Friday, April 10, 2009

China's Hungry Ambition to Become the Electric Car Capitol

Napoleon may have been a sage when he said, "Let China sleep, for when she awakes, she will shake the world (article link here)."

Senior Chinese officials on Friday outlined how they aimed to turn their country into the world’s largest producer of electric cars, including a focus on consumer choice rather than corporate subsidies.

Speaking at a conference at the government’s prestigious Diaoyutai guesthouse here, the officials acknowledged that their efforts faced challenges in terms of the cost and safety of electric cars. They promised a nationwide effort by manufacturers, universities, research institutes and government agencies to overcome these obstacles.

We need to be sustainable in different sectors, particularly in the auto sector,” he said.

Zhang Shaochun, a vice minister of finance, said that the government wanted to let the market determine which electric vehicle models would become popular. So while the government is providing some research subsidies, the main step will be to provide very large subsidies for buyers of electric cars — already up to 60,000 yuan, or $8,800, for purchases by taxi fleets and local government agencies.

"The fiscal subsidy gives voting rights to the consumer,” he said.

China also has a 10 billion yuan ($1.46 billion) program to help the industry with automotive innovation.

In the United States, the government is providing $25 billion to help cover Detroit’s research costs in the coming years.


Electric car makers may find it easier to gain a following in the Chinese market than in other countries. First-time buyers in China are less accustomed to the power of gasoline-powered cars; most commutes are short and slow because of traffic jams; and Chinese law makes it hard for consumers to sue automakers for safety problems.

- Brewskie

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