Hybrid cars rush to market, electric race towards future

The European Union will require the carbon dioxide emissions of new cars sold to be reduced to 95g per kilometer by 2020, from its current 130g per km, according to a new draft law approved on Wednesday by the European Parliament's Environment Committee.

A total of 91 new energy vehicles are displayed at the on-going Shanghai auto show 2013. Among them, 56 models are made by international carmakers, while there are 35 Chinese carmakers.

Hybrid luxury and super cars rush to meet standards

International luxury carmakers tend to employ hybrid technology to reduce emissions. German luxury carmaker BMW showed its Active Hybrid concept cars, while Mercedes displayed BlueEfficiency technology at the ongoing Shanghai auto show 2013. Audi and Lexus drove a bit of further with their mass production models Audi Q5 hybrid and Lexus GS300h and ES300h.

"On the large cars and luxury cars…many markets force emission standards they have to hit. Hybrid enables some to hit the emission standards. With technology, which is relative, you will establish a hybrid engine," Robin Bew, chief economist at The Economist, told chinadaily.com.cn at the Shanghai auto show forum.

Super carmakers who seldom consider emission control joined the hybrid rush this year. Italian's newly launched LaFerrari and Lamboghini Veneno are the hybrid pearl on the super sports crown. German Porsche also has the Panamera S E-Hybrid ready, while British carmaker Aston Martin will make its super sports car hybrid on demand.

The driving force may be the "super credits" stipulated in the newly approved draft law: Carmakers earn "super credits" when they produce cars that emit less than 50g of CO2. Within each manufacturer's "balance", each of these extra clean cars would count as 3.5 cars that failed to meet the regulation in 2013. The credit will fall to 1.5 from 2016, and 1 from 2024.

The draft law will exempt carmakers producing fewer than 1,000 cars a year from the legislation. So Rolls-Royce and Bently may happily use their fuel-guzzling engine without worrying about carbon dioxide emissions.

"Hybrid is a mechanism for a heavy vehicle, such as luxury cars or SUV, to pulling down the carbon emission. It is a strategy which works for car manufactures on niche big vehicles, but I'm not sure it is a strategy for reducing carbon emission for overall," said Bew.

Fully electric cars target a cleaner future

Volvo Car are offering mature hybrid cars, while also developing pure electric concept cars.

While the automobile giants do not believe that fully electric technology will pay back in the near future, their joint venture brands or sub-brand will still go with electric, including BMW-Brilliance Automotive's Zinoro, Daimler-BYD's Denza, and BMW's Mini E and Mercedes SLS AMG Electric.

There are clearly problems with fully electric vehicles, around the infrastructure necessary for those to run, according to Bew.

At this moment, the customers do not see good electric products and do not want to buy, Albert Lam, chairman and group CEO of Detroit Electric Holdings, told the reporter in an exclusive interview during the Shanghai auto show.

"So you have limited market and limited sales. When the government sees people have much more interest in electric cars, and there are good electric cars in the market, they will build infrastructure," Lam said.

US luxury sports car maker Detroit Electric, a new player, bet its future on electric power in the high-end segments. The company offers only fully electric sports cars, and gives out a charging pile at purchase.

Fully electric power guarantees zero car emissions, as well as swift acceleration, quick response, and quiet engine operation. This has been seen in the fully electric sports cars including Mercedes SLS AMG Electric and Mini E.

"The pure electric motor is very small, and efficient in delivering a very good performance," said Lam

Chinese carmakers are generally fans of pure electric engines. Giant Chinese carmakers SAIC Motor, BAIC Group, GAC Group together with BYD are promoting and selling electric cars.

GAC Group's General Manager Zeng Qinghong said the route for GAC is "to start from hybrid and towards fully electric. Hybrid technology is more mature and more cost-effective."

"After the whole fully electric system, including battery, electric motor, and electric control, becoming mature and cost-effective, the direction will be fully electric vehicles in the future," said Zeng.

China has realized that, with such a large domestic car market, if the country can get electric vehicles to work, China will have the dominant global position, according to Bew.

"The Chinese government has development in infrastructure. It is development for the future, and it is development for the environment. It is good to have this future technology. To bring you from one point to another in a city, if you can ride 100 km, it's enough," said Hans-Peter Hauer, publisher and editor-in-chief of Motor Journal.

"The Chinese government is implementing very good policy. The policies cover financial and permit," said Lam.

In Shanghai and Guangzhou, customers who buy a fully electric car will get a car plate without charge and will not need to wait in the plate lottery process. Beijing, where car buyers have to wait for plate lottery, is reported to adopt this encouraging regulation this year.

"We haven't seen a particular successful way in any market yet," said Bew.