Saturday, April 11, 2009

China to lead in electric cars?

Following up on Jeff's post, there have been a few recent articles in the New York Times reporting on how China plans to become the world's leading producer of electric cars. Citing air pollution and the increased importing of foreign oil as two of the primary concerns that electric vehicles would address, the idea is also promoted as a key to China's international competitiveness. While it is unclear how this will help them address the problem that they've had with meeting the safety standards of the U.S. and European countries, it seems likely that they'll be able to make inroads as a supplier of batteries to those markets as increased production reduces the manufacturing costs.
The articles mention several of the factors that will both help and hinder the process. On the positive side, commutes in China are usually intracity, and often slow due to the traffic congestion. Many consumers are buying cars for the first time, and won't necessarily notice (or care) that the cars are less powerful than gasoline powered vehicles. And Chinese law makes it difficult for consumers to sue automakers over safety issues. To help with the adoption, the government is offering subsidies to the consumers of such vehicles, up to $8800 for taxi fleets and local governments.
There are several major challenges to overcome as well. The vehicles are predicted to be twice as expensive as conventional vehicles, and still significantly more expensive even with the maximum rebate. The majority of the people in urban areas live in apartments, and thus infrastructure will need to be created to allow the vehicles to be charged. And because much of China's electricity comes from coal, it will not reduce the pollution problems as much as it might otherwise. However, as we've learned in class, it's easier to clean up pollution at a few thousand point sources than it is to clean up millions of tailpipes. It's also easier to change the generating source later on than it would be to replace millions of vehicles if they were to wait on this.
Overall, it looks like China is very interested in making rapid inroads into this market, both at home and internationally. It will be interesting to see how Detroit responds to this new challenge, and whether it will even be able to.

Web sources:
China Outlines Plans for Making Electric Cars
China Vies to Be World’s Leader in Electric Cars


Laure said...

The shift towards electric cars in China can only be good news for the planet. It is true that, as of 2007, China was opening a coal power plant every ten days, but recent events might alter the energy mix in China.
EDF, the French leading electricity provider formed a JV last Summer with CNPG (China Guangdong Nuclear Power Holding Company) to construct and operate 2 nuclear power plants in Taishan (Guangdong province) in the 2009-2014 time frame. This is part of EDF's strategy to target China, the US, South Africa, and the UK as expansion markets.
Obviously, nuclear power raises other issues, especially in China where safety and quality standards, as Mark mentioned, are not up to par with Western countries' standards...

Mithun said...

I agree, this lateral shift towards PHEV technology, can only be a good news for the suffocating planet. China showing an active involvement in the hybrid market, will help reduce the CO2 contribution of not only china, but also US, as US is the the top most market on China's list. It is yet to be seen, if they are able to meet US safety standards, but if they do, we already know how competitive chinese products are at least in terms of cost.

kbmulloy said...

Detroit car companies seem worried after the last Detroit auto show where the Chinese unveiled their new PEV cars. Although the Chinese still have quite a way to go before they can pass US safety qualifications and they have yet to develop a car that doesn't look like a Japanese knock off, they're estimating in three years they will enter the US car market. So it's good for America that these new vehicles are going to lower our carbon footprint. If Obama's alternative energy program works out, then these cars may be a major stepping point for America towards becoming 'green.'


Garrett Groves said...

I'll be very interested to see who makes the next big leap in PHEV battery technology. Thirteen years ago, the battery for Chevrolet's first electric car weighed 1,000 pounds and added $40,000 to the ticket price. Today, the battery in the Chevy Volt will supposedly weigh only 400 pounds and cost consumers an extra $10,000. A significant improvement, but hardly satisfactory. The learning curve, however, is encouraging.

Like everything else, it seems that the next lithium-ion battery breakthrough in technology could be right around the corner. It's impressive that companies are already betting on a future population transported in electric vehicles, but the next generation li-ion battery is still the missing key.

David Wogan said...

Competition from Chinese companies might be what Detroit needs to get on the ball. Or the competition might be one of the last nails in the coffin for the American auto industry. Who knows? In any event, Chinese companies will most likely be selling us a lot of batteries for our cars.