What's Clogging Up Beijing's Push For Electric Cars
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.
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.
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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.ã€€
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.