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Green Transportation

China’s EV market lags in global race – report

China’s electric vehicle industry is moving more slowly compared with other major auto markets as sales significantly drop and market share remains small, according to a report by global management consultancy McKinsey & Company.

During the second quarter, the country sold 235 EV’s, a 31 percent plunge from the 343 units sold from January to March. This is the sharpest decline among other EV markets, according to the company’s Global Electric Vehicle Index.

In a news article from China Daily, China’s EV market was recognized as being outshined by the United States, which sold 7,931 vehicles during the same period, a 28 percent growth from the first quarter.

Meanwhile, 4,240 units were sold by Japan, 2,056 by France and 1,284 by Germany.

While the statistics only include the sales volume of electric vehicles, the result would not change if sales of hybrid vehicles were included, said Axel Krieger, head of the McKinsey's China Auto Hub.

The Chinese EV market downturn was reportedly brought about by the short supply in batteries, poor infrastructure, and low responsiveness among customers, China Daily quoted Mr. Krieger as saying.

Back in April 2009, the Chinese government announced its target to make the country the leader in electric cars production. Accordingly, it approved subsidies for EV research and development and subsidies of up to $8,800 per hybrid or all-electric vehicle purchased by taxi fleets and local government agencies in 13 Chinese cities.

However, despite relevant efforts and incentives to boost the use and purchase of EV’s, China’s share in the global EV market is still low.

“Government-sponsored subsidies have failed to stimulate consumer demand,” said Mr. Krieger.

Out of 48 million cars sold since January 2009 up to June 2012, only 7,834 were from China, representing just 0.02 percent of the overall sales volume.

By 2017, EV production in China is estimated to reach more than 270,000 units, but that is just one percent of the global production volume, said McKinsey.

“Despite initial challenges and setbacks...EV’s will play a critical role in solving China’s formidable energy security and pollution challenges,” noted the consultant firm in another report that assessed the current status of EV’s in China.

Under its 12th five-year plan, China aims for five million battery-electric vehicles and plug-in hybrid-electric vehicles by 2020.

“For China’s electric vehicle industry to take off, each of the industry’s key stakeholders – the government, manufacturers, suppliers, and infrastructure – should consider adopting a different strategy,” suggested McKinsey. (C. Dominguez)



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