Honda eyes China's electric car market

The president of Honda Motor Co. said Monday the company is studying the possibility of rolling out electric vehicles in China, making it the latest Japanese car maker to look for potential demand in an untapped slice of the world's largest auto market.

The Japanese car maker is considering initiating a testing program in China for electric vehicles, following similar tests in the U.S. and Japan, the company said in a release.

"The chances are good in China," Takanobu Ito, Honda's president, told reporters after a news conference for an electric-vehicle test program in Saitama Prefecture, north of Tokyo.

Honda's comments follow those from Japan's leading auto maker, Toyota Motor Corp., which said recently that it is considering introducing electric cars in the country.

It was a rare upbeat comment by Honda, which has been cautious about the prospects for electric cars. It has said the costs of making vehicles that run only on electricity are still too high for the mass market.

Electric vehicles are expected to account for 1% or 2% of global vehicle sales by 2020, according to an estimate by the financial services firm J.P. Morgan Chase & Co.

Honda has said it plans to release electric cars in the U.S. and Japan in 2012. But it lags behind some of its rivals that have more aggressive plans. Nissan Motor Co., for instance, introduced its Leaf electric hatchback this month in the U.S. and Japan, and plans to bring it out globally by 2012.

Mr. Ito said Honda may use its Fit electric compact and the Accord plug-in hybrid—which are being tested in Saitama—in any electric-car test program China.

Honda's plans for electric vehicles in China will depend on what environmental policies the government adopts to encourage purchases of energy-efficient cars, and what strategies local partners prefer, Mr. Ito said.

Non-Chinese auto makers have expressed concerns that the government may force those that want to make electric vehicles in the country share critical technologies with local makers.

The Chinese government is weighing a 10-year plan for technology transfer to China by foreign auto makers if they opt to build and market electric cars and hybrids in the country.