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Chery Electric Cars

SPEAKING FREELY

China’s electric car revolution

By Ryan Rutkowski

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.

With 17 of every 1,000 people in China owning a car in 2008, compared with a global average of 120 per 1,000 persons, the country is already the second-largest auto market in the world. It is expected to exceed the United States to become the largest auto market by 2030. While this astounding growth is great news for the auto industry, it is disastrous for the world’s most populated country.

China is running up against environmental resource constraints

and an increasing dependence on foreign oil from Africa, Russia, and the Middle East. The country is already the top emitter of carbon dioxide and experiences widespread air pollution in urban centers.

The good news is that the Chinese government is not only aware of the problems posed by the prospect of fast-increasing numbers of cars on the road, but is also working to address the issue. Many major urban centers are building efficient public infrastructure and urban housing to incentivize people to get out of cars, and China has maintained heavy taxes on vehicle registration, driver’s licenses, and car sales to limit the cars on the road. Nonetheless, the exponential growth curve that represents China’s passenger vehicle registrations points to the fact these measures will not be able to stop the Chinese consumer.

But there may be another means to reduce China’s dependence on foreign oil, reduce urban pollution, and make Chinese auto companies globally competitive: alternative fuel vehicles. In 2008, the Ministry of Science and Technology mandated that 10% of Chinese cars will run on alternative fuels by 2012 and called for 10 billion yuan (US$1.5 billion) in research subsidies over the next three years for research and development of alternative fuel vehicles.

Last February, the Ministry of Finance announced a new commitment to promote alternative fuel vehicles in the country’s 13 largest cities — Beijing, Shanghai, Chongqing, Zhangchun, Dalian, Hangzhou, Jinan, Wuhan, Shenzhen, Hefei, Kunming, and Nanchang. The mandate calls for public services to begin adopting alternative fuel vehicles in these cities and provides subsidies for production and purchasing of alternative fuel cell vehicles, including 50,000 yuan per hybrid and 60,000 yuan per fully-electric model produced by domestic car manufacturers.

While there are many different alternative fuel cars being considered (ethanol, natural gas, hydrogen fuel cells, biodiesel to name a few), electric vehicles are currently the most promising. They are simply more efficient than gasoline cars, and promise a combination of lower fuel costs, lower emissions, and lower production costs compared with most other competitive alternative fuel cars.

Nonetheless, there are some challenges in developing electric car technology. First, the costs of building infrastructure, such as recharge stations. According to China Charges Up, a report by Mckinsey Company, the country will need to invest 5 billion to 10 billion yuan by 2020 to build the necessary recharging stations.

Second, there are concerns over the safety, weight, and recharge speed of lithium-ion batteries. Indeed, a major concern with electric cars is the amount of time it takes to recharge a battery (even the most advanced batteries take an hour to recharge at best). Nevertheless, manufacturers of the next generation of electric vehicles and batteries have already found innovative ways to address these concerns.

For example, Better Place, a US auto manufacturer, has developed a method of using battery swap stations for long trips in which drivers can simply replace a depleted battery with a charged battery rather than wait for it to recharge.

However, China’s success in producing electric vehicles hinges on the ability of its automakers to find a way to make electric vehicles at the China price. The country has had a great deal of experience in manufacturing cheap electric vehicles, such as electric bicycles and tour vehicles, already in wide use throughout the country.

While the leading global automakers in Japan, South Korea, the US and Europe have made hybrid-electric and fully-electric vehicles — such as the Toyota Prius and Chevy Volt — cheaper and more efficient, they are still just out of the price range of the majority of consumers in the US, China, and especially in the developing world.

China’s history with electric vehicles, government mandates, and new consumer trends have incentivized Chinese automakers to make electric vehicles. Recently, one of China’s leading domestic manufacturers, Chery Automobile, announced the release of the S18, the first of their new S series fully electric series. Chery was founded in Wuhu city, Anhui province in 1997, and began specializing in cheap cars for the domestic market.

The company has 10 passenger car models, with its A-5 hybrid model selling for less than US$15,000. Moreover, Chery is China’s first automaker to sell cars abroad, with production facilities in Russia, Iran, Malaysia, and Egypt, and with plans to enter the US and European markets in 2011. The S18 can travel between 120-150 km/h and comes equipped with a battery capable of recharging up to 80% in a half hour.

Chery also produces hybrid versions of its A5, A3, and A13 models.

Shenzhen-based Build Your Dreams (BYD) was started in 1995 by Wang Chuan-Fu to produce lithium-ion rechargeable batteries, and has since moved into the market for passenger cars. In 2003, the company entered the auto business and its $14,000 F3 sedan is quickly becoming the best-selling sedan in China. With BYD’s background in lithium-ion batteries and new found success in auto manufacturing, it was only a matter of time before it developed an electric vehicle.

Chery Electric Cars

In 2009, BYD rolled out a new F3DM plug-in electric dual mode vehicle. This vehicle sells for $21,900 (just below the Toyota Prius and the Chevy Volt to be released in 2010) and it promises to travel 100km on a single charge with the capability to shift to gasoline if the battery runs low (similar to the Chevy Volt).

Initially, BYD signed a deal to sell 50 cars to the Shenzhen municipal government and is expected to hit the mass market in China soon, with hopes to enter the US and European markets in 2011. It has already reached a deal to sell this model in Israel in 2010.

Geely Automobile, China’s largest privately owned car firm, has announced the upcoming release of its EK-1 model, the first of its new EK series of fully-electric cars, at the end of the year. Founded in Hangzhou in 1997, Geely sold 30,000 units in China last year and has factories in Russia, Ukraine, and Indonesia. It has big ambitions for foreign export, hoping for 75% of auto sales in foreign markets and to establish production facilities in 15 countries by 2015.

Its new EK-1 promises to travel 80km on a single charge, reaching a top speed of 104 km/h, and is capable of a full recharge in five hours. Geely hopes to follow up with the second generation EK-2 and the third generation EK-3 within two years.

Indeed, all of China’s major state-owned and joint-venture automotive companies have announced plans to launch electric vehicle models. In 2007, Chongqing’s Chana Motors released the first domestically researched and produced hybrid-electric model, the Joice HEV model, in preparation for the 2008 Olympic Games, and will begin selling hybrid models in the third quarter of 2009.

SAIC Motor Corp will release a hybrid-electric car in 2010 and a fully-electric car in 2012. Dongfeng Motor Corp began selling the Civic Hybrid model in China in June. Beiqi Foton Motor is one of China’s leading producers of hybrid-electric buses and established the country’s first energy auto design and manufacture base in 2008. FAW group, China’s oldest car manufacturer, plans to release hybrid-electric cars by 2012


As Chinese domestic automakers find innovative ways to produce cheap electric cars to fulfill the demand of China’s domestic market, they will be able to use this technology to expand internationally. A new generation of Chinese electric cars may help drive down the production cost of electric cars globally.

In doing so, electric cars may become the car of choice not only in China, as the fastest growing car market in the world, but also in the United States, the largest car market.

Ryan Rutkowski is a freelance contributor.

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.

(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)

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