Simanaitis Says

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CHINESE AUTO TIDBITS

I AM FASCINATED by the People’s Republic of China and its relationship with the automobile. One of the longest lasting Communist economies in the world also has a rich heritage of capitalist entrepreneurs. Its 1.38 billion people include those living in agrarian simplicity and others in soaring urban environments. And an increasing number of them all drive cars.

Not without complications and curiosities. I have commented on China’s BEV (Battery Electric Vehicle) market, its automotive style and its license plate lotteries, auctions and skullduggeries. Here, I collect tidbits from two recent issues of Automotive News.

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The article “In China, Carmakers Keep the Faith” by Print Editor Richard Johnson appeared in Automotive News, May 16, 2016. He recounted that, to some extent, the blush is off the rose of China’s burgeoning auto market. To counter a slump in new car sales, for example, the Chinese government instituted a 50-percent reduction, for one year only, in the sales tax on vehicles with 1.6-liter or smaller engines. This, despite the fact that larger crossover vehicles are the buyers’ choice at the moment.

On the other hand, with a population of 1.38 billion, the term “slump” is a relative one. At an Automotive News World Congress in 2011, Johnson noted, a Chinese auto executive “predicted that new-vehicle sales in China would more than double to 40 million units by 2020, including 30 million passenger vehicles.

Concerning this annual sales projection, Johnson said, “What a pipe dream that was, right? Or was it?”

Passenger car sales in China rose 7.3 percent in 2015 to 21,146,300; it’s projected to rise 7.6 percent in 2016.

Said Johnson in a compelling tidbit, “We don’t quite grasp that 41 percent of GM’s sales are in China.”

Here, I paraphrase GM president “Engine Charlie” Wilson’s 1953 comment: “What’s good for China is good for GM.”

In fact, what “Engine Charlie” actually said at his U.S. Secretary of Defense confirmation hearings was rather more nuanced. When asked about business versus government interests, he said, “… for years I thought what was good for our country was good for General Motors, and vice versa.”

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Data from Automotive News, May 2, 2016; source: China Association of Automotive Manufacturers.

Another article, “EV Reality Check” by Hans Greimel and Yang Jian, appeared in Automotive News, May 2, 2016. It described oddities of China’s push for electrification of its passenger car fleet.

The Chinese government combines BEVs and PHEVs (Plug-in Hybrid Electric Vehicles) into one category, NEVs, New Energy Vehicles. Note, conventional hybrids, like the non-plug-in Toyota Prius, are not included. What’s more, to qualify, a PHEV must be capable of traveling 50 km/31 miles in EV mode.

The incentives are significant: a subsidy equivalent to as much as $8475, an exemption from purchase tax and—all important in urban areas—a guarantee of a license plate.

This exemption from license plate lottery or auction is significant in another way: It locks the driver into a New Energy Vehicle future. The plate can be transferred only to another NEV purchase.

The Chinese infrastructure is only partially ready for BEVs. The Automotive News article gives an example: A university professor of ancient Chinese literature paid the equivalent of $18,012, after spiffs, for his EV200 hatchback built by Beijing Automotive Industry Co.

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A Beijing Automotive Industry Co. EV200. Image from baicic.com.

The BAIC EV200 has a claimed range of about 125 miles, which drops to perhaps 60 miles in winter. Also, in Beijing’s sweltering summer, the professor prefers not to degrade the car’s range through use of its air conditioning.

The professor’s apartment block has no EV charging, but he’s fortunate in living on the second floor: To recharge his EV200 at home, the professor drops an extension cord out a window of his apartment. If he’s lucky, he might recharge his car at work, where Peking University, a major research institution of 30,000 students, has a single eight-car charging station.

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Last, there are urban legends that are slightly unnerving to NEV drivers and their neighbors: Quoting the professor: “Some people say there is radiation from the battery, but I’m not sure if that’s true.” ds

© Dennis Simanaitis, SimanatisSays.com, 2016

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