Automobile, page 33

Issue 526, June 27, 2011

Translated by Zhang Wen

Original article [Chinese]

It’s a year since China launched its trial to subsidize the sale and production of vehicles powered by alternative fuels - those early aspirations seem to have been quietly forgotten.

 Only a small number of new energy vehicles have been sold, and most of the 10 billion yuan in subsidies promised by the government are still waiting to be distributed.

China’s ‘Ten Cities, Thousand Vehicles Program’, launched in 2009, has now been expanded to 25 cities, but industry expert Wang Binggang says that high prices, underdeveloped technology and the shortage of charging stations mean that these cities have far fewer electric cars than planned.

In Beiing for example, 50 electric cars that were launched for the Olympics were taken out of service last year. Other pilot cities are falling short on their ambitious sale targets – Shenzhen was aiming for for 25,000 by 2012; Hangzhou planned 20,000; Shanghai, Hefei, and Changchun each wanted to sell more than 10,000 to 20,0000 car sales.

Government departments and state-owned enterprises, which had been building the hype, have quieted down. Manufacturers, such as Nissan, General Motors Chery and Changan, who had been positioning themselves to cater to the new market, seem to have shifted focus.

One employee as Chery said the company has found that pilot cities lack charging stations and qualified sales personnel.  Shenzhen have more charging points that any other city in China – some 2,000 – but that’s less than a sixth of its target for 2012.

Regional protectionism is a major reason for the delays in meeting targets across the country, particularly for buses.

“Just take a look at the pilot cities, you can see that the alternative energy buses that the government purchased are mostly made by local car companies,” said an employee at a bus manufacturer.

Investment in the industry has shrunk this year and many problems have emerged, says Li Shengmao, a senior researcher with China Investment Consulting. But others say that it’s good for that the initial frenzy has died down.

“There was too much speculation […] when it dies down, it will squeeze some speculators out,” says Wang.