China's charge slows on electric car ambitions

SHENZHEN, CHINA: Du Mingfu is taking a nap as he waits 40 minutes or so for his electric-powered taxi, produced by Warren Buffett-backed car maker BYD, to charge in China's southern city of Shenzhen, a pioneer of the country's green vehicle push.

A city bordering Hong Kong that has grown from virtually a village 30 years ago into a sprawling metropolis, Shenzhen has 62 charging stations for electric vehicles, but only five to serve its more than 1,000 private e-vehicles and plug-in hybrids. The rest cater to public transport vehicles, such e-buses and e-taxis like Du's.

It's nearly three years since China launched an electric car pilot programme with great fanfare in 13 cities, later extending that number to 25, but the country is grappling to overcome the teething problems that plagued the project in its early days.

"We were a bit too optimistic, as everybody then believed that the development of new energy vehicles was a big trend," said Cai Yu, an official at the body overseeing Shenzhen's pilot scheme. "But there are a lot of questions, such as technology issues and there are not enough charging stations."

Land on which to build charging stations in Shenzhen is expensive - and scarce - while the forecast demand for e-vehicles has failed to gather pace, Cai said, despite subsidies that the government started offering in some cities in 2010.

China had 243 charging stations and 1,328 charging poles, which are smaller units installed in car parks or other public areas, in operation in the 25 pilot cities in 2011.

This month, Beijing approved a blueprint for the country to move more quickly to develop its energy-saving and new-energy vehicle industry, restating its goal to have half a million new energy vehicles on the road by 2015 and 5 million by 2020.

EXCITED AUTOMAKERS

Local automakers SAIC Motor and Dongfeng Motor Group Co have pledged to invest $1.9 billion and $441 million, respectively, in green vehicles, while global automakers BMW and Nissan are working with local governments to roll out their E-Mini and Leaf cars.

"I'm very glad to see that one government has made a goal of having 5 million electric cars and plug-in hybrids by 2020," Renault and Nissan Motor CEO Carlos Ghosn told Reuters on the sidelines of the Beijing auto show on Monday.

Ghosn said this would be positive for Renault and Nissan because they would have a whole line-up of EVs.

"I think it's a great opportunity for the alliance," he said.

Others are less sure about China's target.

"We just listen with scepticism ," said e-taxi driver Du.

Government subsidies of up to 120,000 yuan for China-made new energy cars have failed to attract a large number of buyers as many people prefer to wait for battery prices to fall and confirmation of a proven track record on safety and technology.

A BYD e6 sells for 369,800 yuan, and after subsidies it will still cost nearly 250,000 yuan. That's more expensive than some foreign brands such as the Audi A1.

Last year, only 8,159 new energy vehicles - electric, plug-in and hybrid - were sold across China, including those used in government pilot programmes for e-taxis and e-buses.

The long charging time is a big deterrent, especially for taxi drivers for whom time means money, although Du enjoys the comfort and spacious interior of the e-taxi.

"People ask me whether the electric car has a future. Frankly speaking, I don't know," said Du, who joined the city's e-taxi pilot scheme about 18 months ago. "It takes so long to charge and the only thing I can do is to take a nap."

Du usually charges his taxi for 40 minutes in the middle of his 12-hour shift, but to fully charge at the end of his shift takes up to a further hour and a half.

Private users take at least 6 hours to fully charge a BYD e6 at home with slow domestic charging facilities. The cost to charge an e-taxi for one day is 100 yuan, while the cost of fuelling a petrol-driven taxi is about 400 yuan for a day.

MISSES TARGET

Shenzhen had more than 3,000 new energy vehicles, by the end of 2011, taking a lead among the 25 cities in China's e-vehicle scheme.

BYD has orders to produce another 500 e-taxis and 1,000 e-buses for the city this year, taking the its new energy vehicles in the public transport fleet to 5,000.

That still lags Shenzhen's goal of putting 34,000 new energy vehicles on the road under a three year-plan that ends this year.

The city is working on a development plan for 2013-2020 for new energy vehicles, which is expected to extend subsidies for electric car buyers, although it would not sponsor charging stations.

Under draft regulations released last month, vehicles selected for government use should cost no more than 180,000 yuan and they must be domestic brands.

A BYD e6 is now out of the government's purchasing budget, but Cai said the Shenzhen government is in talks with BYD on lowering the cost of e-cars.

"We will introduce several versions of the e6 later this year and should meet the government's price requirement," Paul Lin, business director of BYD Europe B.V., told Reuters at the Beijing auto show.