Simanaitis Says

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CHINA’S EV MARKET

WHAT WITH gasoline prices at historic lows, BEVs (Battery Electric Vehicles) and HEVs (Hybrid EVs) have been glued to U.S. showroom floors. Not so in China, though. A series of government actions, central, regional and local, have fostered BEV growth. Not without oddities, however. I learned about this at the SAE 2016 Hybrid and Electric Vehicle Technologies Symposium, held February 9 – 11, in nearby Anaheim, California.

Program

Yunshi Wang of the University of California, Davis, spoke about “China’s EV Development Status, Government Policies and Issues on that Market’s Rapid EV Deployment.” Here are tidbits gleaned from his presentation and from some other research.

BEV sales in China for 2014 were up an astounding 334 percent over the year before. This is at least in part because previous years’ totals were so meager. However, there’s also an abundance of 90 different BEV models available in the Chinese market, everything from the astoundingly exclusive and, at a base price of Yuan 734,000 ($110,100), astronomically expensive Tesla to an array of micro EVs, which make up the vast majority of this growth.

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ZD Panda EV. Image from chargedevs.com.

The ZD Panda EV is a popular Chinese micro EV. The car is a joint venture of Geely, which these days includes Volvo as a subsidiary, and Kandi Technologies, a Chinese manufacturer of BEVs, all-terrain vehicles and go-karts. A city car, the Panda goes no more than 80 km/h (50 mph) and, once various government spiffs are applied, costs less than $7700.

Chinese subsidies for BEVs are substantial and varied. Wang noted the central government contributes an equivalent of $11.4 billion annually, compared with the U.S. federal government’s figure of $865 million. The Chinese pot is enriched by regional and local subsidies, again considerably beyond levels of those offered in the U.S.

Not that this hasn’t been accomplished without hanky-panky: Hitherto, 88 percent of these subsidies went to converted commercial vehicles. There has been a huge market for these converted minivans, some displaying crafty bookkeeping with a single battery pack credited to more than one conversion. Others have employed particularly shoddy fabrication that has BEV proponents worrying about durability (think hoverboard batteries).

Other BEV incentives include an exemption from the usual purchase tax, 10 percent of the car price; a subsidy for installation of home charging equipment and, a critical spiff environmentally, exemption from city schemes for reducing air pollution.

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Beijing’s Tiananmen Square. Image from theguardian.com.

Beijing, for example, started odd/even license rationing within its 5th Ring Road with the 2008 Summer Olympics, thus effectively keeping half the cars off the street on any particular weekday. Well, not exactly half: White plates, typical of military and other influential types, are free of the restriction, as are BEVs.

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In 2013, Chinese military plates became less likely to appear on cars deemed luxuriantly decadent. Image from “Chinese Plates.”

Car purchases in China aren’t restricted per se, but the purchase is useless without a plate. There are two distinct schemes for allotting plates, the Beijing lottery and the Shanghai auction. Other regional and local agencies accomplish this with a 50/50 auction/lottery. In any case, a new BEV gets its plate free of any such hassles.

Shanghai plate auctions have been active since 1994, with a recent average winning bid of Yuan 80,686 ($12,100). A prospective new car buyer there has a 5.2-percent chance of success in an auction. By contrast, Beijing’s lottery has been in effect since 2011, with a 0.49-percent success rate. Both have been not without skullduggery.

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Image from china.org.cn.

In 2015, BEVs made up 15.6 percent of Shanghai’s new car market. Their Beijing penetration was only a third of this, at 5.2 percent. One reason for this is the nature of driving in the two megacities. The average Shanghai driver travels perhaps 26 km (16 miles) each day. In Beijing, it’s 40 – 50 km (25 – 31 miles).

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An EV vending machine. Image and video from autoblog.

Another variation is avoiding ownership entirely through rental on demand. In Shanghai, Beijing and other Chinese cities, there are multi-story car-rental kiosks, sort of EV vending machines. A ZD Panda EV goes for around $3.25 an hour.

In January 2016, U.S. Department of Energy Secretary Ernest Moniz said that sales of electric vehicles in the U.S. may not reach one million until 2020 (a goal that President Barak Obama had set for 2015). In his SAE remarks, Yunshi Wang observed that by 2020 China will have more than 280 million vehicles on their roads. It would be pessimistic to guess only one million of these would be BEV sales that year. ds

© Dennis Simanaitis, SimanaitisSays.com, 2016

 

 

 

2 comments on “CHINA’S EV MARKET

  1. Gene Herbert
    February 13, 2016

    Sounds like the ideal environment for G.M.’s Volt.

  2. Mike B
    February 13, 2016

    Volt is a hybrid – probably not competitive with BEVs in that market. Bolt, maybe, though it would be high-end, with only things like Tesla above it. Spark, probably better but given the market maybe mid-range (it’s tiny for us but a class or 2 up from a glorified-golf-cart micro).

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