Global brands go local for new-energy subsidies

The locally made Denza by BYD Daimler premiered at the Beijing Auto Show. Photos provided to China Daily

With the current government policy limiting electric vehicle subsidies to locally produced brands, foreign carmakers are turning to localization and innovative business models.

Shenzhen BYD Daimler New Technology Co Ltd - a joint venture between the German giant and China's top electric vehicle maker - announced to receive orders for its all-electric Denza in Beijing on May 17. Eligible for the national subsidy, its price to buyers is 255,000 yuan ($40,800).

Debuted globally in April at the Beijing Auto Show by BYD Daimler, the Denza also received market entry permission in Shanghai, so enjoys not only national subsidies, but also free license plates.

The venture is now seeking to qualify for subsidies from the Shanghai government to further lower the Denza's price.

Lin Mi, vice-president of BYD Daimler, said that based on BYD's experience in new-energy public transportation, Denza will sell "solutions" to customers including charging facilities.

"As an innovative company building new-energy vehicles, we will also be innovative in marketing and sales strategies, for example a trial on an e-commerce platform," said Lin.

BYD Daimler has already signed an agreement with power and automation technology group ABB for supplying direct-current fast chargers over the next six years that is expected to result in the world's largest fast-charging network for electric vehicles.

The wall-mounted chargers will have a number of innovations designed for user convenience and safety, such as a mobile app that allows cloud-based remote monitoring and control of charging sessions, said the companies.

The chargers will be sold through Denza dealerships along with the vehicles and priced at 10,000 yuan for seven-hour chargers and 20,000 yuan for fast charging units that need only three hours.

"Charging facilities will be one of Denza's competitive edges," said Lin.

Another German automaker BMW has also made headway in localization of electric vehicles in China.

Earlier in May, BMW Brilliance celebrated the first anniversary for its locally developed Zinoro brand with the lease of the first model 1E.

As the first e-drive sport activity vehicle in the country, the 1E is also the only premium new-energy vehicle available only for rent or leasing.

"The 1E comes with a worry-free solution, which means we are opening the door of premium e-mobility to the public," said Olaf Kastner, president and CEO of BMW Brilliance.

The 1E costs 400 yuan a day or 7,400 yuan a month with a three-year lease. The price includes license plate registration, insurance and a package of services.

Built in Shenyang, Liaoning province, the car is listed in both the national electric vehicle and Beijing local catalogs.

"As well as individuals, many companies and institutions are showing interest in renting the new vehicle," said Kastner.

Although yet to be eligible for a free license plate in Shanghai as an imported brand, US electric carmaker Tesla is also considering the rental business.

Yang Guoping, chairman of Dazhong Transportation Group, said his Shanghai-based company is in talks with Tesla, but did not disclose further information.

AA Yongche, a company renting cars by the minute, announced a 100-unit order of the Tesla Model S, which would make it one of the first Chinese buyers.

The firm said the rental price for the Model S will be 1.5 yuan per minute, "making the Tesla close to who wants the experience".

Shanghai-based eHi Auto Services Co also said it has ordered hundred units of Model S for its local fleet.

Yongche.com has approached Tesla for a future order of 10,000 Model S vehicles, while China Auto Rental, the leader in the country, also announced a possible cooperation with Tesla.

Zhang Zhiyong, an auto industry analyst, said it will be a favorite cooperation for Tesla, as the leasing business will help it avoid the challenges in distribution network construction.

"More importantly, without paying 700,000-plus yuan, more consumers interested in the Tesla can easily experience the Model S," said Zhang.