Select Page

CHINA has lots of people, not much oil and rulers who love big projects. Small wonder that makers of electric cars see it as the market of the future. The Chinese government wants to have 500,000 electric cars, lorries and buses on the country’s roads by 2015 and 5m by 2020. It is providing customers with subsidies worth up to 60,000 yuan ($9,250) and other incentives, too. If it carries on doing so, electric cars and plug-in hybrids could account for 7% of new-car sales in China by 2020, assuming an oil price of $130 a barrel, says a forthcoming report by the Boston Consulting Group (see chart). That would make China the biggest market for electric vehicles, by volume, in the world.

Foreign firms are salivating. But they are also nervous. “The price for market access has gone up,” says Michael Dunne, the president of Dunne & Co, a car consultancy in Hong Kong. Foreign producers are being told about new “draft” rules which mean they must share more intellectual property and branding rights with their Chinese joint-venture partners, he says.

On June 27th Carlos Ghosn, the boss of Nissan—which with its partner Renault is taking the biggest electric-car bet by launching a range of plug-in models—said he would wait to learn more about the new policy before deciding how many electric cars Nissan will make in China (including the new Nissan Leaf). “We will adapt our strategy to the rules,” he added. At present there are plenty of unknowns, such as whether subsidies will benefit only Chinese brands.

Read the entire article at: The Economist

Earthgarage – Greener Car. Fatter Wallet.