Days after U.S. EV Bills Introduced, China Initiates 5 City EV Pilot Program
Posted June 1, 2010 at 9:53 am 
Filed in: Last Thursday, both the House and the Senate introduced bi-partisan legislation to advance the large-scale deployment of electric vehicles around the United States. The members of Congress agreed that electrification of light-duty transport is critical to reducing oil dependence while revitalizing the American automotive and technology industries.
In an interesting coincidence – and hopefully one that will spur action on this side of the Pacific –China today announced a substantially increased subsidy program for electric vehicles and their infrastructure.
As Amy Davidson explained in a Huffington Post op-ed, both the House and Senate bills propose innovative strategies to overcome the barriers facing large-scale deployment of electric vehicles. They help make charging infrastructure more financially viable and require that utilities prepare to support that infrastructure. Most importantly, however, the legislation would focus resources on 5 to 10 “deployment communities” around the country, where concentrations of electric vehicles would establish economies of scale and prove that the technology not only works, but is desirable, for the average American. As in the highly successful Race to the Top competition for education funding, areas would compete with comprehensive plans that indicate wide stakeholder participation (including utilities, local officials, and car dealerships) for deploying electric vehicles. The goal would be to get 700,000 vehicles on the road in those regions within the next six years.
Davidson writes: “The community-based approach addresses this problem by providing incentives for all the key components of an electric vehicle ecosystem at the same time, in a single geographic region. And it is the recommended approach of businesses throughout the electric vehicle supply chain, including leadership organizations like the Electrification Coalition.”
The bills and the Electrification Coalition are also discussed by David Roberts in Grist. In industry news, they are described in Automotive Digest and by Susan Kraemer on CleanTechnica.
Davidson also points out that these challenges mean that the transition to electric vehicles cannot happen on its own. “In countries like China, Denmark and Japan, where the transformation is already underway, the government has made electrification a national priority.”
Today Reuters reported that China is launching a pilot program for electric vehicles in 5 cities. Residents of Shanghai, Shenzhen, Hangzhou, Hefei, and Changchun will receive rebates of 60,000 Yuan ($8,800) if they buy purely electric vehicles and 50,000 Yuan ($7,320) in subsidies if they buy plug-in hybrid cars. The government will also pay for electric charging infrastructure, and has mandated that the state electric utilities and state grid companies ready themselves for electric vehicle charging and build the recharging stations. The 5 city program is part of a larger program to establish 13 centrally subsidized electric vehicle pilot programs.
Pollution and climate change concerns only partially motivate these policies. China and its many electric vehicle and electric bicycle companies intend to make the Middle Kingdom the global leader in the manufacture and export of electric vehicles.
Former battery maker BYD, buoyed by Warren Buffet’s investment, sold around 450,000 vehicles last year and in March 2010 brought the plug-in hybrid F3DM to its dealerships. BYD has big plans to start exporting to the United States, and has even established a U.S. headquarters in Los Angeles. Its all-electric vehicle, the lithium-ion powered e6, was launched in March, though it has thus far only sold the electric vehicles to taxi operators. SAIC, Geely and Chery, three of China’s largest automakers, also intend to commercially market electric vehicles before the end of 2010.
Yet like the United States, China faces substantial, if somewhat different, challenges to electrification. China’s original 13-city plan would have deployed 60,000 alternative-fueled vehicles by 2012. In a country where 37,383 new vehicles hit the road every day, however, even the goal seems to fall flat. Indeed, some argue that China’s EV program isn’t moving as fast as might have been hoped.
Without substantial government incentives, EVs are simply still too expensive for the Chinese market. BusinessWeek interviewed 51 year old Huang Jihai, who decided to buy a conventional vehicle instead of an EV for his daughter, saying that “Some of the hybrids and electric cars look pretty cool, but they are too expensive…I’d rather spend less money on a reliable gasoline car.” The difference between the two vehicles he was considering – one of which could be plugged in – was US$2,500.
Sounding uncannily like those in Washington pushing for government support of clean tech , Yang Jian, the editor of Automotive News China, wrote in a December 2009 editorial that “Unless the government adds detailed action plans and centralized direction to its plan, China may well squander the vast opportunity electric vehicles are now offering.”
Well, Beijing is answering.
Today, as we confront the ugly reality of oil dependence, there is a window to push forward policies that will enhance our energy security without impacting our mobility. Ideally, we should partner with China, taking advantage of our comparative advantages in manufacturing, technology, and market readiness. President Obama made a worthy start to this endeavor last November when he met with President Hu Jintao and announced, among other measures, the U.S.-China Electric Vehicle Initiative.
However, action needs to be more aggressively matched to words. Joint pilot programs, cross-border manufacturing incentives and a healthy competitive spirit can work to overcome the obstacles to electrification that exist in both China and the United States.
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