How to Drive Electric Vehicles onto the Market
Posted September 8, 2009 at 6:39 am 
Filed in: The name suggests a state-owned enterprise from the days of the Little Red Books: China Aviation Industry Harbin Hafei Automobile Industry Group Co., Ltd.
That would be wrong.
A few days ago the company (Hafei for short) presented a fully functional electric car at the Shenyang Exposition. Powered solely by a lithium-ion battery, the car has a 112 mile driving range, a maximum speed of 81 mph and can be charged to 80% of capacity in only 20 minutes. That third achievement is tremendously important. The battery pack on the Chevy Volt, not scheduled for general release until 2011, takes about 8 hours to charge and can only travel 40 miles before switching over to its small gasoline tank.
The Hafei announcement is not a particularly big deal. That’s because a bevy of Chinese automakers are selling electric cars now.
Arguably the most successful domestic manufacturer, BYD – “Build Your Dream”, with a logo only a hair off BMW’s – has been selling its mass-produced plug-in hybrid, the F3 Dual Mode, in China since 2008. BYD comes to vehicles from a history as a Guangdong-based rechargeable battery maker. They are doing what they do best at the lowest possible cost, whereas companies like GM are struggling to learn a new discipline and purchase their batteries from abroad.
BYD, partly owned by Warren Buffet’s firm, has been exporting vehicles for years and plans to sell its new five seat E6 Crossover abroad by 2010. The all-battery E6, with a 186 mile range, will first go to Israel and Europe and then later to the United States.
Electric vehicles are expensive and risky. (That’s why U.S. companies have shied away for so long.) So what explains the Chinese enthusiasm?
Credible, long-term government support is part of the answer. Beijing has committed to sponsoring electric vehicle pilot programs in twelve cities over the next few years. The Wuhan city government has already signed contracts with the Renault-Nissan Alliance for vehicles and charging infrastructure. The central government will pay for the entire cost of the vehicles, making them free for participating Wuhan drivers.
Chinese automakers, obviously, don’t want to miss the boat.
If Washington is serious about retaining a competitive domestic auto industry and serious about reducing oil consumption, it had better catch up with Beijing. Federally-sponsored large-scale demonstration projects in U.S. cities are one way to kick our now mostly state-owned vehicle enterprises in the butt.
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