Riding on a Green Dream

By Hou Weili

Despite cost-saving and environmental advantages,new-energy vehicles battle on to go mainstream

Take a walk along the streets of Hefei and chances are you will see a steady stream of new-energy vehicles manufactured by Jianghuai Automobile Co. Ltd. (JAC).

“As the petrol price continues to rise,new-energy vehicles are much better options compared with similar level petrol-powered cars for consumers in cities like Hefei,” said Mei Hanbing, owner of JAC new-energy cars in Hefei, capital city of east China’s Anhui Province.

He estimated that having a new-energy car would save consumers as much as 9,000-10,000 yuan ($1,431-1,590) on an average annual mileage of 20,000 km.

While JAC was not a pioneer in new-energy car development, it has been instrumental in spearheading efforts at commercializing the vehicles. JAC was focusing on new-energy vehicle research as early as 2002 and set industrializing pure electric cars as its priority in 2009.In December 2010, the Chinese homegrown automaker produced 585 first-generation J3 electric vehicles (EVs) for private ownership, claiming to be the first automaker to commercialize electric vehicles on a large scale. A year later 1,000 second-generation J3 EVs were made and sold,while on September 29, JAC produced 500 thirdgeneration J3 EVs.

Thanks to JAC’s achievement in commercializing electric vehicles, Hefei has rolled out of a demo project promoting new-energy vehicles for private use in 10 cities across China.

New-energy trend

At the 2012 International Forum on Chinese Automotive Industry Development held from August 31 to September 2 in north China’s Tianjin, Wan Gang, Minister of Science and Technology, said that while the auto industry had become one of the country’s pillar industries, China faced chronic air pollution, carbon emissions, fuel consumption and traffic jams.“Currently, the contradiction between huge demand for vehicles and severe energy shortage as well as strict emission controls is becoming critical. So it is imperative to boost the development of the new-energy auto sector,”Wan said.

According to a report on the new-energy auto industry released by Zheshang Securities Co.Ltd. in March, the number of registered cars in China soared from 11.8 million to 19 million during the 11th Five-Year Plan (2006-10),increasing by 10 percent year on year. However,only 54 out of 1,000 people own cars in China, much lower than the world average level, suggesting huge market potential for automobiles. This also suggests massive pressure on fuel supplies.

The report said the consumption of vehicle fuels would hit 25 million tons by 2020. What’s more, China’s fuel consumption heavily depends on imports. About 56 percent of crude oil used in China were imported in 2011, and by 2030, the number will reach 70 percent.

Additional pressure on the auto industry comes in the form of stricter emission controls,as the Chinese Government pledged to cut carbon emission per unit of the GDP by 40-50 percent by 2020.

“All of these pressures, as well as opportunities, are urging auto makers to make significant breakthroughs in core technologies of developing new-energy vehicles and boost their application,” said Jiang Min, a product programming engineer in JAC.

A rise in petrol price since March further turned the spotlight on new-energy cars.

“In the context of increasingly soaring petrol demands and a turbulent international situation,it is predictable that the price of petrol, a non-renewable resource, will go up for a long time in the future,” said Peng Wei, an analyst with Ping An Securities. Peng believes a sustained increase in the petrol price will inevitably transfer the current consumption patterns on vehicles to an energy-saving-oriented one.

According to statistics from the China Association of Automobile

Manufacturers, from January to August, China sold 6,019 new-energy vehicles in total, among which 2,661 were pure electric and 3,358 were hybrid models

“New-energy cars are bound to be the future trend,” said Peng.

The State Council pledged to boost the newenergy auto sector in the next few years. A plan released in April promised China’s accumulative output of pure electric and plug-in hybrid electric vehicles would reach 500,000 units by 2015.

According to statistics from the China Association of Automobile Manufacturers, from January to August, China sold 6,019 new-energy vehicles in total, among which 2,661 were pure electric and 3,358 were hybrid models.

To buy or not to buy

The truth is that favorable policies and huge market potential are not adding up to corresponding pro fits in this sector.

The sales of new-energy vehicles, especially pure electric ones, mainly depend on government procurement. Low recognition among consumers, insufficient charging facilities and sluggish industrialization are all obstacles to progress.

ShiNiNG DEBUT:A customer checks out by a JAC plug-in hybrid car at the 14th Shanghai Auto Show on April 26, 2011

Compared with fuel-driven cars, new-energy vehicles are economic, practical and energysaving. Taking the third-generation J3 EVs made by JAC for example, the car is priced at 150,000 yuan ($23,800), including the 57,000-yuan ($9,000), 10,000-yuan ($1,590) and 5,000-10,000-yuan ($795 to $1,590) subsidies granted by the Chinese Government, the Hefei Municipal Government and JAC, respectively.Citizens in Hefei can buy the car at only 75,000 yuan ($11,900). The car consumes only 14 kwh of electricity for every 100 km. “Driving an electric car for 10 million km will save 750,000 liters in fuel and cut carbon emission by 900,000 cubic meters,” said Jiang.

The advantages have not aroused mass market appeal, however. In August,Guangzhou, capital of south China’s Guangdong Province, introduced a license plate lottery for new cars and allocated 1,090 license plates for new-energy and energysaving vehicles in the first round of the lottery—but only 186 were used. And so far,there is still no private purchase on pure electric vehicles in Beijing as preferential policies haven’t been introduced.

“I am planning to buy an electric car but worry about the charging problem,” Liu Lichuan from Beijing said. Lack of charging facilities is the biggest challenge in the newenergy auto sector and there is still no clear answer to who should be responsible for building such infrastructure. “The government should support and introduce a unified standard to establish infrastructure, like charging stations in order to promote the industrialization of the sector,” said Jiang Min.

According to the nation’s development plan for new-energy and energy-saving vehicles, a network covering 2,000 charging stations and 400,000 charging points in more than 20 pilot cities and their nearby areas will be established by 2015.

JAC has taken the lead in solving the power charging issue. For the third-generation J3 EVs, two kinds of charging cable are available for the car, matching with charging points built by the State Grid and household outlets respectively.

“It can travel at least 100 km in one charge,enough for short-trip transportation in cities,”said Jiang. She owns a third-generation J3 EV and expects charging stations to be established in as many cities as possible before too long, adding to customer cost saving and environmental preservation for the future. ■