Provinces across China are pledging vast sums of money to develop an electric vehicle charging infrastructure in the country even though consumer demand for such vehicles is failing to gather momentum.
IHS Automotive perspective | |
Significance | Provincial governments across China are pledging to ramp up infrastructural development and to invest in technology related to the development of new-energy vehicles (NEVs). |
Implications | The new heads of the Central Committee of the Chinese Communist Party are showing signs that they will push for the deployment of NEVs. Premier Li Keqiang recently stressed that government officials should use NEVs. |
Outlook | With the country working to reduce pollution, there is expected to be a surge in policies to encourage the deployment of NEVs, with rental schemes the latest trend to give potential private consumers a chance to try out electric vehicles. |
Provinces across China are pledging to invest substantial sums of money to develop infrastructure to enable the fast charging of electric vehicles (EVs) and to create funds to strengthen local new-energy vehicle (NEV) production. Local governments and companies are also showing renewed interest in developing EV components and related technologies. So far private purchases of EVs in China have been lower than the central government's targets, but a recent interest in private leasing of EV passenger cars has produced positive results, a trend that is likely to be replicated across the country. On 12 July, Prime Minister Li Keqiang stated at the executive meeting of the State Council that China needs to accelerate the deployment of NEVs and thereby conserve energy and reduce the negative impact on the environment. He suggested that government officials and public transport should take the lead in using NEVs while the supporting infrastructure is built, the National Business Daily reports.
Rental schemes for EVs gather momentum
Rental schemes for EVs are now being seen as a way to promote the wide-scale deployment of these vehicles and to give potential consumers direct access to EVs in the hope that this will encourage private purchases of the electric models currently on the market in China.
Xiamen
The city of Xiamen in the coastal Fujian Province has followed the example set by the cities of Beijing and Shanghai and has started an EV rental service this month. A fleet of 20 Chery EVs are now available for rental service in Xiamen, local media report. The Xiamen Shengxin EV rental store provides a total of 20 Chery QQ3EVs and M1EVs, at a daily rental cost of CNY150 (USD24) and CNY280, respectively. A further five EV rental service outlets have been set up on Xiamen Island, where consumers can charge the vehicles for free. The city expects to have 100 EVs for lease this year.
Shanghai
At the 2013 International Electric Vehicle Piloting Cities and Industry Development Forum, Ma Chunlei, the mayor of Jiading, said that the district would provide a subsidy of CNY40,000 for EVs intended to be used for leasing. There is also a CNY15,000 subsidy for purchases of EVs in Shanghai, which is also applicable to EVs bought for leasing, giving a total subsidy of CNY55,000. The government claims that there are 800 charging stations in Jiading, with one battery exchange station. However, EV users have complained that charging stations are located at inconvenient spots. The leasing business in Jiading is operated by eHi. In addition to the subsidy, Jiading offers easier access to parking spaces and preferential prices for electricity when using EVs. By the end of the year eHi aims to have 200 EVs for lease. PR director Shao Wei said that the rental fee will be comparable with those of a conventional gasoline (petrol)-powered car, which is currently CNY150 a day including insurance, a yearly check, and maintenance fees. Rental by the hour will also be available. Apart from the Roewe E50, the company is also looking at other models, including the GM Volt as well as Chery, Zotye, and Lifan EVs. Long-term rental will target local government and corporate clients and will account for 70% of the total amount, while short-term rental will focus on individual users.
Beijing
In May the Beijing government started the Electric Partnership Programme in the Tsinghua Science Park. The programme is part of a scheme whereby Beijing will gradually build charging spots, arrange EV use, and start EV renting in 12 business parks this year. By the end of 2015, Beijing expects to have 20 parks participating in the EV renting and charging programme, with over 300 charging spots. The first phase of Beijing's EV rental scheme was well received, with a fleet of 15 BAIC E150 EVs snapped up on the first day by young employees working in the business park who chose the one-month CNY1,999 rental option. Rental options of CNY49 for a two-hour period, CNY99 per day, or CNY1,999 per month are offered. The EV rental company Yika Auto Rental intends to introduce 300 EVs for lease this year. Xu Xinchao, director of Beijing's New Energy and New Materials department, part of the Beijing Science and Technology Committee, has stated that Beijing is working to establish fast-charging stations in all seven of its suburban districts. The city also plans to build a charging network within a 5-km radius of the central urban area next year.
More provinces pledge to develop EV infrastructure
Heilongjiang
On 7 July, the city of Suihua in the northeastern Heilongjiang Province agreed with Australian company Earl Group to join forces to produce NEV components and EVs. Of the total CNY12-billion investment, the first round of CNY2 billion will be used to build a 200,000-square-metre plant by October 2014, with expected annual production worth CNY1.256 billion in the region. In addition, the province plans to build 300 charging spots by 2015.
Shandong
Linyi High-Tech Park in Shandong Province has signed a strategic contract worth CNY11 billion with the Donghu Industrial Investment Fund for the establishment of the city's EV Industrial Park for the development of NEV components.
Hefei
The provincial government of Hefei, together with state-owned enterprises, plans to establish 260 charging piles and five large charging stations this year, according to a report in local newspaper Anhui Business. These 260 charging piles for electric taxis and five charging stations for electric buses will be built in a 5-km area. There are another 1,000 charging piles for private cars currently under construction. Hefei plans to build a 5-km charging ring where EVs can be charged.
Outlook and implications
Conventional car rental services have only a decade-long history in China, but the younger generation is showing a positive reaction to the e-car rental schemes currently being rolled out across the country. The next step of the EV rental co-operative agreement in Beijing will focus on infrastructural construction in areas where there is large transport demand such as airports, hotels, and large communities. The programme will launch EVs in Beijing's Haidian district first, build time-sharing lease trial plots, and then promote the EV rental scheme across the whole city. The EV release programme was initiated in Tsinghua Science Park on 20 May, with all 15 of the models offered for rent taken up, prompting the authorities to introduce more models and encouraging more cities to start renting EVs.
Cities across China have made pledges to increase the number of charging spots, but most have so far failed to meet their targets. Recently, however, many cities and their provincial governments have pledged further funds to develop the charging infrastructure to boost EV sales. Simultaneously there is a major trend gathering momentum whereby provinces are encouraging the development of key technologies relating to EV development. For example, the provincial governments of Tibet and Shaanxi will together invest in producing lithium carbonate for use in NEVs. The project is expected to begin at the end of 2013. The Tibet National Energy Company currently holds the rights to salt lakes in the Ngari region of Tibet. Salt lakes are a source for extraction of lithium carbonate, but so far China's salt lake extraction processes have been dwarfed by those in other countries, according to industry reports. Chinese companies such as China Xinjiang Nonferrous Metals Corporation as well as Sichuan Tianqi Industry Group and Sichuan Guorun produce lithium carbonate from locally mined and imported lithium minerals.
China aims to see the deployment of over half a million NEVs on its roads by 2015 and over 1 million by 2020. The government's draft policies and comments from senior politicians indicate a continuing interest in strengthening China's role in the global development of the NEV market (see China: 21 July 2013: China's NEV policies fail to meet targets, new subsidies imminent). In addition, the trend to ease pollution by limiting new car sales will probably also see an increase in policies to encourage sales of NEVs (see China: 12 July 2013: China's industrial emissions grow as restrictions expected on vehicle sales to curb pollution).