Looking overseas for new-energy vehicle ideas

A child examines a car at an automobile show in Guangzhou, the capital of Guangdong province.[Photo/China Daily]

The Ministry of Commerce is encouraging domestic auto companies to utilize foreign investment and technology to boost their development of energy-saving and new energy vehicles, a senior official said.

The ministry will introduce preferential fiscal and taxation policies to encourage auto companies to import new energy vehicles' key components; promote international technology cooperation such as outsourcing, joint development and application for patents overseas and support eligible companies to become listed overseas to attract foreign capital, diversifying their usage of foreign investment.

As the national authority of foreign investment, the Ministry of Commerce will work out more and better methods of utilizing foreign investment to implement the country's 12th Five-Year Plan (2011-15) of developing new energy vehicles, which has become a strategic emerging industry, according to Qiu Lixin, deputy director of the ministry's department of foreign investment administration, on Nov 9 at the 2013 China International Green Innovative Products and Technologies Show, which was held in Guangzhou from Nov 8 to 11.

Qiu said China's new-energy vehicle industry is still in its infancy, with sagging market demand, a lack of key technologies, poor research and development, and restricted industrialization and commercialization in the sector.

"There is a big gap between China's new-energy vehicle industry and those in Japan and the US," she said.

According to the State Council's development plan (2012-20) of energy-saving and new-energy vehicles, the production and sales of electric vehicles and plug-in hybrid electric vehicles should be increased to 500,000 by 2015 and 5 million by 2020.

This is a difficult task for the industry, Wu Zhixin, vice-president of the China Automotive Technology and Research Center, pointed out at the seminar on the development of energy-saving and new-energy vehicles.

As is shown by Wu's center's survey, 39,768 new energy vehicles had been put into use by March in the 25 pilot cities appointed by the central government since 2009. But the number is still far from the goal set for 2015.

"Most of these vehicles are used in the public sector. Although private purchases are subsidized in six of the 25 cities, individuals' desire to buy new-energy vehicles is low. For example, the sales of private new-energy cars are zero in Changchun, one of the six cities," Wu said.

He revealed that the government will soon announce the new list of pilot cities this year to combat pollution, especially in the Beijing-Tianjin-Hebei region, Yangtze River Delta and Pearl River Delta.

"The promotion will include more cities and hopefully raise the total number of new energy vehicles put into use to 300,000," Wu said.

To speed up the industrialization of new-energy vehicles, the country has launched 25 technological innovation projects and will allocate 4 billion yuan ($655 million) from central finance as a subsidy, Su Bo, associate minister of industry and information technology, said during the Green Industry Conference 2013 held in Guangzhou from Nov 7 to 9.

China provides buyers of new-energy vehicles with a bigger subsidy than any other country, according to Wu from the China Automotive Technology and Research Center. For example, the total subsidy for an electric car in China received from the central government and the local government is about 120,000 yuan, double that in the US.

The auto companies and component manufacturers from home and abroad who attended the seminar during the 2013 China International Green Innovative Products and Technologies Show in Guangzhou reached a consensus that it is a must for the country to develop energy-saving and new-energy vehicles and that it is a timely moment now for them to transform and upgrade the auto industry.

Zhang Xiyong, acting general manager of BAIC Motor, said his group is planning to invest 5 billion yuan in developing new-energy vehicles over the next five years, with 30 percent of annual research funding allocated to new-energy vehicle projects.

"The shortage of fossil energy, the rising of oil prices and the thirst for efficient secondary energy have made countries all over the world to make the development of new-energy vehicles a national strategy," Zhang said.

"The deteriorating air quality in China has made it an urgent task to promote the usage of new-energy vehicles," said the acting general manager of the corporation based in often haze-shrouded Beijing.

BAIC Motor had sold 5,000 new-energy vehicles by 2012 and its production capacity is currently 40,000 per year. Zhang revealed that sales in 2013 are expected to hit 3,300, and the company will endeavor to bring the production capacity to 200,000 annually by 2017.

SAIC Motor, one of the country's three biggest auto groups, has also set an ambitious goal of taking 20 percent of the domestic market of new energy vehicles by 2015.

Gan Pin, executive director of the group's department of new-energy vehicle and technology management, pointed out at the seminar in Guangzhou that the tightened national standards on the average fuel consumption for auto companies is another big drive for the companies to develop energy-saving and new-energy vehicles.