(EnergyAsia, August 15 2012, Wednesday) — China will not meet either of its ambitious production or sale targets for its plug-in electric vehicles (PEV) later this decade, said US-based Pike Research.
According to its latest report, China’s PEV production will fall well short of the government’s goal of manufacturing 500,000 PEVs a year by 2015 while sales will also prove disappointing.
Pike Research said PEV sales in the world’s largest automotive market will grow at a compound annual growth rate (CAGR) of 60% from 2012 to 2017, surpassing 152,000 units sold annually by 2017. However, that figure represents less than 1% of the country’s total light duty vehicle market.
The Chinese government has made vehicle electrification central to its aggressive plan for growing the automotive market both domestically and internationally and has created many national and local incentives for plug-in electric vehicle (PEV) purchases.
“Many members of the emerging middle and upper classes prefer imported vehicles with nameplates from the United States or Germany – especially larger sedans in which owners can sit comfortably while their drivers navigate China’s often congested roads,” said Pike’s research director John Gartner.
“The Chinese government initially overestimated consumer demand for electric vehicles, and has made adjustments to its incentive policies.
“Many members of the emerging middle and upper classes prefer imported vehicles with nameplates from the US or Germany – especially larger sedans in which owners can sit comfortably while their drivers navigate China’s often congested roads.”
According to Pike Research, China is adjusting its programme away from battery electric vehicles to be more inclusive of hybrids and plug-in hybrids.
Still, the government will find it difficult to implement its policies as the country’s fragmented regional governments and the close relationships between local governments and local vehicle manufacturers have created problems in implementation, especially for vehicle and technology standardization.
Competing interests, such as companies producing vehicles with proprietary technologies, have already delayed the release of China’s Energy Saving and New Energy Vehicle Industry Development Plan (2011-2020), making it difficult for companies to plan their investment in EV production and infrastructure, said Mr Gartner.
In the long-run, China’s EV ambitions will provide a huge boost to electric car development worldwide.