China-made cars going electric, green

Shanghai, May 6 (Gasgoo.com) 'Green' vehicles highlighted the recent 2009 Shanghai auto show (April 20-28). China's automakers -- local ones and joint ventures -- have been banking on 'green' cars as the long-term strategy for sustainable grwoth. This trend has been evidenced by the fact that a couple of Chinese automakers took the wraps off of their green cars at the show.

China's car companies have a strategic reason to move quickly toward electric cars: the legacy car companies in North America, Europe and Japan haven't yet mastered the technology. According to a new forecast from research and consulting firm Frost & Sullivan, that's partly why China-based Chery, Geely, SAIC and Changan unveiled new energy cars at the Shanghai auto show last month, and why the country is heading toward electric vehicles.

Frost & Sullivan believes that there are three phases for the development of 'green' cars in China. The short term alternative solutions are LPG/CNG and hybrids. The market will gradually transit to electric vehicles in the middle stage. Fuel cell vehicles will be the choice in the long run.

Hybrids prevail in the short term

LPG/CNG vehicles have been used in China for many years. The development of LPG/CNG is hindered by the shortage of gas infrastructure and relatively unfavorable vehicle performance. Therefore, the application of LPG/CNG is limited to taxies and buses in several cities like Chengdu, Chongqing, Beijing and Shanghai.

Hybrids running on both electricity and gasoline, on the other hand, seem to gain momentum in recent years. At the 2009 Shanghai auto show, more than 20 hybrid vehicles are unveiled by Chinese domestic carmakers. However, Frost & Sullivan sees hybrids a necessary step for eventually heading toward battery electric vehicles or fuel cell vehicles.

The consumers are not fully aware of the advantages of battery electric vehicles and will slowly accept the technology. Plug-in hybrids will help the public shift from hybrids to battery-powered cars in the future. Moreover, pure electric vehicles require an extensive public charging infrastructure. It may take decades to construct the charging stations and infrastructure in China.

Electric Cars, the Next Movement

According to Tristin Lin, Senior Consultant from Frost & Sullivan, electric cars will be the next step after hybrids in China. Chinese carmakers have every reason to develop electric vehicles. Frost & Sullivan gives the detailed explanations from the government, carmakers and customer's perspectives.

Firstly, the Chinese government has decided to turn the country into one of the leading producers of all-electric vehicles within three years, and making it the world leader in electric cars and buses afterwards. China is expected to raise its annual production capacity to 500,000 hybrid or all-electric cars and buses by the end of 2011.

Secondly, Chinese carmakers would also like to make intensive efforts to develop electric cars. Opposite to making gas-powered vehicles which China lags far behind the United States, Japan and other countries, the development of electric cars makes it possible for Chinese firms to bypass the current technology and get a leap to the next stage.

Thirdly, electric cars have practical advantages for Chinese customers' driving behavior. Under rare occasion, Chinese drive a long distance between cities. Commutes are fairly short and frequently at low speeds because of increasingly heavy traffic. So the limitations of all-electric cars, for instance, the limited distance range, are not a big deal.

Based on the technology of electric cars, China is going to move toward fuel cell vehicles. The technologies of hybrid and electric cars are also applied to fuel cell vehicles. However, many issues need addressing, such as battery technology, recharging infrastructure, and governmental subsidy, among others, to realize the dream of 'green' cars.

Frost & Sullivan forecast that hybrids for the general public will come true by 2011 or 2012 in China. The battery electric cars will start in 2010 and see gradual penetration in the next decade. For fuel cell vehicles, there will be a long way to go in China market.