China aims to lead the electric car revolution

Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years, and making it the world leader in electric cars and buses after that.

"China is well positioned to lead in this," said David Tulauskas, director of China government policy at General Motors.

China is behind the United States, Japan and other countries in making gas-powered vehicles, but by skipping the current technology, it hopes to get a jump on the next.

Japan is the market leader in hybrids today, which run on both electricity and gasoline, with cars like the Toyota Prius and Honda Insight. The United States has been a laggard in alternative vehicles. G.M.'s plug-in hybrid Chevrolet Volt is scheduled to go on sale next year, and will be assembled in Michigan using rechargeable batteries imported from LG in South Korea.

China's intention, in addition to creating a world-leading industry that will produce jobs and exports, is to reduce urban pollution and decrease its dependence on oil.

But electric vehicles may do little to clear the country's smog-darkened sky or curb its emissions of global warming gases. China gets three-fourths of its electricity from coal, which produces more soot and more greenhouse gases than other fuels.

A report by McKinsey & Company last autumn estimated that replacing a gasoline-powered car with a similarsize electric car in China would reduce greenhouse emissions by only 19 percent. It would reduce urban pollution, however, by shifting the source of smog from car exhaust pipes to power plants, which are often located outside cities.

Beyond manufacturing, subsidies of up to $8,800 are being offered to taxi fleets and local government agencies in 13 Chinese cities for each hybrid or allelectric vehicle they purchase. The state electricity grid has been ordered to set up electric car charging stations in Beijing, Shanghai and Tianjin.

China wants to raise its annual production capacity to 500,000 hybrid or all-electric cars and buses by the end of 2011, from 2,100 last year, government officials and Chinese auto executives said. By comparison, CSM Worldwide, a consulting firm that does forecasts for automakers, predicts that Japan and South Korea together will be producing 1.1 million hybrid or all-electric light vehicles by then and North America will be making 267,000.

Premier Wen Jiabao highlighted the importance of electric cars two years ago with his unlikely choice to become minister of science and technology: Wan Gang, a Shanghai-born former Audi auto engineer in Germany who later became the chief scientist for the Chinese government2s research panel on electric vehicles.

Mr. Wan is the first minister in at least three decades who is not a member of the Communist Party.

And Premier Wen has his own connection to the electric car industry. He was born and grew up here in Tianjin, the longtime capital of China’s battery industry, 110 kilometers southeast of Beijing.

Tianjin has thrived in the six years since Mr. Wen became premier. It now has China's first bullet train service (to Beijing), a new Airbus factory and a new airport. Tianjin has also received a surge of research subsidies for enterprises like the Tianjin-Qingyuan Electric Vehicle Company.

Electric cars have several practical advantages in China. Intercity driving is rare. Commutes are fairly short and frequently at low speeds because of traffic jams. So the limitations of all-electric cars - the latest models in China have a top speed of 95 kilometers an hour and a range of 190 kilometers between charges - are less of a problem.

But the electric car industry faces several obstacles here too. Most urban Chinese live in apartments, and cannot install recharging devices in driveways, so more public charging centers need to be set up.

And when Tianjin-Qingyuan puts its entirely battery-powered Saibao midsize sedan on sale this autumn, the body will come from a sedan that normally sells for $14,600 when equipped with a gasoline engine. But the engine and gas tank will be replaced with a $14,000 battery pack and electric motor, said Wu Zhixin, the company's general manager.

That means the price will nearly double, to almost $30,000. Even if the government awards the maximum subsidy of $8,800 to buyers, few Chinese will be able to afford the cars.