It’s no secret that China has ambitious plans to develop its automotive industry. Now, the New York Times reports government and industry leaders have set their sights on making China a leading supplier of electric and gasoline-electric hybrid vehicles to markets worldwide, and doing so in just three years.
If such a thing is possible, China is in a unique position to do so. Both the country’s automobile industry and its driving public are relatively new to the game, making the adoption of newer technology arguably somewhat easier than it would be in countries with a more established automotive culture, tradition, and infrastructure.
Key points to consider:
China is already heavily invested in the battery business, and carmaker BYD showed a plug-in hybrid model at the Detroit auto show in January. BYD reportedly has some 5,000 engineers devoted to battery development, and is said to be in negotiation with at least one U.S. manufacturer to supply it with batteries.
Electric companies have been ordered to establish electric car charging stations in major cities.
Most driving in China is limited to urban areas, with and commutes are relatively short, making the limited range and lower top speeds of most electrics less of an issue.
Eighty percent of Chinese car buyers are first timers, and unlikely to have preconceived notions about what the driving experience should be like. An electric car, even a slow one with limited range by our standards, might be just fine for a driver unaccustomed to anything else.
All this, along with government backing and subsidies of up to $8,800 for fleets and governments buying electric vehicles, could speed development and reduce battery costs. This momentum will help China realize its goal of producing 500,000 hybrid and electric vehicles annually by 2011, compared to 2,100 last year.
The rapid rise of global competition could add significantly to the challenges facing the U.S. auto industry, though it may also create opportunities.
--Jim Travers
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