Thursday, April 29, 2010

"Price competition will drive Electric Cars mass market. Chinese companies will have yet to prove that they can claim auto brand properties, but cost wise they are out of competition. Once thousands of engineers working in China on lithium batteries, safety and design of Electric Cars convert quantity into quality this market will take off in iPod fashion."
GM Volt:




China’s automotive fleet is rapidly expanding. Last year the Chinese market overtook the US to become the world largest automotive market, and sales are expected to continue to expand 55% to 13.55 million passenger vehicles per year by 2015.
The country is currently the third largest consumer of oil in the world with all of Europe a close second and the US number one. As China’s volume of vehicles continue to increase along with economic growth so too will their oil demand. China will pass the US and become the world’s largest oil consumer within a few years and thereafter continue to expand consumption. China is already importing more than 50% of its oil.
Fortunately, there is already great demand among the Chinese population for electric cars. GM plans to sell the Chevrolet Volt there and several Chinese automakers including BYD have already begun to sell electric cars in the country. Nissan is considering selling the LEAF in China as well.
A recent poll performed by Ernst and Young revealed that a shocking 60% of Chinese consumers are interested in purchasing a plug-in car. This is five times the rate in the US or any other country.
The Chinese government has also expressed great interest in promoting plugin cars, to help stave off foreign oil dependence. The government has already designated 20 cities to deploy extensive plugin charging infrastructure, and have set a production goal of 500,000 “new energy” cars by 2015. A massive series of incentives and subsidies to encourage electric car adoption will be announced in July.
Despite all the obvious benefits, one leading Chinese auto executive isn’t so sure this is a good idea.
Huang Xiangdong, who is vice president of Guangzhou Automobile Group Corp that has ventures with Honda, noted that 83% of Chinese electricity is produced by burning coal.
“Battery electric vehicles and plug-in hybrids do not save more energy than conventional cars on a well-to-wheel analysis,” said Huang. “We think in China it’s not the right time to promote pure electric vehicles.”
While reducing CO2 production is important to some, as in the US, concerns of oil dependence loom large.
“There are broader benefits of electric vehicles, such as reducing the dependence on foreign oil,” Henry Li, general manager of BYD’s auto export trade division.
Irrespective of any naysayers, clearly the Chinese electric automotive market is poised to become extremely large and profitable to automakers who are successful there. As the first foreign firm to get a foothold there, GM has much to benefit from selling electric cars there, and much of the company’s future profit could be tied to it.
“China is currently a larger market by volume than the US,” says GM spokesperson Tom Wilkinson
“It is probably our second or third most important market and growing faster than either the US or Europe,” he says. “In short, it is pretty important.”
So although we’d all like to see the exciting new Chevrolet Volt MP5 concept go on sale in the US, it should be fairly apparent why GM chose to unveil it in China. In fact it was actually produced in partnership with venture partner Shanghai Automotive Industry Corp. Anyway the MPV5 according to GM spokesperson Dave Darovitz “is a concept only.”
“No plans for production,” he adds.
Source (Detroit News) , (photo from Autoblog)"

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