Economy

What's Clogging Up Beijing's Push For Electric Cars

Traffic jam in Beijing
Traffic jam in Beijing
Wu Jing

BEIJING — The continuous heavy haze over Beijing is an ever-present reminder of the country's losing battle with pollution. But it may also have been the engine to jump start the Chinese government’s recent push to promote the sale of and use of electric vehicles.

Beijing officials, who had instituted incentives for purchasing electric cars, have also recently announced a program to create 1,000 charging points downtown and in the suburbs to further encourage the switch to the more environmentally friendly driving option.

Unfortunately, consumer response has been decidely chilly.

There were actually fewer applicants (1,428) for special permits during the first two months of this year than the 1,666 permits the city had allotted, according to Beijing Transport Commission data. This certainly leaves some doubt as to whether Beijing will achieve its goal of having 10,000 new buyers of electric cars this year.

Whether electric vehicles will be capable of completely replacing conventional cars remains the biggest consumer concern. The Chinese government, which regards electric cars as the China's best chance of becoming a global leader in the auto industry, has repeated over and over again its benefits.

So what is holding back the Chinese public from switching over to electric?

First is the unsolved problem of the charging infrastructure. For this, Beijing is obliging carmakers to equip each buyer with a personal charging point. But the buyer, in turn, must possess a fixed parking space to utilize it, and the reality is that a parking space in Beijing costs on average more than 200,000 RMB ($32,000), beyond the means of many.

Even for those who can afford such a cost, there are other practical obstacles. For example, a parking space is often so far from an owner’s property electrical box that it doesn’t meet installation requirements.

Who’s responsible?

Meanwhile, car companies complain that charging facilities are fundamentally the responsibility of China’s State Grid Corporation. The complicated charging installations, as well as their maintenance, are going to drive up costs considerably for car companies, many of whom still rely on government subsidies to survive.

BYD Electric cars on display at Shenzhen's Central China High-Tech Fair — Photo: Brücke-Osteuropa

Battery safety is another issue that makes the potential buyer tentative. Tesla’s share price took a tumble late last year after suspicion that its Model S caught fire because of a damaged battery. In May 2012, a model made by the Chinese electric car company BYD caught fire after being hit by another vehicle, killing the driver and two passengers. Though the experts’ report stated that the fire was not directly related to the quality of the car, the accident was nonetheless a blow to the whole industry. 

In addition, it’s not clear whether the makers of Chinese electric vehicles are really ready for the market. So far only two carmakers are eligible to sell electric cars in the capital, and six others are applying to Beijing officials for permission. The authorities also require that, after obtaining permission to sell in Beijing, non-local carmakers must be able to respond within 30 minutes in the event of a car breakdown.

They must also meet the target of selling more than 500 cars in the first year, and no fewer than 1,000 cars in the first two years. Otherwise, Beijing will revoke its permission to sell.

As electric carmakers frantically try to fulfill these rigid targets, another problem hovers: regional protectionism. For instance, the BYD Qin, a highly praised plug-in hybrid, was not included in the first batch of Beijing’s permission sale list announced last week simply because BYD Auto is based in Shenzhen, rather than the capital. Tesla has repeatedly called on the Chinese government to treat foreign brands equally, but the Chinese government has dug in its heels.

And so, apparently, has the Chinese consumer.

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Geopolitics

Iran-Saudi Arabia Rivalry May Be Set To Ease, Or Get Much Worse

The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.

Military parade in Tehran, Iran, on Oct. 3

-Analysis-

LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.

Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.


Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.

The role of the nuclear pact

Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.

It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.

He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."

The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.

Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.

Photo of Iranian Supreme Leader Ali Khamenei in 2020

Iranian Supreme Leader Ali Khamenei in 2020

commons.wikimedia.org

Riyadh's warming relations with Israel

Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."

The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."

Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."

Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.

If nuclear talks break down, Iran's regime may become more aggressive.

Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.

Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.

For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.

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