Multi-pronged efforts needed to pave way for new energy cars

Intense government-led promotion has introduced more and more new energy vehicles (NEVs) to China's roads, however, experts say, this is not enough.

Though great headway has been made in the electrification of public transportation, including buses and taxis, the NEV industry must look beyond these comfortable government-led fields and jump into the wider private-car market.

PREFERENTIAL POLICIES, BOOMING SALES

NEV promotion was included in the government's work report, which was delivered by Premier Li Keqiang at the annual parliamentary session this March, as the perennial issues of pollution control and emission reduction became hot topics against the backdrop of the smoggy Beijing winter sky.

Since the report, efforts have intensified to ensure that more people can access these environmentally-friendly cars.

Domestic NEV makers have bolstered production capacity while the central government and local administrations have devised more measures to make NEVs a more attractive purchase.

Chinese car makers produced 5,191 NEVs this August alone, 11 times more than the same period last year. For the first eight months of the year, production more than quadrupled to hit 31,137.

According to a plan jointly released last month by seven influential departments -- including the Ministry of Industry and Information Technology and the National Development and Reform Commission -- the public transportation systems in the heavily polluted cities of Beijing, Tianjin, and Hebei Province will absorb 20,222 NEVs into their fleets from 2014 to 2015.

By the end of 2015, NEVs should account for no less than 16 percent of all buses in those regions, the plan said.

Local governments have also shown a commitment to the cause.

According to a new policy, effective as of earlier this month, in Wuhan City in central China's Hubei Province, the city will grant NEV buyers the same amount of purchase subsidies as state subsidies. These double subsidies translate to discounts of as much as 120,000 yuan (19,540 U.S. dollars).

On the back of government support, NEV sales saw strong growth this year even though China's auto sales slowed.

Statistics show that in the first nine months of the year, traditionally-fueled auto output stood at 17.22 million and sales at 17 million, up 8.1 percent and 7 percent respectively. However, growth was significantly down from the same period last year.

Bucking a broader trend, 38,163 NEVs were sold, 2.8 times the volume seen during the same period last year.

TOWARD THE FUTURE

Noticeable increases in NEV sales notwithstanding, experts have cautioned against complacency, calling the progress "long-hanging fruit".

At present, NEV use has generally been promoted for public transportation and by government organs. It needs to be made more appealing to private consumers.

Vice president of China Machinery Industry Federation, Chen Bin, said that NEVs were not likely to replace traditional cars before the battery plaguing NEVs were solved.

Besides, the price of NEVs, despite the attractive double subsidies, continue to put off buyers.

Potential, albeit price sensitive, car buyers are also concerned about inadequate NEV infrastructure. One Wuhan citizen, identified by the surname Chen, said that he would not consider a NEV before more supporting electric facilities were built.

Currently in Wuhan, there are a mere four charging stations with 167 charging piles. The city plans to invest 44 million yuan by the end of the year to finance another 1,280 charging piles.

Other than government funds, social capital should be encouraged to play a role in making NEV use more attractive, said Zhang Guofang, vice dean of Wuhan University of Technology's School of Automotive Engineering.

Zhang proposed NEV rental -- a "try before you buy" project -- as a way of introducing the public to the vehicles.

Last year, nearly 18,000 NEVs were sold in China.

China plans to add around 300,000 NEVs to its public transportation fleets by the end of 2020.