacement needs to be fostered for gasoline automobiles
By Deng Yaqing

To name but two examples, businesses can earn a profit by charging customers for battery recharging, maintenance and car parking, as well as the timeshare leasing of new-energy cars to maximize their value.

In addition, the State Council's guidelines require different regions to follow a set of unified industrial standards for new-energy cars and related charging facilities, and prohibit them from acting on their own whims, effectively cracking down on protectionism.

Prior to the introduction of the new guidelines, local governments had launched different versions of new-energy promotion list and subsidy standards. Some of them tended to gear fiscal subsidies toward only car models produced by local manufacturers and exclude models they were not prepared to manufacture, a practice that has substantially bred protectionism.

"Only competition can propel technological progress, quality elevation and cost reduction. Local protectionism has hindered the long-term development of local manufacturers and undermined consumers' interests," said Su Bo, Vice Minister of Industry and Information Technology.

No easy job

At the end of 2013, there were a total of 250 million oil-energy-dependent motor vehicles in China, which had together sustained an enormous petroleum processing and circulation industry comprising 2,600 refined oil wholesale businesses, 110,000 retail businesses and 100,000 gasoline stations.

Given that, it's difficult for the domestic auto industry to veer away from the existing oil-driven development path. In stark contrast to the matured fuel oil car sector, the new-energy car sector is still in the growth stage, with every link in the chain being weak and feeble.

First, construction of necessary facilities still needs to be carried out. "Now, the biggest obstacle in the way of new-energy car popularization is the difficulty in getting cars recharged," said Wang Binggang, an expert on energy conservation, arguing that a great number of urban consumers have the enthusiasm to purchase electric cars but don't know how and where to apply for the installation of charging poles.

According to a survey by the Beijing Municipal Government in 2013, roughly 40 percent of consumers gave up the idea of buying electric cars because there were no charging poles in their communities, and only 20 percent of electric car purchasers had charging poles installed in their neighborhood.

To solve the problem, the State Council's guidelines have made plain the regulations concerning the land supply for the construction of charging facilities and required to incorporate these projects into city planning.

Battery technology is another tough nut for Chinese electric car manufacturers to crack. At the current stage, the average endurance for common electric vehicles is 200 km, a fact that has further highlighted the urgency of intensifying construction of charging stations.

As Huang Zhen, a professor at Shanghai Jiao Tong University, pointed out, an array of technological challenges have not yet been surmounted such as long charging times, short battery endurance and high production cost.

Dong Yang, Secretary General of the CAAM, said that Chinese new-energy car makers should take the initiative to introduce advanced technologies from other countries and carry out cross-industrial and cross-border cooperation.

In effect, the core of a new-energy car is the battery. The government will focus on propping up frontrunners in this trade to make breakthroughs, Vice Minister Su said.

In addition to infrastructure construction and technological barriers, the seeds for a trend of driving new-energy cars need to be planted in society. Liu Gang, a professor at the Institute of Economics of Tianjin-based Nankai University, suggests that the government should play an exemplary role in using new-energy cars.

According to a recent State Council circular, central government organs and public-service institutions included in the new-energy car promotion plan should ensure that new-energy cars account for no less than 30 percent of their total car purchase volume in 2016, and the percentage will be increased year on year.

Now, China's new-energy car market is in the midst of a painstaking start-up stage. "Lifting its sales to 500,000 units in 2015 represents an arduous task," said Wang, the energy conservation expert, claiming that if the goal can be achieved, China's new-energy car industry will awaken from its current lull.

"Then, the goal of selling 5 million units in 2020 will be in sight," he added.

Email us at: dengyaqing@bjreview.com

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