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Back You are here: Home Low-Carbon Green Transportation China unlikely to meet ambitious E.V. production and sales goals

Green Transportation

China unlikely to meet ambitious E.V. production and sales goals

China has ambitions plan for their electric vehicle industry, aiming to hit a production and sales mark of 5 million units by the end of the decade.

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By supporting the electric and hybrid vehicle sector, China hopes to bring in investments as well as ease their oil consumption and pollution levels by 2020, according to plans of the State Council. The governments want manufacturers to have an annual production capacity of 2 million units by 2020.

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To hit their targets by the next decade, China is first targeting production and sales of 500,000 units by 2015. However, according to a recent report from Pike Research, it is unlikely that they will even reach that goal.

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According to Pike, annual sales of plug-in electric vehicles will reach only about 45,000 units by 2015, increasing to 152,000 vehicles in 2017.

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While China’s E.V. ambitions will provide a huge boost to electric car development worldwide, given as only a few domestically produced E.V.’s are available to China’s general public as of 2012, the Pike analysis doesn’t see China making its E.V. goals anytime soon.

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“Evidence is emerging to suggest that Chinese E.V. manufacturers have yet to develop proven technology that can propel the market,” said research director John Gartner.

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Pike isn’t the only thinktank to recently cast doubts on China’s ability to reach its goals to become a world leader in E.V. manufacture and deployment.

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Bloomberg New Energy Finance recently released a report where it estimated that sales of E.V.’s in China amounted to about 13,000 vehicles from 2009 to 2011 and that they are “not expected to be orders of magnitude higher” for 2012.

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“China is making a big bet on electric vehicles, but it will need to bring in expertise and technology from foreign players to create competitive vehicles, and to deploy the full muscle of its auto industry in order to produce vehicles the public trusts,” said Michael Liebreich, chief executive officer of New Energy Finance.

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He sees the chances of China making their E.V. goals alone as “very slim”.

According to China Daily, China’s E.V. market was ranked fifth in the world by a Mckinsey & Company report, after Japan, the U.S., France and Germany.

According to the report, only about 235 E.V.’s were delivered by Chinese companies during the second quarter of this year, a drop of 31 percent on the first quarter’s 343. Electric vehicle sales only make up a fraction of total auto sales – less than 0.01 percent.

The Mckinsey report predicts that the situation is not likely to improve significantly within the three years and even in 2017, when production volume reaches 300,000, it is unlikely that E.V. sales will constitute more than 1 percent of vehicle sales.

Yan Chenglian, deputy director of the National Engineering Lab, told China Daily that E.V.’s still remain pricier then what the average Chinese can afford with domestic manufacturers unable to bring the price down because most of the core technologies – the battery and motor – still need to be imported.

Most purchases of electric vehicles in China also still tend to be local governments and state-owned companies rather than individuals. This despite the government announcing that it would allocate funds – around 26.5 billion yuan - to subsidize E.V.’s.

Since 2003, Pike noted that Chinese automakers have released or announced the production of 40 battery electric vehicles and 31 plug-in hybrid vehicles that will be on the market by 2015. Several Japanese and American manufacturers have also entered into the Chinese E.V. market while European suppliers have yet to enter China. – K. Jalbuena

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