China's new energy vehicle industry takes its first long, hard steps

Shanghai January 17 (Gasgoo.com) The Eleventh Five-Year Guideline finally came to a close last year, with the government exerting all its energy to pulling the plug on China's reliance on fossil fuel cars. This new year marks the beginning of the Twelfth Five-Year Guideline, a period that is going to be the key chapter in the transformation of the national economy. As one of the most important measures towards national emissions reduction and one of the seven strategic industries the government is looking to cultivate, new energy automobiles will continue to enjoy funding and support from the highest levels of government.

As far as the auto industry is concerned, new energy cars are going to play the leading role for the five year period that is the Twelfth Five-Year Guideline, with their 2015 sales forecasts reaching one million vehicles. Regardless of which story one follows when analyzing the industry—whether it be government plans to grant subsidies of 50,000 yuan ($7,590) to buyers of such vehicles, near-daily exposure of new-energy projects by leading automakers, or freshly penned legislation from local government officials—all signs show that new energy vehicles are going to be one of the hottest talking points this year.

Government and commercial enthusiasm is harshly contrasted by actual figures. When looking over investment statistics, China has not made any significant leaps in new energy technology or research.

However, worries of those in the industry still resound. "The craze about new energy cars is detrimental to the automobile industry's development," stated senior National Development and Reform Commission (NDRC) official Chen Bin. He believes that of the countless sectors rushing to open new energy automobile projects, many lack the necessary technology and sufficient research capacity, which in the end negatively effects the industry's healthy development.

In regards to the current obsession with new energy technology, the commonly accepted outlook is that while there is a lot done theoretically, practically there remains much to do. According to the soon-to-be-released "energy-efficient and new energy automobiles industry development guideline (2011-2020)," the Ministry of Finance will invest over a trillion yuan for the further research on energy-efficient and new energy automobile core technology. The industry is slated to officially enter development phase within the next five years.

 However, the guideline, which was originally announced at the end of last year, has of yet not been officially issued. Without any accepted standards, media outlets are left no choice but to guess at when the plans may be implemented. According to the guideline, 2011 to October 2020 will be designated as the period of time where steps will be taken towards development and eventual actualization of new technology plans. The guideline has been collection suggestions from June of last year and garnered a great deal of attention since. It has been put to the State Council where it is currently undergoing evaluation. According to exposed information, the guideline expects accumulated domestic sales of new energy vehicles to reach five million units by 2020, with hybrid passenger cars constituting 50% of total annual passenger car production volume.@@Page@@One of the controversies regarding the guideline is the exact definition of ‘new electric vehicle.' In the past, hybrid models were never mentioned when discussion new energy automobiles. However, many industry insiders believe that as the marketization of new energy technology is extremely slow, and because popularization of hybrid vehicles has the potential to reduce energy waste in a relatively short period of time, that these vehicles are a very effective tool to help ease the transition to new energy automobiles.

The guideline does designate electric vehicles as being an important direction for the automobile industry to go towards. According to the guideline, “China will embark on production of plug-in hybrid electric and pure electric vehicles, while speeding up research on fuel cell-powered automobile technology.” Chen Quanshi, head of the electric vehicles branch of the Society of Automotive Engineers of China (SAE-China), said that, in the end, hybrids would be categorized as ‘energy-efficient vehicles.' Development will be focused on pure electric and plug-in hybrid electric vehicles, he added, saying, “When selecting what road we should take, we have to first decide whether our goal is coming up with a new technological breakthrough or industrialization? Since the goal is industrialization, we have to put all our efforts towards that. Hydrogen fuel cells will be the eventual goal, but currently the industry doesn't meet the necessary production requirements.

With large amounts of funds lined up for investment and policies from the very highest level, automobile manufacturers across the industry are coming up with plans and strategies for new energy technology. Incomplete statistics show that at least 60 companies have put out new campaigns. However, enthusiasm alone is no substitution for actual technological progress, and with the country's automobile industry currently lacking in this aspect, popularization of new energy vehicles will have to wait.

 It is under this background that China's new energy automobile industry takes its first long, hard steps.